Hawaii gov. signs performance-based utility rate bill

The bill takes effect in July 2018

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Hawaii's Democratic Gov. David Ige signed a bill into law Tuesday that would tie the business model of electric utilities to several consumer-centered metrics, including reliability and greater integration of renewable energy.

"The purpose of this act is to protect consumers by proactively ensuring that the existing utility business and regulatory model will be updated for the twenty-first century by requiring that electric utility rates be considered just and reasonable only if the rates are derived from a performance-based model for determining utility revenues," according to the bill.

SB 2939, also called the Hawaii Ratepayer Protection Act, tasks the state's public utilities commission to establish performance incentives and penalty mechanisms that "directly tie electric utility revenues to that utility's achievement on performance metrics and break the direct link between allowed revenues and investment levels."

Among the items the PUC will consider when determining rates:

· Economic incentives and cost-recovery mechanisms

· Volatility and affordability of electric rates and customer electric bills;

· Electric service reliability;

· Customer engagement and satisfaction, including customer options for managing electricity costs;

· Access to utility system information, including but not limited to public access to electric system planning data and aggregated customer energy use data and individual access to granular information about an individual customer's own energy use data;

· Rapid integration of renewable energy sources, including quality interconnection of customer-sited resources; and

· Timely execution of competitive procurement, third-party interconnection, and other business processes.

The bill takes effect in July 2018.

Hawaii has a 100 percent by 2045 renewable energy portfolio standard, as well as one of the highest per capita rates of solar power use in the US.

In addition, the cost of importing energy via fossil fuels is three times higher than on the US mainland, incentivizing the state to become energy independent.

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