What is your reaction to how the EPA’s carbon emissions rule might affect your state? What are some ways your state is already prepared and what might be more challenging?
We are pleased with the rule in terms of state flexibility and optionality. I think that’s a positive—they were listening…They’re willing to defer to state plans and not one-size-fits-all but allow states that are more advanced, such as ourselves, with a very aggressive renewable portfolio standard and energy efficiency portfolio standards…We have sister states, California and the Northeast states, Regional Greenhouse Gas Initiative states, that also have aggressive renewable portfolio standards…There are questions that are still out there in terms of how much flexibility when it actual comes down to review of the plans.
Overall it’s positive. Our state is quite ahead…We have a very aggressive renewable portfolio standard–which is 40 percent by 2030. In fact, some of our utilities, a local, rural cooperative, has set for itself a higher standard, more than 50 percent renewable by 2030. Their diversity portfolio is actually constrained. They can’t do wind on their island. Kauai has a lot of endangered species–birds. So they can only do solar, biomass and hydro. They’ve been very proactive.
Our utilities in our state have had to embrace these other alternative components of the generation resource toolkit, and energy efficiency, demand response. There’s many ways to achieve greenhouse gas emissions (reductions)…The good thing about what the EPA rule did is it allows for system-wide reductions, not just point source…Energy efficiency has been very successful in Hawaii…customers have reduced their consumption. We have a very engaged customer base with the rates that we have, and people that are very open to being demand-response, demand-side management participants.
We don’t have natural gas. We’re an island…There are efforts now…some utilities are looking into the possibility of bringing liquefied natural gas into Hawaii. But that is a horizon that’s farther down. So the immediate compliance strategy will have to be building on what we have already done.
We have one coal plant, which I believe is environmentally compliant…It does help to stabilize pricing on Oahu…When you combine with the oil and diesel-fired types of generation we have, it helps to mitigate pricing. There’s some local refining, but the crude is imported, so we’re paying a premium for that and that’s why our electricity prices in Hawaii range anywhere from 34 cents per kilowatt hour to a high of 46 cents per kilowatt hour. So it’s very high electric costs for the customers.
Do you foresee your state having a formal or informal stakeholder process?
We’ve been working very collaboratively with our state environmental regulation agency, which is the Department of Health, and with the Department of Business and Economic Development (which includes the state energy department)…The next process is…whatever plans we put together will be subject to the public hearing and input processes of our respective agencies.
We’ve always looked at ourselves as an energy ecosystem that has to solve its own issues and we’re constrained that way because we’re little island grids…Sowe can’t look across borders.
Do you feel your role and responsibilities as a state regulator are evolving? Why or why not?
I feel we are leading, and we as regulators have the responsibility to help facilitate and support that transformation…and trying to encourage utilities to think of new and innovative ways to reduce costs to customers, to share cost-savings with customers, to integrate more renewable energy resources, to embrace the tools in the toolkit like storage.
What are some of the biggest energy issues facing your state?
We have the best wind resources in the country, if not the world…Again, harnessing all that cheaper renewable energy…not curtailing that energy, trying to target improvement and modernization of the grid (is key).
In our state, the solar peak doesn’t necessarily follow consumption load peak at the end of the day. Unlike other states on the mainland, our solar peak is between 10 am and 3 pm (and that creates an opportunity for electric vehicles that can be charged during the day while they are parked.)
We have also some baseload resources you don’t think are baseload. We have geothermal. It is utilizing resources that are already there—resources people don’t think of as generation—energy efficiency, demand response…we can shift load.
We are sending a postcard from the future. Things that are happening in our jurisdiction are happening in real-time so there’s an opportunity for innovation…even in environmental compliance areas that the other states are not yet facing because they don’t have this high penetration of renewables, they don’t have some of the issues that we’re dealing with in terms of rooftop solar and distribution interconnection issues, etc.
This interview was conducted at the NARUC summer meetings in July 2014. To see Q&As with commissioners from other states, visit our interactive map. For a broader story about how state regulators from around the country are reacting to the EPA’s carbon emissions proposal, click here.
If you’re a commissioner and didn’t get to talk to Morning Consult at the conference, feel free to contact Emily Holden. We’d love to hear from other state officials and stakeholders too.