One hundred years ago today — Aug. 24, 1914 — a Hawaiian Electric ad in the Honolulu Star-Bulletin promoted Westinghouse electric fans, asking readers to "count up the minutes and hours lost on account of the heat at the desk that has no fan." The utility was less interested in selling fans than in the product the fans required: electricity.
Over the next century, that approach grew Hawaiian Electric into a multibillion-dollar company. Electricity flowed one way while revenue flowed the other.
Today, that model is crumbling. During the past four years, a rooftop solar powerplant was installed in Hawaii every hour. More than 40,000 consumers became "prosumers," generating solar power shared on the grid. Some are using energy storage to leave the grid altogether. Concurrently, fossil fuel costs have pushed rates to an all-time high, and consumers are using less electricity per person.
Changes like these are forcing utilities to rethink their role and relationship with customers. Just like phone companies transitioned from selling a dial tone to minutes to data and apps, utilities must evolve from pushing electrons to providing energy services.
As Hawaiian Electric navigates this change, here is what success might look like:
» Control. Tomorrow’s utility will put customers in charge. Your electric bill today shows total monthly energy consumption, but you don’t know how, when or where you used that energy. Compare that to a cell phone bill that itemizes every call and text. This transparency gives customers control — we can only manage what we measure.
Modern technology like smart meters will make it possible to see how much energy we use at any given time, making the invisible, visible. If the utility gets it right, we will also know how the cost of that energy changes during the day, so that we can adjust behaviors and budget our energy use wisely. This information opens a toolbox of solutions — such as smart appliances, smartphone apps, etc. — to put customers in charge.
» Choice. Tomorrow’s utility will provide customization — one size doesn’t fit all. If consumers want to go solar, the utility will make it easy to plug in. In fact, it’ll help finance solar directly on customer bills. If consumers want home energy storage, the utility will welcome the addition to the energy ecosystem. As the Public Utilities Commission suggested, "customers would pay for grid services they utilize and receive compensation for various grid services they provide."
Renters and high-rise dwellers who can’t install solar on their own roofs will also have choices. Like community gardens, community solar programs will allow consumers to "hui up" and benefit from remote solar.
Customers will also be able to participate in "demand response" programs that allow the utility to dial down their water heater or air conditioning momentarily to help balance supply and demand on the grid. This assists the grid operator in maintaining reliability as we add more fluctuating renewable energy. These customers will receive credits for their participation.
» Value. Tomorrow’s utility will recalibrate the value of electricity. Not all electricity is created equally. Its price must reflect when, how, and where it’s generated and used.
Dynamic electricity rates will reflect the instant needs of the grid. When the trades are blowing and the sun is shining, energy can be cheaper. When the wind drops off and air conditioners crank up, the price will rise. Residents can take advantage of different prices throughout the day — or use batteries to buy low and sell high.
Cleaner transportation is another opportunity for tomorrow’s utility. Electric vehicles can run on renewable energy, while their batteries are built-in storage that can help manage the grid. By finding ways to put people in EVs, the utility can tap into nearly $20 billion that Hawaii consumers will otherwise spend on gasoline over the next decade.
Tomorrow’s utility shouldn’t be interested in selling you electricity or Westinghouse fans; it should put customers first and provide the control, choices and opportunities you need to participate in a low-cost, low-carbon energy system.