Competitive Bidding

The Public Utilities Commission is currently considering whether to implement a competitive bidding process for the acquisition of new energy generation resources. If implemented, competitive bidding would expand resource options considered and used by local power companies.

Prior to 1978 the development, delivery, and generation of electrical power was left entirely to utility companies. As the electric industry grew so did the utility companies’ decision-making authority, which was often in favor of large scale and central generation methods. These actions caused concerns for many because of the way that they prevented smaller scale and renewable power production alternatives from being considered. In response to these concerns Congress enacted the Public Utilities Regulatory Policies Act (PURPA) of 1978. Some of the main goals of PURPA included a reduction in oil dependency and an increase in the use of renewable resources. It also required electric companies, for the first time, to purchase power from smaller qualified independent producers.

DCA believes Hawaii has reached a point where competitive bidding can play a more meaningful role in producing cost-effective power for the state. By requiring competition for new generating resources between independent power producers and utility companies, non-utility providers will have an opportunity to develop solutions to our need for additional resources. Competitive bidding is a step in the right direction toward providing more cost-effective power generation for all consumers in Hawaii.