Pacific West Energy, LLC is not going away quietly. With a handful of high-profile backers, its request to lease feedstock land for a proposed 20-megawatt power plant may yet win approval from the state Agribusiness Development Corporation.
Or it may not, depending on what an investigative committee determines.
The ADC controls several thousand acres of prime agricultural land in Kekaha, Kaua`i, that were once part of the Kekaha sugar plantation. Its tenants, known collectively as the Kekaha Agriculture Association (KAA), operate and maintain most of the infrastructure there under an agreement with the agency. Last year, the ADC asked the state Department of Business, Economic Development and Tourism to evaluate the proposal of Pac West to grow biofuel crops on 1,150 acres and a competing proposal by Pacific Light & Power, a Kaua`i based company. It recommended awarding a lease to Pac West.
But on September 15, the ADC’s Kekaha committee rejected Pac West’s proposal in favor of PLP’s. The deciding factor appeared to have been PLP’s focus on meeting the needs of area tenants, compared to Pac West’s plans to sell its electricity directly to the island’s utility.
Pac West had originally tried and failed to lease feedstock lands from the Gay & Robinson sugar plantation. Over the past few years, it has instead been seeking ADC and other government and private lands.
Two months after the Kekaha committee voted to support only PLP’s project, Pac West president William Maloney wrote a four-page letter requesting reconsideration and harshly criticizing the committee’s decision-making process.
Maloney argued that PLP, through its relationship with KAA, had inside knowledge of the ADC’s priorities for the development of its Kekaha lands, which included the preference for a tenant to provide power to KAA members. Had his company known of “this secret criterion,” it would have offered to provide energy to KAA, Maloney wrote.
With the committee’s decision to lease land to PLP, which proposed using 1,850 acres of the ADC’s mauka lands and 1,180 acres on the Mana plain, Maloney argued that the ADC seemed to have enough lands to accommodate both projects.
When Pac West initially approached the ADC about leasing land in Kekaha, the ADC informed the company that only 750 acres of mauka land and about 450 acres of makai land were available, Maloney told Environment Hawai`i. Yet the Kekaha committee approved PLP’s project, which sought more than twice that amount.
The fact that the committee voted at a subsequent meeting to ratify the decision by one of its tenants, seed corn company Pioneer Hi-Bred International, to relinquish its mauka lands in favor of some makai lands that Pac West hoped to occupy convinced Maloney that his company was being treated unfairly.
In his November letter, he asked that all Kekaha lease decisions be suspended and recommended that future applicants be provided all adequate information, such as the ADC’s draft master plan.
On December 8, Kaua`i County councilwoman JoAnn Yukimura and International Longshore & Warehouse Union president Isaac Fiesta, Jr., wrote letters to the ADC in support of Pac West’s proposal.
Yukimura pointed out that, if allowed to fully develop its project, Pac West could provide the island with a significant amount of liquid ethanol, as well as 30 percent of its electricity needs. The latter would help the Kaua`i Island Utility Company reach its goal of 50 percent self-sufficiency by 2023, she wrote.
Both Yukimura and Fiesta pointed out that Pac West’s project could provide union-paying jobs to many former sugar plantation workers.
The committee met last month to discuss Pac West’s reconsideration request and decided to appoint a committee to investigate PLP’s project further before issuing a lease.
At the meeting, DBEDT’s Cameron Black advocated for greater diversity in renewable energy projects. Steven Rymsha, KIUC’s senior energy solutions engineer, had a lot more to say.
Rymsha complained that under the PLP plan, electricity must pass through the KAA’s antiquated transmission system before it reaches KIUC’s and said he wished the west side lands could play a greater part in reducing the island’s reliance on fossil fuels.
Rymsha added that a proposal to install a photovoltaic system on a triangle of unused Kekaha lands has been met with resistance from KAA, despite the fact that KIUC is willing to help improve the infrastructure at Kekaha, specifically, upgrading substandard reservoirs.
