Hawaii

Summary The Hawaiian Electric Company’s (HECO) Energy Efficiency programs have been in place since mid-1996. Hawaii does not have any natural gas energy efficiency programs. In July 2009, Hawaii consolidated the energy efficiency programs of most of its electric utilities into a single program operated by a third-party contractor, Science Applications International Corporation (SAIC). Hawaii has two significant utilities — HECO, which includes Hawaii Electric Light Co. (HELCO) and Maui Electric Co. (MECO), and Kauai Island Utility Cooperative (KIUC). HECO’s customers support this program through a public benefits charge. KIUC operates its programs independently. Hawaii is collaborating with the United States Department of Energy to achieve the goal of supplying 70% of the state’s energy needs through renewable energy and energy efficiency programs by 2030. Hawaii’s Public Utilities Commission (HPUC) has also adopted an Energy Efficiency Portfolio Standard (EEPS) with a goal of achieving 4,300 GWH of energy savings by 2030. Hawaii offers shareholder incentives for utilities and is investigating decoupling as an option. Decoupling reduces the financial disincentive for utilities to support energy efficiency by separating utilities’ profits from their levels of sales. According to the Energy Information Administration, Hawaii utilities spent $16.6 million on electric energy efficiency in 2007, saving 11,830 MWh.

Hawaii's energy efficiency programs provide opportunities for residential, commercial, and industrial customers to save energy. Hawaii is currently expanding its energy efficiency efforts. The state signed a Memorandum of Understanding (MOU) with the federal Department of Energy in 2008. This MOU established the Hawaii Clean Energy Initiative (HCEI), a long-term partnership between Hawaii and the DOE. This partnership will advance energy efficiency and renewable energy in Hawaii with the goal of supplying 70% of the state’s energy needs by 2030.

In 2009, the HPUC contracted with a third party, Science Applications International Corporation, to administer HECO’s programs. Kauai Island Utility Cooperative operates its programs independently. Hawaii does not provide natural gas energy efficiency programs.

According to the Energy Information Administration, Hawaii utilities reported efficiency program savings of 11,830 MWh in 2007 — 0.11% of total retail sales.

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Ratepayers who are customers of Hawaiian Electric Company support Hawaii’s newly consolidated energy efficiency programs by paying a public benefits fee.  Kauai Island Utility Cooperative operates its programs independently.

Hawaii has received energy efficiency-related funding through the federal economic stimulus package. The state will receive $4 million in weatherization assistance. Hawaii’s State Energy Program will also receive $26 million.

According to the Energy Information Administration, Hawaii utilities spent $16.6 million on electric energy efficiency in 2007 —- 0.73% of their total spending.

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Energy efficiency is included within the definition of “renewable electrical energy” in Hawaii’s Renewable Portfolio Standard (RPS), which was codified in HRS §269-91, et seq., and amended in 2006, 2008, and 2009. The RPS set a goal of a 10% reduction in net electricity sales by the end of 2010, 15% by 2015, 25% by 2020, and 40% by 2030. The Public Utilities Commission may assess penalties against a utility for failing to meet the RPS, unless the failure was beyond the reasonable control of the utility.

Recent legislation (HB 1464) also established a formal energy efficiency portfolio standard (EEPS) that sets a goal of a 4,300 GWh reduction by 2030 (equal to about 40% of 2007 electricity sales). The Public Utilities Commission must establish interim goals to be achieved by 2015, 2020, and 2025 and may adjust the 2030 standard to maximize cost-effective energy efficiency programs and technologies.

Beginning in 2015, electric energy savings brought about by the use of renewable technologies, including solar water heating and seawater air conditioning, may count towards this standard.

In October 2008, an order was issued to investigate implementing a decoupling mechanism similar to the one used in California. Panel hearings were held June 29 – July 2, 2009 to discuss decoupling and various alternative mechanisms.  The commission is expected to issue decisions regarding decoupling mechanism(s) and their impacts on utilities, customers and other stakeholders. Utilities are required to submit a 2009 test year rate case.  See HI Docket 2008-0274.

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A utility shareholder incentive is in place and is based on a percentage share of net benefits attributable to demand-side management programs.  Hawaiian Electric Company must meet or exceed the established megawatt-hour and megawatt energy efficiency goals for both the commercial/industrial sector and the residential sector to be eligible for a DSM utility incentive.

If all goals are met, the utility will receive 1 percent of the net system benefits. The incentive increases incrementally to a maximum of 5 percent of the net system benefits if actual performance exceeds the goals by 10 percent or more. Incentives are capped at $4 million (before taxes).

The Gas Company (TGC) and Kauai Island Utility Cooperative are subject to the Renewable Portfolio Standard but are excluded from DSM utility incentives. TGC does not currently operate any DSM programs and KIUC has not requested incentives. The most recent bill establishing an Energy Efficiency Portfolio Standard allows the PUC to establish incentives and penalties based on performance in achieving the EEPS.  

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In 2008, Hawaii began replacing its Integrated Resource Planning (IRP) process with a new Clean Energy Planning Scenario process as part of the Hawaii Clean Energy Initiative (HCEI). The HCEI is a Memorandum of Understanding between the governor of the state of Hawaii and the U.S. Department of Energy. Signed in January 2008, the MOU has the goal of decreasing energy demand and accelerating use of renewable, indigenous energy resources in Hawaii in residential, building, industrial, utility, and transportation end-use sectors so that efficiency and renewable energy sources will meet 70% of Hawaii’s energy demand by 2030.

The Public Utilities Commission has suspended the IRP dockets for Hawaii’s utilities and a Clean Energy Planning Scenario (CEPS) Framework is anticipated to be filed with the commission. Since then, the Hawaiian electric companies and the State Consumer Advocate have jointly developed a draft proposal for the CEPS framework and will file it with the PUC.

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• Public Utilities Commission of the State of Hawaii
• Public Utilities Commission of the State of Hawaii: Order 23258, Docket No. 05-0069
• Hawaiian Electric Company Integrated Resource Planning
• Hawaii State Incentives for Renewables and Efficiency
• HB 1464
• Hawaii Energy Efficiency Program
  
  

Last Updated 10/30/2009

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