Approved HECO Power Supply Plan Means Development Opportunities in Hawaii

On July 14, 2017, the Hawaii Public Utility Commission (PUC) issued Decision and Order No. 34696, approving the Hawaiian Electric Companies’ Power Supply Improvement Plan (PSIP).   This plan provides a roadmap for achieving the State’s Renewable Portfolio Standard, which provides for 100% renewables in the electric sector by 2045.  

The plan is the culmination of a process that began in April 2014 and is informed by extensive analysis by the utility, input from various stakeholders and guidance from the PUC.   The approved PSIP presents a long-term “optimal” resource plan through 2045 that includes new utility-scale renewable generation, legacy generation retirements, new energy storage, distributed generation and demand response.  

The focus of the approved PSIP is the 5-year “Action Plan.”   This plan requires approximately 300 MW of utility–scale additional renewable generation and approximately 200 MW of energy storage (excluding projects already under development that are included in the Action Plan) on the islands of Oahu, Maui and Hawaii.  Therefore, the PSIP Action Plan represents substantial opportunities for developers, EPC’s and financing entities.

The next step will be a utility-led competitive process to procure resources from project developers.  While the 5-year action plan serves as a guideline for the next five years, it is likely that one or more Requests for Proposals will be issued on an all-source basis.  It is the competitive process and the resulting power purchase agreements that come out of that process that will determine the specific makeup of the next tranche of resources on the path towards Hawaii's 100% RPS goal.   

The competitive process will be conducted under the auspices of the PUC via a docketed proceeding.  Within that proceeding, the utility must file a draft of the RFP(s).  Stakeholder input will be solicited, which will likely result in modifications to the RFP(s) that is (are) ultimately approved by the PUC.  After that approval, the RFP(s) will be issued.  

A key question is the length of time it will take for the PUC's RFP approval process to transpire.  If the past is any guide, the issuance of an RFP could be anywhere from 6 to 12 months away.  

Developers:  stay tuned. 

 

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HDBaker & Company was honored to assist the Hawaiian Electric Companies develop the PSIP.   Between 2014 and 2016 our role included planning process design, objective research and evaluation of supply-side technologies to be considered in the planning process, development of forward cost curves for generation and energy storage resources, evaluation of floating platform offshore wind development challenges, evaluation of terrestrial wind and solar resource development potential within the Hawaiian Islands (working with the National Renewable Energy Laboratory), interactions with PUC staff and stakeholders during technical conferences, and substantial contributions to the development of the final reports filed with the PUC.