Overhaul of two MECO turbines OK’d

The Maui News

The state Public Utilities Commission last month approved the overhaul of two 21-megawatt Maui Electric Co. turbines at MECO’s Maalaea Power Plant with a projected total price tag of $9.3 million.

The overhauls to the units, the largest that MECO has, come as the units reach their recommended limit of 50,000 hours, according to the PUC decision and order on June 20. Both units are “cycling units” that provide the reserve power to integrate renewable energy.

The work on each unit will take six months and will be performed by Air New Zealand.

Unit M17 will reach its 50,000 hours in December, when the overhaul is expected to begin. The unit should be operational again in June.

The total cost of the unit overhaul is $4.7 million — $2.7 million for the capital costs and $2 million for operations and maintenance, the filing said.

The Unit M19 overhaul has a $4.6 million price tag — $2.6 million for the capital costs and $2 million for operations and maintenance.

The PUC had to approve the expenditures because each project exceeded $2.5 million.

MECO said that the costs will not be included in its pending rate case but will try to include the costs in the Revenue Adjustment Mechanism after the projects are completed and in use.

In August 2010, the PUC approved decoupling, a rate-setting mechanism aimed at encouraging the development of renewable energy and energy conservation by eliminating the utilities’ incentive to sell more electricity. The decoupling mechanism set up a charge on customers’ bills known as the “Revenue Balancing Account,” or “RBA Rate Adjustment.” It helps pay the utility for its fixed costs and offsets its loss of electric sales to those who invest in rooftop solar power systems.

The utility will include the overhaul costs in its base rates in the next rate case, MECO said in the filing.

While the units are down, MECO will be installing its spare engine.