As Hawaii transitions from the cost of service model, the structure it has established has both upside potential earnings for the state utility as well as lower earnings potential for underperformance. In general the structure drives a utility to control costs and encourages it to optimize investments by accessing performance incentives over a multi-year period. Incentives are included for accelerated achievement of the state Renewable Portfolio Standard (RPS), accessing grid services (using DERs and efficient grid management), DER integration, AMI deployments, equity and LMI energy efficiency, and grid reliability. Click here for the five-page summary.
Commissioner Potter shared, “The framework we made is strong and we are proud of the effort. It both protects the health and viability of the utility and focuses on the value that energy users in Hawaii will receive.
“We believe that this can be replicable to other places considering how performance-based regulation can work in their jurisdiction. The model establishes effective revenue opportunities and will lead to meaningful impacts on the way the energy system is managed.”
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