Plans For Smart Grid Rollout In Hawaii Stalls

HONOLULU (AP) -- Hawaii regulators have rejected plans for a broad expansion of smart grid electric technology that would have been paid for by residents and businesses.

Hawaiian Electric Co., the state's primary utility, had envisioned a $115 million smart grid project reaching 451,000 locations on Oahu, Maui and the Big Island. But the utility's proposal fell apart when the Hawaii Public Utilities Commission on Monday denied a request for expanded testing of the technology on Oahu.

The "smart grid" concept relies on installing new electric meters that can wirelessly communicate with the utility, allowing it to better distribute power and handle additional renewable energy.

"Our office was concerned that the investment would be made but ratepayers wouldn't see the benefits," said Dean Nishina, executive director for the state Division of Consumer Advocacy.

The utility should create a comprehensive plan for upgrading the electric grid before it makes another attempt to use ratepayer money to put advanced electric meters in homes and businesses, according to the PUC's ruling.

"They want to see the smart grid roadmap first," said Peter Rosegg, spokesman for Hawaiian Electric. "It's not a big setback. ... They're saying, 'Let's do it in a more deliberative manner.'"

Opponents of Hawaiian Electric's smart grid proposal said they're not convinced the state should invest so much money on smart grid technology when other options may be more practical.

"Shouldn't we start by asking, 'What are the best choices, how much do they all cost?' instead of, 'Here's the one we really like and here's everything good about it?'" said Mark Duda, president of the Hawaii Solar Energy Association.

Hawaii leaders could consider ways to use more decentralized power, such as rooftop solar panels, before the state spends on a costly smart grid system controlled by the electric utility, said Henry Curtis of the environmental group Life of the Land.

"This needs more public discussion before we jump in and pick a particular solution," Curtis said. "In the long run, when we can create power at homes and businesses that supply all the needs of those buildings, then the grid is going to become obsolete."

Hawaiian Electric, a subsidiary of Hawaiian Electric Industries Inc., had requested an additional 18 months to expand its smart grid test. The test would have charged ratepayers $1.35 million to install 5,000 new electricity meters on Oahu, adding to its existing pilot project of 9,400 smart meters.

With its ruling, the PUC closed the smart grid docket on Hawaiian Electric's initial 2008 request. That means the utility would need to start over with state regulators if it tries again.

Ongoing smart grid tests on Maui and Oahu will continue, and Hawaiian Electric may continue to implement new technology as long as it doesn't pass upfront costs on to its customers.

Referennce Yahoo Finance / Associated Press