Monday, September 1, 2014

Is HECO reducing your electric bill?

By Henry Curtis

My electric bill is too high. What are you doing to reduce it?

HECO, MECO and HELCO have each filed their proposed Power Supply Improvement Plan (PSIP) to the Public Utilities Commission.  These plans also include reference to their Distributed Generation Interconnection Plan (DGIP).

"Today, approximately 9% of the average customer bill is comprised of taxes other than income taxes. The investment plans contained in this PSIP will result in the deployment of over $6.4Bn in capital over the 2015 through 2030 time period. …These taxes automatically increase with any increase in bills, such as the near term increases driven by the PSIP and DGIP transformational investments."

There is a proposed sharp increase in near term-investments.



 "This profile reflects the basic fact that transformational investments need to be made in advance of each of major changes to the O‘ahu grid. The LNG transportation, re-gasification and unit modification investments must be made to enable the LNG fuel savings. 

Rapid reacting contingency storage and other grid enhancements are necessary to ensure system reliability with current levels of DG-PV, as well as being required to enable DG-PV growth over the next 5 to 7 years. 

Replacement dispatchable resources must be built or sourced in advance of any additional unit deactivations and retirements. Smart Grid capabilities must be built to enable dynamic pricing."

The HECO Companies define Full Service Customers as "any residential or commercial customer that imports the entirety of their energy demands from the grid, and does not self-consume or export any energy derived from distributed energy resources co-located with their load."

Under the current rate regime prices will fall in the long-term for Full Service Customers.


Under the proposed rate regime to be adopted in 2017, there will be a sharper drop in long-term rates for Full Service Customers.



The last sentence in the Chapter on Financial Impacts suggests a guaranteed short-term price hike coupled with a promise of long-term price relief.

Under the current rate design, while electricity bills for average full service residential customers will increase in the short-run, by 2030, electric bills will be reduced by 16% in real terms from 2014 levels under the current tariff structure and by 23% under DG 2.0.”   

Absent from the analysis is that on Neighbor Islands the current price of solar plus battery is cheaper that the current cost of grid-based electricity. 

In the near-term and the long-term solar and battery prices are expected to fall. 

There is no analysis of customers exiting the system.

As customers leave, the remaining customers will see their rates rise to cover the fixed costs of the utility.

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Sunday, August 31, 2014

Where are the solar panels in Waikīkī?

By Henry Curtis






Waikiki has a large number of hotels and resorts including the Hilton Hawaiian Village, Halekulani Hotel, Hyatt Regency Waikīkī, Sheraton Waikīkī, Moana Surfrider Hotel and Royal Hawaiian Hotel.

There are surf shops: Quiksilver, Billabong and Volcom.

There are luxury designer brand stores popular surf clothing brand stores including Chanel, Louis Vuitton, Prada, Burberry, Dior, Tiffany & Co., Fendi, Cartier and Gucci & Coach.

Some high end boutiques intentionally crank-up their air conditioning and intentionally leave their doors open with the belief that cold air streaming across the sidewalk will entice shoppers to come in.

But where are the solar panels?



Waikiki has surf and sand and stores and high-rises. 

But whether you are looking out of a high-rise or viewing Waikiki from the Diamond Head lookout, solar panels are not present.

The same can be said for Iwilei. Parking on the roof at Dole Cannery affords one a view of Iwilei and Downtown.



With the exception of Costco which has solar and City Mill which has holes in their roof to allow sunshine in, Iwilei resembles Waikiki.


Areas with intense sunshine, mega-flat roofs and an absence of solar panels.

Hawaiian Electric Company (HECO) has a web page which shows solar energy penetration for different neighborhoods around O`ahu.



\
 The coastal area from Pearl Harbor to Iwilei, Downtown, Kakaako and Waikiki is the sunniest area of O`ahu. 

The map clearly shows that the area has not adopted solar. 

