Consider greater decentralization for power utility

Hawaii’s outside-the-box notion of becoming wholly supplied by renewable energy gained some outside-the-state support last week from a national expert, who sees a lot of potential in revolutionizing how we handle our electrical power.

Advocates see this as a healthy injection of new ideas in an energy market that will need them. And while prudence should always have the upper hand, the state’s utility regulators, facing a monumental decision over the future of Hawaiian Electric Co., will need to consider outside-the-box ideas to meet the state’s ambitious goals.

The expert, Jon Wellinghoff, offered one of those ideas. Speaking before last week’s two-day Maui Energy Conference, Wellinghoff proposed turning over management of Hawaii’s power grid to an independent third party that doesn’t answer to shareholders.

Wellinghoff, former chairman of the Federal Energy Regulatory Commission, said that what’s known in the industry as an independent system operator (ISO) would be a private, not-for-profit entity. That, he said, would be the most effective model for enabling competition among energy producers and ensuring that they have access to the grid.

This would not be an easy process, Wellinghoff acknowledged. There are undoubtedly technical issues to reckon with, and some system-wide investment in overall modernization.

Progress toward the reorganization would be marked off in years, not months. And any changes must be designed to save ratepayers money, not impose new cost burdens.

But in the end, Hawaii could have a less centralized system of grids and satellite micro-grids that could more nimbly accommodate energy from a range of sources.

The Public Utilities Commission, which regulates the electric companies, should remain open to such concepts.

The PUC has just finished lengthy hearings on the proposed merger of Hawaiian Electric Industries, the state’s largest utility group, with NextEra Energy Inc. A lot of industry observers have been watching the deliberations with some concern that the players are clinging too steadfastly to the legacy model of centralized energy production and distribution.

Among them: Blue Planet Foundation, which describes itself as a local nonprofit organization “committed to ending the use of fossil fuels on Earth, starting in Hawaii.” It supports the 100 percent renewable energy target date of 2045 and applauds Gov. David Ige, an outspoken critic of the NextEra merger plan, for championing it.

So far, the organization has lobbied for more breakthrough planning from Hawaiian Electric, which has had various resource plans rejected by the PUC as supporting the status quo.

Blue Planet consulted with another expert, Matthias Fripp, University of Hawaii assistant professor in electrical engineering, who believes the 100 percent renewable goal is doable. The model assumes that the busiest consumption periods could be matched with peaks in the daytime production of renewable energy, primarily solar.

He proposes to meet the challenge primarily by shifting when people tap energy through various means, by pricing off-peak rates attractively or encouraging electric vehicles recharging during the peak times.

There are various hurdles to overcome — electric vehicles, storage batteries and many “smart” technologies are still priced beyond the reach of most people.

However, those factors can change, and policymakers should move boldly toward what are too easily dismissed as lofty goals.

NextEra has not yet made commitments equal to the need for change. It would have been interesting to gauge the company’s reactions to Wellinghoff’s ideas, for example. But, as many noted with raised eyebrows, NextEra representatives did not participate in the Maui conference.

One strength NextEra offers is the capacity to make big changes. Without a doubt, the grid will need capital, and the Florida company has that in abundance.

But the grid will need innovation, too. In the final analysis, whoever runs Hawaii’s utilities may need a push to embrace a new way of doing business.