HECO’S latest roadmap has more to cheer

The light may have come on at Hawaiian Electric Co. There is more aggressive movement than in the past toward fulfillment of the 100 percent renewable portfolio standards required under state law.

More than a week ago HECO submitted its third Power Supply Improvement Plan (PSIP) to the Public Utilities Commission. That panel had handed back two previous PSIP documents as insufficiently addressing the green-energy challenge confronting the state.

But the remaining unknowns — in particular, who will own the parent Hawaiian Electric Industries and guide the plan to fruition — leave enough uncertainty that regulators will need to impose conditions on any approval in order to protect the interests of the ratepayer.

The PSIP document lays out a 30-year course toward 2045, the year when the law requires state utilities to hit the renewable target.

The more easily attained advances are front-loaded in the timetable, with Molokai and Lanai pegged to reach their 100 percent goal in 2030. Maui and Hawaii island will follow by 2040, with Oahu the final system to cross the finish line five years after that.

The tone of the discussion has shifted, and the push for upgrades enabling a new “smart grid” is the most encouraging part of that change. Where HECO in the past has cast that development as indefinite, the company seems fully committed now.

And that’s key to the plan’s success. A smart grid enables more flexibility, allowing for greater penetration of solar and wind power with its variable loads, and it permits customer controls and choices for energy usage. Time-of-use rates provide an opportunity for saving money.

The utility also seems to have embraced the notion that the adoption of electric vehicles on Oahu could provide a way to shift more electrical usage to the midday, when solar energy is plentiful, enabling the grid to accommodate more of it.

Further, it could provide an alternative revenue stream for HECO, which desperately needs to transition to a business model that is less about producing electricity and more about managing and distributing it.

The PUC may hesitate on one aspect of the PSIP: HECO is holding fast to its blueprint calling for liquefied natural gas as a “bridge” fuel as it transitions to renewables.

Gov. David Ige, who can exert influence here through his appointed Commission Chairman Randy Iwase, has strongly opposed LNG as a fuel requiring costly infrastructure investments.

It is also a fossil fuel, Ige has pointed out, which siphons attention and resources away from initiatives that could advance green-energy projects.

But HECO is making a compelling argument that LNG can, and should play a measured role in the move toward green energy, and the governor should consider a compromise.

This fuel will help HECO system upgrades pencil out more easily because Next-Era Energy Inc., the prospective buyer of HEI, has supply channels that would keep the cost down. That savings would keep customer rates manageable, said HECO Chief Executive Officer Alan Oshima, while the company embarks on its costly grid upgrades.

HECO officials, meeting last week with the Honolulu Star-Advertiser editorial board, said LNG will enable a smoother conversion of its generation system to alternatives, such as biofuels. It also should soften the impact of grid modernization costs on the ratepayers.

That’s a critical consideration in an economy where electric bills contribute heavily to the high cost of living.

But the PUC would be right to guard against LNG scaling up too radically, the infrastructure investments adding excessively to overall expenses that get passed on to ratepayers. This is meant to be temporary, not permanent.

The commission last week gave another utility, Hawaii Gas, permission to increase its supply of LNG. Clearly, HECO is not the only player where this fuel is concerned, nor should it be.

HECO, a company that not long ago had clamped down on how much rooftop solar energy to take in, is finally loosening up the constraints.

Its risk-averse inclinations are still evident; the decision to end a solar-farm partnership with the financially troubled SunEdison Inc. was one example. Fortunately there is hope that this deal could be salvaged through talks with the company’s creditors.

Even in this plan it’s seeking to manage its financial risks, a mission that will be more difficult should the PUC reject the proposed merger with NextEra.

But risk management is reasonable, as long as the consumers don’t bear the brunt of it.

This iteration of the PSIP does represent a step forward for a company that has moved far too cautiously in pursuing Hawaii’s longstanding green-energy goals. It’s good to see HECO picking up the pace.