Big Win for Solar in Hawaii as PUC Rejects HECO’s Integrated Resource Plan

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Hawaii solar gets a major boost with a ruling from the Hawaii Public Utilities Commission ordering Hawaiian Electric Companies to develop a distributed generation interconnection plan in the next 120 days. The plan is designed to help HECO define the utility of the future.

We’ve been writing a lot about solar in Hawaii lately. It’s not just that we love Hawaii — though of course we do. But Hawaii, with its increasingly high grid penetration, has become a test case for the rest of the nation. What happens there could set the stage for solar in other states.

Hawaii solar has been having its ups and downs. The Board of Electricians and Plumbers just issued new rules requiring that electricians bond and ground solar PV systems, which solar advocates fear will increase the cost of installing solar.

 

However, that was followed by some much better news from the Hawaii Public Utilities Commission (PUC). On Tuesday, the PUC, backed by the governor, sent a very strong message to Hawaiian Electric Companies (HECO), the utility Hawaiians love to hate.

 

In a rejection of HECO’s integrated resource plan, the PUC told HECO that it’s failed to advance a sustainable business model. The PUC said that HECO is not doing enough to lower electricity rates and connect more solar PV systems to the grid. Hawaii residents have been complaining of extremely long waiting times to get their systems connected.

 

As commissioner Michael Champley stated, “The commission recognizes the inability to interconnect is a major source of customer frustration and has to be dealt with promptly.”  

 

The upshot? The PUC ordered HECO to develop a “distributed generation interconnection plan” in the next 120 days.

 

The PUC’s move is another significant development in Hawaii solar that could serve as a model for the rest of the country. As PUC Chairwoman Hermina Morita said in a news conference, the plan is designed to help HECO “define the utility of the future.”

 

The PUC laid out these orders for HECO:

 

  • Implement plans to reduce energy costs.

  • Be more proactive on integration challenges.

  • Improve the process to interconnect PV systems.

  • Embrace customer demand response programs.

 

Commissioner Lorraine Akiba said, “It is now incumbent upon the Hawaiian Electric Companies to use this roadmap diligently and promptly to move forward.”

 

HECO issued a statement indicating that it welcomed the PUC’s roadmap. Although the company stated it’s already working on many of the now-mandated initiatives, the new order flies in the face of their current reality.

 

Details on the new roadmap for HECO can be found on the PUC site. For those interested in digging in a bit further, here are the main points:

 

  • Integrated Resource Planning (Docket No. 2012-0036, Order No. 32052, “IRP Order”) – which rejected the HECO Companies’ Integrated Resource Plan submission, and, in lieu of an approved plan, has commenced other initiatives to enable resource planning and proffered a white paper entitled, “Commission’s Inclinations on the Future of Hawaii’s Electric Utilities.” The white paper outlines the vision, strategies, and regulatory policy changes required to align the HECO Companies’ business model with customers’ changing expectations and state energy policy; and provides specific guidance for future energy planning and project review, including strategic direction for future capital investments.

  • Reliability Standards Working Group (Docket No. 2011-0206, Order No. 32053, “RSWG Order”) – which makes various rulings regarding the final work product of the working group, and provides the PUC’s observations and perspectives regarding integrating utility-scale and distributed renewable energy resources in a reliable and economic manner; and directs the HECO Companies, and in some cases, the Kauai Island Utility Cooperative, to take timely actions to lower energy costs, improve system reliability, and address emerging challenges to integrate additional renewable energy.

  • Policy Statement and Order Regarding Demand Response Programs (Docket No. 2007-0341, Order No. 32054, “Demand Response Policy Statement”) – which provides specific guidance concerning the objectives and goals for demand response programs, and requires the HECO Companies to develop a fully integrated demand response portfolio that will enhance system operations and reduce costs to customers.

  • Maui Electric Company (MECO) 2012 Test Year Rate Case (Docket No. 2011-0092, Order No. 32055, “MECO Order”) – which accepted the PUC consultant’s reportreviewing MECO’s System Improvement and Curtailment Reduction (SICR) plan and directs MECO to file a Power Supply Improvement Plan to address the SICR plan’s shortcomings.