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Saturday, August 30, 2014

Corporatocracy and the Trans-Pacific Partnership presentation at Law School

By Henry Curtis

On Friday Dr. Matthew Rimmer, an Australian Research Council Future Fellow, spoke about the Trans Pacific Partnership (TPP) to an audience at the William S. Richardson School of Law.

The Trans-Pacific Partnership is a highly secretive and expansive free trade agreement being negotiated between the United States and eleven Pacific Rim countries.

His talk was sponsored by the Environmental Law Program, Pacific-Asian Legal Studies, and the UH Mānoa Political Science Department.

"One could see the TPP as a Christmas wish-list for major corporations.”

Dr. Rimmer was introduced by David Forman, the Director of the Environmental Law Program and Professor at the Ka Huli Ao Center for Excellence in Native Hawaiian Law.

Ritter noted that “the Obama Administration has pushed for the Trans Pacific Partnership across the Pacific Rim and at the same time it has also been negotiating the Transatlantic Trade and Investment Partnership (T-TIP) with the European Union.”

Matthew Rimmer, Joseph Stiglitz and George Monbiot have decried the regulatory chill that investment law casts over governments.

There are provisions in the proposed TPP and other enacted treaties that allow corporations to sue governments. These provisions are strong while the TPP provisions to protect the environment are aspirational. Corporations do not have to first exhaust local opportunities for redress at the national level.

Corporations could sue the federal government at the international tribunal level whether the case pertained to a federal, state, or local law or court decision.

The tribunal could award damages to the corporation to be paid by the federal government.

Ritter noted that over 500 Investor-State Dispute Settlements (ISDS) have been filed under other multilateral trade treaties.  Half of them have been resolved of which approximately 42% were decided in favor of the Host State, approximately 31% in favor of the investor and approximately 27% were settled out of court.

In 2012 the French firm Veolia sued the Egyptian government for raising the minimum wage.

U.S. chemical company Ethyl Corp. sued Canada because it had banned the use of a gasoline additive called MMT for public health reasons. Canada paid Ethyl $13 million.

The Australian government imposed restrictions on cigarette packaging. Philip Morris moved some of its operations outside of Australia, then imported cigarettes from those foreign locations. Philip Morris then sued the Australian government for damages for the loss of its intellectual property.

Argentina’s freeze on people’s energy and water bills was successfully challenged by international utility companies.

El Salvador’s refusal to grant permission for a gold mine on environmental grounds has been challenged by a Canadian company for the loss of its anticipated future profits.

Vattenfall, a Swedish power company which is wholly owned by the Swedish government, filed a case against the German government for restricting the use of nuclear power.

Canada’s patent laws that restricted some US pharmaceutical operations have been challenged by drug company Eli Lilly.

TransCanada has threatened to bring the Keystone XL Pipeline Project before an international tribunal if the Obama Administration blocks or delays approval.

TPP trade negotiations are being conducted by governmental trade officials and corporate elites.

In 2013 WikiLeaks published a leaked draft of a secret international trade agreement that could create stricter laws governing digital copyright and freedom of speech.

Health providers, including surgeons, could be liable for the methods they use to treat patients” stated Public Citizen. “Essentially, except for when a surgeon uses her bare hands, surgical methods would be patentable under the U.S. proposal.”

Negotiated in secret, the proposed text is bad for access to knowledge, bad for access to medicine, and profoundly bad for innovation. The TPP fails to address larger questions about equity, development, and human rights.

In January 2014 WikiLeaks publishes the Environment Chapter of the Trans-Pacific Partnership.

The WikiLeaks Press release noted, “When compared against other TPP chapters, the Environment Chapter is noteworthy for its absence of mandated clauses or meaningful enforcement measures.

The dispute settlement mechanisms it creates are cooperative instead of binding; there are no required penalties and no proposed criminal sanctions.

With the exception of fisheries, trade in 'environmental' goods and the disputed inclusion of other multilateral agreements, the Chapter appears to function as a public relations exercise.”

There has been no detail revealed about the labor rights chapter — nor has been any substance leaks by organizations, such as WikiLeaks.     

 U.S. Senator Elizabeth Warren spoke to the National Press Club.

