Tariff would unfairly impede private power generation
THE ISSUE
Hawaiian Electric Co. is seeking a new tariff on customers that build their own power systems.
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COMPANIES that install their own power generation systems to cut electricity bills
could end up paying fees to Hawaiian Electric Co. that would wipe out all or much of their savings.
With HECO seeking to build another power plant to increase capacity it says is needed to meet demand and promoting conservation through lowering rates for consumers who use less power, it would seem that HECO would welcome private generation.
But that's not the case. HECO is asking the Public Utilities Commission to place new tariffs on customers that have their own power systems, contending they burden other customers while saving themselves money.
The commission should closely examine HECO's claims of need for the extra fee.
Hawaii has the highest electricity rates in the nation, so it's no wonder customers are looking for ways to cut their costs.
Representatives of two retirement communities opposing the request say the tariffs would eliminate the savings from their cogeneration systems, which produce electricity and heat water for their facilities.
Kahala Nui Senior Living Community spent $500,000 for its system that generates 25 percent of its electricity and estimated it would cut $100,000 a year in power costs as a result. If HECO gets to charge a "standby rate" of between $9 and $11.40 per kilowatt per month, Kahala Nui could end up paying as much as $125,000 a year for electricity it might not even use.
Pohai Nani Good Samaritan Retirement Community, which generates about 60 percent of its power, also could see a good portion -- about $50,000 -- of its estimated $120,000 in annual savings taken up by the tariff.
HECO contends that customers who produce some of their own electricity while still being connected to its grid should be paying a fee for that service because they can draw from HECO whenever the need arises. But because neither facility is completely independent of HECO, they are paying for the service through every billable kilowatt-hour HECO charges them.
HECO also argues that because cogenerating customers use less of its power, others are unfairly burdened with the cost of having to have the electricity available nonetheless, and that includes transmission, maintenance of power lines and other infrastructure. But cogenerating customers also are reducing potential build-up costs for HECO by reducing demand.
The key factor for HECO appears to be loss of revenue. If more customers, particularly those that draw a lot of electricity, break away from its system, the company stands to collect less money, so it is understandable that it would try to protect its own investment.
However, as a public utility, HECO has as much of an obligation to its customers as it does to shareholders.
