Maui Electric Responds to County of Maui’s Guernsey Report

January 15, 2016, 5:21 PM HST · Updated January 15, 5:21 PM
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Guernsey report. Photo by Wendy Osher.

Guernsey report. Photo by Wendy Osher.

Representatives with Maui Electric Company today released a statement in response to the County’s Guernsey Report which outlines energy options to the proposed NextEra/Hawaiian Electric deal.

County officials today released an analysis of alternate forms of ownership for an electric utility and announced a new county Energy Coordinator position as well as efforts to secure a “utility consultant.”

Maui Electric responded in a written statement saying:

“The Hawaiian Electric Companies take very seriously our commitment to provide our customers with safe, reliable, affordable electric service and to achieve our state’s clean energy goals, including a 100% renewable portfolio standard.

Under the existing investor-owned utility model, Hawai‘i is a national clean energy leader, including integrating twenty times more solar per customer than the national average, and generating electricity using almost 50% renewable energy on Hawai‘i Island and more than 30% renewable energy on Maui.

Any credible analysis of alternative utility ownership models or market structures must recognize that such efforts are complex, time consuming and costly and may in fact increase rates for electric customers with no guarantees of improvements in reliability or integration of renewable energy.”

MECO 2030 plan. Graphic by Wendy Osher.

MECO 2030 plan. Graphic by Wendy Osher.

Maui Electric touched upon several areas of contention relating to: electric rates; proposed legislation relating to eminent domain; consideration of Maui County’s remote location and three separate island grids; and near-term recommendations for operation.  Maui Electric representatives outlined their concerns below:

  • In fact, the report from the County’s consultant says electric rates would likely increase for Maui customers after acquisition of Maui Electric’s assets by either a cooperative or municipal utility. The report also concludes significant investment is needed in the electric grid to achieve the state’s clean energy goals, and yet notes that limited access to capital is a disadvantage of a municipally owned or co-op utility model.
  • We haven’t reviewed the proposed legislation regarding eminent domain so we cannot yet comment on the specific proposal, but any effort by the County to acquire Maui Electric through eminent domain or taking the assets of an electric utility would not be simple or fast – or cheap. It would include multiple time consuming steps, considerable uncertainty, and greater expense for legal proceedings.
  • The general statements made in the report about the benefits of alternative ownership models also do not take into account the unique circumstances of Hawai‘i and in particular, Maui County’s remote location and three separate island grids.
  • Regarding the near-term recommendation to pursue an Independent System Operator or Regional Transmission Operator to plan and run the Maui Electric grid, it should be noted that elsewhere such entities operate in much larger markets, covering multiple states or large states such as California and Texas where costs are spread over very large markets. In our small island market, costs to add this layer of a new organization would likely increase costs to customers.
Maui Electric Company. Photo by Wendy Osher.

Maui Electric Company. Photo by Wendy Osher.

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Maui Electric representatives further contend that, “there is no evidence in the report that an ISO or RTO would bring greater expertise to managing the complexities of running a small island grid and the challenges of reliably integrating increasing levels of variable renewable energy that are already higher than anywhere else on the mainland.”

“Even on the mainland, the federal General Accounting Office has reported that there is no consensus that Independent System Operators or Regional Transmission Organizations in other parts of the country have been proven to lower costs for customers. The American Public Power Association says there are questions whether these structures can meet the future reliability needs of their customers,” company representatives said.

Maui Electric representatives say their efforts remain focused on continuing to “transform the company” to improve service for customers, modernize its grid, integrate increasing amounts of low cost renewable energy and meet the state’s clean energy goals. “We look forward to working with Maui County to achieve these goals,” representatives said.

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