HECO proffers its time-of-use energy prices to state’s PUC

Hawaiian Electric Co. filed plans for time-of-use rates with the state Public Utilities Commission on Thursday, a program designed to encourage customers to use more energy during off-peak hours and when solar power is strongest.

In a 178-page proposal, HECO laid out its plan for time-of-use rates for its customers on Oahu, Hawaii island, Maui, Molokai and Lanai. If it is approved by the PUC, residents will be able to choose whether they want to switch to the time-of-use rates from the flat rate they currently pay.

Under the time-of-use proposal, customers who opt in to the program on Oahu would pay 11.04 cents per kilowatt-hour from 9 a.m. to 4 p.m., 36.20 cents from 4 p.m. to midnight and 13.68 cents from midnight to 9 a.m. The flat retail rate on Oahu was 25.3 cents per kilowatt-hour last month.

"This time of use period structure incentivizes customers to move usage to the mid-day hours from all other hours," HECO said in the filing.

In October the PUC ordered HECO to develop a time-of-use rate for all customers so customers can choose to pay less for electricity during the middle of the day and more in the evening. That is to encourage electricity use when solar power is at its peak and cut down on the use of fossil fuels.

Ray Starling, program director of Hawaii Energy, a ratepayer-funded conservation and efficiency program, said a good time-of-use program can be the best way to increase energy efficiency.

"Good time-of-use rates can be the biggest incentive of all," Starling said. They help the system because they pull power from the system at a very cheap time and are able to cap energy needs during a time when it is most costly for the utility, he said.

Robert Harris, spokesman for the Alliance for Solar Choice, said the proposal is incomplete because it does not provide a similar price structure for those who provide power to the grid, such as solar owners. If the time-of-use program would pay a higher rate for solar power stored in a battery and sent to the grid at night, it would encourage more solar owners to get battery storage systems.

"It only solves one side of the equation," Harris said. "To encourage customer investment in storage so they can provide HECO power when HECO needs it the most, exported power needs to be credited similarly.

"If power is worth more later during the evening, it should be valued accordingly," Harris said.

In the order, the utility said the time-of-use rates are likely to favor those who can invest in a combination of solar generation and battery storage. HECO said it was open to continued discussions.

"TOU (time-of-use) rates may not be practical for families who work during the daylight hours and who do not have access to on-site generation and/or storage technologies," HECO said in the filing.

Customers who decide to use the program on the Big Island would pay 15.71 cents from 9 a.m. to 4 p.m., 46.39 cents per kilowatt-hour from 4 p.m. to midnight, and 17.87 cents per kilowatt-hour from midnight to 9 a.m.

Customers on Maui would pay 23.81 cents from 9 a.m. to 4 p.m., 45.70 cents per kilowatt-hour from 4 p.m. to midnight and 26.84 cents per kilowatt-hour from midnight to 9 a.m.

Customers on Lanai would pay 36.64 cents from 9 a.m. to 4 p.m., 52.36 cents per kilowatt-hour from 4 p.m. to midnight and 35.79 cents per kilowatt-hour from midnight to 9 a.m.

Customers on Molokai would pay 29.64 cents from 9 a.m. to 4 p.m., 52.85 cents per kilowatt-hour from 4 p.m. to midnight and 29.65 cents per kilowatt-hour from midnight to 9 a.m.

Those prices would be good for 2016 and be adjusted at the end of 2016 for the next year.