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HomeMy WebLinkAboutREP AWESC 003 07/18/2012 2010-2012 REPORT OF THE COMMITTEE ON AGRICULTURE, WATER AND ENERGY SUSTAINABILITY DATE: July 18, 2012 RE: Comm. No. 778/Res. No. 277-12 PLACE: Council Chambers Kailua-Kona, Hawai`i TIME: 3:55 p.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Your Committee on Agriculture, Water and Energy Sustainability, to which was referred Resolution No. 277-12, reports as follows: Resolution No. 277-12, transmitted by Chairperson Dominic Yagong via Communication No. 778, dated July 11, 2012, encourages the State of Hawaii Public Utilities Commission to raise Hawai`i Electric Light Company's (HELCO) renewable feeder penetration threshold from 15 percent of peak load to 50 percent of minimum load. Net Energy Metering is a system that allows customers who generate electricity (using wind, solar, etc.) primarily for their own consumption to sell excess electricity to the electric utility company. According to HELCO, there is a limited amount of Net Energy Metering systems that can be interconnected to HELCO's grid on each individual distribution feeder before significant impacts may occur to the reliability of electrical service provided to customers. The Public Utilities Commission has set a 15 percent threshold for the amount of excess electricity that may be delivered by Net Energy Metering systems to each individual distribution feeder. According to HELCO's Rule 14H, when the 15 percent threshold is exceeded in an individual distribution feeder, a Supplemental Review of the customer's application is required, which will most likely result in an Interconnection Requirements Study that would cost the customer between $2,000 and $100,000, depending on the size of the Net Energy Metering system. If the study determines that additional equipment or grid improvements are needed, then the customer would be responsible for those costs as well. Increasing the minimum threshold would provide HELCO the opportunity to work with companies such as National Energy Partners, LLC to negotiate financing of general upgrades and improvements to the electrical utility grid as an alternative to requiring the Interconnection Requirements Study. There were five testifiers from the Hilo Council Chambers and four from the Pahoa Council Office. All nine testifiers spoke in support of the resolution. Mr. Yagong submitted the following amendments via Communication No. 778.1: • Change "50 percent" to "100 percent" in the resolution title and the BE IT RESOLVED clause. AWESC Report No. 3 AWESC-3 Page 2 July 18, 2012 • Adds a new WHEREAS clause: "WHEREAS, it is important for the residents of Hawai`i County to have an opportunity discuss this issue with the Public Utilities Commission in an open forum and; now, therefore," • Adds a BE IT FURTHER RESOLVED clause: "BE IT FURTHER RESOLVED that the Public Utilities Commission schedule at least two hearings to be held in Kailua Kona and Hilo, to discuss the subject matter." Mr. Yagong explained that the 50 percent minimum load is equivalent to a 15 percent threshold, which is where it is at now. Changing it to a 100 percent minimum load would allow the peak load to go up to a 30 percent threshold. Mr. Hoffmann had some questions for Mr. Jay Ignacio, President of HELCO, regarding the threshold limits. Mr. Yagong explained that Mr. Ignacio was out of town and that he would be present at the next meeting to answer questions. The amendments submitted via Communication No. 778.1 passed unanimously (Mr. Onishi was absent). During discussions on the main motion, Mr. Yagong explained that if the Public Utilities Commission allowed HELCO to raise the threshold to 30 percent, whereby allowing more homeowners to install solar without having to pay for the Interconnection Requirements Study, then National Energy Partners, LLC would be willing to pay for the required upgrades to the grid. Mr. Yagong also stated that over 40 percent of the building permits pulled in the State of Hawai`i are for solar installations. In 2009, there were 237 photovoltaic installers in the State of Hawai`i, now there are 684 installers. Mr. Yagong then read from a letter that he received from Mr. Ignacio via email stating that HELCO is in agreement with the resolution's desire to increase the amount of renewable energy used on Hawai`i Island. Although they agree with the resolution's spirit to increase the use of photovoltaic energy as fast as possible, they still must ensure that there are no electric reliability or safety issues for their customers when there are high levels of photovoltaic installations concentrated in an area. The letter, however, did not address the Interconnection Requirements Study that must be paid for by the homeowners. Mr. Yagong explained that once the threshold of 15 percent is met in any given area, any additional homeowners in that same area that want to install solar must each pay for a study instead of just having one study done for the entire area. Ms. Ford stated that some homeowners on solar are using backup batteries in order to be completely off the grid rather than having to pay for the expensive Interconnection Requirements Study. Mr. Yagong announced that HELCO,National Energy Partners, LLC, and others from the solar industry will be attending the next meeting of the full Council to answer questions. Mr. Hoffmann stated that he wanted to ask Mr. Ignacio why we are the only county in the United States that is strapped as we are now. He knows of no other municipality that suffers from the same type of cost inflation and restrictions. Mr. Hoffmann urges both the Council and the Administration to move this issue forward. AWESC-3 Page 3 July 18, 2012 To add to Mr. Hoffmann's comments, Mr. Yagong stated that even Kaua`i has certain areas with a saturation rate of up to 80 percent, depending on the proximity to the grid. Your Committee on Agriculture, Water and Energy Sustainability is in accord with the purpose and intent of Resolution No. 277-12, as amended to Draft 2, and recommends its adoption. dwe AYES NOES A&E EX Respectfully submitted, BLAS X FORD x COMMITTEE ON AGRICULTURE, WATER HOFFMANN x AND ENERGY SUSTAINABILITY IKEDA X _ ONISHI X ' PILAGO X � SMART X J YOS u •TO, CHAIR YAGONG x AWESC REPORT NO. 3 YOSHIMOTO x ADOPTED: AUG 0 1 2012