On December 23, 2020, the Hawaii Public Utilities Commission (PUC) issued a decision and order approving a new performance-based regulatory framework (PBR Framework) for the Hawaiian Electric Companies. The concept is easy to understand. The actual implementation mechanisms are extremely complex. The essence of PBR is to incentivize the utility with a system that rewards the utility for exemplary performance.
Under the PBR Framework, the electric companies will be challenged to immediately control costs, improve efficiency, and reduce customer rates. At the same time, financial rewards for exemplary performance in key areas will drive improvements in the integration of renewable energy into the utility’s system, increase customer choice, and accelerate the achievement of the State’s clean energy goals. Safeguards, including regular reviews by the PUC and an Earnings Sharing Mechanism, will help protect the utility’s financial condition during this transition, and ensure that unintended consequences are timely addressed.
The PBR Framework adopted by this decision and order has been meticulously developed over the past two and a half years, and has involved: many long hours of meetings, workshops, and conferences; preparation and review of thousands of pages of analysis, briefing, and discovery requests; and several days of panel hearings. The dedicated work by a broad spectrum of stakeholders, including Hawaiian Electric, the Hawaii Consumer Advocate, local governments, clean energy companies, and environmental groups have created this solid foundation for PBR.
To view the entire proceeding visit: Docket No. 2018-0088