Hawaiian Electric Proposes NEM Rate Cut For Solar Customers

Posted by SI Staff on January 20, 2015 No Comments
Categories : Policy Watch

Hawaiian Electric Companies is submitting a plan to the Hawaii Public Utilities Commission (PUC) to reduce the compensation it pays to net-energy metering (NEM) solar customers to below the retail rate. Hawaiian Electric, which represents three Hawaii utilities, says the step is intended to better manage the growth of photovoltaic solar power systems.

The proposed Transitional Distributed Generation program would credit NEM customers at a rate that Hawaiian Electric says better reflects the cost of the electricity produced by their rooftop solar systems. Under the current NEM program, customers receive credit on their electric bills at the full retail rate for electricity they produce. This credit includes the cost of producing electricity plus operation and maintenance of the electric grid and all other costs to provide electric service.

Hawaiian Electric says paying NEM customers the retail electric rate for their surplus generated power is essentially shifting the utilities' costs for generation, transmission and distribution unfairly from those who have solar to those who do not.

Under the proposal, existing NEM program customers and those with pending applications would remain under the existing NEM program. Any program changes from this proposal would apply only to new customers.

Hawaiian Electric is asking the PUC to approve the new program within 60 days. Under the utilities' proposal, the Transitional Distributed Generation program would remain in effect while the PUC works on a permanent replacement program, which it says will work through a collaborative process involving stakeholders from across the community, including the solar sector.

The group of utilities says the proposal is important for it to meet its plan to clear its interconnection backlog.

If this transitional program is approved, Hawaiian Electric says it expects to be able to modify its interconnection policies so as to raise the solar threshold for neighborhood circuits from 120% of daytime minimum load (DML) to 250% of DML. In many cases, this will eliminate the need for a longer and costly interconnection study, the utility says.

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