HECO wants to build smart grid

Hawaiian Electric Co. asked the state Thursday to approve a $340 million smart-grid system that would improve reliability, allow for increased use of renewable energy sources and give customers more control over their electrical use.

HECO said the $340 million Smart Grid Foundation Project would include a wireless communication network, smart meters and enhanced technology that would upgrade the existing electric grid to be more automated and energy-efficient. The smart-grid program would cost the 455,000 HECO customers on average $747, although HECO said commercial customers would pay the bulk of the costs.

“Modernizing our electric grid is a critical part of our commitment to better serve our customers and achieve a clean energy future for Hawaii,” said Alan Oshima, Hawaiian Electric president and CEO, in a news release. “This investment will lay the technological foundation to enable us to provide our customers with better service, more options to manage their bills, more renewable energy and other services in the future.”

The smart-grid project would improve the system’s ability to detect outages and restore power. In addition, smart meters would provide customers with electricity usage information to help them better manage bills. Customers would be able to see their personal energy information on their computers and mobile devices, to give them more control over their energy use and electrical bills.

On Oahu, residential customer bills would increase 23 cents per month over 20 years, and more than half of the costs would be paid by commercial customers, HECO said. The company did not say how much commercial customers’ bills would increase.

“In the context of looking at this cost, we have to look at the benefits it is bringing to the consumers,” said Jeff Mikulina, executive director of Blue Planet Foundation, a clean-energy organization and partner in the HECO smart-grid project. “It’s going to enable much more control on the behalf of the consumer. … It will really enable HECO to bring more rooftop solar online because it will give them a better understanding of what will happen on the grid.”

Mikulina said the program’s benefits include savings that total $151 million over 20 years from energy efficiency. One benefit of the smart-meter program would be that customers could get text message notifications to help budget their electrical bills, he said. “You could say, ‘I only want to spend $150 per month,’ and you get a text when you are getting close,” Mikulina said.

The smart-grid plan must be approved by the state Public Utilities Commission to go into effect. HECO said it would recover the cost of the program through a line item on customers’ bills called the Renewable Energy Infrastructure Program, which could be abbreviated as “REIP.”

HECO would begin to install the smart-grid project in 2017 on Oahu, and in 2018 on Hawaii island and in Maui County.

HECO said customers will be notified ahead of meter installation and can choose not to upgrade to a smart meter. Under HECO’s proposal, residential customers who choose not to have a smart meter installed would pay a monthly charge of about $15 to help pay for the cost of continued manual reading and maintenance of their nonstandard meters.

When Kauai Island Utility Cooperative rolled out its smart-meter program in 2013, many KIUC members said they were concerned that the radio waves emitted by smart meters can cause health problems. They also said they were worried about privacy, as the meters allow utilities to remotely read customers’ meters as well as connect and disconnect service.

KIUC charges $10.27 per month to customers who chose not to have a wireless smart meter installed at their home, and about 3,000 members, about 10 percent of all members, have opted out.

KIUC’s smart-meter program cost $11 million, or about $333 for each of KIUC’s 33,000 members.

HECO also said that if NextEra Energy Inc. were to buy the company as proposed, the cost of the smart-grid system would go down by $22 million for a total cost of $318 million. NextEra could do it for less because of the company’s experience with smart meters and its lower borrowing costs.

NextEra switched its 4.8 million Florida customers to smart meters in 2010 at a cost of $800 million, or $167 per customer.

With smart meters the utility would no longer need meter readers. HECO said it is developing a transition plan for the 50 meter readers it now employs on all islands. HECO said there would be no layoffs because of smart meters.