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MECO increases renewable power, storage amounts sought in next procurement

RFP targets are 295 GWh of energy, 58 GWh of storage

Maui Electric Co. will be seeking 295 gigawatt-hours of renewable energy and 58 GWh a year of power storage in its next round of requests for proposals, according to the utility and filings with the state Public Utilities Commission.

The first round of requests, announced last year, netted two projects — the 60-megawatt Kuihelani Solar with 240 megawatt-hours of battery storage in Central Maui and the 15-MW Paeahu Solar with 60 MWh of battery storage on Ulupalakua Ranch land. Kuihelani Solar received the go-ahead from the PUC in March with the approval of its power purchase agreement; Paeahu Solar is still trying to work out issues with neighboring residents.

In a June 10 order, the PUC offered guidance to Hawaiian Electric Cos. on its next round of requests for renewable energy projects. HECO, the parent company of MECO, will submit a draft request for proposal, based on the PUC order, by July 10.

Once approved by the PUC, MECO can begin soliciting proposals later this summer, according to Sharon Suzuki, president of MECO and Hawai’i Island Utilities, in a Viewpoint published today on the Opinion page.

MECO spokeswoman Shayna Decker said Thursday that the utility will be open to all types of renewable energy, which must be paired with energy storage.

The amount of renewable energy sought is much higher than the original HECO filing with the PUC in April, which had MECO seeking 65 MWh instead of the 295 MWh in the June proposal.

In explaining the increase, HECO said in a May PUC filing that its April proposals were aimed at obtaining renewable energy amounts for 2022 targets that were not covered in the first phase of procurements. However, the PUC urged the utilities to accelerate the switch from fossil fuels to renewable energy to reduce greenhouse gases and customer costs.

Developers also had concerns that HECO tended to issue proposals to “be just in time for current need” and not allow them to prepare and propose future projects. HECO said it took both concerns into consideration when increasing renewable energy amounts.

One of the major purposes of MECO’s Phase 2 proposals is to retire the oil-fired Kahului Power Plant, which was built in 1948. Decker said 40 MW of power and 58 GWh of storage will replace the power produced by the old plant at Kahului Harbor.

The new proposal also tosses in the 40MW originally proposed for a biomass plant on Maui to come online in 2022, HECO said in its May filing.

The PUC warned the utilities to “avoid including overly conservative technical and performance requirements” that were unjustified and could drive up costs for consumers. HECO also should allow bidders the option to propose projects to become operational beyond 2022 to 2025, the PUC order said.

Given opposition from the Power Pono Coalition, which is seeking to gain intervenor status in an contested case proceeding involving Paeahu Solar, and some criticism about the size and number of panels with Kuihelani Solar, Decker said that MECO recognizes the “importance of location of projects.”

MECO will require developers to work with communities where they are proposing projects be built, Decker said. The utility also is developing a process for developers to use MECO-owned properties for renewable energy projects, she said.

Pono Power Coalition’s concerns about Paeahu Solar include lowering of property values on neighboring parcels in Maui Meadows, the glint and glare of the panels, health issues, insufficient archaeological and biological studies and a “heat island” that will warm surrounding areas and affect the microclimate.

The group’s attorney Lance Collins said Friday that there has been no action by the PUC on the request.

Eddie Park, business development manager for Paeahu developer Innergex Renewables USA LLC, said Friday that they are continuing to communicate with the community and held a three-day open house earlier this month.

“We have been gathering and incorporating some of the feedback from the community with the goal of delivering a project that balances archaeological, cultural, environmental, technical, economic and social considerations,” he said. “Community consultations will continue as further results from environmental and engineering studies are concluded.”

He could not “speculate” as to when a power purchase agreement with the PUC will be approved, but Park said “we anticipate finishing construction activities and beginning operation of the project by June 2022.”

AES Distributed Energy’s Kuihelani Solar is on track to begin construction next year and be operational by 2022, according to Nick Molinari, AES project development manager. Currently, AES is in the process of engineering, design and conducting land studies, he said.

The project’s 200,000 solar panels will be built on as much as 500 acres of old sugar fields off Kuihelani Highway in Central Maui, Suzuki said. The land is being leased from Mahi Pono, which purchased the Hawaiian Commercial & Sugar Co.’s fields from Alexander & Baldwin.

A bill that died in the last legislative session that would have permitted solar arrays to be built on prime agricultural land does not impact Kuihelani Solar. Kuihelani’s solar panels will go on as lower-grade farmlands, Molinari said.

Kuihelani Solar’s power purchase agreement calls for MECO to pay 8 cents a kilowatt-hour for the power from the solar array and battery system — the lowest cost for renewable energy on the island and much lower than the 15 cents per kWh for fossil-fuel-generated power, he said.

“AES is deeply committed to helping Maui achieve the goal of producing 100 percent of its energy from renewable sources,” Molinari said. “Upon completion, the project will generate enough power for up to 27,000 homes on the island.

“We look forward to continuing to work with the community and key stakeholders to share information, address issues of potential concern and achieve energy independence for Maui while helping the environment.”

MECO will be holding a public gathering to discuss renewable energy with representatives from Maui Tomorrow and the Sierra Club from 6 to 7:30 p.m. Wednesday at the J. Walter Cameron Center. The title of the forum, which is free, is “100% Renewable Energy: What Will Maui Look Like?”

* Lee Imada can be reached at leeimada@mauinews.com.

** This story includes a correction from original publication on Sunday, June 23, 2019.