Key features of the 2015 Annual Plan of most interest to the Companies are:

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1 ;- i L c i-^ ^^ r-, i.. no The Honorable Chair and Members of the Hawai'i Public Utilities Commission Kekuanao'a Building, First Floor 465 South King Street Honolulu, Hawai'i Dear Commissioners: Subject: Docket No Hawai'i Public Benefits Fund Hawaiian Electric Companies' Comments Regarding Hawaii Energy's Program Year 2015 Annual Plan Pursuant to Order No , Setting Deadline for Comments Regarding Hawaii Energy's Program Year 20J5 Annual Plan, issued on June 16, 2015, the Hawaiian Electric Companies' offer comments on Hawaii Energy's^ Program Year 2015 Annual Plan ("2015 Annual Plan"). I. Background Hawaii Energy's 2015 Annual Plan, provides "... detailed strategies, budget, goals and a roadmap for administration and delivery of the Hawaii Energy Program based on enhanced [Public Benefits Fund Administration] statutory authority, [Hawaii Energy's] experience to date, PUC directives and the State's clean energy goals."' Key features of the 2015 Annual Plan of most interest to the Companies are: g. Increasing the Peer Group Comparison program to reach 240,000 households while improving customer experience through the use of web-based services and enhanced tools; and h. Establishing a Strategic Energy Management (SEM) teaming process to assist large businesses and institutions lo plan and ' The "Hawaiian Eleclric Companies" or "'Companies" include the Hawaiian Electric Company, Inc., Hawai 'i Electric Light Company, Inc., and Maui Electric Company, Limited. ^ Hawaii Energy is the ratepayer-funded energy conservation and efficiency program administered by Leidos Engineering, LLC under contract with the Hawaii Public Utilities Commission serving the islands of Hawaii, Lanai, Maui, Molokai and Oahu. ^2015 Annual Plan al 4. Hawaiian Electric po BOX 2750 / HONOLULU, HI 9684O-OOO

2 Page 2 execute effective energy management as a critical part of business operations. The Companies appreciate and value Hawaii Energy's efforts in these areas and note that the Companies are actively involved in and have plans for similar efforts related to both Peer Group Comparison and Strategic Energy Management. The Companies look forward to working with Hawaii Energy on these key features of the 2015 Annual Plan and assisting in energy reduction efforts throughout the islands. The Companies find it timely and appropriate to provide the following comments in response to the 2015 Annual Plan. II. Discussion A. General Comments on the Annual Plan The Companies note that as the Hawaii Energy Efficiency Program expands there appears to be potentially overlapping and duplicative work with existing utility programs; specifically the Companies perceive duplicative efforts in smart grid, demand response, electric vehicles, and time of use rates. The Companies have a stated goal of a 20% reduction in customer bills, and reaching the slate's energy efficiency goals is an important component of achieving lower costs for our customers. However, the Companies anticipate that this potential duplication of effort and cost would be contrary to lowering customer bills. The Companies view the programs noted above as existing and core responsibilities of the Companies. Such programs are most effectively deployed as part of a broader integrated portfolio of utility capabilities designed to provide value to both the customer and the dynamic needs of the grid. The Companies welcome synergistic and complimentary programs and request that Hawaii Energy take the necessary steps to ensure that efforts in these programs are not duplicative in scope or content. The Companies are encouraged that "Integrated Demand Response capability into energy efficiency projects"^ is a stated key program factor. The Companies echo this sentiment and see it as an extremely important contributor to the efficient use of program dollars. The Companies are committed to fostering this integration through collaborative efforts. Our Customer's experience is very important to us and we are continuously seeking to improve it. The Companies offer the following comments on specific sections in the 2015 Annual Plan. ^ Id. at 5. Hawaiian Electric PC BOX / HONOLULU, HI