From what I hear, Wall Street, pharmaceuticals, telecom, big polluters and outsourcers are all salivating at the chance to rig the deal in the upcoming trade talks. So the question is, Why are the trade talks secret? You’ll love this answer. Boy, the things you learn on Capitol Hill,” Warren said. “I actually have had supporters of the deal say to me ‘They have to be secret, because if the American people knew what was actually in them, they would be opposed.’” 

 There has also been a very dynamic battle happening between the Obama Administration and the United States Congress particularly over the fast track authority” according to Ritter.

President Obama wants Congress to restrict its ability to question parts of the TPP. Obama wants ‘Fast-Track’ authority which would mean that Congress could only vote yes or no.

The AFL-CIO observed of theTrans-Pacific Partnership: "Negotiations must include provisions that will benefit US workers, not simply the largest global corporations."

The Communications Workers of America have been vocal about the trade deal. “The main goal of the Trans-Pacific Partnership seem to be making the world safe for corporate investment and profits by harming workers, consumers, the environment and democracy.”

Professor Joseph Stiglitz asserts that “there is a real risk that it will benefit the wealthiest sliver of the American and global elite at the expense of everyone else.’" He worries about the impact of the deal upon equality: "The fact that such a plan is under consideration at all is testament to how deeply inequality reverberates through our economic policies." He warns: "Enriching corporations — as the Trans-Pacific Partnership would — will not necessarily help those in the middle, let alone those at the bottom.”

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Friday, August 29, 2014

Net Metering targeted for extinction

By Henry Curtis

The HECO Companies Power Supply Improvement Plans (Docket Number 2014-0183) has become a Super Docket with 25 parties and intervenors. 



Utilities
HECO, MECO, HELCO

Hawaii Gas
Government
Consumer Advocate

DBEDT

County of Maui

County of Hawaii
Renewable Energy
Hawaii Renewable Energy Alliance

Eurus Energy America Corporation

Ulupono Initiative LLC
Solar
Renewable Energy Action Coalition of Hawaii, Inc.

Hawaii Solar Energy Association

Hawaii PV Coalition

Sunpower Corporation

Alliance for Solar Choice
Wind
First Wind Holdings, LLC

Tawhiri Power LLC
Cable
NextEra Energy Hawaii, LLC
Fossil Fuel
AES Hawaii, Inc.
Micro-Grid
Parker Ranch’s Paniolo Power Company, LLC
Trade Group
Blue Planet Foundation
NGOs
Sierra Club

Life of the Land

Puna Pono Alliance



In the history of the PUC there have been a half dozen or so energy-related Super Dockets with 20 or more parties and participants.

A major issue in this docket  will be Net Energy Metering whereby customers with rooftop solar can export excess energy  to the grid, during which time the customer’s meter runs backwards. The ratepayer pays only for the net grid-based electricity consumed.

The October 2008 Hawaii Clean Energy Initiative (HCEI) Energy Agreement was very clear about Net Energy Metering (NEM) coming to an end.

NEM currently provides an interim measure to encourage the installation of and pay for renewable energy generated from customer-sited systems, generally PV systems. The parties agree that NEM will be replaced with an appropriate feed-in tariff and new net metered installations shall be required to incorporate time-of-use metering equipment and, when time-of-use rates are implemented on a full scale basis in Hawaii or the applicable area, the net metered customer shall move to time of use net metering and sale of excess energy.”

The Agreement was signed by the State of Hawai`i, DBEDT, HECO and the Consumer Advocate.

How that end should occur is in dispute. 

Should it be in the future, a gradual phase-out starting now or cold turkey termination? 

This transition is being intensely debated here in Hawai`i and throughout many parts of the U.S. and beyond.

Picture a highway in which the one or two electric cars drivers use zipper and high occupancy vehicle (HOV) lanes. The owners do not have to pay when parked at parking meters. The cars do not run on gasoline so the owners do not pay a highway tax. Life is great.

