Hawaiian regulators approve time-of-use rate pilot to aid solar integration

Dive Brief:

  • Hawaii’s Public Utilities Commission (PUC) approved a two-year pilot program giving customers of Hawaiian Electric Co. (HECO) the option of choosing time-of-use rates, the Associated Press reports. 

  • The program is designed to encourage customers to shift their electricity usage to times when rates are lower, such as when solar power and other forms of renewable energy are available, and away from peak demand hours. As many as 5,000 customers will be allowed to sign up. 

  • The approval coincides with news that HECO is preparing to request a 6.5% rate hike for its Hawaii Electric Light subsidiary. The utility filed a grid modernization in April that included a $340 million allocation to expand smart metering, necessary for TOU rate adoption by customers. 

Dive Insight:

The road to 100% renewable energy is not necessarily smooth.

Solar power will likely be a large part of meeting Hawaii’s 100%-by-2045 renewable portfolio standard. But adding solar power to the state’s grid has created multiple problems.

HECO is concerned about grid stability, with some of its local feeders already overloaded with rooftop solar. Installers and solar adopters protested when the state ended its retail rate net metering program, but solar continues to grow. About 17% of HECO have solar panels on their rooftops and the state has already hit caps for a new net metering program on some islands. 

In the latest adaptation to meet the growth of solar power, the PUC has approved a pilot program designed to shift usage to times when solar power, and other forms of renewable energy, are abundant, and away from times when HECO has to fall back on conventional generation to meet demand.

The voluntary program creates three time periods, each with its own rates: mid-day from 9 a.m. to 5 p.m., on-peak from 5 p.m. to 10 p.m, and off-peak from 10 p.m. to 9 a.m.

The mid-day rates are designed to be lower than the typical customer pays under the current residential rate scheme, while the on-peak rates would be higher than the typical residential tariff.

On Oahu would pay $0.148/kWh during mid-day and $0.349/kWh during on-peak hours. Off-peak rates would fall to $0.219/kWh. On the Big Island, customers would pay $0.104/kWh during mid-day, $0.47/kWh for on-peak and $0.321/kWh for off-leak power.

"You want to create a rate structure, a pricing structure, to essentially force a change in behavior with respect to utility usage," Delmond Won, executive officer at the PUC, told the Associated Press.

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Filed Under: Solar & Renewables Energy Storage Distributed Energy Regulation & Policy
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