Categorized | Business, Energy

Senator Solomon questions delay in new 50MW geothermal plant

MEDIA RELEASE

Honolulu – Sen. Malama Solomon today released a letter sent to the Public Utilities Commission and Boston Pacific Company, Inc. questioning and requesting clarification of the delay in awarding a contract for the development of a 50-megawatt geothermal project on Hawaii Island by Hawaiian Electric Company (HECO) and Hawaii Electric Light Company, Inc. (HELCO).

“I am alarmed that HECO and HELCO have now consumed close to three years in a process that included a “request for information” and a “request for proposals” related to geothermal power generations,” Solomon, who represents Senate District 4 – Hilo, Hamakua, Kohala, Waimea, Waikoloa, Kona, said in the letter sent on January 23, 2014.

In February 2013, HELCO issued a Geothermal Request for Proposals (RFP), but several months later, on December 20, 2013, the utility company announced that “Hawaii Electric Light has determined that none of the submitted bids sufficiently meet both the low-cost and technical requirements of the Geothermal RFP.” HELCO was expected to award the contract last August or September.

Solomon, in the letter to Chair Hermina M. Morita and PUC commissioners, called this a unilateral and unjustified determination by HECO.

“For the past several years,” continued Solomon, “consumers on Hawaii Island have sought to expedite the production of affordable renewable geothermal energy…geothermal development has not progressed because HELCO/HECO have refused to retire their old fossil fuel plants in order to integrate cheaper renewable energy, including geothermal energy, onto the grid.”

Solomon identified “bad faith actions” taken by HELCO/HECO including their failure to submit an Integrated Resource Plan (IRP) that was compliant with specific industry framework requirements.

“I strongly believe the recent actions of HECO/HELCO in the Geothermal 50-megawatt RFP demonstrate that HECO is intent on delaying (and/or preventing) geothermal development on Hawaii Island,” said Solomon. “This is due to HECO’s preference for fossil fuel and bio fuels for its own plants to the detriment of the development and integration of other renewable sources for energy.”

In the letter, Solomon also asserted that she had been told that the “RFP was a confused mess that did not conform to industry standards and that it required information from bidders based on data that HECO failed to provide.”

She goes on to say that industry experts have claimed that the RFP contained unrealistic operating requirements making it impossible for bidders to advance pricing structures that would benefit the ratepayer and make it economically feasible for a developer.

Solomon urged the PUC to consider reactivating the 2007 Docket on Wheeling in order to provide energy producers and ratepayers with options that can be met by private sector energy transmitters and developers. She also requested information on the qualifications and experience of Boston Pacific Company, Inc., the Independent Observer, claiming a lack of notable hands-on experience in geothermal energy production and transmission.

In addition, Solomon questioned HECO’s criticism of the price structure for ratepayers offered by the geothermal bidders when HECO and the PUC have recently approved an agreement with Hu Honua Bioenergy LLC setting rates at a high of $253 per megawatt hour. She asked whether the bids tendered for the Geothermal RFP were lower or higher than this figure and by how much.

“The PUC has an affirmative obligation to address this matter; the time has come for the State regulatory agencies and bodies to stop supporting the HECO monopoly and to act to protect the interests of its residents and ratepayers,” Solomon said in ending the letter.

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