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HECO submits application to PUC

Hawaiian Electric Submits Application to PUC for New Oahu Generating Unit
Plans Include Community Give-Backs




June 17, 2005

Lynne Unemori
Phone:  (808) 543-7972

(Honolulu, HI):  Hawaiian Electric Company today plans to file with the Hawaii Public Utilities Commission (PUC) the project application to build an approximately 100 megawatt (MW) combustion turbine generating unit at Campbell Industrial Park.  In a companion filing the company is also taking the unprecedented step of seeking PUC approval to undertake a number of initiatives on behalf of nearby communities in recognition of their hosting the power generating facility.

“There is a growing recognition of the cumulative burden of infrastructure – whether from landfills, industrial parks, power plants or other facilities – placed on certain Oahu neighborhoods, primarily because zoning and other restrictions leave no alternatives for people who live in those areas,” said Robbie Alm, Hawaiian Electric senior vice president for public affairs.

“We must be sensitive to this and as a result, we have been meeting with West Oahu and Waianae Coast community leaders to get their ideas on reasonable steps to address community concerns regarding the siting of another power plant on their side of the island.  These steps have come to be known as ‘give-backs.’”
As a result of the meetings, the community identified and Hawaiian Electric agreed to seek approval for the following give-backs:

1).  A 7% base electric rate discount for those who live in the 96707 zip code (Makakilo,  Kapolei, Honokai Hale, Ko Olina), which is adjacent to the proposed new power plant. If approved, the discount would last for 10 years and, to avoid encouraging excessive electricity use, would only apply to the first 786 kilowatt-hours used per month (the current average monthly residential use in the area).

2).  Conversion to recycled instead of potable water in Kahe Power Plant operations. 

3).  Construction of three new environmental monitoring stations along the Leeward Coast to monitor air quality, and resumption of a fish monitoring program.

In addition, the company pledged that on its own it would:

4) Create a “report card” for the community on company activities including:

a. Expanded distribution of current reports issued under the Campbell Local Emergency Action Network (CLEAN) reporting system currently in place for neighborhoods around Campbell Industrial Park, 
b. Statistics on activities such as renewable energy use and support for energy efficiency and conservation,
c. Reporting on the results from the new environmental monitoring stations and fish monitoring program.

5) Support a community-driven conservation awareness education program.  Such a comprehensive program would address energy, water, and land conservation and would involve partners from government and other private business.

6) Strongly affirm the company’s financial and volunteer support for activities in the West Oahu/Waianae Coast communities.

This milestone in community give-backs could not have been reached without the effective leadership and involvement of Mayor Mufi Hannemann.  While recognizing the need for a steady supply of electrical power to help drive the growth of West and Central Oahu and beyond, the Mayor was also very insistent in having affected communities benefit from this project, specifically residents from Kapolei to Waianae.

He had his representative, former Councilmember John DeSoto, actively involved in the community-based discussions and planning.  The Mayor expressed his appreciation to all the community members who were involved in this process and Hawaiian Electric for their role in developing this "win-win" situation.

The new combustion turbine generating unit – the first power plant on Oahu in 17 years by the time of its planned operation in 2009 – is proposed to be located at Campbell Industrial Park, next to existing power plants operated by independent producers – AES, Kalaeloa, and H-Power (waste-to-energy plant).  An additional 138 kV transmission line about two miles long, within and adjacent to Campbell Industrial Park, will also be needed to more reliably transmit power from the new and existing units within the industrial park to the grid.  Preliminary costs for the new unit and transmission line, as well as related substation improvements, are estimated at $130 million.

Plans are for the unit to burn naphtha, a much cleaner fuel than the low sulfur residual fuel oil currently used in most of Hawaiian Electric’s power plants.  The unit will also be “fuel-flexible,” that is, able to burn ethanol or other environmentally friendly biofuels, or hydrogen, when they are commercially available.

“We consider this a transitional unit, capable of burning both fuels of the past and fuels of the future. We have received assurances from potential suppliers that the type of generating unit we are looking to purchase has already used biofuels and hydrogen as fuel sources,” said Alm.  “Thus when supply is available, we would welcome the conversion of the unit away from the use of fossil fuels.”

In the meantime, he noted that with the use of naphtha, the new plant will not cause additional oil to be imported into Hawaii.  “Our discussions with the refineries indicate there is currently a surplus of naphtha produced in Hawaii, and this new unit will be able to operate using that surplus.  We are obviously pleased not to add to Hawaii’s importation of fossil fuel,” said Alm.

Plans are for the combustion turbine to be run primarily as a “peaking” unit, which means it would operate mainly between 5 p.m. to 9 p.m. on weekdays to meet peak evening demand for electricity.

Hawaiian Electric is now preparing an Environmental Impact Statement (EIS) for the proposed unit.  The air permit application was submitted to the State of Hawaii Department of Health in the fall of 2003 and is currently under review. 

Alm noted that with Oahu’s growing economy and increasing electricity use, the island’s power generation reserves continue to decrease. 

“It’s essential to have an adequate level of reserves on an island power grid, because if we lose generation for any reason, we only have those reserves available,” said Alm.  “Unlike the mainland, we’re not interconnected to other power sources.  We are a stand-alone utility and we cannot count on anyone but ourselves for the power our customers need.”

In the meantime, until the new unit can be built, the company expects to have enough power to meet the island’s demand for electric service under normal conditions.  It noted, however, that with existing units running harder to meet higher demand or with potentially higher than forecasted peak demand due to unusually hot weather or other causes, the possibility of generation-related outages is greater. 

To keep generation reserves up and to support the company’s goal of decreasing the growth of Hawaii’s use of imported oil, Hawaiian Electric has also embarked on an aggressive program to promote other energy solutions, including:

  • A major push for both residential and business energy conservation and efficiency (most recently visible in the launch of a television advertising campaign featuring the music of jazz group Hiroshima) 
  • Renewable energy projects such as a potential Oahu wind farm above Hawaiian Electric’s Kahe Power Plant  (which is now pending community review) and continued support for its highly successful solar water heating program, as well as continued research and development of other renewable resources, and
  • A proposal before the PUC to partner with major customers to use smaller-scale efficient “combined heat and power” generating units on customer premises.  This is a form of “distributed generation” in which the units use the waste heat for applications such as heating water for swimming pools or commercial laundry operations, or for running air chillers.