Editorial: Manage costs of modernizing grid

It’s been a long time in coming, but Hawaiian Electric Companies are finally taking some necessary, initial steps toward becoming a 21st century power utility, one more geared to distributing the energy from various producers rather than producing and selling it all themselves.

Two major developments were reported this past week:

>> The state Public Utilities Commission (PUC) gave approval to HECO’s first phase of a grid modernization plan, a blueprint of technological upgrades to give the power grid capacity for two-way data exchanges.

This will, along with giving better energy tracking and control other efficiencies, allow for more finely tuned adjustments to accommodate more green energy on the grid than is now allowed.

>> The commission also approved contracts for six more grid-scale, solar-plus-battery-storage installations, demonstrating the agency’s focus on getting the utility edging closer to achieving the state’s clean-energy mandates.

These are encouraging developments viewed broadly, but ensuring that the benefits are worthwhile will require continuing oversight from the PUC and other officials.

For example, one of the six solar installations hinges on the approval of a proposed state law that would allow such such solar arrays to be built on prime agricultural land. That legislation should not be allowed to pass, and the developer in this case, Ho‘ohana Solar I, should find another location for its 52-megawatt solar farm.

Clean energy development is an imperative for Hawaii, which is working hard to wean itself off a dependence on fossil fuels. But it’s not a net gain for the state if it means sacrificing good agricultural land, which Hawaii also urgently needs to keep in production.

And as for the “smart grid”: The PUC needs to ensure that the utility stays on track in delivering its advantages to as many of its customers as possible.

For the present, the approved version of the modernization plan is a scaled-down version. The last proposal, dubbed the Smart Grid Foundation Project, was filed with the PUC three years ago but was dismissed over cost concerns.

After fulfilling a commission directive to file a modernization strategy, HECO opted for the current plan, which sets a more targeted goal of deploying “smart meter” technology to an estimated 175,170 customers.

These are largely customers living in areas that already have a high degree of home-generated solar energy being added to the grid. The modernization of these more-saturated circuits will allow more solar units to be connected to the grid safely, said Shannon Tangonan, HECO manager of corporate communications.

The changes will come at a cost, however: $86.3 million is what the utility projects as the pricetag for the improvements in the current phase.

HECO will recoup its expenses through a fund paid in by customers; the increase in monthly billing for this purpose will amount to 24 cents more on Oahu, 34 cents on Maui, 27 cents on Molokai and Lanai, and 55 cents on Hawaii island, where the greater distances mean a larger investment in infrastructure.

This does not sound like much, but remember: It’s only Phase 1. The utility must work to project a more comprehensive estimate of costs so ratepayers know what to expect, long-term.

While the full benefits of the first round of improvements won’t accrue to everyone, the modern grid will ultimately help enable smaller community-solar projects.

In these developments, a ratepayer can reap the savings produced by a communally financed solar installation, requiring a lower-cost investment. Community solar is a program now enabled in law but not yet realized; the PUC should see that it is.

HECO does counter the argument that solar energy savings is an option enjoyed only by the wealthy. Costs have come down for installations, Tangonan said, and there are other, increasingly accessible options soon to be unveiled. On-bill financing is just around the bend, she said, and through this program more people will be able to pay off their photovoltaic panel installation costs incrementally, through their electric bill.

Among the interest groups happy, finally, to see the advent of the smart grid and other changes is the nonprofit Blue Planet Foundation. However, Jeff Mikulina, the advocacy group’s executive director, points to the success story of customer-owned Garden Island utility, the Kauai Island Utility Cooperative. The much more nimble KIUC had smart metering done a decade ago, he said.

Yes, HECO has a much more challenging scale of work to accomplish than does the small co-op. But 10 years is already too long to wait for it to catch up.

Hawaii was the first to set out the goal of 100 percent clean energy by 2045. Today, California and New Mexico are following suit. It is great that, from a policy standpoint, Hawaii is leading the way.

But the PUC must now press for implementation that effectively realizes the goal. That’s what really will spell success.