Last month, Neil \u201cDutch\u201d Kuyper, president and CEO of Parker Ranch, laid out his arguments why residents in the northwestern corner of Hawai`i island might want to defect from Hawai`i Electric Light Company\u2019s grid.<\/p>\n
Simply put, a new energy portfolio that includes wind, liquefied natural gas, and pumped storage hydroelectric power would be worth hundreds of millions of dollars more than HELCO\u2019s assets in the Waimea-Kohala area, he said.<\/p>\n
According to analyses that Siemens and Booz Allen Hamilton have conducted for the ranch, the net present value of the new portfolio would be $600 million to $700 million, while HELCO\u2019s stranded assets in the area would be worth only $150 million to $200 million, Kuyper said during a panel at the Asia Pacific Clean Energy Summit.<\/p>\n
With high electricity costs reportedly devouring much of the ranch\u2019s profit margin, it formed Paniolo Power, LLC, in early 2014 to explore ways to reduce electricity rates, taking a hard look at renewables.<\/p>\n
\u201cRenewables make increasing sense as oil prices rise,\u201d he said, adding that a 2013 Hawai`i Clean Energy Initiative analysis suggests that with prices in the $125-135 range, renewables have the potential to provide $12 billion in benefits.<\/p>\n
By comparison, the assets of Hawaiian Electric Company, Maui Electric Company, and HELCO, total less than $4 billion, he noted. What\u2019s more, he said, HELCO\u2019s annual revenues over the last few years have ranged between $420 million and $480 million.<\/p>\n
\u201cIt\u2019s stunning how much wealth and income gets extracted \u2026 because we have the highest rates,\u201d he said. HELCO\u2019s electricity rates are some of the highest in the nation.<\/p>\n
So, he asked, is there a deal to be made with the utility now that the risk of irrelevance is rising? Given Hawai`i island\u2019s high rates, \u201cit appears to be the most logical place for large-scale customer defection,\u201d he said.<\/p>\n
Paniolo Power is considering various options, including establishing a micro-grid for the Waimea-Kohala area, which Kuyper said would be as large as that of the island of Kaua`i, but with half the population. The company is also looking at developing a \u201crealistic and compelling alternative portfolio\u201d to replace oil-fired generation, and\/or an undersea cable to O`ahu \u201cto levelize rates,\u201d he said.<\/p>\n
Paniolo Power has filed a motion to intervene in the Public Utility Commission\u2019s docket on the Hawaiian Electric Companies\u2019 Power Supply Improvement Plans. One question the company hopes to explore is whether utility-scale renewables on Maui and Hawai`i island can be cost-effective enough, given increases in distributed generation and liquefied natural gas use on O`ahu, to justify the cost of a cable, Kuyper said.<\/p>\n
Last month, Paniolo Power issued a request for qualifications for a pumped storage hydroelectric system on Parker Ranch lands. The company is looking at a range of potential hydro-energy storage solutions, from 10 megawatts (MW) to as high as 200 MW, according to an August press release.<\/p>\n
\u201cThe elevation change of 7,000 feet on Parker Ranch is a strategic asset,\u201d Kuyper said in the release. \u201cIf an undersea cable is possible for Maui, perhaps it\u2019s possible for Hawai`i island in the long run. And if that is the case, Parker Ranch could enable a large-scale storage solution as part of an integrated statewide grid.\u201d<\/p>\n
Should Paniolo Power choose to become a full-blown utility, the Kaua`i Island Utility Cooperative could be a model. During the panel discussion, KIUC CEO David Bissell said that because the company is a co-op, it can acquire funding for renewable energy projects cheaper than any independent power producer.<\/p>\n
\u201cIt\u2019s a no-brainer for the utility to do it,\u201d Bissell said.<\/p>\n
\u201cThe cheaper cost of capital [available to co-ops] has an enormous, enormous advantage \u2026 that gets passed through to ratepayers. A co-op is a very intriguing model,\u201d Kuyper said.<\/p>\n
Kaua`i Model<\/b><\/i><\/p>\n
If he had to cite one advantage a co-op has over the Hawaiian Electric utilities, Bissell said, it would be that he doesn\u2019t have to worry about growing profits for shareholders. And without that pressure, KIUC has been able to aggressively pursue renewable energy and conservation projects.<\/p>\n
More than 90 percent of its members have smart meters to help manage electricity usage. In addition, the utility has partnered with Green Energy Team, LLC, which will provide 7 megawatts of biofuel-generated electricity amounting to 13 percent of the island\u2019s load. It recently signed a 20-year agreement with Gay & Robinson, which will develop a hydroelectric plant that will meet another 5 percent of the load. And it\u2019s also invested in some major renewable projects of its own: a 12 megawatt solar array in Koloa, expected to go online next month, and another 12 MW array on Department of Hawaiian Home Lands in Anahola. After 25 years, the DHHL has the option to take over the Anahola project, he said.<\/p>\n
KIUC plans to generate at least 50 percent of its electricity with renewables by 2023, he said.<\/p>\n
\u201cWe\u2019ll be at 40 percent early next year,\u201d he said.<\/p>\n
To help integrate large amounts of electricity from intermittent sources, KIUC is pursuing a pumped storage project on DHHL, Department of Land and Natural Resources, and Agribusiness Development Corporation lands in West Kaua`i. (See our story on page 11.)<\/p>\n
\u201cWe\u2019re confident we can use PV to pump water cheaper than using fossil fuels,\u201d he said, adding that the company is also looking at battery storage (too expensive right now) and PV, LNG and\/or biogas.<\/p>\n
With these projects, KIUC hopes to lower the average member bill by 10 percent, maintain reliability, and be a leader in energy storage technology, he said.<\/p>\n
Volume 25, Number 4 October 2014<\/p>\n","protected":false},"excerpt":{"rendered":"
Last month, Neil “Dutch” Kuyper, president and CEO of Parker Ranch, laid out his arguments why residents in the northwestern corner of Hawai`i island might want to defect from Hawai`i Electric Light Company’s grid. Simply put, a new energy portfolio … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[320],"tags":[3],"class_list":["post-6072","post","type-post","status-publish","format-standard","hentry","category-october-2014","tag-teresa-dawson"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/6072","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6072"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/6072\/revisions"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6072"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}