PUC Docket Proceedings
Energy is one of the sectors regulated by the Hawai’i Public Utilities Commission (PUC). Established in 1913, the Hawai’i PUC’s primary duty is to protect consumers by overseeing and regulating public utilities. That means ensuring safe, reliable service is provided at just and reasonable rates. The PUC’s role has expanded from traditional utility regulation involving rate cases, major project approvals (e.g. capital projects, fuel supply agreements, power purchase agreements), and review of long-term plans to oversight over major energy policy directives and program implementation. This includes, for instance, Hawai’i’s 100% Renewable Portfolio Standard (RPS), which mandates 100% of net electricity sales come from renewable sources by 2045, and an energy efficiency portfolio standard (EEPS), which calls for a 30%, or 4300 GWh reduction in electricity usage by 2030. Below is a summary of the major ongoing energy policy docket proceedings.
Community-Based Renewable Energy (CBRE) – Docket No. 2015-0389
This docket was opened in October 2015 to review an application for approval to establish a rule to implement a community-based renewable energy (CBRE) program. Community-Based Renewable Energy (“CBRE”), also known as shared renewables, allows customers who cannot site solar, small wind, or other renewable distributed generation on their own property to participate directly in off-site projects through a bill credit arrangement. Act 100, 2015 Session Laws of Hawai’i, required each electric utility file, a proposed community-based renewable energy tariff or tariffs for the PUC’s review and “establish[ment,]” provided that said tariff or tariffs “are found to be in the public interest.”
The program consists of two phases, each of which includes a capacity limit, as well as a time limit, to help ensure technical integration with minimal impact to grid stability, and successful implementation from a customer experience standpoint regarding bill crediting and customer service. Phase 1 aims to establish foundational capabilities and gain experiential learning. Towards this end, eight megawatts (MW) of solar photovoltaic (PV) program capacity was made available across Hawaiian Electric Companies’ service territories, with capacity amounts and credit rates varying by island. Phase 2 is intended to be the long-term continuation of the CBRE Program with allocated capacity to be released in increments, based on the utilities’ periodically updated resource plans and market demand. It will also encompass periodic program updates based upon customer needs and lessons learned. Phase 2 is more sophisticated in design as it incorporates time-varying credit rates and extends the program to peaker facilities that produce at least 85% of their average monthly output during on-peak hours and utility-owned facilities that serve at least 50% of low-to-moderate income customers.
- In December 2017, the CBRE program framework was adopted (Decision and Order No. 35137).
- In June 2018, the Public Utilities Commission (PUC) approved Hawaiian Electric Companies’ CBRE tariff and related filings with modifications and directs Hawaiian Electric Companies to implement their CBRE program. The PUC directed Hawaiian Electric Companies to file for CBRE program cost recovery in a separate docket (Order No. 35560).
- In August 2018, Hawaiian Electric Companies filed their request for the CBRE program cost recovery requesting the PUC approval to: 1) recover the costs of any unsubscribed energy and associated revenue taxes through each Company’s respective Energy Cost Adjustment Clause (“ECAC”) or Energy Cost Recovery Clause (“ECRC”) to the extent such costs are not included in base rates; 2) recover the cost of any compensable curtailed energy and associated revenue taxes through each Company’s respective Purchased Power Adjustment Clause (“PPAC”); and 3) account for CBRE Bill Credits as reductions to base revenues and ECAC revenues or to ECRC revenues
- In February 2020, the PUC approved Hawaiian Electric Companies’ cost recovery and accounting treatment related to the CBRE program (Decision and Order No. 37007).
- In April 2020, the PUC convened Phase 2 of the CBRE program and established seven objectives to significantly increase participation in the CRBE program (Order No. 37070). Based on these objectives, the PUC discussed the following elements of Phase 2: program capacity, the procurement process, project capacity and distribution, capacity reserved for smaller projects, mechanisms to serve residential and low-to-moderate income (LMI) customers, and special considerations for Molokai and Lanai. The PUC also set forth dates for Hawaiian Electric Companies’ to submit comments, draft tariffs and RFPs, and the convening of a technical conference to discuss the draft tariffs and RFPs.
Transferred unallocated capacity from Phase 1 to Phase 2
Competitive Bidding to Acquire Dispatchable and Renewable Generation – Docket No. 2017-0352
The Public Utilities Commision (PUC) initiated this docket, in order to proceed with competitive procurement of dispatchable firm generation and new renewable energy generation. On July 14, 2017, the PUC issued an order accepting Hawaiian Electric Companies’ Power Supply Improvement Plans (“PSIPs”), which set forth Hawaiian Electric Companies’ intention to competitively procure new grid-scale generation resources. Those plans included procurement of nearly 400 MW of new renewable resources across the Hawaiian Electric Companies’ service territories by 2021. This docket is opened in order for the PUC to receive filings, review approval requests, and resolve disputes if necessary in the request for proposals (RFPs) process.
The Framework prescribes that the following steps should take place prior to distributing the Final RFPs:
- The utility determines how to incorporate certain recommendations from interested parties in the draft RFPs;
- The utility submits its final, proposed RFPs to the PUC for its review and approval (and modification if necessary) according to the following procedure:
- The Independent Observer shall submit its comments and recommendations to the PUC concerning the RFPs and all attachments, simultaneously with the electric utility’s proposed RFPs.
- The utility shall have the right to issue the RFPs if the PUC does not direct the utility to do otherwise within thirty (30) days after thePUC receives the proposed RFPs and the Independent Observer’s comments and recommendations.
