PUC asks state, county for input on PGV

Months after suspending an application for an amended power purchase agreement between Hawaiian Electric and Puna Geothermal Venture — pending the completion of a supplemental environmental review — the state Public Utilities Commission is seeking input from both Hawaii County and the state Department of Land and Natural Resources.

In a proposal filed with the PUC last month, PGV requested that the suspension order be rescinded, after which the power plant said it would seek to engage with either Hawaii County or DLNR to determine whether an environmental review is required, and if so, what level of review would be needed.

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As part of the proposal, PGV said it would immediately undertake, at its cost, whatever action the county or DLNR deems is necessary.

“This proposed approach would also enable the commission to complete its review and consideration of the (power purchase agreement) without being delayed by an environmental review process that PGV estimates very conservatively could take at least two years and cost potentially $2 (million) to $3 million,” PGV said in the May 14 filing.

But before the PUC can consider PGV’s proposal, it needs to “determine the DLNR’s and the county’s positions relative to environmental review,” the commission wrote in a June 4 order lifting the suspension of the docket in a limited scope to do just that. The suspension order otherwise remains in full effect.

A letter was sent June 4 from the PUC to Mayor Mitch Roth and DLNR Chairwoman Suzanne Case asking if the county and department are willing and able to engage with PGV on the matter; whether they agree with the PUC’s finding that the project requires an environmental review pursuant to state statutes; and if they agree that an environmental review is needed, would they be willing to be the accepting authority.

Case said in a June 22 letter to the PUC that the DLNR is not willing to assist PGV and declined to comment on the PUC’s findings regarding an environmental review because the department does not have regulatory jurisdiction over the project.

Cyrus Johnasen, a spokesman for Roth, confirmed that a letter from the PUC has been received and said the county will respond accordingly, likely this week.

“Our administration’s main priority is the sustainability of our island home,” Johnasen said. “For us, any initiative that takes us further away from our reliance on fossil fuels is a step we are willing to take. That said, we are still reviewing the request and will determine our county’s ability to engage once the proper parties are consulted internally.”

A spokesman for PGV did not respond to questions in time for this story.

Under the proposed PPA, the rate paid by the utility to PGV will be fixed and no longer linked to the price of oil.

By eliminating the volatility of oil prices from the rate paid to PGV, the new fixed-price contract will ensure that bills are more stable, Hawaiian Electric said previously.

As part of the amended agreement, PGV agreed to modify its current facility to provide an additional 8 megawatts of energy and firm capacity, which will further reduce electric bills and the use of fossil fuels to generate electricity.

According to the March 31 order suspending the docket, PGV voluntarily prepared an EIS in 1987, which was approved by Hawaii County.

While the 1987 study would otherwise satisfy environmental review requirements, changes to PGV’s generator proposed in the PPA require a supplemental environmental review, the order states.

“For an EIS to meet its intended purpose, it must assess a particular project at a given location based on an explicit or implicit time frame,” the order said. “The 1987 EIS contemplated a 35-year useful life of PGV’s generator — from 1987 to 2022. The 1987 EIS specifically contemplated decommissioning PGV at the end of its useful life.”

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Because the pending application proposes to extend PGV’s life until 2052, the PUC order said the previous EIS would not suffice because the length of the agreement, from the date of approval to 2052, extends three decades beyond what is covered by the original EIS.

Email Stephanie Salmons at ssalmons@hawaiitribune-herald.com.

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