Hawaii PUC Rejects Smart Grid Proposal

Hawaii’s Public Utilities Commission (PUC) last week denied a request by Hawaiian Electric Co. (HECO) to extend pilot testing for its advanced metering infrastructure (AMI) project to 5,000 more smart meter because of cost concerns. The move poses a major hurdle for the utility’s overall smart grid initiative.

The utility had said in May that additional pilot testing would be necessary to understand, in detail, how advanced metering would work with a new customer information system. The extended pilot testing program would have cost $1.75 million.

The PUC said that HECO could not proceed with the plans outlined in its original application, filed in December 2008, without engaging in the extended pilot testing. It wrote that “any new AMI or, preferably, AMI/smart grid application should include or be preceded by an overall smart grid plan or proposal filed with the commission.”

The PUC dismissed the application without prejudice and closed the docket, which means that HECO will be able to re-file an application.

The news comes on the heels of Maryland Public Service Commission’s denial  of Baltimore Gas & Electric Co.’s (BGE’s) application to deploy smart meters to all of its customers. The commission denied the proposal in June because it said ratepayers would be saddled with financial and technological risks.

That smart grid project had received a $200 million federal stimulus grant from the Department of Energy last October—the largest amount awarded to a utility. BGE resubmitted an amended proposal for the plan earlier in July.

The original BGE proposal called for rate increases to pay for the project up front, as well as mandatory time-of-use pricing. The current plan still calls for some increases (about 30 cents per user per month, according to the filing), but BGE claims they will be offset by an average customer savings of about $100 per year.
Sources: HECO, BGE, POWERnews