Honolulu, HI —

Yesterday, the Public Utilities Commission of the State of Hawai‘i (PUC) approved a national precedent setting settlement between Hawai‘i investor-owned utilities and renewable energy organizations that adopts new rules governing connections between renewable energy sources and the electrical grid. The new rules, scheduled to go into effect December 3, 2011, are expected to pave the way for more decentralized renewable generation, like rooftop solar panels, to contribute to the energy mix in the islands. Home and business owners often face extra costs and red tape in installing rooftop solar systems because utilities are wary of the effects of independent, small systems feeding energy into the power lines. The new rules ease utilities’ acceptance of more power from rooftop solar panels and other decentralized renewable sources, while lessening the burdens on utility customers who want to “go green.”

“The improvements to Hawai‘i’s interconnection rules are a big first step toward enabling more homes and businesses to join the clean energy wave. Hawai‘i and the rest of the nation need to continue such progress to break our addiction to dirty fossil fuels,” said Earthjustice attorney Isaac Moriwake, who represented the Hawai‘i Solar Energy Association (HSEA) before the PUC.

The improved rules include allowing the amount of renewable generation on a local power line to move beyond the current barrier of 15 percent of peak load, without requiring a special study of the potential impacts. The 15 percent level, which was raised from 10 percent last year in a previous settlement, has acted as a virtual ceiling on renewable energy at the circuit level because of the costs and delays of such studies.

Now, the utilities may use a streamlined “supplemental review” process to approve renewable generation beyond the 15 percent level without a full-blown interconnection study. The streamlined review process also opens more grid capacity to solar photovoltaic systems, because they generate electricity during the day when circuit loads are higher. This accommodation of higher levels of solar PV is the first such step in the nation and may lead to further ways to improve access for renewables to the grid.

While 15 percent of peak load has long been the “rule of thumb” for utilities across the U.S., the increasing levels of decentralized solar energy in Hawai‘i and other states are raising the need to find ways to accommodate higher contributions from renewable energy sources. Hawai‘i’s improved rules pave the way for further advancements in interconnection practices here and elsewhere.

“The 15 percent of peak load limit has essentially closed many circuits across the state to renewable energy business,” said Mark Duda, President of HSEA. “Hopefully, this more efficient and transparent system will open up not only more access to the grid, but also broader perspectives on how we can achieve a clean energy future.”

The settlement the PUC approved yesterday was the product of more than a year of negotiations between the Hawaiian Electric utilities and several non-utility organizations, including HSEA and Interstate Renewable Energy Council (IREC), a non-profit organization that tracks and grades interconnection practices nationwide. Hawai‘i’s interconnection practices have received “F” grades in IREC’s annual “Freeing the Grid” reports, but that grade will undoubtedly improve.

“We appreciate the Hawaiian Electric companies for recognizing the benefits of improving the interconnection process for all parties involved,” said Duda. “We want to continue to work with the utilities to find ways to facilitate access for distributed renewable energy while maintaining a reliable grid.”

The PUC’s order left several disputed issues to be resolved later. They include a controversial proposal by the utilities that would allow them to impose expensive remote monitoring and control equipment (known as “SCADA,” for “supervisory control and data acquisition”) on systems as small as 20 kilowatts or less, so they can turn off the systems at their discretion. HSEA and other renewable energy parties have opposed this proposal as unduly burdensome and not cost-effective.