Utility transitioning for the future
Faced with high electric bills due largely to oil prices, many of our customers at the Hawaiian Electric companies are understandably turning to solar to reduce their costs. More than 8 percent of our Maui customers now have solar – more, by far, than anywhere on the Mainland.
The tough part when in the forefront is that the path forward is not certain. Due to the extremely high levels of rooftop solar in some neighborhoods, the safety and reliability risks are real. Hawaiian Electric companies need to find solutions to these challenges on our own, and we know we need to move faster.
We also need to communicate more and sooner so that our customers know we’re focused on solving these problems. For those who have been waiting for approval to install their solar systems, I know it’s frustrating. As president and chief executive officer, I assure everyone that we’re working hard to address these challenges, utilizing every resource we have with technical support from industry and government research institutions.
In the big picture, these challenges signal a much bigger evolution in our company and in our industry. We’re transitioning on multiple fronts: from oil to renewable energy; from centralized power plants to distributed power sources throughout the electric grid; from less flexible big generating units to more flexible small ones; and from a system that sends energy in one direction from power plants to customers to a multidirectional grid.
And we’re making headway.
Case in point: The recent deactivations of our Honolulu Power Plant and Shipman plant on Hawaii Island as well as two generating units at the Kahului Power Plant. More deactivations of older fossil fuel plants are ahead, including two generators at Waiau Power Plant. A total of 226 megawatts – more than 14 percent of our utility-owned generation – will be turned off by 2016. The two remaining Kahului generators will be shut down by 2019.
Together, our energy ecosystem is making steady progress on renewable energy. In 2013, 18 percent of the electricity used by our customers came from renewable sources, up from 14 percent in 2012. And we’ve already met Hawaii’s milestone goal of 15 percent by 2015.
We need to evolve to meet the changing expectations and needs of our customers. Now more than ever, customers expect prompt and useful information, choices and control. Rate options that reward careful users, special discount rates for charging electric vehicles, a smart grid that means faster power restoration, easier integration of renewables and the ability for residents to better manage your energy use and costs as never before. We have implemented or are proposing all of these.
For more than a century, utility grids were built and expanded to carry power one way only. But with customers now able to generate their own energy, we must, in a fraction of that time, adapt the electric system to allow power to flow in many directions at once. In the future, we see our central role as the grid operator enabling the integration of more low-cost renewable energy – both centralized and distributed – while still sustaining safe and reliable service.We’re collaborating with others to help do just that.
For example, we’re working with the Hawaii Natural Energy Institute on smart grid and smart inverter technology that gives customers more control over their energy use and could help integrate greater amounts of rooftop solar. Other energy storage trials are underway. As we move to this renewable future, we’re pursuing other options to reduce the use of expensive, imported oil to help lower customers’ electric bills. Liquefied natural gas is a cleaner, nearer term option that can potentially save customers $300 million to $500 million per year.
In a dynamically changing environment, we know we must continue to adapt. And with the help of our customers, regulators and other policymakers and stakeholders, we are.
* Dick Rosenblum is the president and chief executive officer of Hawaiian Electric Co.