Energy Informational BriefingHouse Committee on Energy & Environmental Protection

and the Senate Committee on Energy and Environment

UPDATE ON ENERGY INITIATIVES

Public Utilities CommissionState of HawaiiCarlito P. Caliboso

Chairman

January 22, 2009

Commission Regulatory Authority

• General supervisory power over public utilities under Chapter 269, HRS. HRS §269-6(a).

• “The public utilities commission may consider the need for increased renewable energy use in exercising its authority under this chapter.” HRS §269-6(b). Act 177 (SLH 2007).

Traditional Regulatory Objectives, Ch. 269 HRS

• Reliable Electricity Service

• Just and Reasonable Electricity Rates

• Fair Opportunity to Earn Reasonable Rate of Return

OIL PRICES (WTI)

40

50

60

70

80

90

100

110

120

130

140

Jan-

07

Feb-

07

Mar-

07

Apr-

07

May-

07

Jun-

07

Jul-

07

Aug-

07

Sep-

07

Oct-

07

Nov-

07

Dec-

07

Jan-

08

Feb-

08

Mar-

08

Apr-

08

May-

08

Jun-

08

Jul-

08

Aug-

08

Sep-

08

Oct-

08

Nov-

08

Dec-

08

Jan-

09

Data Source: U.S. DOE Energy Information Administration

http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_m.htm

$/B

arr

el

OIL WTI

EFFECTIVE RATES

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

Jan-

07

Feb-

07

Mar-

07

Apr-

07

May-

07

Jun-

07

Jul-

07

Aug-

07

Sep-

07

Oct-

07

Nov-

07

Dec-

07

Jan-

08

Feb-

08

Mar-

08

Apr-

08

May-

08

Jun-

08

Jul-

08

Aug-

08

Sep-

08

Oct-

08

Nov-

08

Dec-

08

Jan-

09

Data Source: HECO Companies' "Effective Rate Summaries" Reports

KIUC Fuel and Purchased Power Rate Adjustment Reports

Mo

nth

ly E

ff R

ate

s -

En

erg

y C

ha

rge

s $

/kw

h

OAHU HAWAII MAUI LANAI MOLOKAI KAUAI

EFFECTIVE RATES AND OIL PRICE CHANGESSINCE JANUARY 1, 2007

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Jan-

07

Feb-

07

Mar-

07

Apr-

07

May-

07

Jun-

07

Jul-

07

Aug-

07

Sep-

07

Oct-

07

Nov-

07

Dec-

07

Jan-

08

Feb-

08

Mar-

08

Apr-

08

May-

08

Jun-

08

Jul-

08

Aug-

08

Sep-

08

Oct-

08

Nov-

08

Dec-

08

Jan-

09

Data Source: HECO Companies' "Effective Rate Summaries" Reports

KIUC Fuel and Purchased Power Rate Adjustment Reports

U.S. DOE Energy Information Administration

http://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_m.htm

Pe

rce

nt

(%)

Ch

an

ge

Eff

ec

tiv

e R

ate

s -

En

erg

yC

ha

rge

s

OAHU HAWAII MAUI LANAI MOLOKAI KAUAI OIL

Priority Policy andRegulatory Objectives

• Energy Security – Reduce Dependence on Imported Oil– Supply Security

– Price Stability

• Climate Change – Reduce Green House Gas Emissions

• Maximize Cost-Effective Energy Efficiency

• Increase Renewable Energy

• See HCEI Agreement

Energy Strategies

• 2004 HECO Rate Case 04-0113 DSM Application Bifurcated

• Energy Efficiency Docket 05-0069

• Public Benefits Fee, Act 162 (2006)

• Energy Efficiency Program Administrator Docket 2007-323

Energy Efficiency

• RFP Issued and Contractor Selected

• Fiscal Administrator: BoH

• Contract Administrator: Jim Flanagan Associates

• Program Administrator: Science Applications International Corporation (SAIC)

Energy EfficiencyProgram Administrator

• RPS– 10% Renewable Energy by 2010

– 15% Renewable Energy by 2015

– 20% Renewable Energy by 2020

• Penalties Established for RPS at $20 per MWh of deficiency. (Order 12/19/2008 Docket 2007-0008)

Increasing Renewable Energy Generation

• Feed-in-Tariffs (Docket 2008-0273)

• Decoupling Mechanism (Docket 2008-0274)

• Net Energy Metering– System Caps Increased for HELCO

and MECO from 1.0% to 3.0%-4.0% (Order 12/26/2008, 2006-0084)

– HECO to apply for 15% circuit cap per HCEI

Increasing Renewable Energy Generation