- In January 2018, the PUC provided guidance on Hawaiian Electric Companies’ Proposed Request for Proposals for Dispatchable and Renewable Generation and appointed independent observers (IO) to serve as the monitor of the competitive bidding process and to report on the progress and results to the PUC (Order No. 35224).
- On April 6, 2018, the PUC established the Performance Incentive Mechanisms (PIMs) applicable to procurement in Phase 1 of the Hawaiian Electric Companies’ Final Variable Request for Proposals (Order No. 35405)
- In September 2018, additional shared-savings performance incentive mechanisms were approved up to a cap of $3,000,000, applicable to power purchase agreements (PPAs) beyond the Base PPAs that Hawaiian Electric Companies submit to the PUC by March 31, 2019 (Order No. 35664).
- Related: in March, 2019, six solar-plus-storage projects were approved on three islands (power purchase agreements filed in Docket Numbers 2018-0430, 2018-0431, 2018-0432, 2018-0434, 2018-0435, 2018-0436).
- On July 10, 2019, Proposed Final Stage 2 RFPs for the islands of Oahu, Hawai’i, and Maui were filed with thePUC.
- In August 2019, the PUC transferred Hawaiian Electric Companies’ Proposed Draft Requests for Proposals for Molokai and Lanai to Docket No. 2019-0178 (Order No. 36494).
- In October 2019, in reviewing Hawaiian Electric Companies’ Phase 2 Performance Incentive Mechanism (PIM) proposals, the PUC made adjustments to the PIM design for Phase 2 in recognition of the increased volume, diversity, and complexity of this phase of the procurement (Order No. 36604).
Related Docket Nos. 2014-0183, 2011-0038, 2003-0372, 2018-0433, 2019-0050, 2019-0178.
Decoupling – Docket No. 2013-0141
The Public Utilities Commission (PUC) initiated this docket to re-examine the existing decoupling mechanism (established in Docket 2008-0274), to determine whether it is serving its intended purpose, is fair to Hawaiian Electric Companies and its ratepayers, and is in the public interest. Decoupling is a regulatory tool that modifies the traditional rate-making model where utility revenues is tied to electricity consumption (i.e. increased electricity sales translates to higher revenue; under decoupling, Hawaiian Electric Companies is guaranteed a PUC-approved revenue regardless of the quantity of electricity sold. This is intended to align the financial interests of Hawaiian Electric Companies with that of Hawai’i’s clean energy goals (e.g. renewable energy and energy efficiency). The decoupling mechanism is comprised of two components: the Revenue Balancing Account (RBA) and the Revenue Adjust Mechanism (RAM). The RBA serves to “de-link” or decouple revenues from the amount of electricity sold and adjusts monthly on one’s utility bill. The RAM serves to compensate Hawaiian Electric Companies for changes in utility costs and infrastructure investment between rate cases, which the utilities must file every three years. This docket resulted in a cap on the RAM and revisions to the RBA tariffs (Decision and Order No. 31908 and Order No. 32735), reporting of performance metrics on Hawaiian Electric Companies’ website, and the establishment of performance incentive mechanisms related to reliability and customer service.
Related Docket No. 2008-0274.
Demand Response (DR) – Docket No. 2015-0412
This docket was opened in December 2015 following Hawaiian Electric Companies’ application for approval of a demand response program portfolio tariff, reporting schedule, and cost recovery of program costs through the demand-side management surcharge. Demand response (DR) programs focus on peak reduction and are designed to modify customer use of electricity so as to permit the most efficient and cost-effective operation of the electrical system. DR programs use two basic mechanisms: time-based pricing (ex: on-peak/off-peak pricing, real time pricing) or an automated or manual control program).
This is a continuation of Docket No. 2007-0341 to develop a framework for a demand response (DR) portfolio that can assist in the integration of additional renewable resources onto the grid, contribute to system reliability, and offer customers greater control over their energy usage while offering the possibility of lower customer bills. Ultimately, the vision is for DR to mature to become a fundamental component of a virtual power plant of renewable distributed energy resources (DER).
- In January 2018, the Public Utilities Commission (PUC) approved Hawaiian Electric Companies’ revised DR portfolio tariff, resulting in four grid service rules (capacity grid service, fast frequency response grid service, regulating reserve grid service, and replacement reserve grid service) and rate schedules and riders upon which the DR programs are to be deployed in support of the grid service rules. Customers will receive compensation by allowing third-party providers, also known as “aggregators” to control their equipment to help manage the grid. The PUC directs the Hawaiian Electric Companies to submit revised tariffs detailing the design and operation of the proposed Demand Response Adjustment Clause (DRAC) (Decision and Order No. 35238).
- In August 2019, the PUC approved Hawaiian Electric Companies’ proposed DRAC for HECO and MECO and declined to grant HECO’s and MECO’s request for approval of their proposed Demand Response Performance Incentive Mechanism Provision (“DR PIM”) tariffs. The DRAC is a component in the Integrated Resource Planning cost recovery provision to accommodate the uncertainty of variable costs incurred to launch and grow the DR programs (Decision and Order No. 36453).
