Richard Rosenblum

Richard Rosenblum, 63, was "a very happy fella" in retirement on Hawaii island in 2008 when a recruiter happened along and pitched a new job opportunity to him: president and chief executive officer of Hawaiian Electric Co.

Yes, Rosenblum said. He had to think twice about it. The plan for the former Southern California Edison executive was to plunge himself into a lifelong goal of building his own plane and ultimately go flying around the world with his grown son (Rosenblum and his wife, Michelle, also have an adult daughter).

The plane project has been postponed for a future, unscheduled re-retirement date.

"I kind of feel like I spent my whole life preparing and gaining the skills for the transition we’re going through now," he said. "And that is to get Hawaii off of oil, onto renewable energy and into what I would describe as much more of a consumer business … and much less of an industrial business."

On the current job list: HECO became part of a budding consortium of buyers for small-scale imports of liquid natural gas, which he hopes will allow savings to be passed on to ratepayers. And the company announced plans for a pilot of long-anticipated "smart-grid technology" in Hawaii. This, he said, should deliver feedback to customers on energy use and enable more utility efficiencies.

It also may help HECO to better gauge how much customer-generated photovoltaic solar energy is on the grid, to prevent "overvoltages" — too much energy being produced for the amount being drawn.

HECO has not chronicled cases of damage tied to overvoltage, he said, but there have been anecdotal reports of computers and other home gear being fried, and the laws of physics tell him it does happen.

Rosenblum said business and households will need a unified grid, at least for the foreseeable future.

"Very few people want to be in the electric business personally," he said. "They’ve got enough complications in their lives."

QUESTION: What is the cost factor behind the “smart grid” pilot project? Is the initial phase entirely funded by HECO?

ANSWER: Yes. … There’s no charge to our customers whatsoever. We’re economizing in other areas in order to be able to fund it. 

The purpose of it is to gain the information we need as seamlessly as possible, expand it to all other customers, and to really try to lock in what the value is and what the cost is.

The cost we have some handle on. What we’re trying to see is how much value do customers get out of the things we’re rolling out. How much money did we save on meter reading? How much energy usage can customers save by understanding what’s going on? That’s part of the value proposition. … How quickly can we deploy folks for outages, so that we reduce not only the length of the outage but the cost of responding to it?

And once we have those figures, we can do a cost-benefit. We believe there is a positive cost benefit for our customers to a wide rollout. We want to confirm that on our own money.

Q: Smart grids have been used elsewhere; what’s different about Hawaii that makes this test necessary?

A: Lots of things. … They may have rolled it out in Southern California, and we know what that is; they may have rolled it out someplace else. That’s a pretty wide range. What we’re trying to do is narrow that and see how our customers really react. …

We have a very different demographic profile than others. So the time it takes us to respond to outages, the nature of those, what it takes to fix it may be very different than it is … in Southern California, just due to traffic.

Q: What is the demographic difference?

A: Just the usage profiles, the difference in how much energy efficiency people might get because they do or don’t have centralized air conditioning. There’s a lot of those factors that are different here than they might be elsewhere. …

We’re pretty sure this is cost-effective for our customers, but before we spend big bucks, we want to narrow that down to a much higher certainty. We’re very, very aware that our customers are in a high-bill environment. They can’t afford for us to be wrong. So we have to produce value with what we’re doing.

Q: Are meter readers a large part of your labor force?

A: It’s not a huge part but it’s a meaningful part. … We’ve been, one, hiring temps, as opposed to full-time employees and, two, telling them that they need to avail themselves of our training so that they can redeploy. Our goal is to redeploy 100 percent of them that are permanent employees.

Q: Do you have any projections on layoffs?

A: I don’t anticipate any layoffs.

Q: Is the labor savings the main reason for doing this?

A: You’re thinking of it as meters — and, don’t get me wrong, that’s probably the most visible part of it. But what I really want to try to communicate is we’re doing it to try to bring value to our customers. Some of it may be through reduced cost in meter readings, so that our rates can go down. Some of it may be because we can turn on and turn off service remotely, and therefore don’t have to send people out.

Some of it may be because someone calls up and says, “My bill was really high this month; your meter must be wrong.” And we can call up the data and say, “Did you have house guests on such-and-such a day? Because your usage went way up.” “Oh, yeah, my kids were home from college.” 

Q: How much confidence do you have in the integrity of this automation system, given the problems that the Honolulu Board of Water Supply had with that upgrade?

A: We have high confidence, but part of the reason we’re doing the pilot is to get real experience in our environment. … We very consciously picked to get a cross section of everything in our service territory so we can confirm that we are getting accuracy, and we’re getting the reliability we want.…

Q: Are these meters addressable by the customers, too, so they can turn things off remotely?

A: There are two aspects of that. The customer can get, and we will give them the equipment to do it, their meter reading in 15-minute increments, so they can see how their usage changed, days, weeks and months.

What you’re talking about is control of their equipment. At least at this point it does not have that, although the meter does have the capacity to have that feature, so that someone inside the house can add extra equipment onto their refrigerator or washing machine or whatever. Or their thermostat — a thermostat is a really good example — and then they can start remotely controlling things on their house.

Q: Are the smart-grid meters also a form of behavior modification for the consumer, if they can track how they’re using energy?

A: Absolutely, that is part of it. If customers have information, then they can change their behavior, which can save them money.

Q: But customers already know a lot about what saves energy. How is this a game-changer?

A: You’re correct, I think, that most customers are pretty aware of energy-efficiency things they can do — turn down their thermostat, etc. The problem is, they don’t have much feedback, so it is to them somewhat of a theoretical experience. … They have a hard time sticking with it, or getting any reinforcement that they are doing the right thing.

Q: Where do you stand on having different rates based on time of use?

A: That’s certainly something that’s probably in the future. First you have to have the meters, because they enable it. …

There are very many variables in time-of-use rates. … Part of what we’ll do in the deployment is test those rates, and see what the responses are, and where we get the best value for the customer with the least inconvenience. …

On the mainland, they have big coal and nuclear plants, and in the middle of the night they have nowhere to put the electricity, so they want people to run their washing machine at 3 in the morning. …

What we’re seeing in Hawaii is probably something very, very different. We have so much solar in Hawaii — a lot of it rooftop PV, but some of it larger installations — that we’re actually getting a depression in the daytime generation. On some of our islands, 2 in the afternoon is actually our lowest usage period.

So we may actually have time-of-use rates that incent people to charge their car at 2 in the afternoon, because we have nowhere else to put the electricity. … 

Q: About the utility-scale solar project proposed at Kahe Point, could HECO do this in a more diffused installation, rather than all in one place?

A: Sure; but we would have to control the land, and it would be more expensive. There’s an obvious economy of working in one place. … 

We do have other small solar installations on other of our equipment; sometimes on the top of a building, sometimes on top of a parking lot, in order to try to maximize our usage of land and renewable energy. But this is the largest.

Q: What do you say to critics who say HECO put the brakes on the solar industry?

A: I know some of their observations about laying off people are probably true. … 

The issue really is that there are real technical problems that nobody has ever faced before. One out of every 10 of our customers has PV on their home. Nobody in our industry that I know of is much above 1 percent. …

I kind of describe us as a trailblazer in this area. And the problem with being a trailblazer is, everybody else is behind you. The path in front of you is unknown.

Q: But the policy is more preventive, wouldn’t you say, than trying to solve a problem with a lot of overvoltages that cause damage?

A: Yes, but most of what we do is preventive. Electricity is instantaneous and very powerful. And among our jobs is to make it safe for our customers to use.