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Charging Ahead

Hawaii Looks beyond Oil

(page 3 of 5)

The Hawaii Clean Energy Initiative, with its laundry list of commitments to renewable, local energy — including 40 percent renewables by 2030 — is supposed to change everything. The most important element of the initiative is an effort to force businesses and consumers to change the way they think about energy.

Consider: the easiest way to reduce our reliance on fossil fuels is to promote greater efficiency. In the old business model, the utility was paid based on the number of kilowatt-hours sold, which tends to encourage profligacy. The HCEI agreement, though, proposes to “decouple” HECO’s rates from how much energy is sold. Instead, the utility will be rewarded for improving customers’ efficiency.

Robbie Alm, HECO’s senior vice president for public affairs

Decoupling helps control demand; to improve the supply of renewable energy sources, the electric company agrees to post “feed-in” tariffs — essentially, the rates they’ll pay to purchase different kinds of renewable energy. Knowing the feed-in tariff gives companies what they need to decide whether they want to invest in Hawaii’s renewable energy market. Together, decoupling and feed-in tariffs will transform how the electric company — and their customers — do business.  

Not everyone is sanguine about the initiative’s prospects. Even some of its strongest supporters acknowledge the failure of similar programs and initiatives in the past. Mikulina, who has enthusiastically endorsed the HECO agreement, points to the electric company’s Kahuku wind project in the 1970s as a kind of cautionary tale. “When they put those turbines in, that was cutting edge,” Mikulina says. “Those were the largest wind turbines in the world at the time, and they should get credit for it.” Nevertheless, the project, which began in response to the oil crises of the 1970s, foundered when oil prices fell again in the 1980s. Mikulina says, “Recently, they’ve been right on target. But right now, it’s just on paper. And the devil’s in the details.”


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Hawaii Business,January