The Public Utilities Commission is taking a close look at tying together the power grids of Maui and Oahu with a two-way flow of energy.
The commission's decision to open "an investigation to determine whether an Oahu-Maui Interisland Transmission System is in the public interest" was one of several key rulings made Thursday that could affect power acquisition and transmission in Maui County and Oahu.
The PUC said in a release Friday that it was taking the actions to facilitate the development of a "diverse, cost-competitive portfolio of renewable energy projects and utility grid infrastructure improvements that will serve long-term interests of ratepayers."
The PUC ordered Hawaiian Electric Co. to modify its request for proposals for 200 megawatts of renewable energy for Oahu to eliminate references to the undersea cable and Castle & Cooke's Lanai Big Wind project, the news release said. The action is meant to separate the undersea cable from the generation of the 200 megawatts of renewable sources, the PUC order said.
"Conditions have significantly changed since the Big Wind projects and undersea cable were first proposed in 2008," the PUC release said. It added that the current RFP draft had become "overly complex" and involves "greater elements of uncertainty."
The PUC orders give each renewable generation project - the Maui-Oahu interisland grid connection and the Lanai wind project - separate paths for "independent progress" in the hopes of reducing "the number of variables and complexity," the release said.
"We appreciate the additional guidance from the Public Utilities Commission," said Peter Rosegg, spokesman for HECO. "This will help us move forward to seek more renewable energy that can provide the greatest value to our customers."
Regarding Lanai's proposal for Big Wind that has drawn community opposition, the PUC said that it will be initiating a separate proceeding to review the progress of the Lanai wind project, "noting that given the sale of its Lanai assets, some uncertainty arises as to whether Castle & Cooke retains an equivalent ability to develop its Lanai wind project."
Castle & Cooke, which used to own the vast majority of Lanai, presented a bid for wind power generation in 2007-08. When the company sold most of its Lanai holdings to billionaire Larry Ellison last year, Castle & Cooke retained its rights to develop 200 to 400 mw of wind power on 7,000 acres in the northwest corner of the island, PUC documents show, citing the sales agreement.
HECO had been allowed to negotiate with Castle & Cooke on a power purchase agreement after the commission permitted a waiver to the competitive bidding process, after some conditions were met.
"The commission opened the docket specially . . . to make a determination if that project is in the public interest," said Catherine Awakuni, PUC chief counsel, of Big Wind.
Whether Castle & Cooke's Lanai wind project is in the public interest and should be developed will be determined by an evaluation of potential renewable energy projects and grid infrastructure development options, the PUC release said.
Two representatives of groups opposing the Lanai wind project applauded the PUC's actions.
"For me, I think that's a step in the right direction. Taking it out of there (HECO's plans) is a good thing," said Lanai resident Diane Preza of Kupa'a No Lana'i, which opposes the wind project.
Robin Kaye, a spokesman for Friends of Lana'i, another group opposed to the wind farm and undersea cable, said Friday afternoon that "the PUC has recognized that state energy policy should not be set by a developer; it should be set by the community."
"I think that's really critical," he said.
"All in all, we think this is a very good ruling on behalf of the public and the community and certainly Lanai," said Kaye, acknowledging that he was still poring over the details of the decision.
He believes that the voices of the opposition were being heard, pointing to HECO's acknowledgment in documents that community opposition has been a hurdle to the project.
Despite the PUC actions, the fight will go on, Kaye said.
"Until this project is totally dead, we will continue to fight to continue to make our voices heard," he said.
There has been fervent opposition to wind power on Molokai feeding Oahu as well. First Wind had sought a waiver to competitive bidding, like Castle & Cooke, but had not met the additional conditions set by the PUC.
A footnote in the PUC document indicates that the wind power project on Molokai as envisioned is not in the cards.
"The commission is aware that a wind project on Molokai is less likely to be developed since Molokai Properties Inc. (commonly known as Molokai Ranch) in February issued a statement indicating that it did not . . . renew the agreement for the proposed wind farm project on Molokai Ranch lands at this time."
The Maui-Oahu grid connection would not be "a fancy extension cord," like the projects on Molokai and Lanai, said Awakuni. It would be a grid-to-grid, two-way connection.
In opening an investigation, the PUC will determine whether an undersea cable system to interconnect the Oahu and Maui grids may be in the public interest and, if so, under what conditions such a grid-tie cable system should be developed.
"Additional technical information and analysis is required to evaluate the Oahu-Maui grid interconnection. Our intention is to obtain input from knowledgeable stakeholders on the selection process, policy issues and overall objectives with respect to how, where, and at what cost a cable system may be developed," said Commissioner Mike Champley.
The fact that Maui has wind farms at Maalaea and on Ulupalakua Ranch lands and the dumping or curtailment of more than a quarter of the wind power generated were factors in the look at Maui as potential source of renewable power, said Awakuni.
Oahu's power needs are vastly greater than Maui's, but Awakuni said that there are scenarios where the grid connection could help Maui.
"If the economics were right (and) Oahu were able to acquire cheap fossil fuels, it may work to the benefit of Maui," she said.
According to HECO, in May a typical household using 600 kilowatt-hours on Oahu received a $199.59 bill; Maui Electric customers received a bill for $231.49 for the same usage.
She said there will be opportunities for the public to weigh in on the grid connection.
The PUC also closed the dockets on plans for development of 50 mw of firm renewable energy generation for Maui.
"It was premature," said Awakuni, adding that HECO would have to start from scratch if it wanted to renew its request.
"The issuance of this set of orders emphasizes the need for solid and credible information as Hawaii moves forward to transform and modernize its electric system to ultimately benefit its ratepayers in the most cost-effective and strategic way," said PUC Chairwoman Hermina Morita.
* Staff Writer Melissa Tanji contributed to this report. Lee Imada can be reached at email@example.com.