In the environmental impact statement for the proposed Waena power plant, Maui Electric Company refers to its energy-conservation program as “one of the most aggressive and dynamic in the United States.” If this “aggressive” program meets its goals, Maui’s demand for energy in the year 2016 will be 10 percent less than what it otherwise would be, given MECO’s forecasts.
However, if the results of MECO’s first year of implementing its conservation program are any indication, even that 10 percent goal may well be hopelessly optimistic. While MECO anticipated saving the equivalent of about 1.5 megawatt in generating capacity in the first year, actual savings were a mere 319 kilowatts, about a fifth of MECO’s goal.
Demand-Side Management
One result of the integrated resource planning project undertaken by utilities statewide was the development of plans to reduce the need for new power plants by curbing consumption, or demand. These so-called demand-side management programs, approved by the state Public Utilities Commission, give utilities as well as consumers incentives to adopt conservation measures, such as installation of solar water heaters, use of energy-efficient lighting and refrigeration systems, and adoption of energy-reducing techniques in new building design.
Consumers can benefit through lower electric bills and direct rebates from the utility on the purchase of energy-efficient fixtures. Utility shareholders, who would otherwise see their profits decline along with sales of electricity as a result of conservation measures, receive an incentive in the form of a special tariff paid by consumers and adjustments in their overall base rates. (This appears on electric bills as the IRP cost recovery item.)
As part of the IRP process, the utilities must file annual reports with the Public Utilities Commission. Maui Electric Company’s most recent report, submitted on April 30, 1997, outlines its progress in meeting demand-side management goals in the first year of its IRP program.
Falling Short
Altogether, MECO reported 1996 conservation efforts worth 267 kilowatts at the meter, equivalent to 319 kilowatts of generated power once system losses (mainly in transmission lines) are taken into account.
Eighty-five percent of the gross savings — 271 kilowatts — came from just one customer, a large resort hotel. The incentive rebate MECO paid to this customer amounted to $124,869, or 97 percent of the total costs of MECO’s demand-side management program for 1996. The program undertaken by this one customer alone resulted in MECO achieving, and, in fact, exceeding its goals for the commercial sector of its DSM program in 1996.
The remainder of the savings effected by MECO’s DSM program in 1996 came from installation of residential solar-water heaters. In this area, MECO had forecast savings equivalent to 353 kilowatts of generating capacity. Results fell far short of the mark. By the end of 1996, the actual gross savings achieved from installation of energy-efficient residential water heaters amounted to 47.7 kilowatts, barely 13 percent of the savings forecast.
According to MECO, however, the utility was not able to keep up with the demand for solar-water heaters. In addition, many of the customers who installed such systems experienced lengthy delays in receiving the $800 rebates owed them. This, MECO told the PUC, was a result of “the rampant failure of one volume contractor to pass system post-inspections [a required step before rebates are awarded], the delay in the processing of the payments due to the need for re-inspections, etc.”
Despite the problems, MECO said the program was going “so well in late 1996 [that] no advertising seemed warranted. In fact, the biggest problem in the program was processing the backlog of applications. Therefore, it was decided to delay some advertising until the slow season of 1997.”
— Patricia Tummons
Volume 8, Number 10 April 1998