What is decoupling?
Information About Decoupling
- Decoupling is one of many major steps supporting Hawaii’s clean energy future. It removes the incentive for utilities to increase the use of electricity, allowing utilities to better support increased energy efficiency, conservation and increased use and integration of renewable energy resources in the utility system. That, in turn, moves Hawaii closer to its goal of 70 percent clean energy for electricity and ground transportation by 2030 – something which will benefit all of us and our future generations.
- Decoupling breaks the historic link between electricity usage and utility revenues. Traditionally, the more electricity used by utility customers, the more money the utility collects. That practice is directly at odds with our state’s clean energy goals which are now legally required.
- We know customers are interested more in what the actual impact on their bills will be than in the method used to calculate their electricity rates. That’s understandable.
Decoupling in other states
- According to the Progressive States Network, “decoupling has not resulted in any significant rate increases in states that have adopted it and consumers end up with more control over their utility bills to offset increase with conservation measures.”
Decoupling in Hawaii
- Bills will continue to be based on energy usage so customers will still have an incentive to conserve electricity. Hawaii Energy administers programs to assist customers with energy efficiency and conservation. For more information, call Hawaii Energy at 808-537-5577, or visit their website, www.hawaiienergy.com.
- Also, customers can get a refund if the utility earns more than its Commission approved profit. If the utility does not earn at the level that the Commission has approved, it cannot raise its rates to get to that level.
- In the future, bills will be more stable and lower than if we continued to depend so heavily on volatile and expensive imported oil. More than 50% of your electric bill is just for paying fuel costs. By replacing rising fossil fuel costs with energy efficiency and with renewable energy resources that have more stable prices, we can cut bills.
- A key benefit of the clean energy future -- which depends in part on successful decoupling -- is that customers will have more choices and greater control over their bills. Decoupling encourages the utility to support programs and options which help customers to lower their bills by using energy wisely.
- Decoupling allows a utility to recover on a more timely basis its authorized costs to generate electricity and deliver power to its customers. This business model supports Hawaii’s clean energy goals.
- Then Hawaii Public Utilities Commission Chairman Carl Caliboso called decoupling “a superior way to regulate electric utilities during these critical times” and “the best regulatory model to move Hawaii to a clean energy future.”
- Under decoupling, the Commission determines what services it wants the utilities to perform as part of the transition to clean energy and sets the utilities’ revenues to a corresponding level based on the resources and costs needed, plus a reasonable return on investment for the utility. The Commission says it will hold the utilities accountable for their commitments. The Hawaiian Electric utilities will report regularly to the Commission on clean energy activities. The Commission can adjust or end decoupling at any time if it is convinced the utilities are not living up to those commitments.
- The Hawaii Division of Consumer Advocacy also recognizes the potential benefits and agrees to support decoupling but insisted on checks and balances on the utility to protect customers.
- Benefits of decoupling are also recognized by a broad group of renewable energy, environmental, government and energy policy stakeholders who were actively involved in the decoupling docket.
- Decoupling has been established and implemented in other parts of the country for many years. In fact, nationwide, decoupling has been approved by utility commissions and implemented by utilities in nearly half of all states.
- Decoupling is a new concept for most of us in Hawaii, so it’s understandable people have questions about it. Hawaiian Electric and the Consumer Advocate are committed to working with the Public Utilities Commission to provide information and answer questions. Achieving the long-term vision of a clean energy future – a sustainable future for our islands – requires all of us working together toward that goal.