A handful of reporters gathered in Gov. Neil Abercrombie‘s Ceremonial Room on Tuesday morning awaiting an announcement about four major energy policy decisions and taking bets on what they would be.
Abercrombie soon took the podium, flanked by the three leaders of the Public Utilities Commission, and announced that Hawaii has “turned the corner” in its shift to renewable energy.
“There is no turning back. This is the most significant day in Hawaii and its energy future that we have ever had,” he said. “The time for talk has ended and the time for action is upon us.”
Yes, something big is happening, asserted Abercrombie, who is running for re-election. He went so far as to claim that some sort of “energy Rubicon has been crossed” in Hawaii.
But he neglected to specify what the Rubicon was, what “action” he was talking about or clarify why the day was so significant.
To understand the governor’s congratulatory assessment of Hawaii’s energy scene, perplexed journalists turned to three other officials who stepped up to the podium. But rather than clarify things, PUC Chair Mina Morita and commissioners Mike Champley and Lorraine Akiba rattled off wonky phrases like “integrated resource planning,” “reliability standards working group” and “demand-response portfolio plan.”
About 15 minutes later — after complicated talk about requiring Hawaiian Electric Co. to conduct better energy planning — the governor and commissioners shuffled toward the door, refusing to take questions from reporters who were still trying to figure out what the celebratory talk was all about.
Before leaving, Abercrombie suggested that instead of asking questions, reporters should take some time to “absorb” the morning’s presentation.
Morita began to leave with the rest of the speakers before journalists convinced her to return to the microphone to clarify the remarks. She told reporters to look at the PUC website where information had just been posted under the “What’s New” tab.
She said that she wouldn’t take any questions and left.
The odd press conference — that clarified little and that seemed intent on leaving a mystery in its wake — was all the more awkward because of recent tensions between Morita and the governor.
Earlier this year, Abercrombie hedged on whether to reappoint Morita to the PUC. But last month, after facing political pushback, the governor said he was retaining her in the position on a “hold-over basis.”
While Morita’s future remains uncertain — she could still be replaced at a later date, perhaps after this year’s gubernatorial election — the reasons for the governor’s big talk about energy became clear later in the day.
HECO’s Energy Plans Rejected
While it wasn’t readily apparent from the jargon the commissioners spoke in, the PUC did make some significant decisions on Tuesday, as detailed in the documents that were posted on the PUC’s website on Tuesday.
For the first time, the PUC rejected Hawaiian Electric Co.’s long-term energy plans for Oahu, the Big Island and Maui County. The plans are part of a process called “Integrated Resource Planning” and are supposed to chart HECO’s future energy strategy.
HECO’s energy plans, which were sent to the PUC a year ago for approval, were the culmination of a year-long, intensive planning process that included a 68-member community advisory group. The cost of the process: $11 million.
It’s not clear whether ratepayers will have to pay for the rejected plans, or if HECO will absorb the costs.
HECO’s energy plans detailed broad goals, such as reducing consumer electricity rates, retiring oil-fired generators and upgrading its grids to accept more renewable energy.
The plans analyzed future energy scenarios that included solar, wind, biofuel, undersea cables, liquefied natural gas and geothermal energy.
But the PUC said in documents released Tuesday that the plans were “excessively ambiguous.”
The PUC said that HECO’s analytical approach in assembling them was “fundamentally flawed” and used “inappropriate and inadequate” modeling tools.
The plans “did not provide any reasonable context, guidance, or confidence useful for making regulatory or resource acquisition decisions,” the PUC wrote.
To replace the rejected plans, the PUC offered up its own roadmap to Hawaii’s energy future.
The PUC’s plan released Tuesday is a “white paper” called, Future of Hawaii’s Electric Utilities, which outlines “perspectives on the vision, business strategies and regulatory policy changes required to align the HECO companies’ business model with customers’ interests and the state’s public policy goals.”
The commissioners announced at the press conference that HECO will have to file new energy “action plans” that follow the PUC’s guidance within 120 days.
The action plans are supposed to provide a road map for reducing energy costs and bringing on more renewables, such as solar and wind, which have become significantly cheaper than oil-powered electricity.
Commissioners say they were compelled to advance their own plan because HECO had failed to “develop a sustainable business model,” according to the white paper.
“In the meantime, Hawaii’s electricity customers continue to endure the highest electricity prices in the country, and the high cost of this essential service imposes substantial burdens on Hawaii’s households and businesses,” the commissioners wrote in the paper’s introduction.
“These are not recommendations,” Abercrombie said at the press conference. “These are decisions and orders for action plans that have to be put forward to the PUC’s satisfaction.”
The commissioners didn’t say whether there will be any penalties if HECO fails to file satisfactory new action plans.
The PUC also ordered HECO subsidiary, Maui Electric Co., to come up with a better plan for integrating more renewable energy into its grid.
Last year, commissioners criticized the utility for essentially dumping wind energy from its grid. MECO was wasting about 28 percent of the energy from its wind farms, according to PUC documents.
MECO subsequently came up with a plan to reduce this figure to around 2 percent.
But the PUC said Tuesday that the utility needs to go even further in its energy planning.
“MECO has not set forth a clearly defined path forward that addresses integration and curtailment of additional renewables, and that optimizes system operations through all of the tools that are available to MECO,” commissioners wrote in their decision. “In general, what is lacking is the vision of MECO as a ‘utility of the future.’”
The PUC also issued an order setting out guidelines for managing the energy loads on HECO’s electric grids and is now requiring the utility to put together a specific plan for implementing them.
HECO officials — who were noticeably absent from the press conference about their company — issued a statement praising the PUC’s orders for giving them more precise directions as they plan for the future.
“In this challenging, fast-changing energy environment, we welcome the PUC’s clear direction and roadmap,” HECO’s CEO Richard Rosenblum said in a statement. “We’ve been working on many of these initiatives, and these directives confirm the energy policy priorities that will guide our strategies and implementation.”
Rosenblum noted that more than 18 percent of the utility’s electricity is now derived from renewables and HECO has begun deactivating some of its older fossil fuel plants.
So did Hawaii cross the “energy Rubicon” on Tuesday?
Richard Wallsgrove, a program manager at the clean energy advocacy organization Blue Planet Foundation who attended the press conference, isn’t so sure.
“I think that the Rubicon that we need to cross has three components,” he said. “It has a destination, a roadmap and turn-by-turn directions.”
Wallsgrove said that the PUC has now issued a roadmap, but HECO still needs to come up with the directions and the “destination is a bit unclear.”
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