HECO rolls out plan for incentives program

Hawaiian Electric Co., including subsidiary Maui Electric Co., is proposing “demand response” programs where customers receive financial incentives for shifting energy use to certain times of the day and to voluntarily allow output of appliances and equipment to be adjusted to benefit the grid.

The program would allow consumers to save on their electric bills while helping the utility adopt more clean energy, reduce fossil-fuel generation, and relieve stress on the electric grid, HECO said in a news release Tuesday.

The program was filed with the Public Utilities Commission on Monday. The programs will be rolled out next year for Oahu, Maui and the Big Island and later for Molokai and Lanai following review and approval by the PUC, HECO said.

The program covers residential, commercial, industrial and water-pumping customers.

Under the current system, the utility adjusts the supply of power to meet the demand for fluctuating energy throughout the day, HECO explained. The process of incorporating variable renewable energy sources, such as wind and solar, makes the balancing act more challenging.

Demand response programs allow utilities to adjust demand to help maintain the balance between customer use and generation. HECO said that demand response programs can be more cost-effective than energy storage or oil-fired generation to balance demand and supply.

By offering lower or higher prices during certain times of the day, some demand response programs encourage customers to shift energy use to specific times, such as when solar and wind systems are producing the most power. This can maximize the use of wind and solar power that might otherwise be wasted, HECO said.

In most cases, customers participating in demand response programs agree to allow the utility to adjust the energy use of predetermined appliances remotely, like residential and commercial hot water heaters or air conditioners. Larger commercial and industrial customers may also include equipment that they will not miss for short periods. A signal sent from the utility to a customer’s electrical equipment or energy management system adjusts the equipment, HECO said.

HECO currently offers five demand response programs on Oahu. Among them is “Energy Scout,” which provides 32,000 participating residential and small-business customers a credit on their electric bills to allow the utility to turn off their hot water heaters remotely for brief periods. “Fast DR” is a pilot program that pays participating large commercial and industrial customers several thousand dollars in incentives each month to allow the utility to reduce their electricity use briefly when necessary to stabilize the grid.