HECO official: Undersea cable could push down energy costs

KULA – As the state Public Utilities Commission continues to gather public testimony to determine whether a Maui-Oahu undersea power cable would be in the public interest, Upcountry residents were able to ask energy officials and experts questions about the proposal during the Kula Community Association meeting Wednesday night.

The panel included officials from the PUC, Hawaiian Electric Co., Maui County’s Energy Office and environmental advocacy group Life of the Land. About 50 people attended the meeting at Kula Community Center, which was televised live by Akaku: Maui Community Television.

Proposals to transport energy from the Neighbor Islands to Oahu using an undersea cable have been opposed by Molokai and Lanai communities for years, but state and energy officials have said that the proposal currently being considered – a “grid-tied” system that allows energy to flow both ways – can have significant cost benefits for ratepayers on both Maui and Oahu.

“There are benefits from having the cable,” Hawaiian Electric Co.’s Ross Sakuda said at the meeting. “The greater amount of energy we can push through that cable, the lower cents per kilowatt hour . . . (and) if we can push that renewable energy to Oahu, we can offset or displace a lot of the fossil fuels that are used there and help meet state energy policy objectives and renewable portfolio standards.”

Hawaii’s Renewable Portfolio Standards, adopted in 2001, require 40 percent of the utility’s net electricity sales to come from renewable energy by 2030.

HECO has said that connecting the two grids likely will result in lower rates for customers, though just how much lower has yet to be determined.

“Whether or not this is in the public interest really depends on what the cost of the cable is so that we can compare the cost and the benefits,” Sakuda said. “So right now we have estimates, and because the cable right now is in the conceptual stage, the range of cost estimates is really large. We don’t know really what the cable might cost.”

Sakuda said that cost estimates he’s seen to build the undersea cable range from $700 million to $1.5 billion.

That cost likely would be financed either by Maui and Oahu ratepayers over the course of 30 years or possibly with federal funding as is done for transportation projects like highways or rail systems, Sakuda said.

Other financing models are possible, though the utility hopes to first issue a request for proposals to get a better understanding of cost-estimates from developers before assessing benefits, Sakuda said.

But energy expert Henry Curtis said that the state should consider the costs and benefits of all options, not just an undersea cable. Rooftop solar photovoltaics, pump-hydro storage and utility cooperatives are all viable options for the Valley Isle, he said.

“Maui is sort of the cutting edge, there are a great number of opportunities as to how you move forward, how you structure the companies, how you structure the grids and what ratepayers want,” said Curtis, the executive director of Life of the Land on Oahu.

Curtis said Maui may not even need an electric grid in the future.

“There are ways of creating wireless work stations, different technologies coming. Rather than racing to put something underground, you have to ask, in five years, is the grid still gonna be here?” Curtis said.

Curtis added that HECO submitted an Integrated Resource Planning Report in June that admitted the utility does not need interisland power to meet its clean energy goals, and that it was the state Energy Office, administered through the Department of Business, Economic Development and Tourism, that was pushing for the advancement of the undersea cable.

“DBEDT never met a renewable energy project they don’t like, or technology they don’t like,” Curtis said. “Why (Gov. Neil) Abercrombie is stuck with the cable, I don’t know.”

Attempts to reach state Energy Office officials Thursday afternoon were unsuccessful.

The HECO report, which presents various scenarios for the future, does concede that an interisland cable bringing wind power from another island to Oahu would not be needed in order to meet the renewable portfolio standard of 40 percent renewable energy by 2030, though “interisland projects may prove to be more economical than projects on Oahu,” the report said.

The state departments of Business, Economic Development and Tourism and Commerce and Consumer Affairs are listed along with HECO and its subsidiary Maui Electric Co. as primary parties in the PUC docket. Representatives from both departments expressed their support for a Maui-Oahu undersea cable during a PUC hearing last month.

State Energy Administrator Mark Glick told Maui residents during the January meeting that the undersea cable would cost about $626 million to build and, according to his calculations, result in a net savings of $423 million for ratepayers over the course of 30 years.

But residents who spoke at the meeting Wednesday questioned why each island could not be made self-sustainable instead.

“Why can’t Oahu find their own way to produce their energy? Why do we have to subsidize their energy . . . and destroy the ocean while we do it?” Paia resident Annie Nelson asked.

Sakuda responded that HECO is merely trying to comply with the state-mandated clean energy standards while trying to find ways to lower Maui’s extremely high electric rates.

Kula resident Dick Mayer, who helped organize Wednesday’s panel, said that the discussion was important for Kula residents because several of the big wind and geothermal projects proposed are in the Kula region, toward Ulupalakua Ranch.

“We really still don’t know what the cable project is all about, so it’s tough for the public to comment back (to the PUC),” Mayer said Friday. “Even the speaker from HECO didn’t know what the cost of the cable will be. If he can’t narrow it down, the public certainly has no idea, so we don’t know what the effects would be on our utility bills.”

PUC Commissioner Michael Champley, who was present at the Wednesday meeting, asked residents to maintain “realistic expectations” with utility companies like HECO, which must juggle emerging technologies, stricter renewable energy directives and its customer base.

“Given the utility model has been around for 100 years and served this (state) well . . . with all the changes going on, what’s the future for the utility here in Hawaii and in Maui?” Champley asked.

HECO and its affiliates service 95 percent of the state’s 1.2 million residents on Oahu, Maui, Molokai, Lanai and Hawaii Island.

PUC documents on the proposed interisland cable may be found at dms.puc.hawaii.gov/dms. The docket number is 2013-0169.

Written comments may be mailed to the Public Utilities Commission, 465 S. King St., Room 103, Honolulu 96813 or emailed to hawaii.puc@hawaii.gov. Written comments should reference the docket number.

* Eileen Chao can be reached at echao@mauinews.com.