Distributed Energy Resources (DER) – Docket No. 2014-0192
The Public Utilities Commission (PUC) initiated this docket in August 2014 to investigate the technical, economic, and policy issues associated with distributed energy resources (DER). Distributed energy resources include distributed generation, energy efficiency, demand response, electric vehicles, and distributed energy storage. This docket has resulted in the approval of revisions to interconnection standards for inclusion in Hawaiian Electric Companies’ Tariff Rule 14H as well as new program offerings (customer self-supply, customer grid-supply, customer grid-supply plus, smart export, net energy metering plus) following the closure of net energy metering (NEM) to new participants in 2015. These interconnection standards and programs aim to expand customer options and ensure that customers can efficiently interconnect new DER systems that are configured to provide grid-supportive benefits. This docket also established a residential time-of-use pilot to incent customers to shift their electricity consumption from the evening hours to the mid-day when the sun is shining. This evolution in DER policies is essential given the State’s commitment to meet a 100% renewable portfolio standard by 2045.
Phase 1 of this docket focused on establishing a transitional market structure for DERs. Phase 2 of this proceeding, builds upon the transitional market structure established to develop a set of longer-term policies to enable continued beneficial deployment of DER across the State. This will include an evaluation of opportunities to integrate and aggregate various forms of DER (e.g., solar PV, energy storage, demand response, etc.) to enhance their value, adoption of new technical requirements for safely and reliably interconnecting DER, as well as detailed consideration of regulatory policies (including rate design) appropriate for cost-effectively acquiring these resources.
- In October 2015, the PUC closed the Net Energy Metering (NEM) program to new participants. In the NEM program each kWh of energy exported to the grid was credited against customers’ bills at a rate equivalent to the effective retail rate. The PUC approved the Hawaiian Electric Companies’ proposed customer self-supply (CSS) tariff which allows customers to install DER systems that do not export excess energy to the grid. The PUC also approved the proposed customer grid-supply (CGS) tariff which allows the export of excess energy to the grid in exchange for energy credits against the customer’s bill. Under the CGS tariff, the energy credit is set at a fixed rate (for 2 years) equal to the 12 month average on-peak avoided cost ending in June 2015 for each island grid. The PUC ordered that Hawaiian Electric Companies shall establish an initial cap on the availability of the CGS tariff, equal to 25 MW for HECO, and 5MW each for MECO and HELCO service territories. The PUC also approved a minimum bill of $25 for residential customers and $50 for small commercial customers interconnecting under the CSS tariff. (Decision and Order No. 33258).
- In July 2016, the PUC approved revisions to CSS for private rooftop solar installations that are designed to not export any electricity to the grid, and Rule 14H Interconnection of Distributed General Facilities dictating communication and interconnection requirements. The revisions to CSS would reduce the inadvertent export duration from 60 to 30 seconds by changing CSS’s “Non-Export Requirements”. Revisions to Rule 14H clarified expedited Review for Self-Supply Systems, and that Advanced Inverter standards are in effect (Decision and Order No. 33791).
- Effective September 2016, enrollment into the existing Schedule TOU-R tariff shall be closed. Applications received before September 16, 2016 will continue to be considered for service under the terms and conditions of Schedule TOU-R and Schedule TOU EV, respectively. The PUC instructed the Hawaiian Electric Companies to submit tariffs for an interim time-of-use (TOU) program. The Interim TOU tariff shall be available to all residential customers, including those with electric vehicles, and all existing Schedule TOU-R participants may opt into the Interim TOU Program (TOU-RI) at any time (Order No. 33923).
- In October 2016, Docket 2015-0410 (Department of Education Time-Of-Use Rates) was transferred to Docket 2014-0192 (Order No. 33959).
- As directed in Order No. 33923, Hawaiian Electric submitted their TOU-RI tariff. Effective October 18, 2016, optional service under the TOU-RI is limited to 5,000 residential customers. The time-of-day rating periods for all Hawaiian Electric Companies Interim Time-of-Use Tariffs are On-Peak: 5:00p.m.-10:00 p.m. daily, Mid-Day: 9:00a.m.-5:00 p.m. daily, and Off-Peak: 10:00p.m.-9:00 a.m. daily.
- In October 2016, the PUC clarified electric vehicle owners can still sign up for a “TOU EV only” rate schedule under the interim TOU program without having to simultaneously adopt the interim TOU program for their residential consumption (Order No. 33976).
- Effective November 21, 2016, the Hawaiian Electric Companies’ submitted revisions to the existing schedule TOU-RI tariff to expand its applicability to customers with electric vehicles solely for the purpose of charging their EVs at the customer’s place of residence.
- In December 2016, the PUC denied Hawai’i PV Coalition’s, Hawai’i Solar Energy Association’s, SunPower Corporation’s, and The Alliance for Solar Choice’s request for an unspecified upward adjustment to the CGS tariff cap. The Solar Parties stated that the popularity of the CGS tariff had resulted in the rapid depletion of available CGS cap space. The PUC replied that approving an upward adjustment of the CGS tariff cap before the Hawaiian Electric Companies have finished developing a CERE offering, is contrary to the PUC’s intent to enable the success of the CBRE program, pursuant to statutory requirements (Order No. 34205).
- In December 2016, the PUC established priority issues, technical track issues, and market track issues as well as a procedural schedule which shall govern Phase II of the proceeding (Order No. 34206).
- In October 2017, the PUC established among other things an interim customer grid-supply plus (CGS+) program, where customers are allowed to export energy to the grid throughout the day, but the utility is allowed to manage its output (like disconnecting the system or curtailing its output). The PUC found that the 12-month average on-peak avoided cost is a reasonable interim approximation of the relative value of energy exported to the grid from CGS+, and the updated credits are to remain fixed for 5 years. The PUC also approved an interim Smart Export (SE) program which sets export (12am – 9am; 4pm – 9pm) and non-export windows (9am – 4pm) and corresponding export credit rates based on 2017 average marginal cost data that remains fixed for 5 years. During the non-export window, systems that do export energy are not compensated. SE and CGS+ customers will be required to enable advanced inverter functions, to help mitigate any impacts said DER systems will have on grid reliability (Decision and Order No. 34924).
