HECO gets OK for initiative to control customer use

Imagine the electric utility raising the temperature of your refrigerator a couple degrees, briefly and harmlessly, to save electricity — and paying you for it.

That could be in the not-so-distant future for Hawaiian Electric Cos. following a recently approved regulatory framework that allows for a dramatic expansion of the utility’s ability to manipulate the energy use of willing customers.

This operation referred to as “demand response” will let residential and commercial customers volunteer to have certain power-consuming devices occasionally controlled by HECO so the utility can manage the alignment between electricity supply and demand as more sources of renewable — and variable — energy generation are added to electricity grids throughout the state.

Such an arrangement is important because demand could exceed supply on very cloudy or windless days in the future when considerably more power production depends on solar panels and wind turbines.

“The idea is that the customer participates in keeping the grid stable and reliable, and they are paid for that,” said HECO spokesman Peter Rosegg.

The state Public Utilities Commission, which issued a decision approving the framework Jan. 25, said demand response is key to HECO increasing its renewable energy supply.

“Making beneficial use of (demand response) programs is a critical step along the accelerated path to 100 percent renewable energy,” the commission said in its approval.

Last year, HECO’s renewable energy use was 27 percent of statewide electricity sales, up 1 percentage point from the prior year and on pace for at least 30 percent in 2020.

By county, renewable energy use over the last year rose on Oahu to 21 percent from 19 percent, slipped for Maui County to 34 percent from 37 percent because of weather and equipment issues that reduced wind power, and rose on Hawaii island to 57 percent from 54 percent.

HECO has several limited and relatively small-scale demand response programs in operation now. They include hotels allowing the control of noncritical equipment, such as water features and certain elevators; some residential customers allowing manipulation of their water heaters; and other customers permitting brief shut-offs of split air-conditioning systems.

Expanding such programs has been under analysis and discussion for more than two years through a PUC process that involved public hearings and the state Consumer Advocate, community group Life of the Land, the Distributed Energy Resources Council trade association and the state Department of Business, Economic Development and Tourism.

Specific programs and participant incentives still need to be proposed by HECO and are subject to PUC approval, but the utility anticipates that initial users on Oahu and Maui will connect equipment in the second half of this year. Programs for customers on Hawaii island, Molokai and Lanai are expected to come online by 2020.

Rosegg said initial users likely will be companies that use a lot of electricity and can have a big impact on the grid. A rollout of programs for residents is expected to be slower.

Participation is voluntary. Incentives could be credits on a customer’s bill or reduced electricity rates.

Currently, HECO pays residential customers in its existing but closed Energy Scout program $3 a month for the ability to turn off water heaters. That program was limited to 34,000 customers on Oahu, where HECO has about 350,000 residential customers.

Rosegg said he doesn’t know if this program would be reopened or exactly what devices might be included in new residential programs.

Demand response is suited for devices that people don’t interact with, so connecting a TV or stove isn’t foreseen, he said. Rosegg added that depending on advancing technology, it could be possible to connect energy-hogging refrigerators to the grid in the future so they can be turned down slightly for brief periods without harm, or to pull electricity out of batteries in electric vehicles plugged into the grid.

Right now on the commercial side, HECO has a pilot project with about 30 small businesses that have batteries totaling 1 megawatt of capacity that the utility can tap. The Honolulu Museum of Art has emergency generators that it can turn on to reduce electricity use if HECO requests. And the 500-unit apartment complex Kapolei Lofts has a hot water system that HECO can instruct to heat water at optimal times.

All the programs and incentive pricing that HECO rolls out will be aimed at allowing more renewable energy production and saving money so that customers don’t pay more regardless of whether they participate in a demand response program.

“Nobody’s bill should go up as the result of somebody else participating in this,” Rosegg said.