A microgrid tariff proposed by Hawaiian Electric (HECO) is receiving mixed reviews as the state attempts to break new ground in creating microgrid compensation.
Now before the Hawaii Public Utilities Commission (PUC), the utility proposed the tariff in the first phase of a regulatory effort to fulfill a microgrid law (Act 200) signed in July 2018 by Governor David Ige. The law seeks to establish greater structure around microgrid interconnection and the value of microgrid services through a tariff program (Docket No. 2018-0163).
The regulatory effort before the PUC is important to the microgrid industry because ambiguity about utility regulatory treatment is one of the main impediments to microgrid development, said Richard Stuebi, senior fellow, Boston University Institute for Sustainable Energy, which had sent a note of support to the commission for its efforts.
“There is relatively little conceptual agreement on whether and how the local utility should be involved, and how the utility would be compensated for its involvement, in a prospective microgrid,” he said.
While a few precedents have been established, there is no systematic approach on how utility regulators should address microgrids, he added.
First-of-its-kind microgrid tariff
“Being the first of its kind and involving a thorough public process, the Hawaii microgrid tariff proceeding is being watched carefully by the US microgrid community, as it is likely to set a clear direction that other state regulatory authorities will evaluate,” Stuebi said.
The first phase of the docket looks only at emergency situations that would cause a microgrid to island, said Jennifer Potter, commissioner, Hawaii PUC.
“When we first started this, it was a big chunk to bite off,” she said. The first phase is fairly restrictive, and doesn’t look at grid services. And it doesn’t address microgrids interconnecting and use the utility grid as a backup power source. “That’s the next phase.”
In its filing, HECO proposed a $5/kW charge, on an annual basis, for microgrid operators who want to use the resources of the utility to coordinate dispatch and islanding, said Ashley Agcaoili, staff attorney at the Hawaii PUC. For example, for a 500 kW microgrid, the annual fee would be $2,500, she said.
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