Program gives firms bill credits to power down on short notice

Maui Electric gets go-ahead for its fast demand response plan to stabilize grid

Hotels, local businesses and Maui County have agreed to let Maui Electric Co. reduce its power on short notice to help keep the grid stable during periods of high demand.

Special equipment will be installed at 24 participating sites on Maui to allow MECO to remove certain facilities from the grid when necessary. It’s part of MECO’s fast demand response program, which started as a pilot and received the go-ahead from the Public Utilities Commission to expand last July.

“This is part of our overall plan to ensure we continue to provide reliable power to the community, add more renewable energy to our island’s power grid and offer another way for customers to manage their electricity costs,” MECO President Sharon Suzuki said in a news release Monday.

The fast demand response program offers large commercial customers bill credits in exchange for taking their facilities off the grid “during critical energy situations with 10 minutes or less notice,” according to MECO. It’s designed to keep the grid stable and prevent outages when not enough power is being generated to meet demand, such as when output drops from solar and wind facilities or during emergencies.

“When you only have so much to give, you’re asking other people to not take, (which) is really the point of demand response,” explained Fred Redell, Maui County energy commissioner. “We would reduce our load to the grid, and MECO would be able to deliver the power that they need to deliver to all the other customers.”

Redell said MECO worked with the county to find the departments and facilities that could either supply their own power or don’t need to run for a certain period of time. Most county facilities have their own backup generators. The utility will install devices that signal “to our facility to either start our generator and transfer to our generator or to shut off a piece of equipment,” Redell explained.

Allowing MECO direct control makes it possible for a quicker response when demand is high.

“Imagine that the utility then had to call everybody on the phone and say, ‘Can you turn off your air conditioner?’ “ Redell said. “That might not be a reliable way to do it. So they install equipment so they can manage that seamlessly without having to do anything more than turn a switch from their control room.”

The power reduction will be in one-hour blocks and will take place only up to 40 times a year, said Redell, who added that the impacts “should be pretty much invisible to the county.”

Redell said he thinks the program makes more sense than installing diesel power generators, which MECO had requested to do temporarily in 2016 to make up for the loss of backup power provided by Hawaiian Commercial & Sugar Co. At the time, MECO also asked the PUC to expand its demand response program from 0.2 to 5 megawatts.

Enough customers have now volunteered for the full 5 MW, according to MECO. Customers had to agree to reduce their loads by a minimum of 50 kilowatts.

“Participating sites were selected based on whether they met program parameters, and then first come, first served,” MECO spokeswoman Shayna Decker said.

In addition to Maui County, other partners in MECO’s program include the Fairmont Kea Lani, Honua Kai Resort & Spa, Hyatt Regency Maui Resort & Spa, Marriott Residence Inn Wailea, Sysco Hawaii, the University of Hawaii Maui College and VIP Foodservice/Island Grocery Depot.

In exchange for reducing their power generation, each commercial partner receives a monthly credit of $5 per kilowatt enrolled, allowing customers to save on their monthly demand charge, and 50 cents per kilowatt hour actually implemented, which is when the customer is called upon during an event, Decker explained.

MECO expects to have the first businesses enabled for the fast demand response program this month, with the entire 5 MW enabled by the end of the year, Decker said. Businesses will not have to wait until all the systems are installed; the program will roll out as each business gets hooked up.

Redell said he believes it’s a win-win situation. The county gets bill credits for participating in the program, and the taxpayer ultimately saves money when the county reduces its energy costs. MECO can better manage the grid in times of high demand and doesn’t have to use its generators to provide extra power.

“The ratepayer benefits because MECO can provide the services they need to in a cheaper way,” Redell said. “It doesn’t cost them as much to do what they would normally do.”

Altogether, the county could save $200,000 to $250,000 a year, depending on how often MECO uses the service. Redell added that similar programs are rolling out across the country, and that eventually more businesses and possibly homes could participate in the program in the future.

MECO said it is looking into possibly expanding the demand response program for more businesses. For more information, visit mauielectric.com/demandresponse.

* Colleen Uechi can be reached at cuechi@mauinews.com.