Hawaii PUC Decision on Feed-in Tariffs Summary

By Paul Gipe


The Hawaii Public Utilities Commission (PUC) decision on implementation of feed-in tariffs for the state is 128 pages long. Below is a quick summary of key points in the decision.

Republican Governor Linda Lingle has since used her weekly radio address to applaud the decision, indicating that the highest levels of state government support the decision.

Note that though there is an unusually low program cap, Hawaii is a series of islands with very small grids. Nevertheless, it appears that the PUC has reserved most of new renewable capacity to a large wind project that is outside the feed-in tariff proposal.

Hawaii may become a test case for “incrementalists”. If Hawaii reaches the system cap early as it could, the test will be if the PUC then raises the cap quickly or simply allows the cap to stand. Hawaii could then find itself in the same dilemma as California which has to continually revisit its extremely timid net-metering cap.


  • Feed-in Tariffs can and should be implemented. While this conclusion may seem intuitively obvious for a docket on that subject, that is not the case. For example, the Wisconsin Public Service Commission ruled recently that they did not have authority to impose feed-in tariffs on the state’s utilities. Utilities could “voluntarily” set feed-in tariff rates if they chose to do so. Thus, the Hawaii decision on this simple point is significant.
  • Tariffs to be determined in new docket and based on cost of generation plus reasonable profit of the typical average project.
  • Tariffs to include tax subsidies.
  • Tariffs to be determined using Discounted Cash Flow model.
  • Tariffs differentiated by size and technology.
  • Tariffs will not be differentiated by island (each island has its own utility). Tariffs will be uniform across the state.
  • Tariffs to be determined by the Hawaiian Electric Company in a collaborative process with stakeholders. By this wording, it appears that stakeholders have equivalent stature with HECO before the PUC.
  • Net-metering will be maintained.
  • Generators can choose between feed-in tariff and net-metering.
  • No action on current RFPs or existing PPAs.
  • Project size cap of 5 MW.
  • Wave, tidal, geothermal, storage not included.
  • Three size tiers.
    • <20 kW
    • >20 kW<500 kW
    • >500 kW<5 MW
  • System (program) cap of 5% of peak demand on each island. Reserves bulk of new generation to large, central-station wind projects under RFP.
  • Initial Review within two years. Every three years thereafter.
  • Reserves 5% of 5% system cap for projects <20 kW.
  • Utility keeps RECs
  • Cannot sell to third party.
  • Establishes independent observer to oversee HECO queuing procedure.
  • Cost of generation placed on ratepayers as a renewable energy surcharge.