Scheduled Dispatch Program
Overview
The Hawaii Public Utility Commission recently approved an Emergency Demand Response Program (“EDRP") to address the immediate need to mitigate possible resource shortfalls following the September 2022 retirement of the coal fired electricity plant on Oahu which supplied about 12% of the state's total net generation in 2019.
Yes, you read that correctly.
There is still a coal-fired electricity plant running on Oahu.
Last time we checked, Hawaii has no coal reserves and does not produce coal, which means the coal is shipped in by ocean freighter that uses even more fossil fuels. The good news is that it is finally being retired in 2022 and being replaced by clean renewable energy resources.

The Challenge

In anticipation of the plant shutdown, the Hawaii Natural Energy Institute (“HNEI”) presented information at a planning meeting on its AES coal plant retirement and replacement analysis. The analysis identified some projected utility system reliability shortfalls during and shortly after the AES coal plant shutdown in the fall of 2022.

Although these projected system reliability shortfalls are temporary and considered very unlikely, it has been decided to cover the bases and provide some immediate reserve resources. Other planned resources are scheduled to come online at a later date to help keep the grid stable on an ongoing basis.

The HECO Battery Bonus Program

Among other solutions, the Commission is prioritizing one particular approach to meeting the urgent peak demand capacity needs via a new Scheduled Dispatch Program (“SDP") called the HECO Battery Bonus Program.

This new Battery Bonusprogram is based on urgency of the conditions presented by the retirement of the AES coal plant scheduled for September 2022 and is based on the projected utility system reliability shortfalls.

This program will compensate customers who install a new battery and schedule it to discharge over a 2 hour period during the time of evening electrical system peak usage. Further, these customers will be allowed to install up to 5,000 watts (5kW) of more solar PV generation capacity without impacting their underlying tariff program status (Net Energy Metering “NEM”, Customer Grid Supply “CGS”, etc.).

Scheduled dispatch will be required through December 31, 2023, for one two-hour period each day for each participating customer, scheduled at a specific time designated by Hawaiian Electric, which shall address the identified system reliability shortfalls. Hawaiian Electric will determine the time of each participant's two-hour dispatch period at the time of enrollment and may revise the scheduled time with reasonable notice. Dispatch is expected to be scheduled during evening electrical system peak usage as determined by Hawaiian Electric to meet system needs.

  1. Participating systems must be "hard scheduled" to dispatch battery-supplied energy (to either serve onsite load or export to the grid) over a two-hour period. Customers must commit to dispatch a certain kW level during the two-hour period, which will determine their upfront incentive amount.
  2. Customers shall be required to manage their DER systems to automatically prioritize battery charging during periods of substantial solar panel insolation in order to most reliably serve the two-hour battery discharge commitment as scheduled by Hawaiian Electric.

The local solar industry has been asked by the Hawaii Public Utility Commission to help educate and encourage participation in this emergency situation.

Illustration of how the dispatched program would work with and existing Net Energy Metering (NEM) customer.

The Incentives

To encourage HECO Battery Bonus Program participation, the program is based on an upfront incentive payment to a customer who will purchase a battery and enroll their system into the program for a ten-year commitment, the first two (2) years of which will be dedicated to two-hour scheduled dispatch during the time of evening electrical system peak usage. This will most likely be somewhere between the 5pm to 9pm timeframe when most people come home from work and start using energy for cooking, air conditioning, TV, electric car charging, etc.

Hawaiian Electric customers shall receive an upfront Battery Bonus Program participation incentive payment upon commencement of scheduled battery discharge in accordance with the program. The customer incentive will be based on the committed capacity (kW) of discharge of the customer’s battery to be maintained or exceeded for the scheduled two-hour period determined by Hawaiian Electric. The customer incentive will be $850/kW for the first batch of enrolled participation on the Hawaiian Electric system. Thereafter, the next batch of enrolled participation on the system, the customer incentive will be $750/kW. Finally, for the remaining batch of system enrollment, up to a maximum system enrollment, the incentive will be $500/kW. Payments shall be made directly to you, the customer.

Example: The KumuKit Powerblocks battery system has a maximum power output of 5,000 watts (5kW). In this case, a maximum upfront payment incentive of up to $4,250 (5kW x $850 per kW).

After the end of the initial SDP (December 31, 2023), customers may either (a) continue to operate their system pursuant to the SDP schedule or (b) opt-in to an alternative scheduled dispatch program for the remainder of the ten-year participation obligation. Customers choosing option (b) must meet the eligibility requirements of the applicable alternative scheduled dispatch program that has not yet been developed. There are multiple option (b) transition program options being developed that should lower the battery usage after the initial two year emergency period.

In addition to the upfront incentive payment and to ensure that battery charging under the SDP is supplied from renewable sources, existing photovoltaic ("PV") customers may add up to 5,000 watts (5 kW) of new solar PV generation capacity in coordination with their battery installation. without invalidating their existing tariff agreement.

Customers without existing PV generation may also participate in SDP by installing new PV generation and battery storage, both of which shall be required for new DER customers to be eligible for the upfront incentives. These new customers must install battery storage at the time of the PV system installation.