Mayor Billy Kenoi said he’s taking a firm stance when it comes to renewable energy proposals — the projects have to do more than just reduce the island’s reliance on fossil fuels.
Kenoi said his administration will be asking the Public Utilities Commission’s permission to participate in a recently filed Hawaii Electric Light Co. and Aina Koa Pono docket seeking approval of a power purchase agreement between the two companies. Aina Koa Pono wants to build a biodiesel production plant in Ka‘u and sell the fuel to HELCO for use in the Keahole Power Plant. To do so, it proposed adding a surcharge — $1 per 600 kilowatt hours — to every electric bill on the Big Island and Oahu.
“We’re not interested in more renewable energy,” Kenoi said Thursday. “We’re interested in cheaper renewable energy. Unless it has lower rates, we will not support it.”
Kenoi said he was concerned about any renewable energy proposal that doesn’t lower rates, and which locks island ratepayers into long-term contracts that would preclude them pursuing other, less-expensive alternative energy production methods.
He said he agreed with the PUC’s rejection last year of another power purchase agreement between HELCO and Aina Koa Pono that would have added an even bigger surcharge, about $2.10 per 600 kilowatt hours, if customers across the state all paid it. The surcharge would have added at least $10 per month per bill if only Big Island customers paid it.
In that ruling, the PUC found that the contract price for the biofuel was “excessive, not cost-effective, and thus, is unreasonable and inconsistent with the public interest.”
“We don’t favor any renewable energy that displaces (other) cheaper renewable energy,” Kenoi said, including geothermal, solar or wind energy that can be generated more cheaply than the biofuel.
Biofuel does have a place on Hawaii Island, he said, noting a plant just opened in Puna that will make about 16,000 gallons a day.
If companies can make biofuel affordable, Kenoi said he “would love to see that go to transportation.”
About 41 percent of Hawaii Island’s energy was renewably generated last year, and the island has reached about 49 percent renewable so far this year, Kenoi said.
“But we’re still paying high energy costs,” he said, adding he is advocating for ways to start bringing those prices down.
A message left with Aina Koa Pono partner Kenton Eldridge was not returned Thursday.
Under the terms of the contract filed in early August, Aina Koa Pono would provide biofuel to HELCO over 20 years for a fixed price. HELCO said in a statement that the new contract would include an energy surcharge to cover the increased cost of the biofuel. The revised surcharge would raise about $125 million less than the surcharge proposed in 2011, officials said.
The processing plant will be built off Camp Meyer Road, outside Pahala, on 12,000 acres of land leased from the Edmund C. Olson Trust II and the Mallick Trust. The company plans to convert 900 tons of feedstock into biofuel by drying it, turning it into pellets and treating it with a catalyzer before microwaving it to 600 degrees. The process leaves a biochar byproduct.