20 Years of Electric Plans

Changes could be in store for how Molokai is fueled. By the end of the decade, Liquefied Natural Gas (LNG) could replace the use of liquid petroleum fuel for electricity, if the new Hawaii Electric Company (HECO) long-term plan is followed. This would be more cost effective and cleaner, according to HECO’s Integrated Resource Planning (IRP) report, filed with the Public Utilities Commission (PUC) on June 28.

The 775-page document outlines potential scenarious for HECO’s future and how to meet energy needs. It includes the plan for LNG, which is a fossil fuel that has been converted to a liquid, which sharply decreases volume and eases transportation. Molokai’s Pala`au Power Plant could be prepped to run on LNG by 2018, according to the IRP.

The conversion to LNG is one way HECO is aiming to reach its IRP objectives: protect Hawaii’s culture and communities, protect Hawaii’s environment, provide electricity at a reasonable cost, reduce dependency on imported fossil fuels and improve price stability, increase the use of indigenous energy resources, provide reliable service and improve operating flexibility. The plan considers four different energy futures over the next 20 years. Each possible future is based on oil prices and how they will affect clean energy demand and policies.

In addition to LNG, HECO also aims to develop “smart” grids, which will improve customer service, integrate more renewable energy and enable customers to better control their electric bills, according to a HECO press release. On Molokai, this will mean integrating more renewable energy and enabling real-time communication between customers and Maui Electric Company (MECO), a subsidiary of HECO. Island-wide smart meters will be deployed on Molokai by 2017, states the IRP report.

MECO will upgrade its electricity transmission and distribution system on Molokai as a response to customer request, but the plan, which extends to the year 2033, does not pinpoint a time to do so.

“This planning includes the most meaningful promises we can make for our customers,” said Scott Seu, HECO vice president for energy resources and operations. “None of us is satisfied with the status quo. These commitments to action will move us to a cleaner, more secure and affordable energy future.”

Customer Frustrations

The IRP Report and Action Plan come as Molokai residents experience frustration with high energy costs and HECO’s lack of transparency. Molokai’s June 19 public hearing on the IRP drew a crowd of testifiers who wanted more details and more resolute promises. Because the hearing was so close to the date HECO was set to file the IRP with the PUC, the testimony wasn’t considered for the plan. MECO representative Matt McNeff said the comments collected would go into future MECO and HECO decisions. However, the general consensus at the hearing was the Molokai residents have had enough talking – they’re ready for action.

“Months of discussion produced this rather sketchy document with little public input,” said I Aloha Molokai member Cheryl Corbiell in an email she released after the IRP was posted online. However, the report repeatedly refers to HECO’s assessment of customer demand.

The plan also includes On-Bill Financing (OBF), which would make energy efficiency measures available to customers without an upfront cost. Upgrades to energy technologies would be paid over time through their electric bill using some of the costs saved because of the upgrades. OBF could help renters take efficiency measures, because responsibility for repayment stays at the location of installation and not with the resident, according to the IRP.

“OBF can fully achieve its objective of providing energy efficiency opportunities in underserved markets,” states the plan.

An alternative source of funds for the OBF could come from state-issued revenue bonds. The Green Infrastructure Program, which allows these funds to come from bonds, was signed into law the day before HECO filed the IRP. Under the legislation, MECO will include a non-bypassable Green Infrastructure Fee on all customers’ bills. The fee will go toward paying back bondholders.

Back on Molokai, basic structures could be improved. Within five years, deteriorated power lines may need to be repaired at a cost of $361,000 per mile, according to the IRP report. In sales forecasts, Molokai was the only island predicted to experience drops in megawatt-hour sales no matter which of the four futures considered become a reality.

The full IRP can be viewed at hawaiianelectric.com/IRP.

Game-Changing Orders

Undersea cables transporting wind power between islands is prominent in the IRP. However, much of Hawaii’s energy future could be determined by the results of HECO’s Request for Proposals (RFP) for a 200-megawatt renewable energy project to supply power to Oahu. Last week, the PUC issued a potentially game-changing announcement regarding the RFP’s development.

“After extensive review and deliberation, the PUC ordered HECO to modify the Final Oahu 200 MW Renewable Energy RFP by eliminating references to the undersea cable and Castle & Cooke’s Lanai wind project and gave additional guidance for the renewable energy RFP,” stated a PUC press release. “Conditions have significantly changed since the big wind projects and undersea cable were first proposed in 2008.”

The PUC ordered HECO to open an investigation to determine whether a transmission cable between Oahu and Maui is in the public interest and to complete a review of the progress on the potential Lanai wind project, among several other orders related to the RFP. These investigations will now be initiated separately from the RFP.

“The orders reflect the need for foundational information for a strategic systems approach as we consider new renewable energy generation projects and other major infrastructure investment to bring maximum value to Hawaii’s ratepayers for the long term,” said PUC Chair Hermina Morita.

The possibility of a large-scale wind project on Molokai or an undersea cable to the island has already been dismissed by state energy officials.