3 Page 3 B. Section 2.0: Outreach & Marketing Communications Section 2.1 Overview The Companies agree that customer outreach can help maximize customer understanding of offerings and the benefits of participating in the programs. The Companies look forward to collaborating with Hawaii Energy on these efforts. One example of this might be the collaboration on the timing of mailing so that the Companies can time these mailings with the distribution of other information so as to avoid significant increases in customer service call volumes, which can impact service levels to customers Section 2.3 PY14 Market Research Given Hawaii Energy's conclusion that there is a strong "need to increase Hawaii Energy's brand...awareness to increase participation," there may be some advantages to workin^j collaboratively with the Companies in order to demonstrate the implicit relationship. The Companies also have the need to improve customer awareness to increase participation in our programs (e.g., demand response); therefore, aligning as appropriate on marketing opportunities would leverage customer funds most effectively. Section Public Relations The Companies welcome public relations cooperation as appropriate, especially in helping to promote technologies and pilots that deliver energy efficiency while enabling demand response capabilities. C. Section 3.0: Transformational Actions Section 3.2 Key Objectives The Companies recognize the value in Hawaii Energy piloting new "projects that can lead to scalable programs with measurable savings"** and are interested in collaborating, as appropriate, on pilots that demonstrate technologies that promote energy efficiency while enabling demand response capabilities. More broadly, the Companies stress the value in collaborative pilots to avoid duplicate efforts around certain technologies and/or use cases. ''Id. at 10. 'id. at II. ''id. at 12. Hawaiian Eiectric PC BOX 2750 / HONOLULU. HI

4 Page 4 Section 3.3 Behavior Modification Hawaii Energy states that it will work with University of Hawaii faculty to develop a methodology to test various TOU rate structures to drive behavioral change. Hawaii Energy goes on further to state that this is to assist utilities in filling the daytime PV load depression and control the nighttime peak loads.^ The Companies applaud this work and feel that Hawaii Energy should collaborate closely with the Companies on this initiative lo ensure that the efforts can be tailored to the Companies' specific operational needs. Furthermore, as the Companies continue to explore various TOU rates across several technologies, the Companies encourage continued information sharing lo help inform and refine these examinations by both Hawaii Energy and the Companies. Aligning on these efforts will help avoid duplication. Furthermore, as the Companies proceed with filing new rates as part of the regulatory process, this collaboration will ensure that the full value of the efforts is reflected in the new rate structures. The Companies have similar efforts underway for Smart Grid, Shift for Savings Plan, and Electric Vehicle Support and suggest that it would be more cost effective for Hawaii Energy to collaborate with the Companies in these areas to provide the best solutions for customers. In particular, the Companies understand the value of Hawaii Energy building upon its lessons learned in PY2014 Smart Grid efforts. The Companies encourage Hawaii Energy to continue to stay abreast of and benefit from Hawaiian Electric's Smart Grid Initial Phase efforts. The synchronization is likely to add value and ensure an aligned path into the smart grid future. The Companies further encourage Hawaii Energy to continue participating in discussions with Hawaiian Electric and other stakeholders related to ongoing electric vehicle efforts and initiatives to ensure coordinated and complimentary efforts. Finally, the Companies applaud Hawaii Energy's efforts around the Shift for Savings Program, as the Companies' deployment of Grid Interactive Water Heaters (GIWH) is an important step in deploying a population of resources that simultaneously offer energy efficiency savings for the customer while providing meaningful grid services that will benefit all customers. This project represents the outcome of a collaborative effort that can serve as an example for future efforts. Section K-12 Educator Training and Development The Companies agree that Educator Training and Development would be beneficial and the Companies commend Hawaii Energy for undertaking this program. The Companies would welcome the opportunity to explore collaboration opportunities..10 Id. ai 2:1. 10 Id. at 24. Hawaiian Eiectric PO BOX 2750 / HONOLULU, Hi

5 Page 5 Section 3.5 Technical Training The Companies recognize the value of the training programs described in these sections". The Companies propose that offering information on the Companies' demand response curtailment load shedding strategies as part of an overall facility management scheme can deliver greater economic value to the facility management effort. In general, the Companies see the alignment around demand response efforts as an important opportunity to avoid duplication and promote a more efficient use of public benefit funds. Section Strategic Energy Management (SEM) The Companies are currently engaged in helping key customers develop comprehensive energy solutions and plan to continue to develop this effort across the larger customer population. As such the Companies are interested in understanding more fully Hawaii Energy's approach to identify any potential areas of overlap. Energy efficiency is a valuable aspect of a comprehensive energy solution, and the Companies are very interested in encompassing energy efficiency into these comprehensive energy solutions for the customers. The Companies concur that demand response opportunities may represent a meaningful contributor to SEM related activities and are willing to work with Hawaii Energy to help SEM professionals understand these growing opportunities. The Companies view this as an opportunity lo extend the value of program dollars. Section Benchmarking The Companies view benchmarking, particularly of customers with high energy usage intensities (EUIs), as an important exercise, both as it relates to energy efficiency opportunities, but also as it relates to targeted opportunities for demand response programs. The Companies would welcome discussions and information sharing around these benchmarking efforts. D. Section 4.Q: Residential Program Strategy & Details Section 4.1 Overview The Companies encourage Hawaii Energy to consider including GIWH in its catalog of water heater options. The Companies are interested in, and are actively pursuing, the IT IT deployment of large populations of new and retrofitted ' GIWHs. To dale, these devices have demonstrated both efficiencies and the ability to deliver valuable grid services. " Id. at 25. Docket Review of Demand-Side Management Reports and Requests for Program Modificaiions Filed on March 31, Hawaiian Electric Annual Program Accomplishments and Surcharge Rep_ort Hawaiian Electric PO BOX 2750 / HONOLULU, HI

