HECO data shows that customers do not respond to time-of-use rates

Data from Hawaiian Electric’s time-of-use pilot program suggests some issues still need to be addressed before the rate structure is rolled out to more customers.

Time-of-use tariffs are intended to encourage customers to shift their energy consumption to daylight hours. Tariffs are cheaper during the day, when solar energy is abundant, and more expensive in the evening and at night.

HECO tested a sample group of residential and commercial customers on Oʻahu and Hawaii Island with time-of-use tariffs in early 2024.

The first six months of data from January to June showed no statistically significant change in customers’ energy consumption.

Michael Angelo, the head of the consumer protection department, said people may not take advantage of the cheaper daily tariffs because they lack flexibility in energy use.

“It is very difficult for a company to significantly change its operations to realize these cost savings,” he said. “And residentially, we essentially use electricity when we are at home because we rely on it for many of our needs.”

The full report on HECO’s time-of-use pilot program says there is “some room for improvement in meeting customer satisfaction and value objectives.”

DNV

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Hawaiian Electric Company

Only 54% of residential customers said they were satisfied with the program overall. 45% of customers were dissatisfied with the effort required to save energy under the time-of-use tariff system and 47% were dissatisfied with the actual savings they saw on their energy bill.

Commercial customers were even less satisfied with the program: only 49% of participants reported a positive impression of the service life. A quarter of commercial customers said their energy bills increased during the program.

According to HECO, 14% of participants have completely withdrawn from the program, which can be done at any time.

The report recommends that HECO undertake a comprehensive education campaign to help customers change their energy habits and benefit from time-of-use tariffs.

But Angelo cautioned that increased awareness of the program may not result in changes if customers’ energy choices are limited by their schedules.

“It’s difficult for customers to really change their usage behavior,” he said. “I think we should think about what we want to achieve with the program itself.”

Angelo suggested that time-of-use tariffs could be more effective if applied to large industrial customers that use significant amounts of electricity, rather than to individual households.

HECO is currently collecting data from the second phase of its pilot program. During the first phase of the program, any increases to participants’ bills were capped at $10. This legal protection was repealed in July.

“This interim report did not capture the impact of ignoring bill protections,” Angelo said. “So we’ll see what the next phase looks like after bill protection is lifted and whether customers respond more quickly.”