- In February 2018, the PUC approved the proposed tariff revisions to CSS and CGS and approved with modifications, the proposed tariff revisions to Rule No. 14H. The PUC also approved, with modifications, the proposed tariffs for CGS+ and SE (Order No. 35266).
- In June 2018, the PUC approved Hawaiian Electric Companies’ revised SE Tariff and proposed NEM+ policy for adding non-exporting storage to existing NEM systems such as battery storage or additional panels. However, the total export capability must be limited to the size of the original NEM system and the PUC imposed a 100 kW limit on the generation size of the customer’s non-export addition. The PUC also stated that the Hawaiian Electric companies shall apply the 1 kW Rule (allowing minor system capacity alterations of up to 1 kW) to all CGS and CSS applicants, as well as CGS+ and SE applicants, as applicable (Order No. 35563).
- In September 2018, the CSG+ Tariff was approved with modifications (Order No. 35701).
- In October 2018, the TOU-RI Tariff Extension was approved indicating that the Hawaiian Electric Companies’ must update their TOU-RI rates with estimated marginal costs for 2019. The PUC denied the Consumer Advocate’s request to require the Hawaiian Electric Companies’ to submit a metering charge proposal as well as Hawaiian Electric Companies’ request to discontinue their yearly status report on the TOU-RI program (Order No. 35740).
- In October 2018, proposed tariff revisions to Rule 14H and NEM+ were approved in part. The PUC will not require existing NEM system inverter updates or reprogramming as a condition for participation in the NEM+ program. However, the PUC instructed the development of an inverter update policy and work plan to address the issue of updating advanced inverters for DER systems (Order No. 35746). The subsequent NEM+ tariff was modified to remove in its entirety the advanced inverter update obligation.
- In December 2018, the revised TOU-RI Tariff Sheets were approved for MECO and HELCO to take effect January 1, 2019. The Hawaiian Electric Companies revised the TOU-RI energy rates to utilize estimated marginal costs for 2019 (Order No. 35970).
- In August 2019, the PUC modified HELCO’s Smart Export program by expanding the program cap to 10 MW and closed the docket to consolidate ongoing investigation of DER and DR policies and programs in a new investigative docket (Order No. 36476).
Distributed Energy Resource Policies – Docket No. 2019-0323
The Public Utilities Commission (PUC) initiated this docket to institute a proceeding to investigate the technical, economic, and policy issues associated with distributed energy resources (DER) and Demand Response (DR) Programs as they pertain to the Hawaiian Electric Companies (HECO, HELCO, & MECO). Originally, DER and DR policies were investigated in separate proceedings until the PUC noted the success of integrating additional distributed energy resources onto the electric system is highly dependent on coordinating the design and implementation of new grid service programs. As a result, the PUC closed the original DER and DR dockets to open this new docket to investigate these policies more comprehensively by focusing on the following issues:
- What types of new DER programs should be examined and developed?
- What advanced rate designs will be offered to customers?
- How should existing DER programs and tariffs be addressed (e.g., maintained, phased out, grandfathered, etc.)?
- What improvements can be made to the interconnection process and technical standards to better facilitate the integration of DER onto the Companies’ systems?
- Should legacy equipment be updated or retrofitted to current equipment settings?
Additional issues related to DER are also being explored in other on-going proceedings, including Integrated Grid Planning (Docket No. 2018-0165), Grid Modernization (Docket No. 2018-0141), Performance-Based Regulation (Docket No. 2018-0088).
- In September 2019, Hawaiian Electric Company filed their Advanced Rate Design Strategy. The document explores advanced rate designs and how they will impact customer choice and participation through an evolution in rate design and enable and sustain progress on State energy goals.
- In November 2019, the PUC approved the Hawaiian Electric Companies’ 2020 Residential Interim Time-Of-Use Service Tariffs, in compliance with (Order No. 33923) which calls for updating the time-of-use rates with marginal costs for each new calendar year. These have an effective date of January 1, 2020 (Order No. 36922). More rates can be found here and here.
- In April 2020, the PUC announced plans to schedule a status conference with the Hawaiian Electric Companies’ to discuss the immediate impacts resulting from the rapidly developing COVID-19 situation. Procedural schedules for the DER Program Track, Advanced Rate Design Track, and the Technical Track were set forth. The PUC also expanded the Customer Grid Supply Plus program for Hawai’i island by 5 MW, for a total program capacity of 12 MW (Order No. 37066).
- In April 2020, the PUC approved Hawaiian Electric’s request to extend their residential Time-of-Use Electric Vehicle Tariff (“TOU-EV”) for Oahu, Maui, and Hawai’i service territories until September 30, 2021 (Order No. 37067).
