HECO faces state scrutiny over Oahu energy plans

Citing Hawaii’s rapidly evolving energy landscape, the state Public Utilities Commission said Friday it will open an investigation into whether Hawaiian Electric’s plan for an interisland undersea transmission cable is in the public interest.

The investigation announcement was included in one of several orders issued by the PUC that will require HECO to make major changes to the way it solicits bids for 200 megawatts of renewable energy for Oahu.

"The orders reflect the need for foundational information for a strategic systems approach as we consider new renewable energy generation projects and other major infrastructure investment to bring maximum value to Hawaii’s ratepayers for the long term,"  PUC Chairwoman Hermina Morita said.

In addition to launching an investigation of the undersea cable, the PUC also ordered HECO to modify its draft "request for proposals" to eliminate any references to the cable and a proposed wind energy project on Lanai.

Castle & Cooke over the past five years has pursued a plan to develop a 200-megawatt wind project on Lanai and transmit the energy to Oahu via an undersea cable. A companion plan to develop another 200 megawatts of wind energy on Molokai died after successive developers were unable to secure land rights for the project.

Castle & Cooke last year sold its 97 percent share of Lanai to billionaire Larry Ellison but said it retained the rights to the wind project. However, the PUC questioned the legitimacy of the agreement.

"To be clear, the commission does not believe that any ‘development rights’ have been extended to Castle & Cooke to complete its Lanai wind project," the PUC said in one of its orders.

The change of Lanai’s ownership, as well as a host of other factors such as slackening demand for electricity statewide and the potential for importing liquefied natural gas to reduce to the cost of generating electricity, require HECO rethink its approach, according to the PUC.

HECO issued a brief statement in response to the PUC’s orders.

"We appreciate the additional guidance from the Public Utilities Commission. This will help us move forward to seek more renewable energy that can provide the greatest value to our customers," HECO spokes­man Peter Rosegg said.

Friends of Lana‘i, a group that opposes the development of a wind energy project on the island, applauded the PUC’s ruling.

"This takes the state’s energy policy out of the hands of a private developer and shifts it back to the community and the PUC," said Robin Kaye, spokes­man for Friends of Lana‘i. "The community has advocated for years that we don’t want this."