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State Public Utilities Commission Chairman Randy Iwase said Monday he delayed approval of seven utility-scale solar projects on Oahu because he wants to avoid the "monopolizing" of power production in Hawaii.
"We want to make sure we don’t go back to where we are trying to get away from: one group or company monopolizing power production," Iwase said.
Last week the PUC deferred a decision on the seven solar projects and denied approval of an eighth project that could collectively produce 240 megawatts, which at their peak could power up to 40,000 homes.
Hawaiian Electric Co. contracted with several solar companies to build the projects and asked the PUC last year to waive the usual requirement for competitive bidding to speed up the approval process and give customers the benefit of additional low-cost renewable energy sooner.
The PUC postponed the approval, saying HECO did not provide enough information to prove the projects were worth the waivers.
Iwase said diversity in the chosen project developers, areas of the grid affected, and renewable energy resources used was important to consider when adding on more power producers.
As the approvals could allow up to 240 megawatts on the grid, Iwase said a major concern was whether the grid could handle that amount of renewable energy reliably.
"The first question we asked was how can the grid absorb all of this," Iwase said. "Their response was they can handle it. It didn’t go into any detail."
The utility also failed to prioritize the projects, Iwase said.
"If you can’t get all eight, give us a priority list." Iwase said. "That didn’t come in."
Iwase, who took over as PUC chairman in January, has been a supporter of rooftop solar. In February he got HECO CEO Alan Oshima to agree in a policy letter to speed up approval of rooftop solar systems.
The PUC has asked HECO for more information, and Iwase said he hopes to have a final decision on the projects within a month.
HECO’s spokesman said the utility regrets the PUC’s response but will remain committed to pursuing projects that will offer lower electrical bills to customers.
"We’re disappointed with the outcome," said Darren Pai. "This project offered an opportunity to add more low-cost renewable energy to benefit our customers. We will continue to pursue projects that will help us meet our commitments to increase our use of renewable energy."
Maryland Heights, Mo.-based SunEdison, developer of four of the seven projects, said the commission’s decision could cost electrical customers.
"The deferral by the Public Utilities Commission of a decision on seven solar power purchase agreements puts the projects’ benefits to ratepayers at risk," said Crystal Kua, spokeswoman for SunEdison. "Timely approval of these agreements and the resulting construction of the solar projects is important to bringing clean energy and cost savings to Hawaii consumers, so this delay is unfortunate. However, we are encouraged that the PUC signaled that it recognizes the projects’ potential benefits."
The solar projects have to be in operation before December 2016 to qualify for a federal 30 percent Investment Tax Credit. HECO applied for the projects to be waived from the competitive bidding process to help shorten the approval so they would make the deadline for the Investment Tax Credit, Pai said.
"To help our customers as soon as possible and to have the benefit of the Investment Tax Credit, we asked the PUC to waive those requirements so we could work with developers and expedite the addition of more low-cost renewable energy resources," he said.
SunEdison’s four projects would have a total capacity of about 160 megawatts. The total capacity of SunEdison renewable energy projects on Oahu, if the projects were approved, would be 281 megawatts.
"Our projects alone stand to save ratepayers $600 million over the next 27 years," Kua said.
In addition to delaying approval on seven projects, the PUC denied the waiver for Mililani South Solar Park, also owned by SunEdison. The project would have supplied 20 megawatts to Oahu’s grid at 14.05 cents per kilowatt-hour, according to the contract.
The waiver for the Mililani South project was denied because the project was granted an original waiver under the conditions that it would be four separate five-megawatt solar arrays instead of one larger solar farm operated by one developer, said Jeff Ono, the PUC’s consumer advocate.
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