Electrification of Transportation (EoT) – Docket No. 2018-0135
The Public Utilities Commission (PUC) opened Docket No. 2018-0135 as a repository for Hawaiian Electric Companies’ Electrification of Transportation (EoT) Strategic Roadmap. This came out of a related docket (Docket No. 2016-0168) which required Hawaiian Electric Companies to submit a plan detailing their participation in fostering EV adoption and charging opportunities, following the extension of their commercial public charging station pilot program (Schedules EV-F and EV-U) thru June 30, 2023. The EoT Roadmap describes near- and long-term strategies for creating a clean energy future in Hawai’i through reducing the State’s dependence on fossil fuels, in-line with Hawai’i’s goal for utilities to produce 100% of their electricity from renewable resources by 2045. In the Roadmap, Hawaiian Electric Companies analyze the benefits of increased electrification of transportation for Oahu and outline ten initiatives aimed at accelerating the adoption of EVs in Hawai’i, ranging from education and outreach, lowering EV purchase costs, opportunities for public, workplace and residential smart charging, and engaging the tourism industry, to the electrification of buses and other medium and heavy-duty vehicles.
- In November 2018, an addendum to the EoT Roadmap was filed which expanded the projections for EV adoption and potential benefits to Maui and Hawai’i Islands.
- In March 2019, the PUC approved two pilot electric bus tariffs which are in effect through December 31, 2023 (Docket No. 2019-0000, Transmittal No. 18-06, Decision and Order No. 36220).
- In July 2019, the Hawaiian Electric Companies submitted an Electric Vehicle Critical Backbone Study: Planning Methodology report.
- In July 2019, the PUC directed the Hawaiian Electric Companies to file a workplan to implement their EoT Roadmap in the near-term, with a focus on EV rate design and charging infrastructure (Order No. 36448).
- In October 2019, the Hawai’i Electric Companies submitted an EoT workplan, which lays out their near term actions focusing on rate design, charging infrastructure deployment/support, charging infrastructure deployment and programs, and outreach and education. The plan also provides a summary of filings and an anticipated schedule for the next 18 months.
Related Docket: 2016-0168.
HEPF EoT Roadmap Summary Matrix
Based on the comments filed in response to Hawaiian Electric Companies’ Electrification of Transportation (EoT) Strategic Roadmap which outlined ten initiatives, HEPF created a matrix summarizing selected stakeholder comments and ranking of near-term priorities.
Energy Efficiency – Docket No. 2007-0323
The Public Utilities Commission (PUC) initiated this docket to examine the issues and requirements raised by and contained in Part VII of Chapter 269, Sections 269-121, et seq., Hawai’i Revised Statutes (HRS) pertaining to Hawai’i’s Public Benefits Fund (PBF). HRS §§ 269-121 and 269-122 authorize the PUC to contract with a third party administrator to operate and manage energy efficiency and demand-side management (DSM) programs in the State and to assess a Public Benefits Fund surcharge to support those programs. By statute, the PUC may also redirect all or a portion of the funds collected by Hawaiian Electric Companies through the current DSM surcharge to the third party administrator. This docket continues to set the PBF surcharge for each year. It also is where the Public Benefits Fee Administrator (PBFA), Hawai’i Energy, files its Annual Plan. These energy efficiency programs are intended to help Hawai’i meet its Energy Efficiency Portfolio Standards (EEPS), which require a 30% reduction, or 4,300 GWh in electricity demand relative to a 2008 baseline by 2030; Docket No. 2010-0037 lays out a framework for meeting the standard. The EEPS consists of the EEPS Technical Working Group and Public Benefit Portfolio Technical Advisory Group (TAG) who make recommendations in support of the evaluation and policy process.
- Refer to PUC DMS for actions taken prior to 2019.
- In May 2019, Leidos Inc. (Hawai’i Energy) submitted their Triennial Plan and proposed PBF budget for program years 2019-2021 (Order No. 36289).
- In June 2019, the PUC set the 2019 Program Year PBF Surcharge and requested a supplemental addendum by July 12, 2019 to respond and address the concerns raised by the Division of Consumer Advocacy (Order No. 36383).
- In July 2019, Leidos Inc. (Hawai’i Energy) filed their Response of Hawai’i Energy as the PBFA to the Division of Consumer Advocacy’s Comments Filed May 31, 2019 Regarding Hawai’i Energy’s Triennial Plan Program Year 19-21 and Supplemental Addendum.
- In October 2019, the PUC approved the Hawai’i Energy Program Triennial Plan and PBF budget of $113,324,642 for program years 2019-2021, and set the PBF surcharge beginning January 1, 2020 to collect the target revenue equal to 2% of the projected total electric revenue, plus revenue taxes (Order No. 36708). However, the PUC noted several areas of the plan require further detail and improvements and has required the PBFA to refile final versions of Appendix B of the Triennial Plan and Budget no later than December 31, 2019.
- In December 2019, Leidos, Inc (Hawai’i Energy) submitted modifications, improvements, and additions to their Triennial Plan in response to (Order No. 36708). These are discussed in five main areas: 1) additional details and justification for Energy Optimization Initiatives (EOl), 2) additional details and justification for Market Transformation and Economic Development (MTED) core area initiatives, 3) improved metrics to evaluate performance, 4) PBFA to work with commission staff and stakeholders to develop a robust and detailed 10-Year Plan, and 5) PBFA and Hawaiian Electric Companies’ prioritized collaboration efforts.
- In June 2020, the PUC set the Public Benefits Fee (PBF) surcharge for program year 2020. The 2020 PBF surcharge will collect revenue through a per kilowatt-hour surcharge and will consist of separate residential and commercial components that will collect the target revenue equal to 2.0% of the projected total electric revenue, plus revenue taxes. The surcharge will be reduced by Hawaiian Electric Companies’ estimated collection of the Green Infrastructure Fees on behalf of the State of Hawai’i Green Infrastructure Authority to establish a “GIF-revised target PBF surcharge revenue.” The 2020 target surcharge revenue and the amount of PBF surcharge collected for both residential and commercial/industrial must include any reconciliation amounts for the period of April 1, 2019, to March 31, 2020 (Order No. 37186).
