Dive Brief:

• The Hawaii Public Utilities Commission rejected the Integrated Resource Plan from the Hawaii Electric Company (HECO) and associated utilities including Hawaii Electric Light Company, Inc. (HELCO), Maui Electric Company, Limited (MECO), and Kauai Island Utility Cooperative (KIUC).
• The PUC issued new directives which would align the utilities' business models with what customers are asking for and with what Hawaii’s energy policies require, including lower power prices, faster interconnections for distributed generation, and better integration of distributed generation into the state grid.
• HECO is making its grid smarter, shuttering older fossil plants in favor of liquefied natural gas capabilities, and is already obtaining 18% of its power from renewables, on the way of the state mandated 40% by 2030, according to President/CEO Richard Rosenblum.

Dive Insight:

A January 2014 PUC study reported that “renewable energy provides a significant opportunity for Hawaii to reduce electricity costs to customers” and that “various sizes of wind energy and solar photovoltaic generation on each island, as well as in-line hydroelectric generation” can “provide net value to ratepayers.”

The PUC study stipulated that “not every approach to procuring renewable energy and deploying it in Hawaii provides net value” and specified that “biofuel resources are more costly than conventional generation and other renewable options.”

Most significantly, the PUC study found that “customer-owned generators that sell energy to the system through NEM tariffs at full retail credit impose costs that exceed the avoided costs (the value to the system)” but more data and an improved evaluation methodology would strengthen an analysis that does not include “certain externalities, equity considerations, and fuel price volatility impacts as well as other important regulatory considerations that are not easily monetized.”