Analysis

PUC "Public Comment – Docket No. 2014-0183 – PSIPs"

October 6, 2014

The Honorable Chair and Members of the Hawai'i Public Utilities Commission

465 South King Street

Kekuanaoa Building, 1st Floor

Honolulu. Hawai'i 96813

 

Subject: "Public Comment – Docket No. 2014-0183 – PSIPs"

Dear Commissioners,

Hawaii Electric Light Power Supply Improvement Plan of August 2014 submission fails in several fundamental ways to provide the people of the state of Hawaii a path to fossil fuel-free energy future, one that can be completely powered by clean and renewable energy sources. 

We commend HECO for setting a power supply improvement goal for each of its component utilities in order to achieve a consolidated Renewable Portfolio Standard of 67% by 2030, which is in excess of the 40% required by statute.   However, in 2014, there are no longer valid economic or technological reasons that HECO and its subsidiary utility operators cannot transition by the year 2030 to achieving the goal of 100% solar, wind, wave, and other non-fossil fuel energy generation, based on a smart grid infrastructure that is interconnected, reliable, robust, and which primary power-generation sources are distributed and not utility owned and operated.

Today, commercially available renewable energy power options that do not emit CO2 and other toxic emissions into atmosphere are available from a number of utility suppliers – avoiding emissions that directly result in the acceleration of climate change impacts.  Image the clean energy growth in technology and solutions that will be available to HECO along the path to the year 2030.  The Commission cannot ignore the connection between Hawaii’s energy demands, HECO’s plan priorities, and the environmental consequences of regulatory decisions that are made to power demand.

HECO’s Power Supply Improvement Plan (PSIP) is replete with half-steps to a complete clean energy plan for Hawaii.  HECO’s PSIP calls for a transition from the direst of fossil fuel generation (diesel) to less dirty (approx. 50% the emissions) LNG.   It is understood that grid load balancing considerations require utilities to have at their disposal on-demand power generation options, but this not the way forward. Replacing one form of fossil fuel with another does not answer the intent of national Renewable Portfolio Standards or the goal to a fossil-fuel free Hawaii power grid.

HECO’s so-called “Preferred Plan” calls for changes in consumer rates that “… more fairly allocates fixed grid costs across all customers (assumed effective in 2017) is expected to reduce monthly bills for average residential customers by 27% from 2014 to 2030.”   HECO’s Preferred Plan appears less about rate equity and more about slowing future adoption of customer sited solar generation connected to the public power grid.  The “Preferred Plan” calls for raising the monthly rate minimum paid by HECO solar customers to more than 300% of the current utility monthly fee base of $20 for interconnection.   

It is possible, and likely, this minimum monthly rate change (regardless of power purchased from HECO and simply for being connected to the grid) would be better titled the Robin Hood Rate Plan. 

As proposed, the Plan will create additional economic barriers of entry in the adoption of solar by the general public (after solar system capital costs and installation fees) while rewarding those utility customers who do not adopt solar.   Such a plan provision defeats the very goals of clean energy adoption in Hawaii.    

HECO has participated in the net energy metering system that buys excess power from its customers at market prices for years, but failed to plan and adjust it operations as solar adoption grew in Hawaii, and now the utility’s ability to incorporate that energy back into the system has been strained. Poor planning by HECO and its subsidiaries should not be rewarded by the proposed changes by HECO to the NEM rules, especially changes that discourages solar adoption and bails out bad utility management decisions.  

The “Preferred Plan” also fails to consider and factor into account the present day power revenue donations made to HECO and its subsidiaries by its solar customers who generate more power than used and who are unable under Hawaii’s present NEM (net metering) rules to recoup the value of power “given” to HECO and its subsidiaries within each annual period.  To our knowledge there has not been an audit of the utility’s solar power generation customers or the value that this excess power generation has financially benefited for HECO and its subsidiaries. 

To repeat, HECO’s Power Supply Improvement Plan (PSIP) plan is replete with half-steps to a clean energy plan for Hawaii.  We urge the Commission to fully consider the following suggestions and direct HECO to amend their plan and to fully consider the following plan amendment recommendations.

§  HECO amends their plan to a business and revenue model that considers more than shareholder value, but will transition Hawaii’s electrical utilities from their current power generation and grid management model to a complete transition to clean energy options. 

§  In consideration of the first item, HECO must swift its business model to the 21st century, developing a corresponding utility revenue model that will replace the current power-generation model, and place it with a revenue emphasis on grid infrastructure management services, power back-up services for residential and commercial power-generating customers connected to the grid, and factor in the possibility and revenue opportunity of expanding into renewable power-enabling customer services.