Picture the extreme case. Every car but one is an electric car. The entire highway and road building and operating budget is financed by one person.

At some point the subsidy has to end. But at what point and how?

Switch the picture from transportation to solar.

Globally, solar installations are growing around the world at an astonishing rate of 43 percent per year for more than a decade. 


In Hawai`i solar installations have grown between 70 and 200 percent per year from 2007 to 2013.

Although the global percentage of electricity generated from solar is still small, it is obvious to all that the growth rate is threatening the fossil fuel industry.

The world-wide fossil fuel industry is a multi-trillion dollar a year industry. 

The American fossil fuel industry has record profits.

The U.S. has become a net exporter of natural gas. The EPA is under attack. Fracking operations are on the rise. 

The Edison Electric Institute, the utility trade group, released a report warning utilities of the impending disruptive threat.

The fossil fuel industry has the financial resources and the determination to fight clean energy.

Conservative think tanks like the Heartland InstituteAmerican Legislative Exchange Council (ALEC), Americans for Prosperity, Beacon Hill Institute and the State Policy Network have joined with Exxon and other fossil fuel heavy hitters. 

They are pouring in money to fight clean energy.

The push for the elimination of Net Energy Metering is being led by the Koch Brothers.

The Koch-funded American Legislative Exchange Council (ALEC) updated its position statement earlier this year.

WHEREAS, it is recognized that when these rooftop solar and other DG systems first came to market years ago, many states approved a billing plan called net metering that provided a subsidy to distributed generators to encourage their introduction; and …

WHEREAS, when net-metered customers are credited for the full retail cost of electricity, they effectively avoid paying the grid costs, and these costs for maintaining the grid then are shifted to those customers without rooftop solar or other DG systems through higher utility bills; …

THEREFORE BE IT RESOLVED that the American Legislative Exchange Council encourages state policymakers to recognize the value the electric grid delivers to all and to:

Update net metering policies to require that everyone who uses the grid helps pay to maintain it and to keep it operating reliably at all times;

Create a fixed grid charge or other rate mechanisms that recover grid costs from DG systems to ensure that costs are transparent to the customer; and

Ensure electric rates are fair and affordable for all customers and that all customers have safe and reliable electricity.”

The Energy and Policy Institute asserts that the “fossil fuel and utility interests, concerned about the rise of cheap clean energy, are financing attacks on pro-clean energy policies, in an effort to delay the growth of a market competitor. …special interests tied to the fossil fuel and utility industries are spreading disinformation about the cost of clean energy. …

Furthermore, these attacks on pro-clean energy policies are not about ‘creating free Markets’ as opponents of clean energy policies. …It's about manipulating markets to benefit their allies (and financiers) in the fossil fuel business.”

“In a majority of states in the U.S., there is no free market for electricity; individuals cannot choose from which company to buy their electricity or from what source their electricity comes. …

Renewable energy standards (RES) and net metering policies are sparking massive investment and deployment of clean energy technologies. And these two key policies, driving more of the grid to clean energy, are now under assault at the state level from fossil fuel and utility interests."

Net metering exists in 43 states and the District of Columbia. 

In over twenty states there is an active war between the fossil fuel and clean energy industries. The battle is raging in California, Arizona and Colorado, Utah, Washington, Kansas and Hawai`i.
.
Utilities are challenging existing laws, rules, and programs while community groups and solar trade groups are seeking to expand them.

The Arizona Public Service Company (utility)  asked the Arizona Corporation Commission (equivalent to our PUC) for the right to impose a charge of $50-100 a month to future customers who install solar panels. 

Last year the Arizona Corporation Commission voted 3-2 to impose a 70-cents-per-kilowatt charge on new solar installations. The typical customer would pay about $4.90 a month.

.Other flash points around the country deal with how homeowners are compensated for excess energy given to the grid. There is no compensation given to homeowners in Hawai`i. 

Several states have limits on solar penetration.

The fossil fuel industry is highly polluting while the solar industry is perceived as a clean industry. Rooftop solar avoids many environmental siting issues.

HECO made two giant mistakes.