- In July 2020, based on Leidos’ representations and the independent assessment and verification of its program achievements, the PUC approved a performance award payment of $999,041.00 (inclusive of tax) to Leidos, Inc. for Program Year 2018 and PY16-PY18 Cumulative Claim (Order No. 37202).
- In August 2020, the PUC approved Hawai’i Energy’s Revised Triennial Plan for PY19-PY21, as filed on December 31, 2019, subject to the ongoing development and review of additional details, discussion, metrics, and collaboration (Order No. 37272).
Green Energy Market Securitization (GEMS) Program – Docket No. 2014-0135
Act 211, Session Laws of Hawai’i 2013, established a regulatory financing structure authorizing the Public Utilities Commission (PUC) and the Department of Business, Economic Development, and Tourism (DBEDT) to acquire and provide alternative low-cost financing through a financing program to make green infrastructure installations accessible and affordable for Hawai’i’s consumers, achieve measurable cost savings, and achieve Hawai’i’s clean energy goals. The PUC approved DBEDT to use funds in the Green Infrastructure Special Fund to establish and institute a Green Infrastructure Loan Program also known as the Green Energy Market Securitization Program (GEMS) (Order Nos. 32318; 32281). The program is administered by the Hawai’i Green Infrastructure Authority (HGIA).
- In December 2014, the initial Program Notification was submitted. This addressed PV systems for residential consumers and non-profit organizations.
- In March 2015, HGIA submitted its first GEMS Annual Plan (FY2016). For FY2016, the Authority planned to deploy about $80M in funds through commercial PV products, consumer PV products, and other projects that address PV for renters or deploy capital for other approved eligible technologies. The administration budget for FY 2016 was approximately $1M.
- In April 2015, Program Notification No. 2 and Program Notification No. 3 were submitted. Program Notification No. 2 addressed PV-related technologies and Program Notification No. 3 addressed small business loan products.
- In July 2015, Program Notification No. 4, providing further information regarding consumer protections, the loan deployment process, and bill payment mechanisms, and Program Notification No. 5, requesting to deploy capital to finance commercial energy efficiency, were submitted.
- In February 2016, Program Notification No. 6 was submitted, requesting to finance energy efficiency for government agencies. In March 2016, the PUC conditionally approved Program Notification No. 6, provided that the legislature and Governor enact legislation authorizing an appropriation out of the GEMS Special Fund to loan such moneys to the Department of Education and Department of Budget & Finance for capital improvement program equipment, installation costs for air conditioning, energy efficient lighting, and other energy efficiency measures related to heat abatement at public schools (Order No. 33592).
- In March 2016, HGIA submitted their GEMS Annual Plan (FY2017). For FY 2017, the Authority planned to deploy about $126M in funds through commercial PV products, consumer PV and PV + battery products, commercial energy efficiency products and other projects that deploy capital for other approved eligible technologies.
- In July 2016, Program Notification No. 7, to deploy capital to finance energy storage across the suite of current or future GEMS loan products, and Program Notification No. 8, to deploy capital to finance commercial energy efficiency to state government agencies and departments, municipalities, nonprofits, business, or any other commercial enterprise were submitted. In August 2016, Program Notification nos. 7 and 8 were suspended (Order No. 33866, Order No. 33872).
- In August 2016, Program Notification No. 9, to deploy capital to finance PV installations for small businesses, nonprofits and for-profit apartment building owners was submitted.
- In November 2016, Program Notification No. 10 , to deploy capital to finance consumer leases or power purchase agreements that are pooled together by third party investors, was submitted. In December 2016, Program Notification No. 10 was suspended (Order No. 34219). In January 2017, the PUC terminated the suspension of Program Notification 10 and approved the Program Notification (Order No. 34368).
- In January 2017, Program Notification No. 11, to finance commercial energy efficiency to the DOE for its Ka Hei program, was submitted. In February 2017, Program Notification No. 11 was approved (Order No. 34421).
- In March 2017, HGIA submitted the GEMS Annual Plan (FY2018). For FY2018, the Authority planned to deploy $50 million in funds through its commercial PV plus storage products, residential PV plus storage products, residential and commercial energy efficiency products and community solar products.
- In October 2017, the PUC amended Decision and Order No. 32318 by changing the priority of uses of GEMS program loan repayments (Order No. 34930).
- In February 2018, Hawaiian Electric Companies and HGIA submitted a joint filing for approval of the Green Energy Market $aver (GEM$) On Bill Program. In April 2018, the PUC conditionally approved the establishment and implementation of GEM$ Program Manual and loan products as described in the joint application (Order No. 35415). The Hawaiian Electric Companies and HGIA submitted a filing for final approval of the GEM$ On Bill program in August 2018. In December 2018, the PUC approved Proposed Rule No. 27, establishing and implementing an on-bill repayment mechanism and associated tariff (Order No. 35918).
- In March 2018, Program Notification No. 12, to deploy capital to finance commercial energy efficiency for nonprofits, small businesses and multi-family rental projects, was submitted. In April 2018, Program Notification No. 12 was conditionally approved (Order No. 35375).
- In March 2018, HGIA submitted their GEMS Annual Plan (FY2019). For FY2019, the Authority planned to deploy $25 million in funds through its commercial PV plus storage products, residential PV plus storage products, residential and commercial energy efficiency products and community solar products.
