{"id":202899,"date":"2024-08-29T14:37:36","date_gmt":"2024-08-30T00:37:36","guid":{"rendered":"https:\/\/www.hawaii.edu\/news\/?p=202899"},"modified":"2024-08-29T14:37:36","modified_gmt":"2024-08-30T00:37:36","slug":"electricity-pricing-change-proposed","status":"publish","type":"post","link":"https:\/\/www.hawaii.edu\/news\/2024\/08\/29\/electricity-pricing-change-proposed\/","title":{"rendered":"Electricity pricing change for large Hawai\u02bbi businesses proposed"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading time: <\/span> <span class=\"rt-time\"> 2<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.hawaii.edu\/news\/wp-content\/uploads\/2024\/08\/manoa-uhero-report-real-time-price-tariffs-electricity.jpg\" alt=\"large power towers\" width=\"676\" height=\"381\" class=\"alignleft size-full wp-image-202902\" srcset=\"https:\/\/www.hawaii.edu\/news\/wp-content\/uploads\/2024\/08\/manoa-uhero-report-real-time-price-tariffs-electricity.jpg 676w, https:\/\/www.hawaii.edu\/news\/wp-content\/uploads\/2024\/08\/manoa-uhero-report-real-time-price-tariffs-electricity-300x169.jpg 300w, https:\/\/www.hawaii.edu\/news\/wp-content\/uploads\/2024\/08\/manoa-uhero-report-real-time-price-tariffs-electricity-130x73.jpg 130w\" sizes=\"auto, (max-width: 676px) 100vw, 676px\" \/><\/p>\n<p>A significant change to electricity pricing for large commercial customers in <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> is being recommended by the <a href=\"https:\/\/uhero.hawaii.edu\/\">University of <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> Economic Research Organization<\/a> (<abbr>UHERO<\/abbr>).<\/p>\n<p>A study, released August 27, recommends implementing a real-time pricing (<abbr>RTP<\/abbr>) tariff system. This approach would charge customers based on the hourly marginal cost of electricity production, a model known as locational marginal pricing (<abbr>LMP<\/abbr>). <abbr>UHERO<\/abbr> researchers say that this system could better manage grid demands, promote energy efficiency and fairly distribute costs among consumers.<\/p>\n<ul>\n<li><a href=\"https:\/\/uhero.hawaii.edu\/a-proposal-for-real-time-pricing-tariffs-for-large-electricity-customers\/\">See the entire report<\/a><\/li>\n<\/ul>\n<p>According to the report authors Michael J. Roberts and Ethan Hartley, the system aims to reflect the true cost of energy production, including environmental and transmission expenses. The proposed tariff would combine variable pricing with a fixed charge to help cover infrastructure costs.<\/p>\n<p>The new tariff would also let large customers build off-site solar and receive credit for generation at the locational marginal price. Because such facilities would likely be very profitable, the net benefits would be shared between energy-producing customer, other customers and Hawaiian Electric.<\/p>\n<p>The report suggests piloting the program with <abbr title=\"University of Hawaii\">UH<\/abbr>, before potentially expanding to other large commercial customers.<\/p>\n<p>&ldquo;As <span aria-label=\"Oahu\">O&#699;ahu<\/span>\u2019s electric grid transitions to clean energy, characterized by variable wind, solar, and storage resources, the marginal cost of electricity will become increasingly variable across time and location,&rdquo; according to the report. &ldquo;Consequently, the value of using <abbr>LMP<\/abbr> for customer billing and compensating distributed generation will increase significantly.&rdquo;<\/p>\n<p>The proposal draws inspiration from Georgia Power&#8217;s long standing <abbr>RTP<\/abbr> model, but includes modifications for <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span>\u2019s unique energy landscape.<\/p>\n<p>As <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> pursues its goal of 100&#37; renewable energy by 2045, <abbr>UHERO<\/abbr> believes this pricing strategy could play a crucial role in managing the state\u2019s evolving power grid and supporting the integration of variable wind and solar resources.<\/p>\n<p><a href=\"https:\/\/uhero.hawaii.edu\/a-proposal-for-real-time-pricing-tariffs-for-large-electricity-customers\/\">View the full report on <abbr>UHERO<\/abbr>\u2019s website<\/a>.<\/p>\n<p><abbr>UHERO<\/abbr> is housed in <abbr>UH<\/abbr> M\u0101noa\u2019s <a href=\"https:\/\/socialsciences.manoa.hawaii.edu\/\">College of Social Sciences<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This approach would charge customers based on the hourly marginal cost of electricity production, a model known as locational marginal 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