In 2002 the utility lost a three decade fight to build a high voltage transmission line between the Iolani School area and the mauka area of Palolo. The transmission line had a dozen names including Kamoku-Pukele and Wa`ahila Ridge.

After the loss HECO established the Hawaii Energy Policy Forum. In the first few years HECO tightly controlled and restricted the Forum's membership, meetings and agenda.

In the fall of 2013 HECO made a second major misstep when it sought to put the kibosh on rooftop solar.

Hawaii surveys show overwhelming support for solar. 

Some polls showed support as high as 96 percent. There is also overwhelming support for net metering.

State Legislators are receiving a lot of email on energy issues. 

Supporting more rooftop solar seems like a no-brainer.

In Hawai`i the cost of solar is cheaper than the cost of electricity. 

On the Neighbor Islands the cost of solar plus batteries is cheaper than the cost of grid-based electricity. 

Solar panel and battery prices are falling.

DBEDT is about to launch a $150 million GEMS program to help the hard to reach non-profit sector, apartment dwellers and economically-challenged ratepayers get into the wildly popular no-money-down solar lease and solar purchase markets.

The HECO Companies Power Supply Improvement Plans (Docket Number 2014-0183) has become the flash point for how the utilities, the fossil fuel industry, the clean energy sector and the community impact the direction and speed of change regarding Hawai`i's energy future.

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Thursday, August 28, 2014

The HECO, MECO & HELCO Energy Picture for 2030

By Henry Curtis

The HECO Companies Power Supply Improvement Plans (PSIPs) paint a picture of the future. 


2030 Renewable Energy Percentages

Electricity Source
HECO
MECO
HELCO
Customer-sited, Grid-connected renewables
19.0
20.0
24.4
Wind
8.0
30.0
22.1
Utility-scale Photovoltaic and Solar Thermal
10.0


Utility-scale Photovoltaic

5.0

Biofuels
2.0
1.0

Biomass


8.0
Biomass (including municipal solid waste)
2.2


Geothermal

16.0
54.3
Hydro

0.1
4.3
Feed-In Tariffs


1.3
Total Renewable Energy-based Electricity
61.0
72.0
92.0




Liquefied Natural Gas
28.4
28.0
8.0
Coal*
10.6


Total Electricity
100.0
100.0
100.0


Source: HECO, MECO and HELCO PSIPs, Chapter 5
HELCO fill probably file an addendum to fix their numbers which do not add up.
* The coal is my estimate based on the AES facility fuel conversion to 50% biomass 50% coal. 

Utility
Year Installed
Capacity
(MW)
Type
Duration
(minutes)
Purpose
HECO
2017
200
Battery (advanced lead-acid or lithium ion) or Flywheel
20
Contingency reserves to bring O‘ahu system into compliance with security criteria
HECO
2022
100
Battery (advanced lead-acid or lithium ion) or Flywheel
30
Regulation
MECO-Maui
2015
2
Battery
11
Frequency regulation; PV DG-PV support
MECO-Maui
2019
20
Battery
30
Regulation reserves; reduce regulation reserves carried by thermal unit
MECO-Maui
2019
20
Battery
30
Contingency reserves. Bridge until quick start RICE units can be installed for voltage support in South Maui
MECO-Lana`i
2018
10
Battery
90
Contingency reserves; DG-PV support
MECO-Moloka`i
2018
10
Battery
90
Contingency reserves
HELCO
2017
5
Battery (advanced lead-acid or lithium ion)
30
Managing variable generation ramping events
HELCO
2017
20
Battery (advanced lead-acid or lithium ion)
20
Contingency reserves


Integrated Resource Planning (2012-13)

Carl Freedman was selected by the Hawaii Public Utilities Commission to be the Independent Entity (IE) overseeing the HECO Company’s Integrated Resource Planning (IRP) process.

On July 29, 2013 he issued his Final Certification.

The IE cannot certify that the HECO Companies' planning process was conducted consistent with the [IRP] Framework.”

