Thursday, July 29, 2010

HECO Electric Car Rate Could Be Just the Beginning; Lower Rate Would Be Good, but What About FOFOP?

Not to be curmudgeonly about Hawaiian Electric’s proposed lower rate for electricity used to charge electric cars in the overnight hours, wouldn’t the utility do well to offer the lower overnight rate to all customers?

HECO’s stated goal is “to make Hawaii EV-ready as new, highway-capable EVs are expected to hit the market in the coming year.” That’s well and good, but there’s presumably another goal (not mentioned in this story) in increasing demand in the late-night, early-morning hours.

Renewable energy projects like wind farms often have no market for their electricity when the load drops at night. Higher demand in the overnight hours provides that market and displaces to some extent oil-fired generation at the utility’s power plants.

Giving all customers a lower rate at night presumably would push off some of the demand from the peak hours between 5 pm and 9 pm and lessen the requirement for HECO to fire up its higher-cost peaking units.

The Equity Factor

We wonder also how important the lower electric rate will be in influencing potential customers to buy an electric car. They’re the ones with either the cash and/or a good credit rating to make the purchase, so they’re primed to begin with.

Other factors such as environmentalism, sustainability awareness and FOFOP – fear of future oil prices – could be at least as important as lower electricity rates in motivating someone to buy an EV.

As announced, the lower rates will apply to a tiny segment of the population – a total of 1600 customers in the three counties HECO serves. Left out of the plan is the great majority without the buying power or inclination to participate in the coming EV craze. Without knowing the details of this new rate plan and how it would fit in with other plans, we have to presume that other categories won’t be increased over time to offset the lower EV rate.

Let’s hope the Public Utilities Commission recognizes the good intent of the lower EV-charging rate but expands the concept to a bigger good thing. Lowering the rates for all customers in the overnight hours would encourage expansion of wind and other clean-energy sales to the utility and benefit everyone – not just those who can afford the cash outlay for a new electric car.

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