A portfolio of incentives that went into effect today will guide Hawaiian Electric as it operates under a new business model that emphasizes Hawaii’s clean energy goals.
The state’s Public Utilities Commission issued a decision and order approving the new Performance Incentive Mechanisms, or PIMs, which are key components of the new Performance-Based Regulation Framework that the PUC approved of December.
The PIMs, if achieved by Hawaiian Electric, will offer the utility financial incentives while providing savings and other benefits for customers.
“This decision underscores our commitment to transforming Hawaii’s energy future,” said PUC Chairman James Griffin in a statement. “Though we faced challenges developing these first-of-their-kind performance mechanisms, we all understand the importance in completing this part of the PBR Framework and ensuring the regulatory structure is well-rounded and balanced.”
Customers will benefit because the PIMs include goals such as “increased procurement of grid services from customer-based programs” and “improved collaboration with Hawaii Energy to reach low-to-moderate income customers and promote energy saving measures.”
The PBR Framework and the PIMs will help drop rates for customers as well — an average of $1.27 per month for typical residential customers.
This year, ratepayers as a whole will save about $12.6 million, the PUC said in a news release. Through 2025, that number is supposed to be $69.9 million.
Hawaiian Electric is now also incentivized to move toward cleaner energy, because one of the PIMs is “accelerated achievement of the State’s renewable energy goals,” the PUC said.
“We are very excited about this portfolio of PIMs,” said Commissioner Jennie Potter in a statement. “We wanted to develop PIMs that address a range of issues and incentivize exemplary performance across the board for the utility. Hawaiian Electric has the opportunity to financially benefit from taking on some challenging areas and delivering excellent service, which is a win-win-win for the utility, customers, and Hawaii’s renewable energy future.”
In addition to the PIMs, the PUC’s decision also includes different scorecards and reported metrics, which will track the utility’s performance in “a wide range of performance areas” to collect data for future use.
“This portfolio of PIMs, Scorecards, and Reported Metrics rounds out the PBR Framework approved in December and sets the foundation for future improvements in utility performance,” said Commissioner Leo Asuncion, Jr., in a statement. “On one hand, you have revenue adjustment mechanisms ensuring that the utility keeps costs down, and on the other, you have a portfolio of performance mechanisms pushing the utility to continuously improve.”