New wheeling docket could usher big energy market shift

HONOLULU (KHON2) — The Public Utilities Commission has officially started looking into wheeling on Monday, which means new power producers could use existing utility lines to transmit electricity to other users. It could set the stage for a competitive power market.

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It’s a monumental move by the utility regulator. The PUC chairman told KHON2 last week in our Empowered televised forum that the docket was coming soon. This new docket is phase one, so to speak — starting wheeling with intragovernmental power sharing, not full-scale competitive retail to all consumers just yet.

“This is something that’s probably taken decades to happen,” said the state’s Chief Energy Officer Mark Glick, of the Hawaii State Energy Office. “There was a lot of discussion in the legislature this past year about, why aren’t we doing this? Why aren’t we moving energy to where it’s needed from the places where we can best produce it?”

Now, the PUC has officially opened the door to do just that in phases. First: intragovernmental wheeling — within and between state or city facilities.

“This docket dips one’s toe into it by requiring government-to-government,” explains Henry Curtis, executive director of Life of the Land, a Hawaii advocate since the 1970s on environmental policies including energy. “If there are any subsidies or cross-costs involved, we can work that out now, and then if it all works out, then you can open it up on a retail level to everyone else.”

The move comes as Hawaiian Electric has faced challenges with power supply and distribution, and extended outages.

“The energy office has said for a long time that we believe, this is an appropriate thing to look at,” Glick said. “And particularly now we’ve also said that the status quo is not acceptable.”

Sen. Jarrett Keohokalole, chairman of the Senate Commerce & Consumer Protection Committee thinks that this is a positive step considering the incidents that has happened with HECO in 2023.

“Demand for power in our community is increasing, and the need for safe, affordable, and reliable power and has never been more top of mind. Wheeling could provide more competition in power development, and potentially save taxpayers big money on government electric bills,” Keohokalole said.

HECO’s spokesperson said in a statement: “We welcome continued discussion of how wheeling concepts can be adapted to fit the realities of the Hawaii energy system, with the understanding that Hawaiian Electric will continue to play a primary role in ensuring safe, reliable service and financial equity for all customers. We must address the State’s energy future as a whole and be cautious not to simply adopt solutions that don’t fit Hawaii.”

HECO adds: “Hawaiian Electric supports programs that will aid in continued progress towards 100% RPS by 2045. Inclusive, thoughtful policies that work for Hawaii’s unique energy environment are necessary to move us all forward together to a renewable future in Hawaii. Any programs we pursue, such as wheeling, must be studied carefully to ensure they support such progress and do not aggravate community concerns.”

“I think it (wheeling) does give conniptions to HECO, but it has also raised major concerns in the past from the consumer advocate, from Ulupono Initiative and from Life of the Land, because we’re worried about cross subsidizations,” Curtis said. “We’re worried about that if there is a choice piece of property that would be magnificent to produce solar on it, why shouldn’t that solar go into the grid and help everybody lower their costs, instead of having it benefit just one entity?”

“If large users are able to bypass that and not pay their share of these embedded costs,” Curtis adds, “then they will be absorbed by everyone else, right? I would say it’s ultimately much better if you’re on a continent and there are large players and multiple transmission lines in multiple places to get renewables, but on small, isolated grids, you really have to be very careful.”

Supporters say wheeling can help those not benefitting from the current structure.

“It would allow power producers from one side of the island to actually get the energy, or get the credit for the energy, to, let’s say, a low and modern income community on another side of the island,” Glick said. “Growing demand in the electricity sector means that this is a time ripe ffor new investment into the grid, and all these new things that I think will actually make for strong utilities in the future. Essentially, we’re going from a certain amount of demand now, and we’re increasing it by 50 percent or 75 percent, so that’s a growing market at the end of the day.”

“Post Lahaina, post Maui wildfires, we have to look at every opportunity to save money, to reduce costs, reduce carbon and bring in capital,” Glick adds.

So, what happens next? PUC Chairman Leo Asuncion explains: “We’ll be calling together the electric utilities, governmental agencies, and others together to identify topics around wheeling and what needs to be addressed leading to a determination if wheeling can indeed be implemented in Hawaii. With the opening of this docket, the commission intends to conduct stakeholder outreach to hear from those who have information to share or may be interested in participating in intragovernmental wheeling. Our opening order provides information to allow anyone who has an interest in participating during the stakeholder outreach phase to reach out to us.”

The commission expects are expected to reach a conclusion by November 2025.