Hawaii’s Public Utilities Commission last week approved Hawaiian Electric Company’s (HECO) plan to create an emergency demand response program (EDRP) to help cover the expected energy shortfall caused by the shutdown of Oahu’s coal-fired AES Hawaii Power Plant in September 2022.
Order 37853 approved the EDRP in the form of a scheduled dispatch program (SDP) that would encourage HECO customers to install solar PV and batteries at their homes in order to make up to 50 MW of DR available to the utility during Oahu’s peak energy usage hours of 5 p.m. to 9 p.m. The program also will be open to customers with existing DER resources. (See Hawaii PUC Approves DR Stopgap to Address Coal Plant Closure.)
At a June 28 conference to discuss the program, Yoh Kawanami, HECO co-director of customer energy resources, said, “Plenty of DER resources are out there. If we can put a battery on it and move that generation towards the peak [of the system’s energy use], we can resolve a lot of things.”
The PUC approved a $34 million budget for the program, which HECO will recover through a demand-side management (DSM) surcharge. The surcharge will add an average of $1.37 to customers’ monthly bills over the next three years, the utility estimates. HECO had sought $35 million for the program.
Customers participating in the program will be paid after a verification process that could take up to 90 days to allow HECO to confirm the performance of the equipment during peak hours. Although the PUC had targeted a 30-day verification, Kawanami said the process was being extended because “anyone who lends their system” can be eligible for benefits and that different DER systems may lengthen the verification process.
SDP payments will be considered income by the state, requiring customers to fill out a 1099 tax form to be submitted to the IRS.
HECO will start accepting applications for the SDP on Aug. 1.
Last week’s order also approved an addendum to Oahu’s fast demand response program, increasing authorized participation by 2.657 MW for a total of 7 MW by the end of 2022. HECO hopes to draw more participants to the undersubscribed program through an incentive of $250/kW.
“I know that opening the door [to the EDRP] is scary to a lot of people, but I’m a lot more scared that, come next fall, if we don’t have enough of these measures in place, we’re going to have a much different discussion,” PUC Chair James Griffin said during the June 28 conference.