The independent expert hired by state regulators to oversee Hawaiian Electric Co.’s energy planning process is refusing to certify the utility’s five-year energy plans, saying the company’s work was shoddy despite what’s expected to be an $11 million effort.
In a filing with the Public Utilities Commission on Monday, Carl Freedman said that HECO’s five-year energy plans released last month understate the impacts on consumer electric bills, aren’t based on sound analysis and don’t follow commission rules.
The energy plans, which HECO released after a year of meetings with a 68-member community advisory group, cover Oahu, the Big Island and Maui County. The planning process is expected to cost ratepayers about $11 million, Freedman told Civil Beat.
This is the first time HECO’s energy plans have been rejected and it’s not immediately clear what it means.
PUC attorney Catherine Awakuni said the commissioners can’t comment on an open case.
The PUC requires that Freedman certify the plans, but there’s nothing that lays out what happens if he doesn’t.
“There’s no identified consequences,” said Freedman.
HECO spokesman Peter Rosegg did not respond to an interview request, but released a statement saying that the utility would work to refine its plans. “Ultimately, our goal is to chart a future path to provide our customers with reliable, clean electricity at the lowest possible cost,” Rosegg wrote by email.
It’s possible that the PUC could forbid HECO from recouping the costs of the planning process from ratepayers. Maui Mayor Alan Arakawa already sent a letter to the PUC earlier this month asking commissioners to reject $800,000 in planning costs incurred on Maui.
Freedman’s conclusions echo complaints from some members of the community advisory group in past months who felt that HECO officials were shutting them out of the final planning process.
Freedman’s report to the PUC said that HECO fell substantially behind schedule and that as a result the advisory group didn’t have a chance to provide meaningful input.
Freedman also takes issue with some of the major findings of HECO’s energy plans, which span more than 2,000 pages.
HECO concluded that it could likely meet renewable energy mandates years ahead of schedule and without using undersea cables to bring renewable energy from the neighbor islands to Oahu.
The analysis was quickly panned by Richard Lim, director of the Department of Business, Economic Development and Tourism, and Mark Glick, head of the state energy office. Both doubted whether there were enough sources of renewable energy on Oahu that could be brought online economically.
Freedman said that HECO’s analysis was unsupported and it wasn’t clear how the Oahu utility could accommodate such large amounts of solar and wind resources.
Freedman’s report also says that HECO downplays the impacts that its energy strategy will have on electric bills.
HECO’s energy plans stressed the need to stabilize or reduce electricity costs and laid out strategies that included importing liquefied natural gas and taking oil-powered generators off line. But Freedman said that electric bills are expected to increase substantially during the next five years.
“The commission prioritizes rate impacts as a major consideration of the plans,” Freedman told Civil Beat. “The plans don’t really make good estimates of the rate impacts and they don’t address the commission’s concerns about rate impacts.”
Freedman’s conclusions follow recent rulings by the PUC that criticized HECO for not doing enough to control its costs and bring down rates, and failing to adequately plan for the transition to renewables.
Henry Curtis, executive director of Life of the Land and a member of the advisory group, applauded Freedman’s decision and said that it signaled a shift in power away from HECO.
“I think there’s enormous risk and opportunity in the near future about how we shape energy policy,” he said. “And Hawaiian Electric Co. is no longer in the driver’s seat. There are many players out there and we are all going to shape where energy policy goes in this state.”
You can read the decision here: