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HELCO has new timeline for geothermal project

June 22, 2014 - 12:05am

Hawaii Electric Light Co. is using a new timeline for approving another geothermal power project for Hawaii Island as it attempts to address issues raised by the state Public Utilities Commission and an independent observer.

In a letter to the PUC earlier this month, the utility company said it will seek to complete its evaluation process of bids Feb. 14, with an executed agreement available for regulatory review by the end of April.

That will provide time for bidders to provide a “best and final offer” that, in part, allows for lower cost bids to be submitted.

It also will follow completion of an updated Power Supply Improvement Plan, scheduled for Aug. 26.

HELCO in December announced to the six bidders that none met its low-cost and technical requirements. It initially anticipated making a selection last August or September.

In April, Boston Pacific, the independent observer for the process, criticized the utility for “putting the cart before the horse” and not conducting enough planning to determine whether geothermal expansion is needed.

In response, HELCO agreed to wait until the PSIP is completed before continuing with the process.

The PUC weighed in May 20 with a letter to HELCO, urging the utility to provide a detailed explanation for how it plans to complete the process.

“Such action is necessary in light of HELCO’s lack of timely, decisive action and urgency in completing the bid evaluation and selection process to procure up to 50 megawatts of firm capacity geothermal generation on the island of Hawaii from interested bidders,” the PUC said.

HELCO began the process for seeking up to 50 megawatts of additional geothermal power in 2011. The goal, according to the utility company, is to use the power generation to replace power plants that rely on fossil fuels.

It submitted a request for proposals in February 2013. Each bidder proposed projects in the same “general vicinity of Puna,” according to HELCO, and all but one proposed a single 25-MWt plant. Each proposed 20-year agreements.

In its response, HELCO provided the new timeline as well as requirements for best and final offers.

“Hawaii Electric Light acknowledges that there have been delays,” the utility said. “However, Hawaii Electric Light was ready and willing to select a winning bid(s) in accordance with the schedule set forth in the geothermal RFP had any of the bids provided pricing and technical characteristics that were in the best interest of customers.”

HELCO also noted it will not model a 50-MWt geothermal facility in its PSIP because of risks, including lava inundation, of concentrating facilities on Kilauea’s east rift zone.

If a 25-MWt project is approved, the amount of geothermal power generated in that area would be approximately 63 MWt. Puna Geothermal Venture near Pohoiki is the only existing source of geothermal power in the state.

HELCO also noted in its response that it seeks to receive about a third of its power from geothermal sources by 2020, with fossil fuels providing only 2 percent.

Email Tom Callis at tcallis@hawaiitribune-herald.com.