Friday, October 16, 2015

Ahana Koko Lele, Hana Hou: Hawaii PUC Takes TASC To Task

Not unexpected, the vocal criticism of the Hawaii Public Utilities Commission (PUC) latest decision to end the Hawaiian Electric Companies (HECO Companies) Net Energy Metering (NEM) program has come from solar installers, most notably by those who market the third party ownership model.  Here’s an excerpt from a GreentechMedia article:

Bryan Miller, senior vice president of policy at Sunrun, criticized the PUC's decision for being wildly out of step with Hawaii's politics. 
“The decision will not stand," he said. "It will be reversed either in the political process or in the courts, but it will not stand one way or the other.” 
"I’m so confident," he added, "because over 90 percent of the public in Hawaii says they want more solar, not less. This is going to result in a lot less solar, and will hurt low-income and middle class customers the most." 
Miller recently wrote that HECO is intentionally trying to block customers from going solar, pointing to interconnection delays based on technical concerns that were ultimately proven false. He called for the adoption of time-of-use rates coupled with net metering, which he said would incentivize solar customers to adopt emerging technologies like energy storage to align generation with load. [Contradicting this statement, the PUC Order states "the commission concludes that the HECO Companies have adequately responded to the commission's orders with respect to the interconnection queue, and have begun to take necessary steps to improve their interconnection processes." (page 68)]

First of all, Mr. Miller is poorly informed about Hawaii politics and unaware of the statutory role of the PUC, whose decisions are based on fact and grounded in policy, technology and economics – not the push polls Mr. Miller or The Alliance for Solar Choice (TASC) pays for.   Secondly, it has been the continued reliance on NEM and tax subsidies that have had hurt the low-income and middle class customers the most as more of the fixed cost of the electric system has been pushed on those without rooftop systems and tens of millions of dollars in tax credits have been exported out of state from Hawaii’s general fund taking funding away for programs like public education, Hawaii’s state hospital system and social services to pay the likes of Sunrun type investors.  It has also bolstered a dysfunctional and uncompetitive solar market.

It appears Mr. Miller believes the best chance to keep or increase his for-profit company’s profitability is a political decision.  That’s why the company he works for and the organization he is affiliated with, TASC, continues to run a campaign and use tactics akin to negative political campaigning.  But we’re talking about the evolution of an electrical system here that needs to transition by embracing proven technology and rational economics to achieve a high penetration of  cost-effective renewables affordably and reliably through a sustainable market for all customers.  Achieving these objectives will not come from a political decision based on push polls rooted in negative campaigning which Mr. Miller seems to rely on.

I am not a lawyer but my advice to Mr. Miller:  Don’t waste Hawaii’s time and limited resources with an appeal.  The PUC did a thorough job in citing its legal authority, procedural history and finding of fact and conclusions of law in its Order based on the record.  And your position appears to be unpersuasive and and the record appears to be very weak to support your position as summarized below.  Joint Parties refer to the following entities:  Hawaii Solar Energy Association, Life of the Land, Hawaii Renewable Energy Alliance, Hawaii PV Coalition, The Alliance for Solar Choice, Ron Hooson, Sunpower with Blue Planet filing a joinder to the joint parties’ positions.
·      the Joint Parties proposal to establish an export credit rate by partially discounting the effective retail [a discounted NEM] rate is inappropriate and does not offer a compelling quantification of the value of DER.  The average on-peak avoided cost is a reasonable approximation of such value, which will allow the Parties to this docket the opportunity to consider improvements to the methodology in Phase 2 of the proceeding. (page 137) 
·      the Joint Parties have offered no evidence that solar installers or DER customers would be unreasonably impacted energy credit rates in the range of 15 to 27 cents per kWh.  In contrast, the Consumer Advocate and DBEDT offer estimates that suggest that the approved grid-supply energy credit rates are still substantially higher than the levelized cost of installing residential solar today, after considering the substantial tax credits available in Hawaii.  The grid-supply option is not intended to unduly subsidize participating customers. (page 138) [The payback period will take a little longer but with the right financing tools the return on investment can still be advantageous.]

