Tuesday, October 13, 2015

Hawaii PUC Issues DER Decision & Order - Ends NEM

Yesterday, the Hawaii Public Utilities Commission (PUC) issued a 321-page Decision and Order culminating the Phase I portion of its Distributed Energy Resources (DER) investigation (Docket No. 2014-0192) and stated "[T]his Order initiates the first step in an evolution of distributed energy resource ("DER") policies in the State of Hawaii ("State"), which will significantly advance the integration of DER throughout the State."  In its findings the PUC stated, ". . . by this Order, the commission is approving new options for customers who wish to invest in distributed energy resources for the benefit of themselves and the overall electric system.  These options (customer self-supply, customer grid-supply, and an opt-in time-of-use rate) are interim measures intended to allow continued beneficial deployment of DER while a comprehensive evaluation of DER policies can be accomplished in Phase 2 of this proceeding."

The most significant component of this decision is the closing of the Hawaiian Electric Companies' (HECO Companies) net energy metering program to new participants and transitioning to a self-supply or grid-supply option for a customer to interconnect distributed energy resources to the HECO Companies grids.

The PUC ordered that:

1.  The HECO Companies shall file revised tariff sheets for Rule 14H (interconnection standards) within 5 days from date of the order, which will take effect 2 days after the filing.

2.  The HECO Companies' proposed self-supply tariff and technical specifications, as modified and attached to the Order is approved.  The HECO Companies shall refile the tariff within 5 days from the order date, and it will take effect 2 days after the filing.

3.  The HECO Companies' proposed grid-supply tariff, as modified and attached to the Order is approved.  The HECO Companies shall refile the tariff within 5 days from the order date, and it will take effect 2 days after the filing.

4.  The HECO Companies shall establish an initial cap on the grid-supply option as follows:
               Hawaiian Electric Company (HECO)          25 MWac
               Maui Electric Company (MECO)                  5 MWac
               Hawaii Electric Light Company (HELCO)   5 MWac

5.  Thirty (30) days from the date of the Order the HECO Companies shall refile their Time-Of-Use (TOU) proposal consistent to the guidance in the Order.  The Parties shall have 10 days to comment and the TOU shall take effect upon approval by the PUC.

6.  The PUC found the NEM program for the HECO Companies fully subscribed as of the date of the Order and closed to new participants.

7.  The NEM program shall remain unchanged for existing NEM program participants and applications in the pipeline shall continue to be eligible for interconnection under the NEM program.

8.  HECO Companies shall cease offering NEM application forms and make available a revised interconnection application offering the grid-supply or self-supply options.

9.  The interconnection default option is the grid-supply tariff unless the customer requests the self-supply tariff.

10. If an existing NEM customer (or a customer in NEM queue) seeks to add capacity to their system, beyond the capacity originally approved (or requested in NEM application), the customer must agree to transfer their entire DER system to either the grid-supply or self-supply option.

11. Other interconnection options, such as Standard Interconnection Agreement, Power Purchase Agreement, Feed-in-Tariff remain unchanged.

The PUC, in its findings, certainly sent a strong message to the solar/renewable advocates that their arguments to continue NEM were unconvincing and without evidence (pages 156-163).  As the Order circulates it will be interesting to see if this Order will have an impact on the national scene where other NEM or value of solar programs are being scrutinized.

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