PUC Annual Report–Fiscal Year 2004-05 - Public Utilities Commission

Public Utilities Commission Annual Report 2004-05State of Hawaii Page 8entirely through base rates; and (3) modify the cost recovery mechanism for its two (2) approvedload management DSM programs. The Commission allowed HECO to temporarily continue itsexisting two (2) residential DSM programs and three (3) commercial and industrial DSMprograms, until further ordered by the Commission.d. COMMISSION APPROVES HECO RESIDENTIAL DIRECTLOAD CONTROL (“RDLC”) PROGRAM AND COSTRECOVERY.In October 2004, the Commission approved HECO’s RDLC program as a pilot projectsubject to the conditions stated in the Commission’s decision and in the parties’ settlementagreement. The Commission also approved recovery of program costs that are accrued throughthe date that estimated costs are incorporated into rates as a result of the next rate case throughthe IRP cost recovery provision. Under the five-year program, HECO will provide participatingcustomers with a monthly electric bill credit of $3.00 and will install a radio-controlled switch nextto their water heating unit, which in turn will turn off the water heater when signaled by HECO.The objective of this program is to provide HECO with approximately 17 megawatts (“MW”) ofinterruptible load from residential water heaters during the system peak.In April 2005, the Commission approved HECO’s request to amend the RDLC programeligibility criteria to include customers who live in master metered single family homes or mastermetered multi-family homes provided that HECO requires its master metered customersparticipating in the program to notify all persons who may have their water heaters disconnectedof the potential for such an event to occur.e. COMMISSION APPROVES HECO COMMERCIAL ANDINDUSTRIAL DIRECT LOAD CONTROL (“CIDLC”)PROGRAM AND COST RECOVERY.In October 2004, the Commission approved HECO’s CIDLC program as a pilot programsubject to the conditions stated in the Commission’s decision and in the parties’ settlementagreement. The Commission also approved recovery of program costs that are accrued throughthe date that estimated program costs are incorporated into rates as a result of the next rate casethrough the IRP cost recovery provision.The CIDLC program offers eligible commercial and industrial electric customers theopportunity to nominate all or a portion of their demand as directly controllable or “controlled” (i.e.,able to be controlled or interrupted by HECO under specific circumstances). HECO considers theremaining demand to be the customer’s “firm service level.” In exchange for agreeing to reduceelectrical usage to their designated firm service level when required, HECO will provideparticipating customers with a monthly controlled demand incentive based on recorded usageabove their firm service level, whether or not an interruption of load occurs. The objective of thisprogram is to provide HECO with approximately 21 MW of interruptible load, beyond thatprovided by the existing customers on Rider I.In April 2005, the Commission approved HECO’s request to amend its standard CIDLCprogram contract for participating customers to include two (2) inadvertently omitted provisions.The omitted provisions relate to HECO’s methodology for determining “Demand” and terminationof a customer’s participation in the CIDLC program.