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

Harry Kim to File for Mayor

By Dave Smith - June 4, 2012
Source: Big Island Now


Former two-term mayor Harry Kim today took out nomination papers to run for the chief executive position on the Big Island.

Kim told Big Island Now this afternoon that he will definitely file to run for mayor tomorrow, which is the election deadline for the Aug. 11 primary election.

Kim’s candidacy adds a significant twist to the mayor’s race where he will become the 10th candidate, according to Friday’s report from the state elections office.

Those with the highest profiles, incumbent Mayor Billy Kenoi and County Council Chairman Dominic Yagong, could not be immediately reached for comment.

Kim, 72, served as mayor from 2000-2008 after a 24-year stint as director of the county’s Civil Defense Agency. He was prevented by term limits from running for re-election immediately after that.

Kim knows his chief opponents well.

Yagong ran against him for mayor in the 2004 nonpartisan primary where he received 26% of the vote to Kim’s 62%. Kim has known Kenoi for many years and coached him as a player on the Waiakea High School football team. Kenoi also served as an executive assistant in the last six years of Kim’s administration.

Kim said he didn’t have qualms with either candidate who he said have a “different style of management” from him. Kim had endorsed Kenoi’s bid for mayor in 2008.

Kim said today that his return to politics was largely driven by actions that occurred during the past session at the state Legislature dealing with geothermal development.

He said he was disheartened by the easing of restrictions for those activities including the removal of the requirement for subzones for geothermal development.

But what prompted him into direct action, Kim said, was a request from DLNR Director William Aila Jr. to the state Environmental Council. Aila had asked the panel to exempt exploratory geothermal drilling from the state law that mandates the preparation of an environmental assessment or the more rigorous environmental impact statement.

Kim said he was dumbfounded when a committee of the council voted almost unanimously to recommend approval of Aila’s request.

“I couldn’t believe (the committee) did this,” Kim said. “I said, nah, they wouldn’t do that.”

After being urged to intervene by Gary Hooser, head of the state Office of Environmental Qualify Control, Kim spent four days researching the matter and preparing testimony.

After Kim appeared in person before the full Environmental Council in Honolulu, its members reversed the committee’s recommendation and voted to deny the change Aila had requested.

After that, “I really started thinking about geothermal, safety and health in government,” he said. “How could they do this?”

Kim said he also wondered how, if the exemption stood, government could justify requiring environmental studies for other types of projects.

Kim said his jaw dropped when he heard Aila say drilling for geothermal is comparable to drilling for water.

“I realize that some people truly think that geothermal is harmless,” he said. “I would think people in authority should do some research.”

Kim said he decided to re-enter politics to make sure geothermal and other development “is done right.”

“I realized that it’s not just about geothermal, it’s about faith in government,” he said.

Kim said another subject he is concerned about is solid waste. He said he has never been a proponent of landfills anywhere in Hawaii, and believes the solution is a plant like Oahu’s H-Power where garbage is burned to generate electricity.

He acknowledged that the waste-to-energy facility considered during his second term carried a steep price tag of $125 million, but feels that it’s the government’s duty to find a way to do it affordably.

He said he was also opposed to the County Charter amendment that set aside 2% of county revenues to purchase land to be preserved as open space, partly because it didn’t include funding for maintenance of those lands.

“That’s not a good way to spend public money,” he said, adding that such funding should be found elsewhere.

In the area of public funding, Kim will likely be subjected to questions about his administration’s practice of increasing the size of government during flush times, when soaring property values inflated county coffers.

During Kim’s eight years in office, the county’s operating budget more than doubled to more than $400 million. That included a tax increase of nearly 25% for homeowners sought by Kim and approved by the council for the 2002-03 fiscal year.

Kim said today he will run a campaign similar to his other two, in which he describes himself as an “applicant” for the mayor’s job.

While he has relatively little time for fundraising, that also includes continuing his policy of not taking any campaign donations greater than $10. Kim said no amount of advertising he could purchase would overshadow public perception of his years of public service.

“I worked for the people here for more than 40 years, and by now they should know me and my methods,” he said.

Kim acknowledged that his health could be an issue in the campaign, as he suffered two heart attacks in his final year in office.

“My health at this point is good,” he said, while acknowledging that he is currently undergoing additional cardiac testing.

He also admitted that because of the health issues his family did not want him to run, but supports his decision to do so.

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

Environmental Exemptions for Geothermal Energy near final Approval

KITV-TV - May 4, 2012

Unlike wind or solar, geothermal energy located deep below the earth's surface is always on.

But companies will often shy away from exploring new geothermal sites in Hawaii because of the state's strict environmental regulations, which cost both time and money.

On Thursday, a subcommittee of the state Environmental Council heard from potential geothermal developers about why the State Land Department should be allowed to waive certain environmental regulations.

"The cost and timelines of the current rules make it restrictive to explore in this state," said Bill Sherman, land manager for Ormat Technolgies, a Nevada based company that owns the 30 megawatt geothermal plant in Puna on the Big Island.

After hearing testimony, the seven member subcommittee approved three environmental exemptions for geothermal exploration. They include non-invasive testing and analysis, the issuance of leases on state or reserved lands, and the drilling of exploration wells.

If approved by the full 15-member Environmental Council May 17, the exemptions would allow the State Land Department to drop costly environmental assessments from geothermal exploration projects.

"This simply gives us the opportunity to point out an exemption for the environmental processes," said State Land Director William Aila. "There's still all of the other state, federal and county processes that have to be complied with."

The 30-megawattt Puna Geothermal Venture plant already produces 20 percent of the Big Island's energy needs. Allowing exploration wells to be dug more quickly and cheaply could lead to the construction of more plants.

Ormat is exploring the construction of a 50-megawatt geothermal plant on Ulupalakua Ranch in southern Maui. Meanwhile, Hawaii Electric Light Company opened a docket with the Public Utilities Commission May 1, asking for proposals to build a new 50-megawatt geothermal plant on the Big Island.

In his State of the State speech in January, Gov. Neil Abercrombie lobbied for more renewable energy output and mentioned the Big Island by name.

"That's really in response to the demand that's coming from the community on Hawaii Island," said Aila. "They're paying some of the highest prices for electricity in the state."

However, opposition to the geothermal industry on the Big Island continues to grow louder, where critics blame a variety of health problems on the Ormat plant in Puna.

Gary Hooser, an ex-officio member of the Environmental Council and director of the Office of Environmental Quality Control, believes geothermal technology doesn't harm human health, even though he voted against the exemption for exploratory wells.

"I think if done properly, like most things, geothermal can be perfectly safe," said Hooser. "We need to explore all these alternatives to renewable energy."

Longtime native Hawaiian activist Mililani Trask is currently representing Innovations Development Group, Inc., a company which hopes to dig geothermal exploration wells on the Big Island.

Although members of The Pele Defense Fund have begun speaking out against the interference geothermal plants could pose to native Hawaiian Pele practitioners, Trask says those concerns are overblown. She points to a 1995 decision by the Hawaii Supreme Court that affirmed access rights of native Hawaiians.

"Since that time and until the very present moment, there hasn't been a single case of a single Hawaiian prevented from worshiping tutu Pele because of a geothermal plant in Puna," said Trask. "It just hasn't happened. It's a non-issue."