- In May 2018, Program Notification No. 13, converting $50 million in GEMS funds into revolving line of credit, was submitted and conditionally approved pending the Governor enact legislation allowing HGIA to convert $50 million in GEMS funds into a revolving line of credit for use by State agencies (i.e., HB 1508 SLH 2018) (Order No. 35492). On July 5, 2018, the Governor signed Act 121 (HB 1508), which authorized HGIA to create a $50 million sub-fund to be named the GEMS Commercial Energy Efficiency Revolving Line of Credit for State Agencies and implement the deployment of capital to finance commercial energy efficiency for state agencies effective July 1, 2018.
- In April 2018, the PUC noted that although the docket had been closed in September 2014, pursuant to Decision and Order No. 32318, that approximately 100 documents had since been filed, including twelve Program Notifications and fourteen PUC orders, rendering the docket de factor open. The docket was officially reopened (Order No. 35403).
- In August 2019, HGIA filed a letter to the PUC indicating that, with approximately $34 million in GEMS funds left to lend, HGIA allocate the remaining funds in the following way: 20% to low and moderate income residential customers, 15% to small businesses, 35% to multi-family rental projects, and 30% to nonprofits.
- In April 2020, HGIA submitted their GEMS Annual Plan (FY2021), which details its budget, operations, and financial plans. Due to the disruption caused by the COVID-19 pandemic, coupled with the more stringent eligibility requirements to access financing, the Authority plans to fund between $10.0 to $15.0 million in funds through its existing and possibly new loan products and programs.
Grid Modernization – Docket No. 2018-0141
This docket was opened in June 2018 following the PUC’s directive in Order No. 35628 in Docket No. 2017-0226 to implement Hawaiian Electric Companies’ Grid Modernization Strategy (GMS). As defined by the PUC, “A modernized grid assures continued safe, reliable, and resilient utility network operations, and enables Hawai’i to meet its energy policy goals, including integration of renewable electricity sources and distributed energy resources. An integrated, modern grid provides for greater system efficiency and greater utilization of grid assets, enables the development of new products and services, provides customers with necessary information and tools to enable their energy choices, and supports a secure, open standards-based and interoperable utility.”
Hawaiian Electric Companies submitted their application for approval to implement the Phase 1 of their Grid Modernization Strategy. The application requests approval for expenditures of approximately $86.3 million to implement Phase 1 between 2019 and 2013. Expenditures include the acquisition and deployment of advanced meters, a meter data management system (“MDMS”), a telecommunications network, and related matters. In Phase 2, an advanced distribution automation system (“ADMS”) is planned to enable distribution system monitoring, control and automation.
- In March 2019, the PUC approved the Hawaiian Electric Companies’ application, subject to certain conditions in Decision and Order No. 36230. Hawaiian Electric Companies shall track a project cost savings and operational benefits associated with Phase 1. Starting on June 30, 2019, Hawaiian Electric Companies shall file in this docket, semi-annual progress report.
- In May 2019, the PUC issued Order No. 36334 in response to Hawaiian Electric’s motion for clarification on three aspects of Decision and Order No. 36230.
Integrated Grid Planning (IGP) – Docket No. 2018-0165
The Public Utilities Commision (PUC) initiated this docket in July 2018 to investigate Hawaiian Electric Companies’ proposed integrated grid planning (IGP) process, which through stakeholder engagement, a technical advisory panel, and working groups, intends to merge three separate planning processes (generation, transmission, and distribution) while addressing procurement. The goal is to identify gross system needs, coordinate solutions, and develop an optimized, cost effective portfolio of assets. As IGP integrates all levels of the system, it differs from the traditional resource planning framework known as Integrated Resource Planning (IRP) (between 1990-2014) and subsequent Power Supply Improvement Plan (between 2014-2017). The IGP process was originally raised as part of Hawaiian Electric Companies’ Grid Modernization Strategy.
According to Hawaiian Electric Companies’ IGP report: Planning Hawai’i’s Grid for Future Generations, Integrated Planning Report, the process will be conducted in four steps:
- Forecasts and Planning Inputs
- Resource Needs and Sourcing
- Transmission and Distribution Needs and Alternatives
- Near-term Action Plan and Long-term Pathway
Hawaiian Electric Companies propose to complete the bulk of the planning process in 18 months and conduct an IGP cycle every two years, with the first cycle beginning in 2019, resulting in the first plan by the end of 2020.
- In March 2019, the PUC accepted the IGP work plan filed in December 2018. The work plan includes a summary and description of the IGP process including forecasts, planning inputs, identifying and quantifying system needs, a methodology and process for sourcing solutions, and solution evaluation and optimization. The work plan also includes a stakeholder engagement model consisting of broad engagement, a stakeholder council, working groups and technical advisory panel. The work plan provides a detailed timeline for IGP events, process descriptions, and details of each working group (Order No. 36218).
- In July 2019, the Hawai’i Electric Companies submitted a proposal for review points.
- In November 2019, the PUC provided guidance on the IGP process including: defining the PUC’s role as an advisor and reviewer, providing suggestions to improve the stakeholder feedback process in working groups, suggestions on the use of the Technical Advisory Panel to provide independent evaluation of each Review Point filing, emphasis on stakeholder feedback to be incorporated into the IGP process and into the Review Point filing, updating the IGP timeline as part of every Review Point filing, and further identification of interrelated dockets and critical decision points (Order No. 36725).
- In November 2019, the Hawaiian Electric Companies notified the PUC of the IGP Soft Launch RFP.
