eLab Accelerator 2014
Hawaii Business Model Innovation
Develop innovative utility business models to reliably and affordably integrate high levels of renewable energy resources (both utility-scale and distributed) onto the grid.
Project Team Members
Jim Alberts, Senior VP of Customer Service, Hawaiian Electric Company
Leslie Cole-Brooks, Executive Director, Hawaii Solar Energy Association
Dan Giovanni, Senior Vice President of Operations, Hawaiian Electric Company
Jay Griffin, Chief of Research and Policy, Hawaii Public Utilities Commission
Jeff Mikulina, Executive Director, Blue Planet Foundation
Dick Rosenblum, President and CEO, Hawaiian Electric Company
Hawaii is currently experiencing transformational growth in renewable energy deployment, helping the state achieve its 40% renewable portfolio standard (RPS) by 2030. The Hawaiian Electric Companies (HECO) are currently exceeding their 2015 RPS targets and leading the nation in customer-sited rooftop solar PV. However, integrating additional renewable energy reliability will likely require new investments in the electricity system and further retirement of older, utility-owned fossil-fueled power plants. With current trends,, Hawaii’s electricity system is at a critical inflection point with mounting pressure on the vertically integrated utility’s existing business model. In order to sustain Hawaii’s rapid progress towards its clean energy goals, key stakeholders in Hawaii need to evolve utility business models and pricing structures.
Progress Made to Date (pre-Accelerator)
Hawaii has numerous policies in place to support development of renewable energy, including a RPS, net metering program, feed-in-tariff for renewable generation projects up to 5 MW in size and various loan and tax credit programs at the state and local levels. With these programs, the electric utilities are currently exceeding RPS targets. Other recent legislation and programs include the establishment of an on-bill financing program, aided by the Green Energy Market Securitization (GEMS) program that was enacted in 2013. The 2013 Legislature also passed legislation authorizing the HI PUC to incentivize clean energy progress using shared-savings mechanisms and incentives for grid investments. In 2014, the Hawaii state legislature is hearing a bill that would require the Hawaii Public Utilities Commission to undertake regulatory action to address modernization of the Hawaii electricity grids.
At Accelerator, the Hawaii team focused its attention on four key issues: 1) Building a common understanding amongst stakeholders of the key issues involved in Hawaii’s electricity grid and distributed energy systems, 2) Options available for reforming energy pricing, 3) Investigating best practices for utility business model design, and 4) Strategies for modernizing Hawaii’s infrastructure. The team took advantage of opportunities to learn from eLab faculty and share experiences with other teams in attendance. Team members pledged to continue to work together on issues related to distributed energy resources and energy pricing following the eLab Accelerator meeting, and to develop new stakeholder processes to expand this collaborative work.