Regulatory Update 12-2-2013

Posted on Monday, December 02, 2013

Regulatory Update


1.       Integrated Resource Plan (IRP) (2012-0036)


The purpose of the Integrated Resource Plan is to provide the Utility and all stakeholders with a cogent plan for energy use and planning as we move into a dynamic and uncertain energy future.  The Utility researches and drafts the IRP, and this is done with considerable input from the advisory group, of which HSEA was an active member.  The process was completed earlier this year, but the IRP was not certified by the Independent Entity (IE), who is responsible for making sure that the process of completing the IRP and the final product is in alignment with the requirements issued by the Commission.  The IE did not certify the final IRP for a variety of reasons, including insufficient transparency and inadequate planning for renewable integration and DG, especially with regards to solar energy.  Now, it is up to the Commission to decide how to proceed with the docket.  Will the Commission accept the IRP, ask for additional work or clarification of certain sections, or start the process all over? In this case, the Commission can take to up to 6 months to determine how to best proceed. 


2.       Reexamination of the Feed-in Tariff Program (2013-0194)

The Commission has just begun the process of reexamining the feed-in tariff program.  The program as it currently stands has been mired in a variety of problems from extensive delays on IRS studies, and questions about how to fairly manage the queues.  As a first part of this reexamination, the Commission directed the Utility and the Independent Observer (IO) to draft a Joint Plan which recommends how to work with the active and reserve queues as they currently stand.  The purpose of the Joint Plan was to help “avoid confusion and uncertainty regarding the status of FIT projects during the Commission’s reexamination of the FIT program.”  The Plan was submitted on September 30, 2013, and intervenors (of which HSEA is one) submitted comments to the Plan on November 12, 2013.  The most striking aspect of the Plan is that the Utility and IO recommended that the reserve queues for all tiers be “released” or eliminated.   It’s now up to the Commission to decide how to proceed.  We’re expecting a procedural order and calendar to come out soon.

3.       On-Bill Financing (OBF) and On-Bill Repayment (OBR)

Work is moving ahead to get the OBF pilot program off the ground.  The advisory group (of which HSEA is a member) has been working together on the program details in alignment with the Commission’s D &O 30974.  In short, the OBF is an innovative way that customers can get solar installed, and pay for the system on their bill.  The payment will be “tied to the meter” and will pass onto subsequent occupants.  The target audience for this program is the rental market and low-income residents, and it is slated to begin with a “soft start” March 2014.  The program was originally going to include PV as well, but it was decided to start with the solar hot water first, and then add in PV as the program mechanism gets worked out.  The seed money for of the funding for OBF comes from the PBF, a surcharge on all utility customer’s bill, and which is currently used for solar hot water and efficiency programs through Hawaii Energy. 

Next, the advisory group will develop the program for OBR, which includes private capital, and will fund the installation of PV with repayment on the customer’s bill.  Again, this program is an innovative mechanism where the payment is tied to the meter, and would be taken up by a subsequent occupant should the home be sold or a new renter move in.  The plan is for the program to be up and running next year.

4.       Investigation to Reexamine the Existing Decoupling Mechanisms (2013-0141)

 The HECO Companies (HECO, MECO, and HELCO) have been decoupled since August 2010 (see 2008-0274 Final D & O), and the purpose of this docket is to reexamine the mechanism of decoupling to measure its success.  Decoupling means that the Utility’s profits are not determined by the amount of electricity that they sell, so that the Utility would not be financially harmed by supporting and implementing distributed generation.  Under decoupling, the Utility is basically guaranteed a set rate of return, and they are paid back for the investments that they make on the system in the rate base.  Questions arise, however, as to whether there is sufficient impetus to be cost effective and efficient, and to what degree decoupling helps to implement innovative renewable installation, especially DG.  The parties and intervenors (of which HSEA is one) just submitted their Initial Statement of Position in response to questions from the Commission in order 31635 and subsequent information requests. Simultaneous Statements of Position are due December 20, 2013.  This docket will continue through 2014.

5.       Reliability Standards Working Group (2011-0206)

The reliability standards working group continues to examine various technical matters as they pertain to reliability and interconnection.  Ongoing investigations include the monitoring and accounting for significant system events such as curtailment for all systems including renewables, frequency load shed events, and contingency reserve applications.  Particular updates can be found in the monthly report found on the Commission’s website under DMS.

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