Hawaii is a unique state with an abundance of natural resources that can be used to generate energy. From wind and sun to running water and bioenergy, the Hawaiian Islands have the potential to become a leader in renewable energy production. However, according to the Federal Energy Information Administration, 77% of Hawaii's energy still comes from burning fossil fuels, mainly oil and some coal. With the state's goal of achieving 100% renewable energy by 2045, Hawaii must take steps to reduce its reliance on non-renewable sources and make the switch to clean energy. The Hawaii State Energy Office recognizes the need for a shift in the traditional profit formula typical of the sector.
This formula has motivated the monopoly of the Hawaii utility company to keep their plants running as much as possible, resulting in high energy costs and a lack of energy independence. To combat this, Hawaiian Electric Company (HECO) is restructuring more than a hundred years of regulatory precedent to get Hawaii's monopolistic company to use 100% renewable electricity. The overall coal industry has been declining as other energy sources become more affordable, and now that the last shipment of coal has been delivered to the island, Hawaii is a little closer to its renewable energy goals. Hawaiian Electric now has a specific economic incentive to connect solar energy to rooftops more quickly, and customers now receive an annual dividend to keep their bills low. Public Services Commissioner Leo Asunción believes that performance-based regulation is coming, and even before its official launch S&P and Moody's improved Hawaiian Electric's rating. Ultimately, Kelly of Hawaiian Electric argues that other U.
S. utility companies should recognize that performance-based regulation is coming. With this shift in regulation, Hawaii can move closer towards its goal of achieving 100% renewable energy by 2045.