Consumer Advocacy – Public Utilities (DCA)

The Competitive Bidding Framework was adopted by the Public Utilities Commission in December 2006 as part of Decision and Order No. 23121. The Competitive Bidding Framework sought to establish a competitive process for acquiring or building new energy generation sources in Hawaii. Read Decision and Order No. 23121, including the Competitive Bidding Framework (attached as Exhibit A) here. The Competitive Bidding Framework also identified several conditions or circumstances in which competitive bidding may be waived by the Commission. For example, under Section II.A.3.b.(iii), competitive bidding may not be appropriate “…when more cost-effective or better performing generation resources are more likely to be acquired more efficiently through different procurement processes.” Section II.A.3.d. goes on to state “… the Commission may waive this Framework or any part thereof upon a showing that the waiver will likely result in a lower cost supply of electricity to the utility’s general body of ratepayers…” Initial Waiver Invitation (Docket No. 2013-0156) On June 18, 2013, Hawaiian Electric Company (“Hawaiian Electric”) filed an application requesting the Public Utilities Commission approve waivers from the Competitive Bidding Framework for five renewable energy projects. These projects were selected as part of Hawaiian Electric’s Invitation for Low Cost Renewable Energy Projects on Oahu Through Request for Waiver from Competitive Bidding. To qualify for selection, projects must have included pricing below 17 cents per kilowatt-hour (kWh) and proof of acceptable site control. On February 13, 2014, the Commission issued Decision and Order No. 31913 approving the request for waivers. Because two projects voluntarily withdrew from the process, the order applies to the remaining three (solar) projects located on Oahu and totalling approximately 33 MW. Read the Decision and Order here. For more on this docket, type Docket No. “2013-0156” into the Docket Quick Link search on the PUC-DMS website. Pricing Refresh Opportunity (Docket No. 2013-0381) On November 14, 2013, Hawaiian Electric filed an application requesting the Commission approve waivers from the Competitive Bidding Framework for six projects, totaling 210 megawatts (“MW”) of renewable energy. These projects were selected as part of a “pricing refresh opportunity” offered to developers whose projects were not selected in the Initial Waiver Invitation above. The criteria for selection in this refresh opportunity included revised energy pricing below 16.25 cents per kWh and proof of acceptable site control. Follow this docket by typing Docket No. “2013-0381” into the Docket Quick Link search on the PUC-DMS website. Kahe Utility-Scale Photovoltaic (“PV”) Generating System (Docket No. 2013-0360) On October 22, 2013, Hawaiian Electric filed an application requesting a waiver from the Competitive Bidding Framework for the 15 MW Kahe Utility-Scale PV Generating System (“Kahe PV Project”). Hawaiian Electric estimates the cost of this project to be $42.4 million and that the levelized cost, assuming a 30-year life, will be approximately 16.1 cents per kWh. Hawaiian Electric is also requesting Commission determination that a 46 kilovolt (“kV”) subtransmission line be constructed. Follow this docket by typing Docket No. “2013-0360” into the Docket Quick Link search on the PUC-DMS website.

Decoupling is one of many major steps supporting Hawaii’s clean energy future. It removes the incentive for utilities to increase the use of electricity, allowing utilities to better support increased energy efficiency, conservation and increased use and integration of renewable energy resources in the utility system. That, in turn, moves Hawaii closer to its goal of 70 percent clean energy for electricity and ground transportation by 2030 – something which will benefit all of us and our future generations. Decoupling breaks the historic link between electricity usage and utility revenues. Traditionally, the more electricity used by utility customers, the more money the utility collects. That practice is directly at odds with our state’s clean energy goals which are now legally required.

An accounting mechanism that permits expenses already incurred or to be incurred, to be recovered by a utility in a later time frame.

A docket in the United States is the official summary of proceedings in a court of law. All dockets in Public Utilities Commission DMS are assigned numbers in an 8 digit format, with the first 4 digits corresponding to the year in which the docket was opened (e.g., 2020-0100).

All companies providing electricity to your home or business are regulated electric utility companies.

