Hawaii utilities seek approval for renewable energy RFPs

Maui Electric Co. and Hawai‘i Electric Light Co. have asked the Hawai‘i Public Utilities Commission (PUC) to start the process to seek new renewable energy generation on Maui, Lānaʻi, Molokaʻi and Hawai‘i Island, said parent Hawaiian Electric in a Jan. 9 statement.

To ensure customers benefit from these projects as soon as possible, this effort is targeting projects that can be in service by the end of 2020. The energy plan update, submitted to the PUC on Dec. 23, 2016, envisions achieving 100% renewable energy on Moloka‘i by 2020, Lānaʻi by 2030, and Maui and Hawai‘i Island by 2040.

Following established regulatory rules, Maui Electric and Hawai‘i Electric Light are asking the PUC to open dockets to facilitate issuing formal requests for proposals (RFPs) for new renewable energy projects and to appoint an independent observer (IO) to oversee the procurement process. A separate RFP would be issued for each island.

Appointing an independent observer early in the process would allow the collaborative design of the RFPs and associated technical, operational, and performance requirements for renewable energy proposals. Once the PUC approves the RFP design, the companies will release the RFPs.

“On Hawai’i Island, nearly 50 percent of our energy is produced from renewable sources,” said Jay Ignacio, Hawai’i Electric Light president. “We’ll continue to pursue projects that are clean, sustainable, reliable, and can result in lower bills for our customers.”

“While our energy plans are still under review, we need to move forward in seeking more renewable energy for the benefit of our customers,” said Sharon Suzuki, Maui Electric president. “It’s critical that we move quickly in seeking potential projects that can help meet our state’s clean energy milestones.”

Hawaiian Electric is awaiting approval from the PUC for a similar request for O‘ahu submitted in June 2016.

In a related move that came on Jan. 5, Hawaiian Electric said it is seeking offers from independent developers capable of building utility-scale onshore wind projects on Oahu that would be able to take advantage of the federal investment tax credit for wind power that expires in 2019. Onshore wind projects able to capture the expiring federal investment tax credits for large wind are of interest because they can help reach those goals. The federal investment tax credit for large wind is scheduled to decrease as follows: 24% in 2017, 18% in 2018, and ending at 12% in 2019.

“The potential capacity for additional wind power on Oahu is limited and land costs on this island are significant contributors of renewable projects pricing, so we believe it is important to identify ‘shovel-ready’ projects that can take advantage of the federal tax credits as the cost of such projects will likely be higher in the future,” said Shelee Kimura, Hawaiian Electric vice president for Corporate Planning and Business Development.

Interested parties who are capable of building onshore grid-scale wind projects on Oahu were asked to respond with an “expression of interest” no later than Jan. 31, 2017. Information from the responses may assist in the development and issuance of a more formal request for proposals within a competitive bidding process or the issuance of an alternative means of procurement, subject to approval by the Hawaii Public Utilities Commission.

The detailed request for expressions of interest can be found at www.hawaiianelectric.com/windeoi.

The criteria Hawaiian Electric is looking for includes:

  • Projects would need a capacity of 5 MW or more at a total price per kilowatt hour that offers attractive savings for Hawaiian Electric customers.
  • Developers must have experience with a similar project and demonstrate they can reasonably attain a commercial operation no later than the end of 2022.
  • Developers should submit plans for, and evidence of any community relations outreach to be done during development and through the term of a purchase power agreement and information on any environmental benefits in addition renewable energy generation of the proposed project.

An expression of interest is only an opportunity for developers to state their interest to Hawaiian Electric. Hawaiian Electric noted that it is under no obligation to move forward with any project and that any future project would be subject to approval by the PUC and all other required permits and approvals.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.