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Setting the record straight on some recent criticisms of Hawaiian Electric.
Reading time: 5 minutes.
At Hawaiian Electric, we respect differences of opinion on issues about rooftop solar. However, Anthony Aalto’s March 18 Community Voice piece contains factual errors that should be corrected.
For the record, here are some:
The greatest responsibility for our business is to ensure safety for our customers and employees.
Electricity is a powerful force and the risks from high amounts of distributed generation on neighborhood circuits are real.
Our responsibility is to prevent problems rather than wait until property is damaged, someone gets hurt or even worse.
With now 11 percent of our Oahu customers using rooftop PV, we are far ahead of the rest of the country in the level of PV integrated into our grids.
This is especially significant given that our island grids are remote and must stand alone, island by island, compared to mainland grids with ties to regional grids for backup.
That means we’re encountering technical challenges before anywhere else.
But through research and experience, our engineers have continued to identify solutions to safely allow the window to be opened farther and farther for more rooftop solar without requiring interconnection studies.
Rather than view this as evidence that there was no problem to begin with, independent organizations such as the Interstate Renewable Energy Council have recognized the willingness to push the envelope on these thresholds as a positive step.
Contrary to common misconception, our utilities do not lose revenue when customers install rooftop solar on homes and business. Under “decoupling” — the formula used to set electric rates — we’re allowed to recover costs incurred to serve all customers who remain connected to the grid (including PV customers who use the grid daily).
At the same time, we are not “guaranteed” a set profit (the amount left after expenses are deducted from revenues) and, in fact, have earned considerably less than the profit level deemed reasonable by our regulators for many years.
Rooftop solar is a valued part of the renewable energy portfolio — along with wind, geothermal, hydro, biomass, biofuel, large-scale solar and eventually, ocean energy — that we need to reduce Hawaii’s expensive dependency on imported oil.
It is inaccurate, however, to refer to rooftop solar under net metering as “low-cost.” While rooftop solar lowers bills for customers who install it, that is not the case for those without solar.
Under net metering, rooftop solar customers get credit for their solar electricity sent to the grid at the full bundled electricity rate which covers all costs of providing electric service, not just generation, rather than at “wholesale” rate paid to other power producers.
This means other customers are in essence paying 30 percent more for net-metered solar power than the price of oil-generated electricity, not “30 times” less.
At the same time, we are seeking approval to negotiate contracts with several large-scale solar projects offering rates to sell electricity at around 16 cents per kilowatt-hour and about 30 percent less than the price of oil-generated electricity. All customers, with and without solar, will benefit from these lower-cost projects.
This does not diminish the many other benefits of rooftop solar and our efforts to help customers take advantage of it. And it doesn’t change the understandable desire of many customers to install PV to cut their own electric bills. Although it’s not “low-cost,” net metering is a deliberate policy put in place years ago to support the growth of renewable energy.
We haven’t had a monopoly on electricity generation for more than 20 years. A substantial amount of electricity — more than 40 percent on Oahu — is generated by independent power producers. We make no profit on that purchased power. And each year, the utility-owned share of generation decreases as we retire older oil-fired units and accept more renewable energy from independent producers, including rooftop solar.
Mr. Aalto incorrectly states that Hawaiian Electric and the Public Utilities Commission are resisting on-bill financing for solar. In fact, the PUC is leading the effort, convening all parties to make the program happen and we support it.
We do agree with Mr. Aalto that the utility business is going through dramatic changes. Our utilities are in fact transitioning:
From oil to renewable energy;
From centralized plants to distributed power sources;
From less flexible, big generators to more flexible, smaller ones;
And from a grid designed to send energy one way to a grid where energy flows many directions at once.
And it takes investors — both shareholders and lenders — to provide the upfront capital needed to invest in a modernized grid and other improvements for the transformation we are working on every day to better meet our customers’ changing needs.
About the author:Jim Alberts is the senior vice president of customer service at Hawaiian Electric Company.
Community Voices aims to encourage broad discussion on many topics of community interest. It’s kind of a cross between Letters to the Editor and op-eds. This is your space to talk about important issues or interesting people who are making a difference in our world. Columns generally run about 800 words (yes, they can be shorter or longer) and we need a photo of the author and a bio. We welcome video commentary and other multimedia formats. Send to email@example.com.
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