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Hawaii Issues Guidelines for Utility-Sponsored Community-Based Plans

Under a new policy statement designed to steer utilities toward more effective Community-Based Renewable Energy (CBRE) programs, the Hawaii Public Utilities Commission has directed the three HECO Companies as well as Kauai Island Utility Cooperative (KIUC) to submit revised tariffs and related filings for such offerings. The commission averred that the updated CBRE framework should help the state as it works to attain a goal of all electric generation coming from renewable resources by 2045.

The commission explained that the CBRE initiative, also known as shared renewables, is aimed at allowing all customers to participate in distributed generation (DG) programs, even those who ordinarily would not be able to install solar DG systems onsite, whether because they do not own the premises, the rooftop structure cannot support such equipment, or the roofline is too shaded or oriented away from the sun. In such cases, CBRE plans permit customers to still take advantage of solar facilities through off-site renewable energy projects and an associated bill credit arrangement.

The commission’s latest effort follows a series of actions it took to address growing reliance on renewables to meet demand for electric power throughout Hawaii. In that regard, the commission commented that while residential solar energy use has increased dramatically across the state in recent years, many residents and businesses still have found themselves unable to participate directly in DG programs because of their location, building type, access to the electric utility grid, and other challenges. As a result, the commission instituted the CBRE program, which it described as a means of mitigating the inequity between property landlords and tenants, by expanding the market for eligible renewable energy resources so as to include residential and business renters, occupants of residential and commercial buildings with shaded or inopportunely oriented roofs, and other groups who are unable to access the benefits of on-site clean energy generation.

As amended by the commission, the recommended CBRE program structure now includes island-specific capacity allocations, credit rates, and project size stipulations. The commission set the maximum size for CBRE facilities for each island at three megawatts for Oahu and one megawatt for all other islands. According to the commission, the CBRE facility size restriction is intended to encourage both project size diversity and customer choice. The commission said that the new limits had been informed by utility input.

The modified CBRE plans will utilize a phased approach that seeks to incorporate technical innovations and lessons learned from previous phases. As an example, for the first capacity release, Phase 1, the commission said that eight megawatts of solar photovoltaic capacity will be made available.

The commission stated that upon program commencement, the utilities are to produce hosting capacity maps to guide development into areas with the most streamlined interconnection process. The commission added that at the outset, the utilities must take a balanced approach in establishing the credit rates for the CBRE program. That is, the commission clarified, the utilities must develop price signals designed to incentivize renewable generators to align output to times when the grid needs it the most. Thus, certain time periods will entail levels of compensation differentiated by energy value.

At the same time, though, the commission indicated that its vision for the future is for a more “granular” method of compensation. For the first phase of the new CBRE plan, however, the commission expressed a belief that a basic flat rate is the most prudent approach.

Turning to the next step, the commission maintained that the Phase 2 elements are expected to bring forth a vibrant CBRE market, including business model diversity and innovation, as well as accommodation of a variety of ownership models. To that end, the commission listed three types of CBRE facilities:

  1. Standard CBRE facilities;
  2. Peaker CBRE facilities, defined as CBRE systems that are required to deliver at least 85% of their output during the on-peak time period, from 5:00 p.m. to 10:00 p.m.; in exchange for meeting minimum performance requirements, peaker CBRE facilities will have the opportunity to earn a Peaker Credit Rate at an amount determined by a clearing price auction; and
  3. Utility CBRE facilities, defined as eligible CBRE facilities developed, owned, and/or operated by an administrator acting as a subscriber organization, with the main program requirement for utility-owned projects being that at least 50% of the subscribers must be low- or moderate-income households.

The commission instructed KIUC to submit its new CBRE tariffs within 30 days, while the HECO Companies were given 60 days to file their compliance tariffs. The HECO Companies consist of Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc., and Maui Electric Company, Ltd. Re Hawaiian Electric Co., Inc. et al., Docket No. 2015- 0389, Decision & Order No. 35137, Dec. 22, 2017 (Hawaii P.U.C.).