The Hawaiian Electric Companies propose new demand response programs for customer savings

News Release from HECO  (Editor's note: This is a rate hike proposal.)

HONOLULU, July 29, 2014 – The Hawaiian Electric Companies are proposing a portfolio of programs to provide customers more options for saving on their electric bills while supporting the adoption of more clean energy, reducing the use of more expensive fossil-fueled generation and relieving stress on the electric grid.

The programs are outlined in the utilities’ Integrated Demand Response Portfolio Plan filed with the Public Utilities Commission (PUC) yesterday.

The plan lays out new and enhanced “demand response” programs for residential, commercial, industrial and water pumping customers. Under the programs, customers receive financial incentives for shifting energy use to certain times of the day or voluntarily allowing the output of certain appliances or equipment to be adjusted if necessary to help maintain reliable service for our island grids.

Traditionally, when demand for electricity fluctuates throughout the day, utilities have focused on meeting that demand by dispatching generating units – that is, adjusting the supply of power. This becomes more challenging as variable renewable energy resources, such as wind and solar, continue to increase. The possibility of power outages increases when these resources suddenly stop producing power. Demand response programs allow utilities to adjust demand to help maintain the balance between customer use (demand) and generation (supply).

Further, demand response programs can be a more cost-effective option than using energy storage or oil-fired generation to balance demand and supply.

In addition, by offering lower or higher prices during certain times of the day, some demand response programs encourage customers to shift energy use to specific times, such as when solar and wind systems are producing the most power. This can maximize the use of wind and solar power that might otherwise be wasted.

"Demand response programs are a win-win for our customers and the environment," said Shelee Kimura, Hawaiian Electric vice president for corporate planning and business development. "With demand response, customers get financial rewards that lower their monthly bills. We reduce the use of more expensive generators to meet electricity needs. And together we can unlock the potential for more low-cost renewable energy."

In most cases, customers participating in demand response programs agree to allow the utility to adjust the energy use of pre-determined appliances remotely, like residential and commercial hot water heaters or air conditioners. Larger commercial and industrial customers may also include equipment that they will not miss for short periods. A signal sent from the utility to a customer’s electrical equipment or energy management system adjusts the equipment.

To help enroll customers, the Hawaiian Electric Companies plan to work with independent companies that also have experience implementing demand response. This includes coordinating with Hawaii Energy, the PUC-appointed public benefits fund administrator that manages energy efficiency programs, including rebates for solar water heating and energy efficient appliances.

The utilities also plan to build on their partnership with Energy Excelerator, a resource provider for clean-energy startups, to enhance the demand response portfolio continuously by using emerging technologies.

Hawaiian Electric currently offers five demand response programs on Oahu. Among them is “Energy Scout” which provides 32,000 participating residential and small business customers a credit on their electric bills to allow the utility to turn off their hot water heaters remotely for brief periods. “Fast DR” is a pilot program that pays participating large commercial and industrial customers several thousand dollars in incentives each month to allow the utility to reduce their electricity use briefly when necessary to stabilize the grid.

Subject to review and approval by the PUC, existing programs will be revised and new ones developed and rolled out in 2015 for customers on Oahu, Maui and Hawaii Island, and later for Molokai and Lanai.

The new demand response portfolio complements the use of large-scale energy storage as another way to as another way to support clean energy while maintaining reliable service. Hawaiian Electric recently issued a request for proposals for large-scale energy storage and is currently reviewing bids.

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