Utility regulators nix Hawaiian Electric grid upgrade plan

• A skeptical Public Utilities Commission of Hawaii has sent the state's largest utility back to the drawing board on grid modernization, rejecting an expensive plan regulators said needed to do more to integrate renewable energy.
• Hawaiian Electric Co. (HECO) filed its grid modernization plan last year, with estimates that the Smart Grid Foundation Project would cost approximately $340 million.
• Pacific Business News reports the PUC has given utility officials until the end of June to develop a plan, and must show its progress on the revised strategy within 120 days.

Hawaii regulators told HECO in an order last week that its proposal did not go far enough to bring distributed resources online, a shift which will need to accelerate for the state to meet 100% renewable goals.

“The commission further questions the justification for such a large investment where the project asserts only an indirect link to address the primary issue currently facing Hawaii’s renewable energy integration,” the PUC wrote. “The application does not specifically address how the companies intend to integrate customer-sited assets in the near term and long term.”

The PUC also said the utility application failed to address the risks of redundancy due to distributed energy resource (DER) growth or obsolescence, and it did not spell out an approach for leveraging the growing amounts of DER connected to the state's electric grids.

"Moreover, the commission has questions related to the priority, sequencing, and pace of grid modernization investments proposed, given Hawaii's unique challenges and opportunities," the order said.

HECO had delayed filing its smart grid implementation plan while the state considered a proposed $4.3 billion takeover by NextEra. The initial phase of its smart grid program rolled out in 2014, upgrading portions of the electric grid that serve customers in Moanalua Valley and sections of Pearl City, Diamond Head, Kaimukī, Kahala, and Waikiki.

The utility's proposal included a "modern wireless communication network, smart meters and enhanced technology that will upgrade the existing electric grid to be more automated and energy efficient." Rolling out new meters, HECO said, would help to improve outage detection and restoration, as well as giving customers more information about their electricity usage.

Hawaiian Electric wants to reach almost 50% renewable power by 2020, aiming to go all carbon-free by 2040. The utility's recent Power Supply Improvement Plan says that would put it five years ahead of the state's mandated goal.

The plan calls for HECO to provide 48% renewable power by 2020, without the use of imported liquefied natural gas. The PSIP aims for the addition of 360 MW of grid-scale solar, 157 MW of wind energy, and 115 MW from demand response programs by 2050.