In the past few years the rate of solar installations in Hawai`i has doubled each year. The HECO utilities experienced peak energy use in 2004. Since then the demand for electricity from the grid has been dropping.

Mayes introduced the concept of “cascading natural deregulation.” As the cost of renewable systems trends downward and electric rates go up, those who can leave the grid, will leave the grid.

The fixed costs associated with energy production, transmission, and distribution will then have to be absorbed by the remaining (smaller) rate base still on the grid.

Those who remain on the grid will then see their rates go up even more, which in turn provides ever stronger incentives for more people to opt out of a centralized grid, driving ever higher the rates for the diminishing number of ratepayers who remain.

This cascading natural deregulation will first occur in areas with abundant renewable energy resources and high electrical utility prices such as Hawai`i.

In this scenario, a utility such as Hawaiian Electric Company (HECO), and its subsidiaries Maui Electric (MECO) and Hawaii Electric Light (HELCO) predictably will be sucked down into a bottomless vortex and ultimately fail as a viable investor-owned corporation.

[gview file=”http://Maui-Tomorrow.org/pdf/LifeOfLandPEISComments.pdf”]