PUC, Hawaiian Electric discuss intergovernmental "wheeling" framework, technical and billing hurdles

The Public Utilities Commission and Hawaiian Electric on a third stakeholder meeting reviewed options to enable "wheeling" — the transfer of generation from government-owned or -controlled sites into the grid for consumption at separate utility accounts — and outlined next steps for technical studies, billing design and agency engagement.

PUC Commissioner Yost framed the proceeding as moving toward a faster, more targeted phase of work: "we are going to make an effort to accelerate the pace of progress in this proceeding and, not spend as much time, in general discussion, but but really try to get more to into the specifics of things that people may actually be able to agree to," he said, urging more detailed engagement from state and county land-holding agencies to identify candidate sites.

Why it matters: The commission is seeking a workable process to let government entities develop renewable generation on land they control and convey energy value to other government sites or beneficiary accounts. Stakeholders said that any program must address (1) how interconnection will be analyzed and timed, (2) how compensation for wheeled energy will be calculated and administered within utility billing systems, and (3) how to reduce development risk and uncertainty so projects can be built at scale.

Hawaiian Electric staff described the technical background the utility uses to screen and study interconnection requests. Ken Aramaki, Hawaiian Electric director of T&D and interconnection planning, explained that distribution "hosting capacity" shows how much distributed energy resources (DER) a distribution circuit can take before upgrades are required and that the company models forecasted DER, pending DER and additional candidate DER in a software platform to identify thermal or voltage violations. "Distribution hosting capacity is the amount of small scale DER that can be added to the distribution system before control changes or system upgrades are required to safely and reliably integrate additional DER," Aramaki said.

Aramaki and colleagues walked stakeholders through the difference between distribution-level hosting capacity and injection or point analyses used for subtransmission or transmission interconnections, and they summarized HECO's interconnection pathways: simplified review for ~100 kW and below, an interconnection requirements study (IRS) for larger projects, and distinct review tracks for projects in the roughly 250 kW–5 MW range (mid-tier) and the multi-megawatt utility-scale track. He noted that SCADA (supervisory control and data acquisition) may be required at certain thresholds (for example, Oahu projects at or above 1 MW may require SCADA; neighbor-island thresholds differ).

Peter Young, Hawaiian Electric director of pricing, presented ideas on program design and billing. He said a wheeling offering could be implemented through a tariff to provide clear, consistent rules for how benefits are conveyed and how the utility participates in billing and settlement. "We do think it's more effective, and fair for all the parties or at least clear upfront if we establish them via tariff," Young said, while acknowledging tariff or non-tariff structures could both be feasible. Hawaiian Electric offered to present a straw proposal in coming weeks and to submit a revised Community-Based Renewable Energy (CBRE) proposal later this summer.

Stakeholders raised technical and procedural concerns. An attorney for Earthjustice, Kylie Wiger Cruz, asked why HECO was considering a tariff model rather than a fee-for-use-of-wires model; HECO answered that both compensation approaches could be governed by tariff and that the key questions are how developers earn returns and how receiving accounts get credits or other bill adjustments. Rocky Mould of the Hawaii State Energy Office (HSEA) asked whether sites with small on-site loads but extra space could host wheeling projects; staff replied that projects could be eligible so long as the generation and export are electrically distinct and trackable.

Participants and commissioners emphasized the need to reduce interconnection timing and cost uncertainty. One commenter compared the PUC's goals to methods used by Kauai Island Utility Cooperative (KIUC), in which the utility secures site control and standardizes technical parameters before soliciting developers, an approach stakeholders said can speed delivery and reduce project risk. Hawaiian Electric and commissioners discussed renewable energy zones (REZ), an NREL-informed study that mapped potential solar and transmission upgrade needs; HECO staff noted REZs show potential megawatt quantities in areas but that site-specific injection analyses remain necessary.

Next steps and commitments: Hawaiian Electric agreed to develop and present a wheeling straw proposal and a revised CBRE structure; the commission said it is preparing an order that will move the investigation into the next phase, will publish a procedural schedule and an intervention period, and will plan additional stakeholder meetings (dates on the staff slide included a July 24 meeting and an Aug. 26 meeting, with the possibility of another July meeting or an extended June session).

The discussion did not include any formal votes. Commissioners and staff said they want solutions that are simple to administer, minimize cost shifts to other ratepayers, and support the state's broader aims of replacing oil-fired generation and improving resilience. The PUC will circulate its forthcoming order and HECO's proposals will be docketed for stakeholder comment in the next procedural steps.