Solar Standoff: HECO Oligarchy

solar-panelsHere in the aloha state we are no stranger to monopolies. In the late 19th century the sugar industry began to dominate the Sandwich Islands, giving rise to the Big Five that controlled everything from public policy and taxation to voting and land acquisition. This ultimately led to the overthrow of the Hawaiian Monarchy by the turn of the 20th century. The US military has dominated land control since before statehood, while the pineapple and sugar industries maintained water control by the millions of gallons. Matson shipping has continued to run a virtual monopoly in the islands since three Big Five executives became Matson directors, shipping nearly all of the agricultural goods to the mainland.

Tax breaks and exemptions historically seem to favor the more fortunate, but perhaps we are in for a change. Solar energy in Hawaii has seen an explosion in the last decade, with rooftop solar becoming a commonplace throughout the islands. Customers from the wealthy to those just getting by are investing in the new technology for the future, but the state’s energy oligarchy is tightening its grip. Recently Hawaiian Electric Company (HECO) has new solar customers meeting with resistance, telling them they can’t connect to the grid. HECO claims the reason is of a technical nature, and they need to conduct further studies to determine if the solar surge is safe. Customers on the other hand are upset, and rightfully so, feeling taken advantage of. By definition an oligarchy is when power effectively rests with a small group of people, usually wealthy or elites. HECO is exactly that, and as a group they are abusing the power they have over 95% of this island chain by limiting and slowing solar growth to protect their share of the $360 billion dollars a year in power sales.

HECO Vice President for Energy Resources and Operations says “This is about safety. We are so far ahead of the rest of the nation as far as the amount of distributed rooftop solar in our neighborhoods that we are now at points where there are potential safety and operating liability issues.” This has been the point that HECO has stood behind since the limitations were first issued in 2013. While there is a potential for some truth behind this, it’s largely arbitrary evidence and speculations that the majority of the population believe is just a ruse. If you don’t believe that, ask the public themselves. In a recent poll taken by The Alliance for Solar Choice (TASC), one of the questions asked if people agreed or disagreed with the following statement: “HECO is slowing rooftop solar growth to protect its profits.” Out of 405 surveyed, 90 percent agreed. 94 percent also supported more rooftop solar growth in Hawaii.

Upon the initial limitations to new solar connections, HECO came out with a statement saying that the safety limit for solar influx was 50 percent of peak load. If the amount of energy generated by rooftop solar surpassed the level of energy consumption in any one area, those in charge said energy would flow backwards through the grid and cause explosions of transformers, power surges that could harm electronics, and other hazardous conditions. Shortly after the 50 percent warning was issued, the number was raised to 75 percent. Experts within HECO agreed that indeed, as long as it was below 100 percent, everything would be alright. Well, another few months goes by and guess what, everyone is in agreement that 100 percent of peak load is now acceptable. It didn’t stop there though. Currently the acceptable number for safe amounts of solar energy is up to 120 percent of peak load according to HECO, and sure to climb even higher. So where exactly are these numbers of safety coming from, and who is determining them?

The other issue with the stance of safety is that it fails to consider the mechanisms that are standard with every solar system. The inverters that are installed are equipped with monitors, and are designed to shut down well ahead of the feared explosions that HECO paints in our imaginations. To date, not one occurrence of any solar related explosion or hazard has been reported across the state.

So just how much is the limiting of new solar connections issued by HECO effecting the people of Hawaii? First it’s important to know that the utility superpower did so unannounced to the public, and without first consulting with the Public Utilities Commission, two important steps to keeping the people happy. On the subject of customer satisfaction, it’s noteworthy to mention that according to TASC President Brian Miller, “There’s no utility that’s as unpopular with its own customers as HECO is.” So let’s paint the picture then of a typical homeowner in Hawaii, the state with the highest utility rates in the nation.

William Walker, a resident of a community in Ewa Beach on leeward Oahu, finally decided that the average energy bill of around $400 dollars per month was too much. He and his wife paid $35,000 to install 18 photovoltaic panels, financed at $305 dollars a month. In Hawaii, as in many other states with solar grid connections, we have what’s called net metering. This affords the resident the luxury of deducting from their electric bill the amount of energy produced by the solar panels, and in the event that more energy is produced than consumed, the utility company pays for it. Keep in mind that this energy produced for free is then turned around and sold to customers at the going rate of around 32 cents per kW. Walker estimated that his monthly bill would drop to essentially nothing, offsetting the $305 dollar monthly loan payments and eventually paying for itself in as little as five years with the increasing cost of electricity. Instead, with no advanced warning, HECO decided not to allow them to connect to the grid, sighting the earlier mentioned safety issues as the concern. Eventually they are told they will be able to connect, but in the meantime, Walker and his wife are still paying their monthly utility bill and now have an extra $305 dollar monthly loan payment to worry about on top of that. With 11 percent of Oahu’s population using solar, and installation rates doubling every year over the past six years in Hawaii, it’s a mystery how HECO was unable to foresee the rise in demand and take early action.

Although HECO claims that its restrictions are not tied to finances, and are strictly for the safety of the public, it’s difficult to ignore the numbers. The company is seeing more profit than they have in their 120 year history, beginning in the times of King Kalakaua. The CEO earned nearly $6 million in 2012, and they have upped their electric rates by 50 percent from 2009 to 2012. As the numbers for an acceptable amount of solar being returned to the grid continue to jump up and up with more study, HECO has recently taken a new position on the matter. They are now arguing that the responsibility to maintain the current grid is being shoved into the hands of the less fortunate folks that can’t afford solar. Because solar is becoming increasingly efficient, the folks that can afford it are hardly paying into the system at all anymore. While this may be happening, the state of Hawaii has also recently passed legislation allowing for tax exemptions, loans, and subsidies for those that qualify, allowing for more possibilities to switch to solar than most of the country.

Of course when it comes to profit and motivation for outdated companies like HECO, the age of fossil fuel dependence is inescapable as a determining factor. Republican Cynthia Thielen calls HECO “A company with a drenched-in-oil mentality.” The problem with the companies $1.5 billion dollar a year oil addiction is that the renewable economy is fast outgrowing the finite. As the numbers continue to increase, the amount of money the company receives to maintain the grid is essentially going down, as was previously pointed out. While many people acknowledge that this is a problem, alternate solutions do exist and are being implemented in other parts of the country to alleviate the issue. In Oklahoma for example, legislation was just passed to charge a monthly fee for users to connect to the grid with renewables. In Arizona as well, the court just ruled that users could be charged $4.90 per month, about 10 percent of what the utility companies were asking for. While the maintenance and updating of the system are important factors to consider, it shouldn’t mean putting a halt on expansion of renewable energy sources.

Hawaii is a leading model for the country with many factors that contribute to the importance of moving away from finite energy sources and oil dependency, our location and lack of space at the top. We are ahead of the curve in solar, and there is no reason to stop something that we have an abundance of. HECO needs to open their eyes to the reality of energy in this state, and if they want to survive they have to evolve. The current path of action is one that the public sees as blatant greed, and the people won’t tolerate this without making noise. They need to allow people to connect to the grid with solar and pass new laws to update and maintain the grid, but don’t limit the use of clean, renewable energy. King Kalakaua would have wanted the 120 year legacy that he first sparked with Thomas Edison to do what is pono and listen to the people.

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One Comment to “Solar Standoff: HECO Oligarchy”

  1. Fantastic post – I loved the specifics ! Does anyone know where my company would be able to grab a sample NZ INZ 1190 version to use ?

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