“We’d love to be part of the solution if they’d just let us in,” he said.
Regarding the PV project, committee chair David Rietow explained that the ADC is mandated by the state Legislature to support agriculture, not electricity production.
“We try to fix the old irrigation system to improve the ability to farm. We can’t be a direct generator of electricity for KIUC,” Rietow said. “Whatever it takes to farm in Kekaha is first and foremost.”
ADC executive director Alfredo Lee said that the triangle parcel would have to be transferred back to the state Department of Land and Natural Resources to accommodate a PV project.
Rymsha said that while he understood the ADC’s restrictions on leasing land, he did not understand how that applied to Pac West, which was proposing to cultivate biofuels.
“All the land went to one entity… Why can’t we co-exist?” he asked.
KAA representatives at the meeting chose not to speak on the matter.
In the end, after an executive session, Rietow said that it would take Pac West’s request under consideration.
After the meeting, Lee explained to Environment Hawai`i that the Kekaha committee did not actually approve a lease to PLP in September, but merely “accepted the project.” Lease terms are still being discussed, he says. “We just said, ‘We like your project, we’ll work with you.’ There’s still a long ways to go.”
He adds that he doesn’t know how the investigative committee plans to deal with the issues raised, although he noted that the ADC has decided that the makai plain will be used for seed production and the mauka lands for energy.
Despite PLP’s proposal to use 1,850 acres of mauka land, Lee says none of the land has been allocated. What’s more, there may not be that much land available. Lee says he has not yet tallied how much land Pioneer Hi-Bred gave up. He said only that the total mauka land available is more than 750 acres and possibly more than 1,500.
Maloney says the ADC lands are important to Pac West’s project, representing about 10 percent of his company’s total land requirement on Kaua`i. They are also very close to its mill site.
“I think there was the view that since we lost those lands, our project wouldn’t go forward,” he says, which is not true. “We’ve acquired the [mill] site, we’re going to go through with it.”
Still, the Kekaha committee’s September decision hurt the company’s credibility with people who thought it had the state’s support, Maloney says.
It doesn’t look good when a state agency refuses to lease lands that are important to the overall project, he says.
Maloney says that if they get a lease from the Department of Hawaiian Home Land, which owns land adjacent to the ADC’s lands, his company plans to improve the water system, which will benefit all the makai users.
While the final outcome is far from clear, Maloney says he is heartened by the ADC’s promise to reconsider its decision.
“I believe that they have it within their power to facilitate both projects, and hope that their decision is a first step towards this end,” he says.
Dam Liability
To some, it may appear that KAA and the ADC are in lockstep. But that’s not the case. At the ADC’s Kekaha committee meeting in December, they struggled to come to an agreement over the eme
rgency operation of reservoirs. Jonathan Chun, an attorney representing the KAA, had objected to language in a proposed plan that would have made the association responsible for operating the dams during times of emergency.
The ADC has no staff on Kaua`i and would need the KAA to do such tasks as manage irrigation system flows to prevent flooding during heavy rains.
The problem is, all of the ADC’s Kekaha reservoirs are substandard and require upgrades.
KAA representatives said the association is concerned about the liability that comes with dam operation, noting that its memorandum of agreement with the ADC stipulates that the association would manage the reservoirs once the ADC brought them into compliance.
“If you’re operating a non-complying structure, insurance goes through the roof,” said KAA’s Landis Ignacio.
The committee’s deputy attorney general said she didn’t think the state could indemnify the KAA, but it could try to work on some language that would allay the association’s concerns.
“We all have to lobby for more CIP [capital improvement project] money” to upgrade the reservoirs, ADC director Alfredo Lee recommended.
(For more on the Kekaha committee’s September decision, read the article in our October 2010 issue, “Agribusiness Subcommittee Approves Renewable Energy Project at Kekaha.” All back issues are available online at www.environment-hawaii.org.)
Teresa Dawson
Volume 21, Number 7 — January 2011
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