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State Energy Efficiency Policy Database

Hawaii

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Summary

Hawaii has increased their utility-sector energy efficiency program offerings in recent years.  The Hawaiian Electric Company (HECO), the largest investor-owned utility in the state, has offered energy efficiency programs since the mid-1990s. 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 major electric utility companies—HECO and the Kauai Island Utility Cooperative (KIUC).  HECO’s customers support the energy efficiency programs through a public benefits charge and KIUC operates its customer energy efficiency programs independently. Hawaii uses very little natural gas, and does not have any natural gas energy efficiency programs.

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 has also adopted an energy efficiency portfolio standard (Docket No. 2010-0037) with a goal of achieving 4,300 GWh of energy savings by 2030.

Hawaii has decoupling in place and offers energy efficiency shareholder incentives for electric utilities.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

Hawaii signed a Memorandum of Understanding (MOU) with the federal Department of Energy in 2008. This MOU established the Hawaii Clean Energy Initiative, 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 Hawaii Public Utilities Commission (HPUC) contracted with a third party, Science Applications International Corporation (SAIC), to administer Hawaiian Electric Company (HECO)’s programs. The program is now called Hawaii Energy. Kauai Island Utility Cooperative (KIUC) operates its programs independently. Hawaii does not provide natural gas energy efficiency programs.

Ratepayers who are customers of HECO support Hawaii’s consolidated energy efficiency programs by paying a public benefits fee. Hawaii Public Utilities Commission Docket No. 2007-0323 outlines the structure of the public benefits fund. KIUC operates its programs independently. Costs are recovered by utility rates set by the Cooperative’s directors.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

Summary: Cumulative annual electricity savings of 4,300 GWh by 2030 (equal to approximately 30% of forecast electricity sales, or 1.4% annual savings).

Hawaii’s renewable portfolio standard (RPS) was codified in HRS §269-91, et seq., and amended in 2006, 2008, and 2009. The RPS requires investor-owned utilities and rural electric cooperative utilities to use “renewable electrical energy” to meet 10% of net electricity sales by the end of 2010, 15% by 2015, 25% by 2020, and 40% by 2030. Savings from energy efficiency programs and combined heat and power systems (among other measures) may count towards meeting up to 50% of the standard through 2014.  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.

Beginning in 2015, electrical energy savings will no longer be able to count toward Hawaii’s RPS, and will instead count towards Hawaii’s Energy Efficiency Portfolio Standard (EEPS), which was established in 2009 with the passage of HR 1464.  Hawaii's EEPS sets a goal to reduce electricity consumption by 4,300 GWh by 2030 (equal to approximately 30% of forecast electricity sales, or 1.4% annual savings).  Renewable displacement or offset technologies, including solar water heating and sea-water air-conditioning district cooling systems, count towards the EEPS after 2015.

The Public Utilities Commission (PUC) 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. The PUC has yet to establish rules for the stand-alone EEPS, including eligible technologies; responsibility for doing so falls on the EEPS Technical Working Group established in 2012.  Current energy efficiency targets in Hawaii are set in HI PUC Order, Docket No. 2010-0037, and are subject to revision.

Hawaii has no energy efficiency resource standard in place for natural gas.


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August 9, 2013


Alternative Business Models

In October 2008, an order was issued to investigate implementing a decoupling mechanism similar to the one used in California. In August 2010, the Hawaii PUC issued its final Decision and Order approving the implementation of the decoupling mechanism for the Hawaiian Electric Company (HECO) companies. Utilities are required to report on their performance of commitments made in the Energy Agreement in their rate cases as the basis for review, modification, continuation or possible termination of the decoupling mechanism (See HI Docket 2008-0274 Order dated Aug.31, 2010).


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

In July 2009 Hawaiian Electric Company (HECO) transferred administration of its energy efficiency programs to a third-party “Public Benefits Fee” administrator. The governor’s office claimed:  “Moving energy efficiency programs to an independent third party will remove the perceived conflict between the electric utilities' desire to sell more electricity to increase profitability and the desire to implement energy efficiency programs that will decrease electricity sales.”  The third-party contractor (Hawaii Energy) contracted to run HECO's energy efficiency program is compensated by the Commission for satisfactory performance of its contract (See Hawaii Energy Executive Summary in Annual Report PY 2009). 

The Gas Company (TGC) and Kauai Island Utility Cooperative (KIUC) 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 (EEPS) allows the PUC to establish incentives and penalties based on performance in achieving the EEPS.


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August 9, 2013


Energy Efficiency as a Resource

In 2008, Hawaii began incorporating scenario planning as part of its revised Integrated Resource Planning (IRP) framework. The revisions were a result of the Hawaii Clean Energy Initiative (HCEI), 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 Hawaiis energy demand by 2030.

The Public Utilities Commission (PUC) suspended the IRP dockets for Hawaii’s utilities, but reopened the IRP for Hawaii Electric Company (HECO) in 2012 (Docket No. 2012-0036 Order No. 30233). Hawaii Electric Company (HECO) filed its most recent IRP with the public utility commission in June 2013, covering the planning period 2014-2033.

Utilities incorporate the energy efficiency targets of the state’s Public Benefits Fund within their IRPs.


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August 13, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC
  • Uses a deemed savings database: yes

The evaluation of ratepayer-funded energy efficiency programs in Hawaii relies on legislative mandates (HRS § 269-124(7)). Evaluations are administered by Hawaii Public Utilities Commission. Hawaii has established formal rules and procedures for evaluation. Statewide evaluations are conducted. In terms of a benefit-cost test, Hawaii relies on the Total Resource Cost (TRC) test, and considers it to be its primary cost-effectiveness test. The rules for benefit-cost tests are stated in HRS § 269-124(7). These benefit-cost tests are required for overall portfolio screening.


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August 9, 2013