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NPR: Biden's climate agenda is stalled in Congress. In Hawaii, one key part is going ahead

Posted by Julia Simon on Jan 15, 2022

NPR discussed utility models with AEE's Hannah Polikov. Read snippets below and listen to the full segment here.

On the island of Maui, up a dirt road past some very productive mango trees, there's a solar plant with a view of the Pacific...

A solar company built this plant, not the monopoly electric utility Potter regulates, and for Potter, that's a good thing. For the green transition to work, she says, it can't just be the monopoly utility making renewable energy – lots of renewable energy producers will need to be on the grid.

The problem, she argues, is that traditionally, the monopoly utility, Hawaiian Electric, hasn't had a clear incentive to hook up renewable energy from projects like this quickly...

In this era, utility companies made the case for getting monopoly status...

State-level regulators would govern how the monopoly utility made profits, and the profit formula that won the day was one that incentivizes utilities to build infrastructure quickly, says Hannah Polikov, managing director of Advanced Energy Economy, a trade group for clean energy groups. "The way it's set up is the more that utilities build, the more money that they make," Polikov says.

At the time, when America needed lots of new power plants and transmission lines, Polikov says this incentive structure made a lot of sense: "Historically, when the goal was to go from zero electrification to universal electrification right? we had to deploy a whole lot of assets to get everyone electricity."

But today, amidst pledges to get the electricity sector off fossil fuels, Hawaii's regulators say this old formula is out of place. Instead of encouraging utilities to "build, build, build", Potter says regulators like herself need to incentivize new things, like energy efficiency, and connecting renewable energy to the grid – often from projects the monopoly utility hasn't built itself.

Listen to the full segment here.

Topics: Utility, United In The News