HELCO Drafts RFP to Expand Geothermal on Hawaii Island

The electric utility on Hawaii island published Friday the first draft of a plan to add 50 megawatts of geothermal power to the island's electric grid.

Hawaii Electric Light Co. will seek public comment on the draft to help guide renewable energy developers as they prepare their bids to supply geothermal power to HELCO. A final draft of the document is scheduled to be completed by January, and selection of the winning bidder or bidders is expected by July or August.

An existing 38-megawatt geothermal plant on Hawaii island already accounts for about 20 percent of the island's peak electrical load. An additional 50 megawatts would push the amount of geothermal generation to nearly 50 percent of peak load.

"This project combines our efforts to increase renewable resources on our island with a commitment to reduce costs for consumers," HELCO President Jay Igna­­cio said.

HELCO customers pay among the highest electricity rates in the state.

HELCO plans to conduct a technical conference webi­nar next month to allow prospective bidders to ask questions and provide comments on the draft document, known as a request for proposals, or RFP.

The contracted price HELCO will pay developers for the geothermal energy will not be linked to the cost of oil, as is the case with many of the other renewable energy projects on Hawaii island.

"This is incredibly important for ratepayers on the Big Island," said Lt. Gov. Brian Schatz. "This will help stabilize prices. What people on the Big Island need is clean, affordable energy, and that's the purpose of this RFP."

One of the keys to making the plan work is engaging the community, he added. "We are working hard to have it done right, respecting the environment and the culture," Schatz said.

Bringing another 50 megawatts of geothermal power online will pave the way for the eventual retirement of fossil fuel-burning electrical generators on Hawaii island, he said.

More than 40 percent of the electricity consumed on Hawaii island is generated from renewable resources, the highest percentage of any island in the state. Besides geothermal, Hawaii island has hydroelectric, wind and distributed solar power generation.

SOURCE: Star Advertiser (11/10/2012)

Lowering the Balance of Power? HELCO Wants to Renegotiate its Power Purchase Agreements with Renewable Energy Providers

HILO — Hawaii Electric Light Co. wants to renegotiate its power purchase agreements with renewable energy providers.

Earlier this week, the County Council approved by a 9-0 vote a resolution urging HELCO to renegotiate its contracts based on the price of energy production rather than “avoided cost,” which ties the cost of producing renewable energy to the price of oil on the market.

“We are in agreement with the resolution,” said HELCO President Jay Ignacio on Friday. He testified in favor of the renegotiated contracts when the resolution came before a County Council committee.

Councilman J Yoshimoto said the idea for the resolution came out of a discussion about general energy issues with HELCO officials earlier in the year.

Last December, the Public Utilities Commission approved an amended purchase power agreement between HELCO and PGV to purchase an additional 8 megawatts of power that would expand production to 38 megawatts and provide monthly savings of between $1.60 and $1.90 per customer through 2025.

Those savings struck a lot of people as not enough, given Hawaii Island’s reliance on imported fuel for energy.

“The savings that resulted out of the recent negotiations that HELCO had with PGV were minimal,” Yoshimoto said. That’s why he wrote the resolution to “ask both parties to go back to the negotiating table. That’s the bottom line.”

Ignacio was hopeful PGV was looking to renegotiate at least one of its contracts.

“They (PGV) have approached us and asked to renegotiate the part of the contract governing the first 25 megawatts, and they recognize the problem,” Ignacio said. “We have sent invitations to all the other power producers inviting them to come back and negotiate the energy contracts.”

As stated in the resolution, HELCO will provide the County Council an update on the status of its efforts at its meeting Oct. 17 at the West Hawaii Civic Center. This update will include whether PGV “was amenable to lowering the price rates for payers and the amount of the new negotiated price, if one has been agreed upon.”

Yoshimoto said he was hopeful the negotiations result in savings.

Ignacio, interviewed separately, agreed.

“I do hope so,” the HELCO president said. “From the electric utility’s perspective, we want to get lower cost contracts so we can pass the savings on to consumers.”

“The only assurance that we have is that they negotiate in good faith,” Yoshimoto said.

Hawaii County residents pay some of the highest costs per kilowatt in the nation.

While the Legislature has passed a law mandating that future energy contracts be decoupled from the price of oil, that doesn’t help the existing long-term contracts, some of which are for 20 or 30 years, that rely on the avoided-cost model.

