HELCO's Energy Conservation Plan Falls Short of Goals; Economy Blamed

posted in: May 1998 | 0

HELCO’s Integrated Resources Plan, approved by the Public Utilities Commission in 1996, outlines a demand-side management program that is intended to result by the year 2013 in savings of 31 megawatts of generating capacity.

But, according to HELCO’s report to the PUC made after its first full year of efforts to implement DSM measures, the utility will fall far short of meeting its projections. Instead of achieving a savings of 31 megawatts in avoided peak-power demand by the year 2013 through demand-side management, HELCO’s 1997 annual evaluation report, submitted to the PUC in June 1997, anticipates DSM savings of just 13 megawatts by the year 2013.

Offsetting the losses in DSM are reductions in the projections of anticipated need. In 1994, peak electrical demand in the year 2013 was projected to be 275 megawatts. In 1997, that was revised down to 240 MW. According to HELCO, the reduction in anticipated demand is based on revised forecasts that reflect “updated assumptions regarding Hawai`i Island, state of Hawai`i, U.S., and Japan economic growth.”

Despite the decline in anticipated need, HELCO is pursuing a course that will bring more power on line — at ratepayer expense — well in advance of when it will be needed, according to the state Division of Consumer Advocacy.

Excess Capacity

In a comment September 26, 1997, distributed to the HELCO IRP advisory group, and again in its formal review of the evaluation presented to the Public Utilities Commission on February 17, 1998, the Consumer Advocate described HELCO’s evaluation as an unauthorized revision, based on undefended assumptions, to the PUC-approved integrated resources plan.

In the September document, Lynn Ebisui of the Consumer Advocate’s office chastised HELCO for not discussing the plan revisions with the IRP advisory group: “It is understandable that the short time frame in the first IRP filing (in 1993) did not lend itself to extensive discussions or input solicitation from Advisory Group members. Although that should no be the case in the current proceeding, it is occurring again.”

“Our review of the report revealed several shortcomings,” Ebisui wrote, “the most serious one being the absence of analyses supporting the amended plan.”

The schedule for installation of new generating capacity also drew fire: “HELCO indicated at its September 9 Advisory Group meeting that it considers the EDC [Enserch Development Co.] combined cycle unit and the Keahole Units CT-4 and CT-5 to be ‘fixed’ additions to the system and that its next IRP plan will only address the resource needs after these units are installed. It should be noted that the IRP preferred and alternate plans introduced by HELCO in its first IRP filing are significantly different from the amended plan with respect to the EDC, CT-4 and CT-5 units.”

Ebisui noted that the revision “does not appear to be the least-cost plan from the ratepayers’ perspective,” since HELCO had purchased the CT-5 unit “at its own risk prior to receiving Commission authorization. In addition, HELCO now plans to install the unit before planning criteria appear to require the additional capacity.”

Other inconsistencies between the approved IRP and the revision include the fact that many of the units anticipated for long-term service in the first IRP are scheduled to be phased out now. “For example,” Ebisui writes, “HELCO requested commission approval last year to commit $2.8 million to upgrade the CT-1 turbine and increase its output by 2.5 MW by the end of 1996. At that time, HELCO estimated a five-year life for the upgrade… In the Annual Evaluation Report, HELCO now plans to place CT-1 on standby in June 1991 (less than three years after the upgrade) and not count the upgraded unit as firm capacity.”

A Costly Plan

HELCO reported spending $2.25 million between 1994 and 1996 on integrated resources planning, with an additional $1 million being spent in 1996 on demand-side management programs. For 1997, it anticipated DSM costs at $1.9 million, with additional IRP work estimated at $1.1 million.

This represents a departure from plans filed in the original IRP report, Ebisui notes, but HELCO has not explained the reasons behind the departure.

In any case, results from the DSM program have not lived up to expectations; as HELCO describes this, the “DSM program impacts are slightly below target.” As mentioned above, the long-term results have been scaled back — from 31 MW to 13 MW by the year 2013.

Reasons behind the slow start of the utility’s demand-side management program were given as “the slow Big Island economy, high cost of materials and labor, lack of customer awareness of financing options, project delays, other customer spending priorities, and lack of enthusiasm by trade allies (contractors, equipment vendors, and design professionals).”

The longer-term revisions reflect “an improved assessment of the DSM market potential,” HELCO states.

As of last May, the utility had distributed 15,000 low-flow showerheads, resulting in a capacity savings of 1.3 MW during peak loads. In addition, it had received applications for 479 solar water-heating systems, of which 260 had been installed and inspected. This, HELCO estimates, resulted in capacity savings of 0.12 MW during peak loads.

Commercial conservation programs, HELCO reports, resulted in a peak-load savings of less than 1 MW.

HELCO’s next revision to its IRP is scheduled to be presented to the Public Utilities Commission in September 1998.

— Patricia Tummons

Volume 8, Number 11 May 1998

Leave a Reply

Your email address will not be published. Required fields are marked *