 “The IRP Report does not evaluate customer-sited distributed generation strategies. It remains unaddressed what investments in utility system infrastructure or expenditures towards mitigating system operating protocols are sufficient and justified to accommodate additional variable renewable distributed generation resources.

Customer-sited distributed generation was considered in the analyses only as an assumption, as a subtractive component in the demand forecasts in the planning scenarios. 

This approach does not produce meaningful evaluation of the merits or detriments of distributed generation resources.

The system upgrades and associated costs necessary to effectively interconnect distributed generation have not been identified or included in the analyses of the final resource plans or projections of rate impacts.“

“Customer-sited distributed generation options were not considered in the analyses except as components of the forecasted demand projections in the characterization of the scenarios.  …

No costs, benefits, underlying assumptions, or uncertainties have been identified.

Public Utilities Commission Inclinations (April 28, 2014)

In rejecting the HECO Companies IRP Report, the Commission issued its "Inclinations on the Future of Hawaii's Electric Utilities: Aligning the Utility Business Model with Customer Interests and Public Policy Goals." 

The Commission required the HECO Companies to file Power Supply Improvement Plans

The existing utilities “will continue to be the incumbent utility power supplier” as they “uniquely possess the institutional expertise and knowledge of the current generation portfolio and operation of the bulk power grid.”

These plans should address increasing renewable energy penetration, retiring older inefficient fossil generation units, adding new efficient fossil fuel units, adopting load management tools like energy storage and demand response, environmental compliance, fuel switching and instituting operational practice changes.

At the same time the Commission recognized the need for “New Business Models.”

One future would be where the “HECO Companies would effectively over time become the ‘independent’ power supply integrator and operator of Hawaii's power supply system similar to the roles performed by mainland Independent System Operators (ISOs) who independently dispatch generation and operate the bulk power system to minimize energy costs while maintaining reliability. 

ISOs typically plan and operate portfolios of generation and transmission assets owned by (or contractually controlled by) IPPs, electric utilities and power marketers.”

If this transition to a new business model were to occur then the regulatory model, the financial incentives, penalties and the tax structure would need to be restructured.  

Current Commission Activities

The Commission is working on ways to increase the use of renewable energy. 

The On-Bill Financing program is occupying a significant percentage of the Commission’s work now and over the past year.

On-Bill Financing would allow ratepayers to finance rooftop solar while having a net reduction in their total bill.

The Department of Business, Economic Development and Tourism (DBEDT) recently filed an application with the Commission to establish a Green Bank. Initially $150,000,000 would be raised to bonds.

The money raised through this Green Energy Market Securitization (GEMS) program would financially support rooftop solar for hard to penetrate markets: non-profits, apartment dwellers and the economically-challenged.


Power Supply Improvement Plans (2014)


The HECO Plans largely consolidated known utility plans for the future. Little new information is added.

On-Bill Financing and the GEMS program are not found in the PSIP. 

The utilities have continued the practice of using models where the amount of rooftop solar was an input to the model and not the result of an optimization model. 

HECO simply assumed that the rate of growth for rooftop solar would fall dramatically. It would stop growing at the recent historical rate of 70-200% per year and would instead grow at 7% per year.

There is a built in assumption that renewable utility-scale central generation trumps renewable customer-sited distributed generation.  Line losses associated with central generation are assumed to be non-existent.

Distributed Solar Generation (DG-PV) ...forecast was determined outside of the resource optimization models, and therefore, the DG-PV forecast is a fixed input for purposes of the PSIP optimization models.

Therefore, distributed generation was not treated as a resource ‘option’ in the generation optimization models.

If DG-PV is added as a resource option in the resource optimization models, DG-PV will never be selected it [sic] as an economical choice.

In addition, utility-scale fixed-tilt solar will produce more energy per KW of installed solar PV capacity because the panel tilt and orientation of utility-scale solar can be more precise than can be achieved with distributed solar PV.

This is reflected in the planning assumptions for solar PV where the utility-scale PV has a higher capacity factor than DG-PV.” 

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