By COLIN M. STEWART
Tribune-Herald staff writer
While Hawaii Electric Light Company has predicted its 2012 profits will be impacted as a result of customers switching to solar panels, it does not currently have plans to increase its rates.
HELCO energy services manager Curtis Beck said that the company’s shareholders are currently absorbing the lost income, which last year is estimated to have totaled $7.4 million statewide, with the Big Island accounting for $1.9 million.
Although the impact is substantial, the company continues to haul in tidy profits. HELCO’s net earnings from its statewide electric utilities in 2011 aren’t yet available, but 2010 profits totaled $76.6 million, according to a federal Securities and Exchange Commission filing.
“We don’t want people to think that tomorrow their bill is suddenly going to go up,” he said Tuesday. “They’re handling it just like any expense we might have, and right now we haven’t announced any plans to file any sort of rate adjustment. And we wouldn’t do it for just one expense like this.”
Even so, Beck admitted that HELCO could file for such an adjustment at any time.
“The last one we had was in 2010,” he said, “and before that we had a rate case in 2006. Every few years we may make a change as we are getting more expenses and we need to adjust.”
A rate increase can only go into effect once HELCO or its sister companies propose and receive approval for an adjustment from the state Public Utilities Commission. The same new rate would apply to both regular utility customers as well as those who may feed electricity back into the grid at times, known as “net energy metering,” or NEM customers.
In a status report filed with the PUC last week, HELCO’s parent company, Hawaiian Electric Company, estimated that energy rates on the Big Island would have to increase by .17 cents per kilowatt hour to make up for lost revenue from customers going solar (not 1.7 cents per kilowatt hour, as was erroneously reported Tuesday). Meanwhile, Oahu would see a rate increase of .05 cents per kilowatt hour, and Maui’s rates would go up by .16 cents per kilowatt hour.
The average Big Island customer, who uses 600 kilowatt hours in a month, would see his or her bill go up by $1.02. Average customers on Oahu would pay 30 cents more a month, and Maui residents would pay 96 cents more.
Beck said that the growing popularity of solar panels has definitely had an impact on the company’s bottom line, at least for the short term.
“As more and more of these systems are installed, the rate impact will grow. But you have to compare that against what people perceive, that the price of generating energy from fossil fuels is rising and is expected to continue to rise,” Beck said.
“I want to clarify that we’re looking at this long term,” he said.
Customers who install photovoltaic systems often continue to draw power from HELCO during the day and night, he said, “to the extent that their system is covering the loads within their house.”
If they generate more power than they can use, that surplus energy is fed back into HELCO’s grid, and the customer is reimbursed the full retail value of the electricity to offset purchases over a 12-month period.
While solar panels mean a loss in purchases of HELCO’s power, their costs are more dependable, as compared to the sometimes wildly fluctuating costs of fossil fuels, Beck said.
“Overall, it’s a better deal for those customers to have them avoid that cost of that fuel.”
In an effort to deal with the boom in solar panel popularity, HELCO is looking at increasing its capacity to store energy generated from renewable sources.
Large battery systems, he said, could “even out the variability in power output of these renewable energy sources and solar.
“For instance, we’re in the midst of a research and development project for a battery near the wind farm in Kohala to even out the output of the wind farm,” he said.
Additionally, the company is looking at weaning itself off of fossil fuels by identifying residential, commercial and industrial customers and offering them incentives to voluntarily reduce their electricity use to keep the grid stable when electricity demand is expected to exceed the supply.
Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.