6 Page 6 The Companies find the continued tracking of lighting replacement efforts to be a prudent effort. In so far as this information is made available, this information can be applied to the Companies' long-term system planning. This, in turn, can help foster more efficient system design and therefore help lower costs for customers. Section High Efficiency Water Heating The Companies agree that solar water heaters (SWH) are an effective means to reduce electrical energy consumption and suggest that additional consumer education might increase the residential use of SWH compared to PV-direct water heaters.'"* As noted above, however, the Companies would also like to see more consideration of GIWH technologies as another customer option. Section Energy Awareness, Measurement and Control Systems The Companies note that a few complaints were received from customers as a result of the Peer Group Comparison effort, with customers incorrectly assuming that the Companies are providing their personal information to third parties. The Companies encourage Hawaii Energy to consider this as they market this program, and contemplate performing customer surveys to determine if this is a broader concern. ' The Companies encourage collaboration in order to streamline communication channels to customers around energy consumption, especially in light of the advanced tools examined through Hawaiian Electric's Smart Grid Initial Phase and their evolution and expansion in the years to come. Running parallel efforts, such as multiple web portals, could present a duplication of efforts, where there may be opportunities to combine learning, extend value and ultimately demonstrate the most efficient use of customer dollars. Section New Program Offerings of Residential Energy Services and Maintenance (RESM) The Companies understand the value in replacing mid-life systems and would encourage Hawaii Energy to consider communications and control capabilities as an important element of replacement units. This consideration may enable potential participation in demand response programs of these devices, extending the value of the replacement resource. '"'The Companies are negoiiating a retrofit opportunity for 100GIWH units. 'Md. ai Id. at 29. Hawaiian Electric PO BOX 2750 / HONOLULU, HI

7 Page 7 Secrion Energy Efficiency Equipment Grants The Companies request that Hawaii Energy continue to strive for Island equity in the Energy Efficiency Equipment Grants.'^ E. Section 5.0: Comments on the Business Program Strategy & Details Section 5.1 Overview Regarding Building Energy Efficiency Measures (BEEM), the Companies view submetering as a valuable resource for customers, and moreover, if made available, the data would be useful in developing targeted programs that could offer grid services - and thus increased benefit to all customers. With respect to Custom Business Energy Efficiency Measures (CBEEM), the Companies encourage Hawaii Energy to promote technologies that offer demand response capabilities while offering energy efficiency, noting that payback periods may be accelerated if measures can incorporate demand response capabilities. Concerning Business Energy Services & Maintenance, the Companies encourage the inclusion of demand response program awareness as part of the Energy Study Assistance. 17 Section New Program Offerings of Customized Business Energy Efficiency Measures (CBEEM) The Companies encourage Hawaii Energy to consider supporting or encouraging investment in measures that can simultaneously offer energy efficiency to customers while enabling participation in demand response events; this may offer customers enhanced long-term value. Furthermore, the Companies encourage investment in sub-metering and acknowledge that this data, were it to be available to the Companies, may bring long-term value to customers through informed and targeted program design. Id. at 51. Id. at 53. Hawaiian Electric PO BOX 2750 / HONOLULU. HI )

8 Pages III. Conclusion The Hawaiian Electric Companies appreciate the opportunity to comment on the 2015 Annual Plan, and look forward to expanded collaboration with Hawaii Energy to maximize energy efficiency and obtain maximum value from the program funding. Very truly yours. Daniel G. Brown Manager, Regulatory Non-Rate Proceedings cc: Division of Consumer Advocacy Honeywell International, Inc. Haiku Design & Analysis Energy Industries, LLC Life of the Land Hawaii Renewable Energy Alliance Hawaii Solar Energy Association Leidos Engineering, LLC. (Hawaii Energy) Hawaiian Electric PO BOX 2750 / HONOLULU, HI