Hawaii To Support Electric Car Network

Let's hear it for Hawaii and its Republican Governor, Linda Lingle.

Lingle announced yesterday that the Hawaiian government would support a plan to build a network of electric automobile charging stations throughout the state by 2012. ("Hawaii Endorses Plan For Electric Cars.")

This makes a lot of sense--Hawaii is heavily dependent on oil imports to fuel its economy, and thus is quite vulnerable to disruption.

To make the plan work, however, Hawaii needs to end its dependence on burning oil to make electricity. That shouldn't be too difficult: the cost of electricity in Hawaii is quite high, running between 30-38 cents per kilowatt hour, versus an average of less than 10 cents on the mainland.

At costs like that, wind energy is quite economical, and solar looks pretty good, especially in sunny Hawaii. We'd guess, too, that Hawaii, with its large, active volcanoes, has ample sources of geothermal energy. Indeed, one wonders: what has taken Hawaii so long to make big progress on the alternative energy front.

A Wall Street Journal article (not available online) on the new car electrification plan suggested that one problem is lack of transmission capacity between the islands. That's a lot of baloney. The problem is the monopoly given to Hawaiian Electric Co. and the perverse incentives it has under traditional utility regulation.

Like most electric utilities, Hawaiian Electric has every incentive to build large, central generating facilities with extensive transmission/distribution lines, and to utilize expensive sources of fuel, such as oil. Regulators give the company a set return on its investments.

If Hawaii can revise its regulations to incentivize the power company to invest in distributed solar--rather than more transmission lines--as well as wind and geothermal, it can quickly move forward as a leader in alternative energy.

The plan to electrify the state's auto fleet is a good first step forward. Combined with other steps to reform the way electricity is generated in the state, Hawaii can become a model for breaking the oil addiction, achieving energy independence and reducing greenhouse emissions.