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Utility pays solar projects $222K

Hawaiian Electric seeks to pass on cost of unused power to customers

Hawaiian Electric compensated two Maui solar farms a total of $222,000 for curtailing, or not accepting, 2 gigawatt hours of solar power in 2019, according to filings with the state Public Utilities Commission last month.

In its Friday filing, the utility requested approval by the PUC for recovery of the payments from ratepayers. The PUC required Hawaiian Electric to submit annual reports on the payments of compensable curtailed energy and to explain why the payments should be recovered from ratepayers.

For the Ku`ia Solar project, located near Lahainaluna High, the utility made a $112,000.81 payment to SSA Solar of HI 2 LLC for compensable curtailed energy of 1.0127 GWh in 2019, the filing said.

South Maui Renewable Resources, which is in the vicinity of the Maui Research & Technology Park, received $109,935.85 from the utility for 994 megawatt hours of curtailment; the payment was made to SSA Solar of HI 3 LLC.

Payments to both solar projects were reduced in 2019 by penalties incurred from delays in starting up the projects. For the West Maui project, the curtailment costs were offset by $187,077.20 in delay penalties and $111,205.74 for the South Maui project.

Both 2.87-megawatt systems were scheduled to come online Dec. 31, 2016. The West Maui system began operating in October 2018; the South Maui project, the island’s first utility-scale solar project, came online in May 2018.

Both photovoltaic projects are operated by Kenyon Energy and are paid 11.06 cents per kilowatt-hour for energy fed into Hawaiian Electric’s Maui grid, a cost lower than fossil-fuel produced power.

Clay Biddinger, chairman and CEO of Kenyon, is listed as the manager for both SSA Solar companies in state business records.

In explaining the curtailment, the utility said that the large amount of noncontrollable rooftop solar, more than 110 MW, contributes to the curtailment of grid-scale renewable power during daytime hours. The two solar projects are the first to be curtailed based on when they came online.

The utility said it has worked to increase the amount of variable renewable energy that can be accepted on the grid, which operates on an equilibrium of energy produced and used. Measures include improvements to forecasting abilities on renewable resource availability and to operations of generating units.

The next phase of requests for proposals for renewable energy, which call for battery storage as well as generation, also are expected to reduce curtailment of existing utility scale wind and solar projects, the utility said.

Hawaiian Electric said it should be able to recover the curtailment costs from customers because they were not “incurred in bad faith, out of waste, out of abuse of discretion or in violation of law.”

The contracts negotiated in 2015 with Kenyon are widely used in the industry, Hawaiian Electric officials have said. The utility, knowing curtailment may be needed, agreed to pay for energy that could have been produced but not used. The alternative would have been to build the curtailed energy risk into the price, which would have been much higher than 11 cents a kWh.

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

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