HELCO also has purchase power agreements with two wind farm firms, Apollo Energy Corp./Tawhiri Power LLC and enXco/Hawi Renewable Development; and hydroelectric plant Wailuku Holding Co.

Source - Hawaii Tribune Herald

Council Tries to Bring Down Cost of Power

Posted on September 5th, 2012
by Dave Smith

A County Council resolution urging Hawaii Electric Light Co. to seek lower power costs from renewable energy providers — hopefully to be passed on to consumers — brought out enthusiastic supporters today.

The measure introduced by Hilo Councilman J Yoshimoto asks HELCO to renegotiate its contracts with independent power producers to “de-link” the power from avoided cost, or what it would have cost to generate the power with fossil fuels.

The concept of avoided cost was established by the Public Utility Regulatory Policies Act of 1978 as an incentive for development of sources of renewable energy. The federal law contained a provision that states could opt out of the program, which Hawaii did in 2006.

Currently, only 13 megawatts of the renewable-source electricity HELCO buys is not tied to avoided cost. That includes a contract recently established for an 8-megawatt expansion of Puna Geothermal Venture and a renegotiated price for 5 megawatts of the 30 megawatts already being provided by PGV.

HELCO President Jay Ignacio responds to questions about the utility’s electrical rates. Photo by Dave Smith.
HELCO has declined to reveal its specific power costs, but the company’s president, Jay Ignacio, told Big Island Now that the impact on residential power bills from the new contracts would be negligible.

According to Yoshimoto’s resolution, which passed unanimously, HELCO estimates that PGV’s 8-megawatt expansion under the lowered cost will reduce a typical residential electricity bill by $1.67 in 2015.

Earlier this year HELCO officials signed another de-linked contract, this one with Hu Honua Bioenergy to provide 21.5 megawatts to be generated by the burning of biomass at the former Hilo Coast Processing Co. sugar mill in Pepeekeo. Hu Honua isn’t expected to begin producing power until 2014 at the earliest.

During a meeting of the council’s Committee on Agriculture, Water & Energy Sustainability that ran well into the night, all of the testimony was in support of Yoshimoto’s resolution, although most of those speaking said it did not go far enough.

Kuulei Cooper of Pohoiki testified that the resolution would be “only a suggestion” and didn’t go far enough to break what she called HELCO’s “egregious monopoly.”

Wallace Ishibashi, a negotiator for the International Longshore and Warehouse Union, told council members that electricity prices must come down. He said it affects workers because their employers pay so much for power.

HELCO’s residential rates, currently about 43 cents per kilowatt hour, are often the highest in the nation.

“This is too much,” Ishibashi said. “They’re not going to take it anymore.”

Mililani Trask, a principal in Indigenous Consultants, an organization seeking to develop geothermal energy sources to benefit indigenous peoples, described the previous contract between Hawaiian Electric Co. and Ormat Technologies, owner of PGV, as “price-fixing.”

Trask suggested requiring that the resolution be amended to require that HELCO report back on its efforts to renegotiate contracts.

Yoshimoto later noted that while the Public Utilities Commission approved the 8-megawatt and 5-megawatt deals, it criticized HELCO and PGV for failing to extend the de-linking to the remaining 25 megawatts.

He said the PUC seemed resigned to the result, but the public need not be, and he hoped his resolution would encourage it to speak out.

“I think change starts with the people,” he said.

Yoshimoto noted that rates are established by contracts over which the council has no power. But, he said, just because the companies can make their own deals, that “doesn’t make it right.”

Yoshimoto’s resolution notes that HELCO contracts with three other companies providing power from wind and hydroelectric facilities remain based on avoided costs.

Councilwoman Brenda Ford expressed doubt that reducing the cost of power to HELCO would translate into much in the way of lower consumer bills.

Independent producers using both renewable resources and oil currently produce about 130 megawatts to HELCO, representing a little under half of the utility’s total power capacity.

HELCO President Jay Ignacio told council members that his company doesn’t make any profit from independent power producers. He said HELCO makes profits on its investments including utility infrastructure.

Ignacio said he is agreement with the resolution and his company has already attempted to renegotiate existing contracts. He said HELCO is currently in talks with PGV at that company’s request.

“That’s good news,” Yoshimoto said. He asked if any details could be provided, but Ignacio said the process has to be confidential.