·      the commission finds and concludes it is not in the public interest to allow unconstrained growth in the grid-supply option, particularly if such growth comes at the expense of future opportunities to acquire even lower-cost renewable energy from other sources, or prevents the HECO Companies from offering community-based renewable energy options for their customers. (page 140) 
·      the commission find and concludes that the Joint Parties’ proposal to reduce the NEM program energy credit rates is contrary to State law. (page 156) 
·      the Joint Parties’ claim that closing the NEM program to new participants would create uncertainty in the DER market has no basis in fact.  (page 157) [Solar installers just need to develop a better and more competitive value proposition for customers.] 
·      The Joint Parties further assert that capping the NEM program will increase tax liability for customers who may opt to interconnect under the grid-supply tariff.  However, as discussed below, the record does not contain any evidence that customers will be subjected to increased tax liability as a result of a transition to the grid supply tariff. . . The Joint Parties have submitted “opinions” of two law firms specializing in tax matters, which claim to analyze the tax liability of a residential solar feed-in-tariff program.  However, such a program is not under consideration here. (page 158) [So much for “truthiness” in TASC’s “tax the sun” negative campaigning.] 
·      the commission finds and concludes that the NEM program was simply not designed for DER deployment at the scale experienced today. (page 160) [Established in 2001, the Legislature mandated a cap on customer participation at 0.5% of system peak load.  Currently, NEM program capacity is 30% for HECO, 42% for MECO and 53% for HELCO of system peak.] 
·      After review of the record, the commission finds and concludes that to the extent there is a negative impact to non-participating customers from current DER policy design, the interim options approved and ordered herein will alleviate that impact. (pages 165-167)

In denying TASC’s Motion to Initiate Hearings, the PUC found and concluded that TASC misconstrued applicable law, administrative procedure, and the commission’s orders in this docket with the following findings (pages 171-189):

·      In accepting TASC’s representations in its Motion to Intervene and agreeing to the PUC’s procedural schedule, “the commission concludes that TASC is precluded from now asserting the inconsistent position of a “right to a hearing to cross-examine witnesses, put on evidence, and respond to evidence submitted by other parties.” 
·      The Parties’ – and indeed the public’s interest in the orderly and timely disposition of the significant energy policy issues in this docket – would be prejudiced by allowing TASC to impermissibly assert inconsistent positions and to play “fast and loose” with the commission or “blowing hot and cold” during the course of the proceedings. 
·      The requested relief is fundamentally flawed insofar as this commission-initiated investigatory docket is not, as TASC mistakenly contends, a “contested case.” 
·      TASC’s conclusory claim of an “insufficient” record, to thereby justify an evidentiary hearing is factually unsupported.  Significantly, TASC fails to specify what additional arguments it would advance in an evidentiary hearing, and fails to explain why such arguments were not made in TASC’s joint and individual filings totaling no less than 242 pages . . .

·      It is disingenuous for TASC to contend that the record before the commission is somehow “insufficient” when TASC has argued, in part, that the record as it currently stands only supports a decision to adopt TASC’s recommendations . . . 
·      The commission finds that TASC has been provided a full and fair opportunity to develop a record in support of its arguments and recommendations . . . TASC’s conduct of asserting inconsistent positions and its dubious claim of an “insufficient” record are impermissible attempts to “broaden the issues” and to “unduly delay the proceeding.  As such, TASC has failed to respect the commission’s mandate that TASC’s participation “reflect a high standard of quality, relevance, and timeliness.” 
·      The commission therefore finds and concludes that TASC’s Motion to Initiate hearings has no basis in fact or law, and is an obvious attempt to delay the prompt resolution of the issues in this proceeding, and should therefore be denied. 
·      The commission finds on multiple occasions, TASC has chosen to seek resolution of issues in this docket outside of the collaborative process, rather than adhering to the procedure upon which the Parties agreed. 

So now it’s time to move on to Phase 2 of the DER investigation.  Message to Bryan Miller and TASC:  you all obviously need an attitude adjustment and understand that this investigation is about how to evolve and integrate Hawaii’s electric system with new services and products to serve all of Hawaii affordably and reliably with the most cost-effective and cleanest resources to be a model for the rest of the nation.  This DER investigation is not about a self-preservation initiative to be baited with negative campaigning tactics to influence a "political" decision.  The privilege to participate in the DER investigation means serving a public-interest mandate.  

Last words, your tactics are not grounded in value of Aloha - which embraces cooperation, compassion and caring, so really, you guys need an attitude adjustment.

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