§  HECO will drop plans for LNG adoption, and replace them a fossil-fuel free power generation mix to meet plan goals that includes the adoption of:

1.       Utility scale solar and wind adoption to replace primary non-renewable power generation base before the year 2030

2.       Grid-enabled power storage systems, pumped storage, battery, and other commercially proven utility-grade power storage technologies

3.       A Grid designed to support distributed power generation as the primary, not auxiliary power sources,

4.       Develop and provide optional power back-up services for Customer Generation Sites, supported by a fee plan that provides off-sets for cap-ex grid transition improvements.

 

Recycle, compose, or incinerate: Hawaii's trash future

 

Hawaii County’s (Big Island) efforts to address a growing problem of what to do with its municipal solid waste started off with grand goals and public pronouncements of “recycle and reuse”, but the “Maximize Waste Reduction, Sustainability, also included Energy Production as a caveat ” With energy introduced as element of the RFP, all other sustainable waste management goals were quickly pushed aside in which all roads led to incineration.

The County’s RFP process eliminated all non-combustion waste management options  “ …The County also wishes to maximize beneficial utilization of waste through production of energy…The Acceptable Technology must be the same thermodynamic, chemical, or mechanical design”.

With contradicting goals, the County RFP states how the Administration “…wishes to maximize beneficial utilization of waste through production of ENERGY, and to minimize social and environmental impacts.

The end disposal process for which Municipal Solid Waste is incinerated can only lead to production of significant levels of toxic air pollutants (emissions) to already endemic natural occurring (Kilauea-produced) air quality problems – VOG, a powerful respiratory irritant affecting all Hawaii residents.  

Union of Concerned Scientists considers waste-to-energy (WTE) plants that burn raw municipal waste to NOT be a sustainable form of energy production.  Waste-to-energy plants emit high levels of air pollution, including toxic metals, chlorinated compounds, and plastics.  

No new MSW incineration plants have been built in the United States since 1995 – and for good reasons...

Hawaii County’s High Cost for Water and Power

files/Hawaiis_High_Cost_of_Water_and_Power-2.pdf

Today, electric utilities face many challenges today.  Hawaii's HECO/HELCO while continuing their reliance on unsustainable fossil fuels to power the grid operations,  As renewable and distributed power sources become grid activated, former residential and business consumers of power become producers of power and then multiple benefits to society are realized.

 First and foremost, the reduction and dependence on imported fossil fuels in Hawaii is a shared goal by both utilities and consumers alike.

 A primary societal benefit in which Hawaii’s economy has benefited from the current statewide transition to a clean energy economy is high paying jobs in the solar and wind energy sectors. Hawaii’s energy future is increasingly tied to the growth and harvesting of local, renewable, clean energy sources. Another is the reduction and eventual elimination of harmful emissions derived from diesel-powered electricity generation plants used today by HELCO and its parent HECO.

 At the same time, electric utilities like HECO/HELCO are being forced to adopt a different business model: one that transitions from power generation provider to one of grid manager of an increasingly customer generated power grid made up of distributed clean power sources and from a legacy of utility-controlled centralized grid operations.  Before that day arrives, electric utilities must first address an increasing power management problem that includes load balancing between customer power generation and demand. Rolling back the clock on renewable (fossil fuel replacement) with clean power generation opportunities is no longer economically or politically possible for utilities.

 In a related development, Hawaii is facing its own form of climate extremes resulting from increasing warming planet. Like California, Hawaii County has within recent years faced its own drought cycles and changes to predicted rain fall patterns, both effecting water supplies and water reserves. Two undeniable and colliding factors are now at play in Hawaii County that link that water and power will be managed in the future.

 For electric utilities (HECO/HELCO), the opportunity and challenge in addressing load balancing concerns is storage. For Hawaii’s DWS storage of another kind is also a concern as an increasingly unpredictable climate impact supply and demand for water. For both utilities, cost of operation is always a factor to be improved upon:

 More than 50 percent of each HELCO consumer’s electricity bill is made up of fuel costs.  Hawaii County Department of Water Supply (DWS), largest single factor in its cost of delivering water services to Hawaii is the cost of electricity, not water.  Sixty-six per cent (66%) or nearly two-thirds of DWS’s revenue collected are allocated to pay for electricity supplied by Hawaii Electric Light Co. in support of delivering water to its customers.

 Both of Hawaii Island’s utilities will have to change the way they do business if costs are to come down and sustainable operating practices are to be implemented. The opportunity for collaboration between water and power utilities has never been greater.