Ignacio said the existing contract with PGV for the remaining 25 megawatts expires in 2027, and existing contracts with other renewable energy producers run for either 20 or 30 years.

In addition to the roughly 40 megawatts that HELCO obtains from geothermal, wind and hydroelectric power, the utility receives about 17 megawatts in solar power, most from homes or businesses that use net metering to reduce their individual energy bills.

Ignacio said HELCO’s efforts to obtain power from producers such as Hu Honua, as well as its current plan to obtain another 50 megawatts from geothermal, is designed to reduce HELCO’s dependence on oil and its volatile pricing. Increases in the price of oil can raise electricity bills through PUC-approved surcharges.

“If we can drive that down, that will really help our customers out,” he said.

Council Chairman Dominic Yagong successfully introduced an amendment to the resolution similar to Trask’s suggestion which asked that HELCO appear before the council at its Oct. 17 meeting to report on its progress in renegotiating with PGV.

Ignacio said his company would be willing to provide the update, but would still have to maintain confidentiality.

“I’m not sure what we can share with you,” he said. He also noted that the recent 8-megawatt contract took three years to negotiate.

Any contract changes must be approved by the PUC.

HELCO recently asked the PUC to approve a 4.2% rate increase it says is needed to pay for a variety of renewable energy projects including forecasting systems for wind and computerized models to analyze the addition of more solar power into its grid.

If approved, the hike would add $8.32 to a typical 500 kilowatt-hour monthly electric bill.

HECO's Residential Rates Edge Up in June

HECO's residential rates edge up in June [Honoluu Star-Advertiser]
(Star-Advertiser) 

Rising fuel oil prices pushed residential electricity bills higher on Oahu in June, Hawaiian Electric Co. reported Tuesday.

The rate for residential HECO customers in June is 35.1 cents a kilowatt-hour, up from 34.6 cents a kilowatt-hour in May, according to HECO. The June rate matched the previous rec­ord high set in December.

The June rate translates into a monthly bill of $218.60 for households using 600 kilowatts of electricity a month, up from $215.69 in May.

Hawaii consistently has the highest electricity costs in the nation, largely because of its dependence on expensive fuel oil for power generation.

Low-sulfur fuel oil, HECO's primary source of power generation, cost $144.73 a barrel in June, up from $126.27 the same month a year ago. Prices for the fuel oil began climbing sharply in the Pacific Basin in early 2011 because of high demand from utilities in Japan. The country turned to oil-fired power plants to replace the generating capacity lost when it shut down many of its nuclear reactors after the devastating earthquake and tsunami there in March 2011.

As we have over the past year, Hawaii continues to feel the impact of high prices for low-sulfur fuel oil, the fuel used to power most generators on Oahu, in the Asia-Pacific market, which includes Hawaii," said Peter Rosegg, HECO spokes­man. "More than half the typical bill goes directly to pay fuel costs over which we have no control. It is a painful reminder that we have to get off oil as quickly and as completely as we can," he said.

Elsewhere in the state, Maui Electric Co. customers saw rates rise to 38.8 cents per kilowatt-hour in June from May's 37.9 cents. The typical Maui bill rose by $6.27 to $241.90.

Hawaii island residential rates rose to 42 cents a kilowatt-hour from last month's 41 cents. The typical bill rose by $5.99 to $262.41.

On Kauai the rate fell to 42.8 cents per kilowatt-hour. Last month the rate charged by the Kauai Island Utility Cooperative was 45.1 cents per kilowatt-hour.

Hawaii's average statewide residential electricity rate was 37.05 a kilowatt-hour in March, more than three times the national average of 11.76 cents per kilowatt-hour, according to the latest data available from the U.S. Energy Information Administration.

Hawaiian Electric Industries Deregulation Issues

Presentation to educate the people of Hawaii and others about the 100 year old utility monopoly that has a stranglehold on Hawaii's energy future, operates with full impunity or carte blanch, and rules this state like an outlaw gang in an old west town of the 1880's.

County Council Must Address Community Impact from Geothermal

James Weatherford

The Hawaiʻi County Council is considering legislation to redirect the county's share of geothermal royalty funds back to their original purpose - addressing community impacts from geothermal development.

James Weatherford, candidate for Hawaiʻi County Council District 4, fully supports this initiative and says Bill 256-12 must be passed.

