HECO 5-year plan outlines hopeful start

Hawaiian Electric Co. has issued a broad blueprint on its evolving role in energy production and distribution, and there are reasons to feel encouraged as well as concerned about what it says.

HECO, along with its sister companies, Hawaii Electric Light Co. and Maui Electric Co., are covered by a 2,200-page integrated resource plan (IRP), which will undergo review by the Public Utilities Commission.

The utility points to the community input already gathered in a series of public meetings in May, but the commission can and should amplify that effort through additional open discussions of the plan. Reducing the cost to customers is listed among the challenges the IRP process is meant to explore and surmount, so it’s critical that the public have every opportunity to weigh in (see box).

Among the more provocative elements is the reference to the controversial interisland cable project: HECO now believes it can meet its state-mandated green-energy goals with island-by-island projects, without piping power from an island such as Lanai to Oahu.

Officials also say the future of the undersea cable won’t be known until better cost information can be provided by a potential contractor, so it’s not abandoning that plan at this point. However, there seem to be more options with this new analysis, and that’s a good thing.

Reducing utility costs is one primary focus of the plan, and officials believe success will hang on several initiatives, including:

» Decommissioning older, oil-fired steam generators, such as the Honolulu power plant.

The stated intent to shut down that plant and keep it available for emergency use is a rational one. HECO spokesman Peter Rosegg compared it to a family decision to keep the old car in the garage rather than spending the money on upkeep and repairs that typically increase as mechanical equipment ages.

» Converting plants to accommodate cost-effective renewable and lower carbon fuels, such as biomass, biofuels, and liquefied natural gas.

» Fast-tracking the procurement or development of utility-scale renewable energy resources.

On this last point, HECO is seeking PUC permission to negotiate, outside the ordinary request-for-proposals process, on five proposed contracts for solar and wind energy adding 64 megawatts of generating capacity to Oahu’s grid.

The proponents of these projects, whose identities haven’t yet been disclosed, have committed to selling HECO electricity at a rate averaging just under 16 cents an hour, a savings of about one-third from oil-generated power rates, according to the announcement last month.

The devil will be in the details on such an approach, but accelerating the pace of electricity rate reductions could have a significant public benefit.

Larger-scale renewable energy producers are connected to the grid in systems that enable the utility to manage power fluctuations more easily than from house-by-house rooftop solar installations. This would make moving ahead quickly with larger-scale projects a sensible strategy, if it means the average electricity customer could count on lower rates.

But this doesn’t negate HECO’s responsibility to ensure its customers can control their own energy costs more directly through photovoltaic systems on individual residences and businesses.

The good news, according to the IRP, is that HECO is taking steps to lower one of its renewable-energy hurdles, managing the power use fluctuations on the grid better through "smart" metering. Smart meters can detect an outage and relay that information to the utility; customers also can control household appliances remotely.

The enactment of on-bill financing — putting the up-front costs of PV within reach of more property owners and its cost savings accessible to renters as well — means that a broader segment of the utility customer base can now benefit from green technology. HECO needs a more detailed plan for how it will navigate through that transition.

In Star-Advertiser news coverage of the IRP last week, Henry Curtis of the environmental group Life of the Land, which is intervening in the plan review process, highlighted the need for more details on how the utility will manage its fixed costs as more customers transition to solar. How much of that burden will fall on the remaining ratepayers?

He’s right. Hawaii’s energy customers have their household budgets to consider. Above all, the PUC and the utility must conduct their review and defense of the plan with that reality check foremost in mind.