Hawai'i's electrical future still likely to strain the wallet

By Jan TenBruggencate
Advertiser Science Writer

The future of electrical power likely will involve fewer central power plants, and many small "distributed" generators.

One such generator is in place at the Pohai Nani retirement community on O'ahu, where it makes electricity, heats water, cools air and more.

Still, even though there are savings with such systems, there is no short-term fix for the strain electricity bills place on pocketbooks in Hawai'i, according to the power companies, government consumer advocates and others.

"There's always going to be a higher cost for power in the Islands," said state Consumer Advocate Greg Kinkley.

There are many reasons Hawai'i has the highest electrical rates in the country, utility experts say.

The key issue is isolation. It adds cost to everything, and would even add cost to distributed power systems.

In Maine, power bills are high compared with other states in the continental United States. That's because much of the northeastern state is isolated by forest lands.

Maine Public Advocate Stephen Ward said offshore islands and small communities deep in the forests pay electrical bills comparable to those on Hawai'i's Neighbor Islands — more than 20 cents per kilowatt-hour, some of the highest in the country.

The U.S. Department of Energy says the average residential rate for electricity nationwide in March was almost 8 cents per kilowatt-hour.

Hawai'i's average rate is more than double that at 16.5 cents. Figures from Hawaiian Electric Co. show that rates in the Islands range from a low of 14.4 cents per kilowatt-hour on O'ahu to higher rates on the Neighbor Islands: Lana'i, 24.3 cents; Moloka'i, 22.9 cents; Hawai'i, 22.8 cents; Kaua'i, 22.3 cents; and Maui, 19.3 cents.

A sample of other state averages includes Maine at 11.9 cents per kilowatt-hour; Alaska, 11.7 cents; Nebraska, 5.7 cents; and Idaho, 5.3 cents. California is listed at 10.9 cents, but the power crisis there has driven that price up.

Kinkley, Hawaiian Electric Vice President Chuck Freedman and Kaua'i Electric Co. Manager Denny Polosky cited some of the reasons for the state's higher rates:

• Added to the cost of fuel oil and coal — the primary source of electrical power in Hawai'i — is the cost of transporting it to the Islands.

• Similarly, any equipment, from cable to spare parts for generators, must be flown or shipped long distances.

• The Islands have a smaller demand for power and cannot achieve some of the economies of scale of places with immense, super-efficient units.

• Outside the most urban part of O'ahu, regions are sparsely populated, meaning there are comparatively few customers for a lot of power distribution equipment.

• Mountainous terrain adds construction and maintenance costs to the powerlines.

• Cheaper fuels, such as natural gas, are not available here. Alternative power sources, such as wind generators, solar photovoltaics, geothermal and hydroelectric, have their own problems. Some are more costly than oil, and others raise environmental issues that preclude their ready installation.

Another major issue is that the power companies in the Islands must install far more generating capacity than they normally need.

On the Mainland, where utility grids are commonly interconnected, a power company can often simply buy power from a neighbor during breakdowns or maintenance of generators.

In Hawai'i, each island's utility is required by law to have enough generating capacity to supply its peak demand with its largest generator out of service.

That can mean a utility such as Hawaiian Electric must have as much as 30 percent more capacity than its peak demand, and consumers pay for that extra capacity.

The buzz in the utility industry nationwide is distributed generation, under which utilities would no longer have such large generators.

Maine's Ward said his state already anticipates that.

"I think we're moving fairly rapidly to a situation where a central generating station will be outmoded, assuming the technology of distributed generation produces power that's 4 cents a kilowatt-hour or less," Ward said.

In a few decades, there might be super-efficient fuel cells in every home, generating the electricity that home needs and potentially contributing power to supplement shortfalls on the grid.

"In the long term, fuel cells may be the answer, but you're going to have to look out pretty far, like 50 years," Polosky said.

But there are some applications for distributed generation that are much nearer at hand.

At Pohai Nani in Kane'ohe, it's already here.

The retirement community has a 120-kilowatt co-generation unit that generates 75 percent of Pohai Nani's electric power from propane.

But the key to its efficiency is all the uses Pohai Nani makes of the waste heat from the generator, said Chris Leighton, director of plant operations management and engineering.

Pohai Nani's co-generation unit captures that heat and uses it to warm water for its swimming pool, dishwasher, hot tub and showers, and uses absorption chillers to convert the heat to cold for air conditioning.

"It does quite a bit of good for us," Leighton said.

Contact Jan TenBruggencate at jant@honoluluadvertiser.com or (808) 245-3074.