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MECO Needs to Innovate or Disappear

HEI’s century-old business model is collapsing.

February 20, 2014
Anthony Aalto - Volunteer leader of the Sierra Club of Hawai‘i , Maui Weekly

Our statewide utility, Hawaiian Electric Industries--otherwise known as HECO, MECO and HELCO--is worried about the cost of electricity. No, really!

That's why they're trying to block most people from installing the rooftop solar panels that allow Hawai'i residents to generate their own electricity for free.

Doesn't compute, huh? That's because, in reality, HEI is so blinkered, archaic and extravagant that Hawai'i residents are gouged by the highest electric rates in the country--rates that soared 50 percent between 2009 and 2012. We pay more than twice the next highest rate--in New York.

And that's why it's hard to swallow the idea that HEI/MECO is suddenly so concerned about ratepayers and the "cost" of rooftop solar.

Each year, HEI publishes a report that assesses the cost of Net Metering (NEM). That's the program that allows homeowners to connect their rooftop solar systems to the grid and sell MECO the electricity they generate as a credit against the electricity they consume. The annual report is always an opportunity to attack rooftop solar as evil.

Hawaiian Electric uses a very peculiar method to calculate the "cost" of net metering that, perhaps unsurprisingly, discards all of the ways that net metering benefits us, such as the surplus energy that rooftop solar contributes to the grid, the thousands of jobs the solar industry has created in Hawai'i, the fact that money saved by NEM households is re-circulated in the local economy instead of going overseas to pay for imported oil and so on.

So the number itself is pretty bogus. But even if we were to take the HEI number at face value, what do they claim NEM is adding to the cost of your electricity? On Lana'i it's .06 of a penny per kilowatt hour! On Maui, that jumps to .28 of a penny. And on Molokai, it's a whopping .42 of a penny.

To make this even clearer, Hawaiian Electric's numbers mean that a typical MECO customer without solar who uses 25 kilowatt hours of electricity per day is paying an extra seven cents for that energy due to the existence of net metering. Somehow Hawaiian Electric wants the public to become outraged about this, while every year, they continue spending $1.5 billion on oil, which is, frankly, the single dumbest energy source for electric power generation and costs an average 30 times as much per KWH.

No one's suggesting rooftop solar owners shouldn't pay their fair share of interconnection costs and maintenance of the grid. But even if we do take HEI's bogus number, if that's the level of cost they're concerned about, they could address it by cutting the seven-figure salaries their top executives make, starting with the CEO who makes $6.8 million a year.

What's really going on is that HEI's century-old business model is collapsing. MECO is used to generating power in central plants and feeding around the islands through its ancient grid. But these days, people can generate their own electricity cheaper than MECO, so why buy from the utility? That's why HEI is desperate to stop rooftop solar.



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