Diversity is the key

Gov. David Ige laid out his vision to wean Hawaii off fossil fuels Tuesday, listing the increased use of batteries with solar systems, the short-term use of liquefied natural gas and the reduction in incentives paid to solar owners as changes he’d like to see.

Taking office amid the pending sale of Hawaiian Electric Co., Hawaii’s largest electrical utility, Ige said he is keeping an open mind about the purchase as long as the Public Utilities Commission determines residents will benefit and the new company will stick to the state’s energy goals. The sale of HECO to Florida-based Next­Era Energy Inc. requires approval of the PUC and has generated concern about the loss of local control.

"Concerns that I have as governor and that we will ensure through the process, the regulatory review process, is really that the community’s and the public’s interest is exercised and examined," Ige said in an exclusive interview with the Hono­lulu Star-Advertiser.

"We have started and initiated this path to a renewable future, so we want to make certain that the acquisition, or the proposed acquisition, really doesn’t hamper or deter from our long-term commitment to 100 percent renewable future for the electric utility," the governor said.

Ige also said he supports converting Hawaii power plants to LNG, which could potentially lower the cost of electricity in the short term as the state shifts gradually toward more renewable energy sources.

From an electrical utility perspective, "yes, LNG must be just a bridge fuel," he said. "It must be a transitional fuel. … LNG does offer the opportunity to reduce costs in the near term, but it is still an imported fossil fuel."

Many environmentalists, including Blue Planet Foundation Executive Director Jeff Miku­lina, question whether investing in LNG will only delay the switch to renewable energy.

"We don’t want to be addicted to another fossil fuel that doesn’t service our interest in a low-cost, low-carbon future," Miku­lina said. "No one has articulated what that bridge looks like."

Ige said the state could move away from LNG once technology delivers other cleaner and reliable sources of power.

"The question of how long a transition, I think, really depends on the development of other technologies. It really does depend on (battery) storage," Ige said. "It depends on how quickly we can upgrade our grid and the technologies to allow for more rooftop PV in a way that can maintain the grid."

Companies are racing to develop affordable, safe batteries that can power homes from renewable power sources such as solar.

Ige said his administration will work to add more rooftop solar power, but changes need to be made to how much solar owners are paid for the excess energy their systems produce.

Solar customers will receive lower payments for the power they send to the grid, Ige said, adding that is consistent with the decreasing amounts the utility pays utility-scale power producers, such as wind farm operators.

"We do need to make adjustments," Ige said. "We’ve changed … the power purchase agreements, and it does make sense that we look at changing the net energy metering."

Net energy metering refers to the price HECO pays rooftop solar owners, which is currently about 29 cents per kilowatt-hour on Oahu, the same price retail customers pay HECO for power. HECO has proposed cutting the amount it pays new solar owners nearly in half. The rate was set at a level that would encourage homeowners to buy solar systems.

Ige said a major concern when adjusting the price will be to make it so the structure is beneficial for all ratepayers.

"The challenge is how do you deal with people who have made the investments previously and what is fair to them and how do you get equity amongst all the new people coming on line," he said.

Before deciding on net energy metering, the fiscal benefits of solar connected to the grid to all electric customers should be considered, said Leslie Cole-Brooks, director of the Hawaii Solar Energy Association.

"Perhaps there is going to be a change, but we want to see the full analysis," Cole-Brooks said. "There has never been an analysis of the benefits to the grid solar provides. Maybe it will turn out that NEM (net energy metering) should be less than retail; maybe it will turn out it will be more than retail."

With the pending purchase of the state utility and potential changes to NEM, it is more important than ever for the governor to provide direction, said the Blue Planet’s Miku­lina.

"He is really entering a pivotal year for clean energy in Hawaii. Now is really a time to demonstrate that vision and leadership in energy because we are making these potentially long-term infrastructure decisions."

Despite advocating a change in net energy metering, Ige said helping to increase solar will be a focus of his administration.

"Right now rooftop solar is top of mind with many consumers, and we want to make sure that we can be aggressive with allowing communities and people in our community who want to make that investment to have that opportunity," Ige said.

Ige listed community solar — or larger systems for residents who don’t have roof space for solar — as another option to increase the renewable energy resource in Hawaii.

As solar power’s reliability fluctuates with the time of day, Ige noted other renewable energy sources that can help get the state to its goals.

"The advantage of wind is it can be blowing any time of the day," Ige said.

Geothermal and wave energy will also be important renewable options to help power the state, Ige said.

Batteries are "the next great breakthrough" for adopting more renewables, Ige said.

"We see battery prices dropping all the time. There is significant interest and investment in that. That will allow us to move forward with the renewables," he said.

Ige said that the state should encourage battery use with solar systems.

"We need to encourage investment in them and figure out how we can get them into the grid," Ige said.

One of Ige’s first steps in energy policy was to appoint Randy Iwase, a former state senator, as chairman of the PUC in January. Iwase last month got HECO CEO Alan Oshima to agree to free up a backlog of solar system approvals. Oshima signed a letter saying HECO has an "affirmative duty" to connect solar customers and must seek PUC approval to delay approvals.

Ige was firm about the need to upgrade the state’s current goal of 40 percent renewable energy use by 2030, citing HECO’s goal of renewables making up 65 percent of the utility’s energy mix that same year.

The interim target for renewables was 15 percent by 2015, but the state was already at 18 percent in 2013.

"We need to change the Renewable Portfolio Standards and set a different goal because we clearly are on target," Ige said. "The fact that HECO in their planning documents are reflecting just under 70 percent renewables by 2030 really means the clean initiative goals are too low and we ought to be looking at increasing it a little bit."

On Tuesday at the Legislature, two bills setting a target of 100 percent renewable energy in Hawaii by 2045 at the latest survived the crossover to the other chamber for consideration.

The governor said he agreed with the goal of 100 percent renewable energy dependence but did not provide an exact date when he believes Hawaii can reach that mark, saying he wants targets that are "aspirational but not out of touch with reality."

As for his own home — before moving into the governor’s residence — Ige said he had rooftop PV and a solar water heater for years.

"I did install solar panels on my previous home," he said. "It was maybe the second year when solar had really taken off."

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CORRECTION: Jeff Mikulina is the Executive Director of Blue Planet Foundation, and not the Sierra Club. An earlier version of this story said he also worked for the Sierra Club.