Hawaiian Electric Co. wants to speed up the construction of utility-scale renewable-energy projects on Oahu through a program that would grant qualified developers a waiver from certain regulatory requirements.
HECO’s initiative offers an alternative to developers who have grown tired of waiting for the utility and regulators to finalize a formal bidding framework for a plan to add 200 megawatts of renewable-energy-generating capacity to the Oahu electrical grid.
A draft document governing the bidding process known as a request for proposals, or RFP, is more than a year behind schedule, having gone through significant revisions prompted by suggestions from potential bidders and the state Public Utilities Commission.
"Hawaiian Electric understands that the complexity and significant timeline necessary to develop projects through the RFP may be deterring some renewable energy projects capable of much shorter development periods," HECO officials said on the utility’s website.
HECO’s initiative does not affect the ongoing RFP process, which includes a provision for an undersea transmission cable to Oahu if the renewable energy is generated on a neighbor island.
HECO is offering to work with qualified developers to help them obtain a waiver from competitive bidding rules required by the PUC for utility-scale renewable-energy projects. HECO’s goal is to have at least one project in service by 2015.
To qualify for a waiver, a project must be located on Oahu, have a generating capacity of more than 5 megawatts and use a viable renewable-energy technology. Developers who accept the offer would not be eligible for state tax credits.
Qualified projects would "generally" have to be able to deliver power to HECO at a cost of below 17 cents a kilowatt-hour to achieve HECO’s objective of reducing customer’s bills, said Scott Seu, HECO’s vice president for energy resources. That’s less than the 22.9 cents a kilowatt-hour HECO is paying for electricity from the new Kawailoa Wind project on Oahu’s North Shore and the 19.7 cents a kilowatt-hour it pays for utility-scale solar power under its feed-in tariff program.
Projects also would have to meet all applicable archaeological, environmental and construction permitting requirements, and negotiate a power purchase agreement with HECO.
"We believe the best way to reduce our customers’ bills is to add as much renewable energy on long-term, fixed-price contracts to our grids as soon as possible," Seu said.
Warren Bollmeier, who heads the Hawaii Renewable Energy Alliance, said he was not aware of any developers who were interested in pursuing HECO’s offer. He added the HECO proposal does not guarantee that any projects will be completed any more quickly than under the RFP.
"There is a lot to be learned from this, not the least of which is that HECO will find out what developers think they can actually do. The problem is that even if they pick one developer, it may take another two or three years to find out whether they really can deliver," Bollmeier said.
