When the Hawaii’s Public Utilities Commission weighed in last year on Hawaiian Electric Co.’s long-term plan for supplying power to customers, the regulators took issue with one part of the plan: a proposed 44 percent rate increase on Oahu over 10 years.
The PUC stopped short of approving the power supply improvement plan and offered a word of caution: HECO needed to make sure higher rates didn’t drive customers off the grid because, in the end, keeping customers is HECO’s responsibility.
HECO’s new grid modernization plan is estimated to cost Oahu ratepayers an average of slightly less than $1 per month over six years.
HECO’s latest proposal, a grid modernization plan that the PUC approved on Thursday, has a much more modest effect on consumers.
HECO estimates that the first, $205 million, six-year phase of its so called “grid mod” plan will cost Oahu ratepayers an average of 94 cents per month. The grid mod will cost customers on Hawaii Island about $2.07 more per month. Maui customers will pay about $1.93 a month more.
HECO initially engineered its grid to accommodate something relatively simple: a flow of energy, generally in one direction, from a handful of large power plants to its customers. Now, it needs to accommodate electricity flowing in multiple directions, produced from a staggering array of energy sources, including some 77,000 solar systems set up by HECO customers.
The state’s goal is to produce 100 percent of its energy from renewable resources by 2045, and a key component is distributed energy resources. The PUC made clear it wants a grid that can accommodate more such resources. The question is how to do it without breaking the banks of HECO’s 450,000 statewide customers.
The plan approved by the PUC marks a big reduction in cost and scope from HECO’s previous $736 million proposal. Utility regulators rejected the earlier plan, saying the benefits to ratepayers didn’t justify the costs. A common complaint was that the plan didn’t provide an adequate vision for mushrooming distributed resources like residential rooftop solar systems.
HECO attributed the new plan’s success to efforts it made to reach out to customers, experts and others.
Colton Ching, HECO’s senior vice president for planning and technology, said HECO’s efforts to reach out to customers paid off.
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“The fact that customers from across the state participated in the creation of this strategy along with technical experts and other stakeholders from Hawaii and the mainland is one of the reasons we believe it will be successful,” Colton Ching, HECO’s senior vice president for planning and technology, said in a statement. “Early on, the commission directed us to broaden our outreach efforts and as they noted in their decision, those efforts paid off with a much more customer-focused plan.”