The purpose of Integrated Resources Planning (IRP) is to ensure that an energy company evaluates all of its available options to meet the expected customer demand at the lowest, reasonable cost. An IRP plan can be created for electricity or gas utility companies. Generally, a company’s available options can be classified as supply side (where the company constructs additional production facilities or purchases power or energy resources from an independent producer) or demand side (where the company attempts to modify or curb the customers’ demands). An example of a supply side option might be the construction of an additional production unit to enable the utility company to meet the total projected demand in the next three years. An example of a demand side option is the installation of residential solar powered water heaters to reduce the demand for electricity over the next three years to defer or delay the construction of the small production unit identified above. The Consumer Advocate works with other interested or affected parties before the Public Utilities Commission to implement energy utility programs that should balance supply side and demand side options to determine how to best serve customers. In theory, it should be less expensive to implement effective Demand Side Management (DSM) programs to defer or delay generation additions (as opposed to supply side options) and the Division is working to ensure that only effective programs are allowed. An actual example of a DSM program offered by Hawaiian Electric Company (HECO) is the rebates offered to encourage the installation of solar water heating by residential customers. By reducing the customers’ consumption of electricity generated by the electric utility company, the need for the next generating unit will be deferred. The projected benefits of an effective DSM program is that customers’ bills should be lower because they are consuming less energy and because the need for additional generation sources of electricity do not need to be built immediately. When the construction of additional generation sources is delayed, the delayed installation of another generation source will also have a positive effect on our environment, too. Recent Developments Recently, HECO had filed applications seeking Commission approval to extend their existing residential and commercial DSM programs along with certain modifications. In Docket Nos. 00-0169 (for commercial DSM customers) and 00-0209 (for residential DSM customers), the Consumer Advocate submitted a statement of position indicating that the Consumer Advocate believed in the continuation of these programs. However, the Consumer Advocate believed that the Commission should not allow HECO the continued recovery of lost margins and shareholders’ incentives. Lost margins is where a utility company is able to recover from ratepayers the estimated amount of revenues lost by the utility due to the implementation of DSM measures. DSM shareholders’ incentives represents the utility company’s ability to recover from ratepayers money based on the estimated effectiveness of the programs. It is the Consumer Advocate’s position that, while lost margins and shareholders’ incentives may have been once required to encourage the implementation of DSM programs, market and industry conditions have evolved such that those incentives are no longer necessary. The Consumer Advocate believes that energy companies should decide to implement effective DSM programs in order to protect the best interests of their shareholders, as well as their ratepayers, without “sweeteners” such as the lost margins and shareholder incentives. As a result of this statement of position, HECO (and its subsidiaries) and the Consumer Advocate entered into an agreement that will allow the continuation of lost margins and the shareholders’ incentive mechanisms until the next rate case for HECO.

The basic unit of electric energy equal to one Kilowatt of power supplied to an electric circuit steadily for one hour

On-Peak: Period of relatively high system demand on a utility's generating system, season and time-of-day specific for each utility. Off-Peak: Period of relatively low demand on a utility's generating system.

A customer of a public utility.

The gas that is delivered to your home through an underground system of pipes is considered a regulated utility, while bottled or tanked gas is not.

A compilation of a utility's rates and rules governing its relations with customers; changes are subject to review and approval by the Commission.

Telecommunications include a broad range of services, including wireline phones (such as the phones in your home or business, which connect to a jack in the wall) and wireless phones, calling the neighbor islands, U.S. Mainland, or even foreign countries. Because of the large infrastructures associated with providing such a wide ranging and important service telecommunications are regulated to some degree.

You may notice that certain vehicles, such as tour buses, vans, or limousines, as well as certain other types of water transportation may display a PUC number. The Commission regulates these operations in an effort to guard against discriminatory practices and to ensure safety.

Lighting our homes at night, time spent watching television, making a simple phone call, or using natural gas to heat our water or cook our food all require the use of services provided by a utility. In addition, receiving drinking water at our homes and the collection of wastewater from our homes also fall under utility services. Even some forms of transportation are included. Depending on the type of service there are varying levels of regulation by different governmental agencies.

The Public Utilities Commission does not regulate water and wastewater services offered by the various counties in the state of Hawaii. However, services offered by private companies are regulated.