Last year, Hawaiian Electric put a group of randomly selected Oʻahu and Hawaiʻi Island customers on an experimental rate scheme that made electricity cheaper during the day when solar energy was abundant and more expensive in the evening and nighttime.
On paper, this time-of-use program was a win-win: individual customers could save money on their electricity bills by adjusting when they used electricity, and their collective efforts could help to shift the demand curve on the grid to make better use of available clean power.
But data from the year-long program, detailed in a recent report to the Public Utilities Commission, failed to conclusively demonstrate that either goal was achieved.
HECO told HPR that the results of the study were "mixed."
Residents enrolled in the program did use less electricity in the evening when energy was most expensive, but the decrease was small — about 3%.
There was also no statistically significant increase in energy usage among residential customers during the daytime when energy was cheaper, which was the main way households could take advantage of the rate structure to lower their electricity costs.
Overall, Oʻahu households saved money while Hawaiʻi Island households saw higher bills.
According to the report, some customers may not have the flexibility to shift their energy habits to reap the benefits of time-of-use rates. Customers who worked a typical 9-5 schedule outside of the home were more likely to be dissatisfied with the program.
The report also notes that the program did not adequately meet the needs of some customers with rooftop solar. A large number of customers with net metering unenrolled from the program, likely because their savings under the time-of-use rates were smaller than the compensation they normally received for providing energy to the grid at the same time of day.
Michael Angelo, who heads the state's Division of Consumer Advocacy, said that while the study was important, the data doesn't make a compelling argument that HECO's experimental rates will benefit customers broadly.
But he said it's too soon to rule out time-of-use entirely.
"We really need to delve into what we want to accomplish with time-of-use rates," he said.
He recommended a follow-up study to identify the main cost-drivers in Hawaiʻi's energy system — households and businesses that are using a lot of energy when it is most expensive — so that the utility can address their consumption. For instance, the utility could focus on industrial customers who place a big demand on the grid during evening hours, or find ways to make time-of-use more feasible for EV owners who use lots of electricity to charge their cars.
"There can be value, certainly, from time-of-use rates," he said. "I think the structure and how we look at time-of-use rates really needs to reflect the cost of generating and delivering energy at the time it’s delivered."
But for now, HECO said it's waiting on guidance from the Public Utilities Commission about the next steps for the program.
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