Microgrid – Docket No. 2018-0163
The Public Utilities Commission (PUC) initiated this docket in July 2018 to investigate the establishment of a microgrid services tariff as directed under Act 200, 2018 Session Laws of Hawai’i to encourage and facilitate the development and use of microgrids. A microgrid is a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the utility’s electrical grid and can connect to public utility’s electrical grid to operate in grid-connected mode and can disconnect from the grid to operate in island mode. Some of the preliminary questions that this docket will address is the coordination of existing tariffs and programs, modification of interconnection standards and procedures, and consideration of services and functions in the microgrid services tariff (MSG).
- In August 2019, the PUC directed the formation of a Market Facilitation Working Group and Interconnection Standards Working group. The Market Facilitation Working Group is expected to draft tariff language for the MSG Tariff and make recommendations on determining compensation, how to modify existing programs to support microgrid development, new programs and services, and clearly identified grid services. The Interconnection Standards Working Group is expected to develop a new section of Rule 14H specific to interconnection and islanding/reconnection of microgrids.The PUC also defined microgrid using the United States Department of Energy and Act 200 definition. The microgrid services tariff will allow microgrids to have a mixed resource profile. (Order No. 36481).
- The Market Facilitation Working Group and Interconnection Standards Working group submitted a working group report in February 2020. In March 2020, the Hawaiian Electric Companies’ submitted a Draft Microgrid Services Tariff in accordance with (Order No. 36514).
Performance-Based Regulation (PBR) – Docket No. 2018-0088
The Public Utilities Commission (PUC) initiated this docket in April 2018 to explore new opportunities for evaluating and updating the State’s utility regulatory framework in light of a transforming electric power system—from one that relies on mainly centralized fossil-fuel generation to more distributed renewable energy sources such as rooftop solar photovoltaic systems. The Governor signed into law SB2939 SD2, which requires the PUC to establish performance incentive and penalty mechanisms that directly link electric utility revenues to the utility’s achievement on performance metrics by 2020. This docket will shift the regulatory framework from what is referred to as cost-of service regulation, in which utility’s ability to earn money is closely tied to its capital investment, to performance based regulation (PBR), which follows an incentive structure that rewards the utility for specific outcomes and objectives. While both models are intended to allow the utility to earn fair compensation for providing quality service, the latter allows for aligning financial incentives with the public interest.
The docket proceeding is divided into two phases. Phase 1 covers evaluation and assessment, focusing on building a foundational goals-outcomes hierarchy, current regulatory assessment, and performance metrics. Phase 2 addresses design and implementation, focusing on refining and/or modifying the current regulatory framework through performance incentive mechanisms, revenue adjustment mechanisms, and other regulatory reforms.
- In July 2018, the PUC put forth PUC Staff Report #1, which provided an overview of Phase 1 of the proceeding, discussed the terms and concepts that form the PBR process framework, and proposed three overarching goals: 1) enhancing customer experience, 2) improving utility performance, and 3) advancing societal outcomes. Following this report, Technical Workshop #1 – Kickoff was held, and subsequent Goals & Outcomes briefs were filed.
- In September 2018, the PUC put forth PUC Staff Report #2 offering a revised set of regulatory goals and outcomes for Hawaiian Electric Companies consideration, provided a characterization of the existing regulatory framework, and introduced an Assessment Template by which the Parties may assess the current regulatory framework. Following this report, Technical Workshop #2 – Regulatory Assessment was held, and subsequent Regulatory Assessment briefs were filed.
- In November 2018, the PUC put forth PUC Staff Report #3 to evaluate and identify which regulatory mechanisms are best-suited for changes to address the desired outcomes, and identify metrics, where appropriate, to measure the utility’s performance in achieving Identified outcomes. Following this report, Technical Workshop #3 – Metrics was held, and subsequent Metrics briefs were filed.
- In February 2019, the PUC put forth a Staff Proposal for Updated Performance-Based Regulations to provide background regarding the need to update the utility regulatory framework, recommended twelve priority outcomes to guide the remainder of this proceeding, and recommended a portfolio approach to performance mechanisms, to be further developed in Phase 2. Following this proposal, Parties’ filed Statements of Position.
- In May 2019, the PUC ordered that the principles, goals, and outcomes from Phase 1 to be used in Phase 2. Phase 2 will focus on the development of a portfolio of Revenue Adjustment Mechanisms (RAMs) and Performance Mechanisms. Revenue Adjustment Mechanisms include an examination and development of a five-year Multi-year Rate Plan (MRP) with an annual rate adjustment (ARA), and appropriate adjustments to the Major Project Interim Recovery (MPIR) adjustment mechanism. Performance Mechanisms include a development of reported metrics, scorecards, new Performance Incentive Mechanism (PIMs) to complement the existing PIMs for reliability and customer service and Shared Savings Mechanisms (SSMs) (Decision and Order No. 36326).
- In June 2019, Phase 2 convened and a procedural schedule was established (Order No. 36388).
PBR Goals and Outcomes Matrix
In the first phase of the PBR docket, 12 intervenors filed several briefs, including goals and outcomes, regulatory assessment, and metrics, to guide the PBR framework and inform the type of evaluation approach that will be used for assessment. HEPF developed a matrix highlighting where there is common ground and where there are differences in terms of goals, outcomes, and metrics, making note of concerns and changes relative to those presented in the PUC Staff Report #1.
For more information, docket filings can be accessed from the PUC website by inputting the docket number or searching by keyword.
Last Updated: 3/11/2022