Here are some tidbits from a transcript of Hawaiian Electric Industries (HEI) discussion of quarterly results earlier this week that shed some light on the how the company is integrating renewable energy sources.

Constance Hee Lau – Chief Executive Officer, President, Director, Member of Executive Committee, Chairman of American Savings Bank, Chairman of Hawaiian Electric Company Inc, Chief Executive Officer of American Savings Bank and President of American Savings Bank

Year-to-date through September 30, more than 18% of the electricity used by utility customers came from renewable resources, exceeding the state’s 2015 goal of 15%. On Hawaii Island, renewable generation is up to 49%, and the Maui Electric is up to 30% year-to-date….

In order to accelerate the pace of reducing costs through renewable generation, earlier this year, Hawaiian Electric invited developers to propose renewable projects on Oahu that will meet specific costs and timing requirement. The response was better than expected. And there are currently 9 utility scale photovoltaic projects totaling 244 megawatts of capacity that we’ve requested approval of waiver from competitive bidding from our PUC. We filed for 6 of these just last week. The average price of these projects is 30% below the avoided cost of oil generation, and if approved, we hope to get these projects and service between 2015 and 2018.

This drew a question, and a nonintuitive response.

Paul Patterson – Glenrock Associates LLC

Okay. The lower cost associated with these contracts that you are negotiating the 9 utility contracts, why are they lower than the competitive bid process? Could you explain sort of the differential between those 2 things? And why that’s — could you elaborate a little bit more on that?

Richard M. Rosenblum – Chief Executive Officer of Hawaiian Electric Company, President of Hawaiian Electric Company and Director of Hawaiian Electric Company

Sure. This is Dick Rosenblum. We have perceived for some time that the competitive bidding process we’ve been in is resulting in the bidders essentially bidding against our avoided cost of energy. And so in this round rather we put a price target out of $0.17 a kilowatt hour and said we would not accept any bids above that. We then went through several rounds of bidding, and we’re able to produce a much lower price than we have been able to acquire through the traditional bidding process in the past.

In answer to another question, HECO’s CEO noted the difficulties faced in trying to utilize all available renewable energy at peak periods, when it can be a matter of “too much of a good thing.”

Charles J. Fishman – Morningstar Inc., Research Division

Does the level of renewables on Maui, does that meet the commission’s expectations now? I think you said it was 91%.

Richard M. Rosenblum – Chief Executive Officer of Hawaiian Electric Company, President of Hawaiian Electric Company and Director of Hawaiian Electric Company

This is Dick Rosenblum. I think we’re certainly making progress on meeting the commission’s expectations. That’s 91% of all the available energy is being accepted. The 2 areas where we have — continue to have some challenges, and we continue to try to improve, are in the very early morning hours when the load is very, very low and the percentage of renewables can be very high. And surprisingly, in the midafternoon, when although the load is high, the production of rooftop photovoltaic is also very high. And when that combines with high winds, we have the same sort of situation where the available margin to utilize it is quite low. So we continue to work on those areas, but I think we are well on the way to meeting the expectations of the commission.