The Hawaii State Energy Office has completed a mandatory viability study of alternative utility ownership and regulation models and their ability to stimulate consumer cost savings and help the state meet its aggressive clean energy goals.

Funded by the state Legislature, the third-party study examines existing ownership and regulatory models in each county and evaluates them in comparison to alternative models, such as cooperative, municipal and independent distribution system operators. The study also examines which models could increase local control over energy sources serving each county, further diversify energy resources, jumpstart economic development, reduce greenhouse gas emissions and increase system reliability.

The report considers costs required to change from the existing model to a new model, legal and regulatory approvals needed for the change, impact on revenue requirements and rates and effects on distributed energy resources, such as rooftop solar, batteries and smart appliances.

Incorporating feedback from 18 months of stakeholder meetings and workshops on all islands, it is the most extensive analysis of its kind ever conducted in Hawaii.

Key findings for Hawaii, Maui and Honolulu counties:

  • The current ownership and regulatory framework has ensured reliable service, but regulatory adjustments can ensure it is adapted to the evolving technological and policy landscape
  • A change in ownership model does not necessarily address the top concern of stakeholders, which is to lower electricity rates
  • Regulatory changes have a greater likelihood of achieving State policy objectives
  • The benefits of moving to any of the performance-based regulation models generally outweigh the costs
  • Implementation of performance-baed regulation and other constructs can be achieved on a staggered basis

Key findings for Kauai county:

  • The current ownership and regulatory framework has ensured reliable service, but regulatory adjustments can ensure it is adapted to the evolving technological and policy landscape
  • A change in ownership model would likely increase electricity rates
  • The complexities of the transition and implementation of an IGO may not warrant the change
  • Lighter PUC regulation would help reduce rates and increase utility flexibility, but there is still a need for a safety net for consumers
  • HERA could be a vehicle to provide arbitration services, together with establishing and enforcing reliability standards to help the state meet the renewable energy goals

Read the full report or a summary of key findings.

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