“This is not about being 'pro' or 'anti' geothermal. This is about responsible government being responsive to community concerns," Weatherford said in a statement released by his campaign today.

"The incumbent from Puna has had a year-and-a-half to address the concerns of the community in the vicinity of the geothermal plant," Weatherford added. "Instead of responding to and addressing his constituents' concerns regarding impacts of geothermal in the community, he has been spending geothermal funds for other purposes. Instead of draining the geothermal royalty fund, I will bring Puna taxpayers’ money back to Puna by doing the work required through the budget process to get capital improvement projects for the district.”

Bill 256-12, introduced by Council Chair and Mayoral Candidate Dominic Yagong, will provide an opportunity for residents now living within one mile of the Puna Geothermal Venture facility to be relocated, and would prevent those properties from being reinhabited via resale or rental. This will start to create a buffer around PGV, where as now, some residents live right next to the geothermal power plant.

In addition to relocation, Bill 256-12 also promotes public health and safety by providing expenditures on health studies, air quality monitoring and real-time public notification of emissions.

Mandated emergency evacuation preparedness is also being considered by the council in a separate measure.

On May 16th, the legislation received a favorable recommendation from the Council’s Agriculture, Water, and Energy Sustainability Committee. Scheduled for June 6th is the first of two more votes needed before being sent to the Mayor for signing into law or veto.

Submitted by the campaign of James Weatherford for Puna Council District #4
More on the web: www.jamesweatherford.com

Source: Hawaii Reporter

Puna geothermal plant to hold evacuation drills this summer

By TOM CALLIS
Source: Tribune-Herald staff writer
tcallis@hawaiitribune-herald.com

HILO — Hawaii County is planning its first evacuation drill for a disaster at Puna’s nearly two-decades old geothermal power plant.

Planning for the exercise is still in its early stages, but Benedict Fuata, the Big Island’s civil defense coordinator, said he is aiming to hold a three-day drill in mid-July.

It will be the first drill since the plant, now operating at 38 megawatts, went online in 1993. It will also act as a test of the county’s first geothermal evacuation plan, now being drafted.

Fuata said the county is acting in response to the outcry from dozens of Puna residents concerned that there isn’t enough health and safety protections in place. Those anxieties have resurfaced in the wake of Hawaii Electric Light Co.’s recent efforts to expand geothermal operations on the Big Island by up to 50 megawatts.

“I was mandated by Mayor [Billy] Kenoi to get to the bottom of this,” he said. “He has concerns and I have concerns.”

Fuata said he expects homes to be evacuated as part of the exercise but the scope of the drill hasn’t been determined. The plant, operated by Puna Geothermal Venture, sits in a largely residential area in Pahoa. County Planning Director Bobby Jean Leithead Todd estimated last week that between 87 and 140 homes are located within a mile of the plant.

During recent Hawaii County Council meetings, neighbors of the plant recalled having to flee their homes in 1991 during a well blowout, which released steam created by volcanic activity into the air. Some have claimed adverse health effects as a result.

Fuata, who became civil defense coordinator in March, said part of his job is to investigate those claims to understand the public’s risk. “I’m in fact-finding mode right now,” he said.

The steam, used to create electricity, carries harmful toxins, the worst being hydrogen sulfide. The plant operates with a closed system, meaning no steam is released unless there is a problem. PGV has its own community evacuation plan in place, but it is unclear why it hasn’t been tested since the blowout or why the county hadn’t developed its own plan before.

Fuata refereed to the company’s plan as “general” and said he thinks a more detailed and coordinated effort is needed. Both Kenoi and County Council Chairman Dominic Yagong, who is challenging Kenoi in this year’s mayoral race, said it’s time for the county to do more to address the issue. Kenoi said the county needs to be prepared for any disaster, whether a tsunami, hurricane, or geothermal related. “Every time you go through a drill you learn something,” he said. “You become better, you become more prepared.”

Yagong said he also has been discussing the need for a county plan with Fuata over the last few weeks. He plans to introduce a bill June 6 that would also require an evacuation plan to be developed for current and future geothermal operations. Yagong gave praise during a phone interview Saturday to Puna residents who have brought their concerns to light. “People have expressed their outrage and that has moved government to action,” he said.

The plant has had six air emission violations. Detected levels of hydrogen sulfide were not considered harmful, according to the state Department of Health, which doesn’t consider the plant to be a threat to public health.