{"id":8763,"date":"2016-02-25T05:20:36","date_gmt":"2016-02-25T05:20:36","guid":{"rendered":"http:\/\/www.environment-hawaii.org\/?p=8763"},"modified":"2016-02-25T05:43:37","modified_gmt":"2016-02-25T05:43:37","slug":"purchase-of-three-solar-farms-nixed-by-nextera-buyer-suggests","status":"publish","type":"post","link":"https:\/\/environment-hawaii.org\/?p=8763","title":{"rendered":"Purchase of Three Solar Farms Nixed by NextEra, Buyer Suggests"},"content":{"rendered":"

\"solarfarm\"<\/a><\/p>\n

Although the merger of Hawaiian Electric with NextEra Energy has yet to be approved by the Public Utilities Commission, it would seem from a recent filing with the PUC that the prospective new owner of Hawai`i\u2019s largest utility is already calling the shots when it comes to company decisions.<\/p>\n

Supporting this view is a letter from Bryan Martin, managing director of the D.E. Shaw Co., which was in line to purchase the three solar farms being built on O`ahu by SunEdison. In February, HECO announced that it was terminating its power purchase agreements (PPAs) with SunEdison, whose three installations were to have added more than 100 megawatts to the island grid.<\/p>\n

Meanwhile, the state consumer advocate is also questioning NextEra\u2019s role in HECO\u2019s action. \u201cIf NextEra had any involvement in the decision to terminate the PPAs,\u201d the consumer advocate told the PUC, \u201cthen the commission should require NextEra to come forward to explain why NextEra does not have a conflict of interest in having Hawaiian Electric terminate these PPAs when NextEra could stand to benefit by having a NextEra renewable developer affiliate replace all or some of SunEdison\u2019s projects.\u201d<\/p>\n

The same suggestion was raised by attorneys for SunEdison, according to a report in the\u00a0Honolulu Star-Advertiser<\/em> by Kathryn Mykleseth. She stated that the firm Yamamoto Caliboso had filed a 117-page objection to HECO’s action with the commission. In it, she reported, the attorneys noted that in the merger proceedings, HECO had acknowledged that consent from NextEra Energy is required for major decisions. (The filing had not been posted on the PUC website by close of business on February 24.)<\/p>\n

In a February 23 letter, D.E.Shaw\u2019s Martin stated that as recently as early January, Hawaiian Electric seemed to view with favor the sale of the projects to D.E. Shaw Renewable Investments, LLC (DESRI). The company had signed an agreement to purchase the projects in late December. \u201cAt the time,\u201d Marty wrote, \u201cwe were aware that HECO believed certain interim development milestones in the PPAs had been missed, so we planned to meet with HECO to discuss obtaining customary and standard waivers of the interim milestones \u2013 it is important to note that we did not ask for waivers of any final completion deadlines, but rather asked for waivers of only interim milestones\u201d \u2013 a \u201cfairly common practice,\u201d he added, \u201cin the development of renewable energy projects, and we have never seen a utility cancel a power purchase agreement because a project missed interim milestones.\u201d<\/p>\n

\u201cAt HECO\u2019s request,\u201d Martin continued, \u201cSunEdison made certain concessions to mitigate the effects of the missed interim deadlines. HECO seemed supportive of the concessions, although HECO did acknowledge that it needed approval from NextEra Energy, Inc., prior to making any final commitments to us because of the pending combination of the two companies. I am not sure whether HECO ever received that approval.\u201d<\/p>\n

The next communication from HECO to SunEdison rescinded HECO\u2019s prior proposal and \u201cnotified SunEdison that the PPAs would soon be terminated,\u201d Martin told the PUC. \u201cThe only explanation that HECO offered had to do with concerns relating to a potential SunEdison bankruptcy.\u201d<\/p>\n

\u201cWhile it is true that SunEdison\u2019s financial difficulties made these projects more complicated,\u201d Martin said, \u201cwe do not believe that SunEdison\u2019s financial woes made these projects impossible to finance or construct under new ownership. Furthermore, any claim that the buyers were unable to find financing was not consistent with the actual status of our efforts. I assure you that we are highly interested in resuming work on the projects if HECO reverses course promptly and begins cooperating with our efforts to assume ownership of the projects and close financing.\u201d<\/p>\n

In its comments on the PPA termination notices, made, coincidentally, the same day as Martin\u2019s filing, the consumer advocate urged the commission to look closely at SunEdison\u2019s troubled financial position and the potential legal difficulties that would be created should the company file for bankruptcy.<\/p>\n

Furthermore, the consumer advocate notes that in its own status report, Hawaiian Electric \u201cidentifies situations where Hawaiian Electric appears to have been responsible for causing certain milestone extensions.\u201d Also, a letter from SunEdison to Hawaiian Electric, copied to the consumer advocate\u2019s office, \u201cdisputes a number of assertions and positions held by Hawaiian Electric in its termination notices.\u201d<\/p>\n

The consumer advocate recommended that the PUC evaluate the claims being made by both parties before deciding how to move forward in these dockets.<\/p>\n

\u201cIn general, the consumer advocate expresses its hope that the issues raised by Hawaiian Electric\u2019s termination notices can be settled in a manner that best serves Hawaiian Electric\u2019s customers,\u201d the consumer advocate said in its concluding statement. \u201cIf the PPA terms do, in fact, support additional grace periods to allow satisfactory compliance, then SunEdison should be allowed sufficient time to meet any missed milestones. It should be made clear, however, that any extensions should not place Hawaiian Electric\u2019s customers at risk for a delayed or failed project. Furthermore, any extensions granted by the commission should also require that SunEdison make significant concessions that benefit consumers.\u201d<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Although the merger of Hawaiian Electric with NextEra Energy has yet to be approved by the Public Utilities Commission, it would seem from a recent filing with the PUC that the prospective new owner of Hawai`i’s largest utility is already … Continued<\/a><\/p>\n","protected":false},"author":220,"featured_media":8767,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[351],"tags":[7],"class_list":["post-8763","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-eh-xtra","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/8763","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\/220"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8763"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/8763\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/8767"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}