Filing, Dec. 20: Blue Planet Foundation's Statement of Position on Schedule A Issues
PPA Approval between HELCO and Hu Honua Bioenergy: Decision and Order No. 31758
On Dec. 20, the PUC issued its approval of a Power Purchase Agreement for Renewable Dispatchable Firm Energy and Capacity between HELCO and Hu Honua Bioenergy. It is notable that while the PUC approved this renewable generation, it comes with strings attached: HELCO must also provide a Power Supply Improvement Plan to retire fossil generations and increase the incorporation of other renewables through storage and demand response. Many of the PUC's directives were informed by the RSWG (Reliability Standards Working Group) process that Blue Planet was heavily involved in.
Key points of the order:
- The Commission approved the PPA with a levelized energy payment rate of 25.3 cents, noting that it will provide “firm, dispatchable, renewable energy [and] ancillary services” (see p. 48). It will also provide economic benefits to HELCO ratepayers (see p. 50).
- The Commission orders HELCO to file a Power Supply Improvement Plant within 120 days of this order, which shall include (i) a fossil generation retirement plan, (ii) a generation flexibility plan, (iii) a must-run generation reduction plan, which will analyze the “costs of HELCO’s current must-run designation policies,” and (iv) a generation commitment and economic dispatch review, which shall include a description of the “methodology by which HELCO incorporates energy storage or demand response” into its economic dispatch process.
- The Commission cautions HELCO that it "must not accord preferential treatment to utility-owned generation resources versus Independent Power Producers where the IPPs are more fuel-efficient and economic than utility generation." (See p. 110.)
- The Commission concludes that "HELCO should re-examine its existing generation unit commitment and economic dispatch practices to ensure that: (1) the selected mix of firm and as-available resources will minimize energy costs; (2) non-traditional sources of ancillary services, such as energy storage and demand response, are considered and, if lower-cost, utilitized to supply these services; and (3) curtailments of renewable energy resources, where necessary, are accomplished in a cost-effective manner from the perspective of ratepayers." (See p. 112.)
- The Commission concludes that “HELCO has the responsibility to make major changes to both its existing fossil generation portfolio and its current power supply operational practices in order to reduce power supply costs and to provide significant customer rate relief.” (See p. 120.)
- HELCO must plan to “expeditiously retire older, less efficient fossil generation, reduce must-run generation, increase generation flexibility, and adopt new technologies such as energy storage and institute operational practice changes, as appropriate to enable integration of a diverse portfolio of additional low cost renewable energy resources that are uniquely available on the Island of Hawaii.” (See p. 120.)
- The Commission notes that it seeks actionable strategies and implementation plans rather than “numerous technical analyses that conclude additional studies are required.” (See p. 121.)
Denial of biodiesel supply contract between HELCO and Aina Koa Pono-Ka‘u: Decision and Order No. 31759
- On Dec. 23, the PUC issued its denial of a biodiesel supply contract between HELCO and Aina Koa Pono for approximately sixteen million net United States gallons annually of locally-produced biodiesel over twenty years. As stated in the order:
The commission, based on its extensive review, finds and concludes that HELCO and HECO have not met their burden of proving that the subject contract is reasonable and in the public interest. The commission's decision is supported by the findings and conclusions set forth in this Decision and Order, including, but not limited to, the following:
1. The contract price for the AKP-produced biofuel is excessive and not cost-effective at present and for the foreseeable future, and thus, is unreasonable and inconsistent with the public interest.
2. The commission's approval of the contract will likely require that HELCO dispatch its Keahole combined cycle generation units in an uneconomic fashion (i.e., in uneconomic dispatch mode), and thus, the contract has the potential to displace or curtail more economical, existing renewable energy resources or restrict the additional of other new low-cost, fixed price renewable energy projects.
3. The evidence regarding the external benefits of the AKP Project is not sufficient to support a finding that the contract is reasonable and in the public interest.
HELCO's Geothermal RFP
Notice from HELCO re: RFP for 50 MW of Dispatchable Renewable Geothermal Firm Capacity Generation, Dec. 20: "After careful review of all geothermal bids, Hawaii Electric Light has determined that none of the submitted bids sufficiently met both the low-cost and technical requirements of the Geothermal RFP. We are currently working with the Independent Observer to develop a request that will be sent to the bidders. The request will give the bidders the opportunity to provide additional information so that we can make an informed decision that is in the best interests of our customers and residents and that meets the goals of the Geothermal RFP. These goals include lowering customer bills, reducing our dependence on fossil fuels, allowing for continued integration and management of intermittent renewable resources, maintaining reliability of service, and protecting the health and safety of the public and environment. We appreciate the efforts the bidders have made to date and look forward to working with them and the Independent Observer on next steps."
Local industry news:
SF Chronicle: Officials say Big Island biofuel plan too costly
Star-Advertiser: PUC blocks HELCO buy of biofuel, citing cost
Star-Advertiser: Biofuel firm says HELCO contract not needed for plan to work
Pacific Business News: Aina Koa Pono's supply contract with HELCO denied—again
Hawaii Tribune-Herald: HELCO: Bids don't meet requirements for geothermal contract
Pacific Business News: PUC OKs Hu Honua Bioenergy's contract with Hawaii Electric Light Co.
Scientific American: A solar boom so successful, it's been halted
International Business Times: Solar power growing pains: How will Hawaii and Germany cope with the boom in alternative energy?