on renewable energy portfolio standards...– 15% renewable energy by 2015 – 20% renewable energy...
TRANSCRIPT
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APEC Workshop on Recent Advances in Utility Based Financial Mechanisms that Support
Renewable Energy and Energy EfficiencyHonolulu, HawaiiMarch 30, 2009
REGULATOR’S PERSPECTIVE ON
RENEWABLE ENERGY PORTFOLIO STANDARDS
AND
ENERGY EFFICIENCYCarlito P. Caliboso
ChairmanPublic Utilities Commission
State of Hawaii
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BackgroundRegulatory 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).
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Traditional Regulatory Objectives, Ch. 269 HRS
• Reliable Electricity Service
• Just and Reasonable Rates
• Fair Opportunity to Earn Reasonable Rate of Return
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Reasonable Return ($) on Investment for Utility
Reasonable Rates ($) for Customers
Balancing TraditionalRegulatory Objectives
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Hawaii’s Dependence on OilHawaii Fuel Mix
Percent of Fuel Used for Electricity Generation by HECO in 2007
OilCoalBiomassGeothermalHydroWind
Data Source: www.heco.com
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Percent of Fossil Fuel and Renewable Energy Used in Electricity Generation
2007
Fossil FuelRenewable Energy
Data Source: www.heco.com
Hawaii’s Fossil Fuel Dependence
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Comparison of US andHawaii Oil Demand
Oil Demand by End-Use
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
US Total Hawaii
ElectricityHomeAirInd/CommRoad
Source: HNEI
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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
arre
l
OIL WTI
Oil Price Volatility
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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" ReportsKIUC Fuel and Purchased Power Rate Adjustment Reports
Mon
thly
Eff
Rat
es -
Ener
gy C
harg
es $
/kw
h
OAHU HAWAII MAUI LANAI MOLOKAI KAUAI
Vulnerability to Oil Price Volatility
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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" ReportsKIUC Fuel and Purchased Power Rate Adjustment Reports
U.S. DOE Energy Information Administrationhttp://tonto.eia.doe.gov/dnav/pet/pet_pri_spt_s1_m.htm
Perc
ent (
%) C
hang
e Ef
fect
ive
Rat
es -
Ener
gyC
harg
es
OAHU HAWAII MAUI LANAI MOLOKAI KAUAI OIL
Vulnerability to Oil Price Volatility
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Vulnerability to Oil Price Volatility
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Price of OilSince 1980s
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Climate Change(Global Warming)
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Priority Policy andRegulatory Objectives
• Energy Security– Reduce Imported Oil Dependence– Price Stability– Supply Security
• Climate Change (Global Warming)– Reduce Green House Gas
Emissions– Reduce Fossil Fuel Use
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• Energy Efficiency: – Maximize Cost-Effective Energy
Efficiency Programs• Increase Renewable Energy
Generation– Wind – Solar– Geothermal– Wave, OTEC, Biofuels, & Others
Primary Energy Strategies
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• 2004 HECO Rate Case 04-0113 DSM Application Bifurcated
• Energy Efficiency Docket 05-0069
• Public Benefits Fee, Act 162 (2006) , HRS §269-121.
• Energy Efficiency Program Administrator Docket 2007-323
Maximize Energy Efficiency Aggressively
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Public Utilities Commission
Contract Administrator
ProgramEvaluator
FiscalAgent
Program Administrator
RegulatedElectric Utility
Performance Contract &Regulation
Contract Contract Regulation
Evaluation &
Verification
Contract Oversight
Public Benefits Fee $
Hawaii Energy EfficiencyProgram Administrator
July 1, 2009
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• Renewable Portfolio Standards– Standards– Goals
• Broad Policy Tool (Weapon)– Requires % of RE Generation– Communicates Policy to Change
Establishing Energy Policy to Increase RE Generation
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• RPS (includes EE), HRS §269-92– 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)
Establishing Policy to Increase RE Generation: RPS
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BALANCING TRADITIONAL OBJECTIVESWITH
NEW ENERGY POLICY
Traditional Objectives
New Energy Policy
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Kaheawa WindMaui
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Kaheawa WindMaui
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Hawi WindBig Island
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Hawi Wind Big Island
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La Ola Solar FarmLanai
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La Ola Solar FarmLanai
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La Ola Solar FarmLanai
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Renewable Energy ProgressOthers on the Horizon
• Sea Water Air Conditioning• Ocean Thermal Energy
Conversion (OTEC)• Biomass• Biofuels• Wave• Others TBA
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ALOHA