The PUC on Monday approved a 25-year power purchase agreement between Maui Electric Co. and Innergex Renewables, the developer of Paeahu Solar. MECO will pay 11.7 cents per kilowatt-hour to receive power from the 15-megawatt solar, 60-megawatt-hour battery energy storage system that will be built on Ulupalakua Ranch land mauka of Piilani Highway in Kihei.

“We’re definitely very excited about the decision,” Eddie Park, Innergex director of business development, said Wednesday. “We’re grateful for all of the community feedback that we’ve received, the thoughtful deliberations of the PUC and the many supporters of the Paeahu Solar project.”

MECO said Wednesday that Paeahu Solar is expected to come online in 2023 and will be capable of powering about 6,900 Maui homes per year. Over its lifetime, the project can replace the use of 1.3 million barrels of liquid fuel and reduce greenhouse gas emissions by nearly 530,000 metric tons of carbon dioxide equivalent, MECO said.

It’s also expected to reduce the monthly electric bill of the typical residential customer on Maui by about $3, though that may vary depending on the cost of liquid fuels at the time the project comes online.

Park said the next steps for Paeahu Solar involve seeking out federal, state and county approvals, including building permits, electrical permits and a county special use permit. Park said no date has been set for project officials to go before the Maui Planning Commission. Despite the pandemic, he said he was “confident that we can still stay on track with the project.”

The PUC’s decision comes on the heels of a drawn-out contested case hearing between Innergex and Maui Meadows neighbors who live near the project site. Pono Power Coalition, a group of South Maui residents and other supporters, have said that a project of Paeahu’s size is better suited for an industrial area and expressed concerns about proximity to homes, property values, the glare of panels, health issues and insufficient studies.

They also said the cost of the project was too high, a concern echoed by the state consumer advocate. Other renewable projects approved by the PUC during the same procurement process have come at a lower price, including Kuihelani Solar, a 60-MW and 240-MWh battery project planned for Central Maui that will sell power to MECO at 8 cents per kWh.

Attorney Lance Collins, who represents the Pono Power Coalition, said Wednesday that “the coalition is disappointed in the PUC’s decision which entirely ignored without comment the unrebutted testimony of both of its expert witnesses, Dr. LaCroix and Dr. Richardson,” who brought up concerns over the lack of community engagement and the fact that all successful bidders in Hawaiian Electric’s request for proposals used the same attorney, potentially impacting consumers.

Residents also did not feel their concerns had been addressed and were considering additional action, Collins said.

“Innergex has made no concessions regarding neighbors’ concerns to date and has yet to explain how it will protect the significant cultural sites and native species found in the project area,” he said.

“The coalition plans to bring the PUC’s mistakes to its attention and failing corrective action by the PUC, appeal the decision to the Hawaii Supreme Court.”

Park said that project officials have tried to make several changes to the project, including moving it from 200 to 270 feet away from homes, “and in fact, through this next revision, we’re looking to move it back further to 300 feet,” he said. Park added that Innergex also tried to lower the heights of the tracker system and worked with local organizations to avoid sensitive areas. He said they discussed alternate sites with Ulupalakua Ranch but that the location they chose was close to an existing substation and in a “generally flat part of the ranch.” Park also defended the price of Paeahu Solar’s energy, saying that it went through a competitive process and would ultimately prove cheaper than fossil fuels.

“We believe that this is a fantastic price,” he said. “It is a smaller project in comparison to some of the other projects that were selected in the RFP. It’s also estimated to bring down rates.”

MECO said that the cost is in line with prices for other grid-scale solar and battery projects approved on Maui, Oahu and Hawaii island. Six projects approved by the PUC last year, including Kuihelani Solar, ranged from 8 to 10 cents per kWh.

Paeahu Solar is one of four projects that are expected to come online over the next three years, MECO said. Kuihelani Solar was approved last year, and the PUC is currently reviewing contracts for two other solar and storage projects in West and Central Maui.

* Colleen Uechi can be reached at cuechi@mauinews.com.