Customers won’t feel new rates, HECO says

Hawaiian Electric Co. President and CEO Dick Rosenblum defended the utility’s proposed rate changes Thursday, including the $55 minimum rate for all customers and higher monthly charge for new solar owners.

HECO’s energy transition plan, which it filed with the Public Utilities Commission on Tuesday, sets goals for 2030 of more than 65 percent of energy coming from renewables, customer bills decreasing by 20 percent and nearly tripling the amount of rooftop solar systems.

The proposal included a price structure change that would charge all customers a monthly fee of $55. New solar customers would be charged an additional $16 monthly interconnection fee.

According to HECO, this price change reflects a fair shift in costs for customers who don’t own solar. Non-solar customers pay approximately $38 million to HECO to subsidize solar customers, Rosenblum said.

Rosenblum, in an interview at the Honolulu Star-Advertiser, said that the introduced rate change would not drastically affect the average consumer’s monthly bill.

"The way it is calculated is if you are the average residential customer your bill should be essentially the same. No change," said Rosenblum.

Rosenblum said the additional charge for new photovoltaic owners is needed to cover the cost of integrating solar into HECO’s overwhelmed grid.

"Our system is essentially at capacity. It had spare capacity before. That has all been used up."

Rosenblum said he did not see the proposed fees making solar energy less appealing.

"It still is very attractive. It is just not the bubble we are seeing today," Rosenblum said. "What we are doing is really working with them to help them transition, so people can have this option for the long term in a way that is sustainable."

Rosenblum also addressed solar owners’ negative response to the plan.

"They are getting value and we just want them to pay their fair share," he said. "After two or three years their system is totally paid for but after that they are just getting a good deal. I’m not minimizing it. If I were getting the good deal, I would want to keep it, too. So, they ought to be screaming."

HECO’s plan must be approved by the PUC, which will hold public hearings before making a decision.

The additional $16 charge on top of the $55 monthly fee will only apply to PV customers who connect to the grid after PUCapproval of the plan, Rosenblum said.

One of the proposed goals of HECO’s plan that Rosenblum focused on was Hawaii’s use of liquefied natural gasenergy as a bridge to help transition the state to renewable energy, which include solar, wind, geothermal and biomass.

"Instead of the customers seeing an increase in order to accommodate the transition, the lower-cost LNG gives us room to do the rest of that work without a price shock to our customers," he said.

According to Rosenblum, the total price of the conversion to LNG from oil for all five islands is about $200 million. The two-phase model for LNG would begin with containerized LNG in 2017, and HECO said in 2022 the price of LNG would go down as the utility would switch to bulk deliveries.