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First Wind challenges direction of ‘Big Wind’ project  

Credit:  by Sophie Cocke, Pacific Business News , bizjournals.com 26 April 2011 ~~

The recent decision by Castle & Cooke to cede 200 megawatts of its wind allocation for the so-called “Big Wind” project to Pattern Energy so it can develop a wind farm on Molokai is being greeted with criticism from First Wind CEO Paul Gaynor.

The Big Wind project seeks to bring 400 mw of wind energy from Molokai and Lanai to Oahu via an undersea cable. The original 2008 agreement included plans for Boston-based First Wind to develop a 200 mw wind farm on Molokai and Castle & Cooke to develop a 200 mw wind farm on Lanai.

First Wind officials missed a March 18 deadline to secure land for the project from Molokai Ranch despite several offers. Earlier this month Peter Nicholas, the CEO of Molokai Ranch, announced that he had chosen San Diego-based Pattern Energy as its preferred developer if the project was to go forward, and that he would not work with First Wind.

In a recent letter to the state Public Utilities Commission, Gaynor described the agreement between Castle & Cooke and Pattern Energy as being in direct violation of the original agreement between Hawaiian Electric Co., Castle & Cooke and First Wind, in addition to going against stipulations included in the PUC’s original order approving the agreement.

Gaynor also described the new agreement with Pattern Energy as “contrary to the interests of ratepayers and the interests of the state of Hawaii and its people.”

According to Gaynor’s letter, the original 2008 agreement approved by the PUC stipulated that if one of the Big Wind developers failed in pursuit of their project, the other developer could develop up to 350 mw on its designated island and the remaining 50 mw could be competitively bid. Alternatively, the PUC’s decision allowed for 200 mw of wind energy to be competitively bid, according to Gaynor’s letter.

Gaynor said that First Wind was “very surprised and equally concerned” that the original agreement is now “being subverted, if not breached, by these most recent developments in which C&C has unilaterally claimed a right to develop the full 400 mw and further is seeking to ‘assign’ 200 mw to an entirely new party its ‘development opportunity’ on another island, Molokai, with respect to which C&C has no relationship, contract or any other legal rights whatsoever.”

Gaynor also said that, “to our great disappointment, Hawaiian Electric seems to be supporting these actions.”

Earlier this month, Hawaiian Electric officials advised the PUC against extending an eight-month deadline to First Wind to secure the land needed for the Molokai wind farm. First Wind officials requested the deadline a day prior to the March 18 deadline.

Hawaiian Electric officials also submitted an agreement for PUC approval this month, which included an option for Castle & Cooke to assign a portion of the project to a developer on Molokai – an action which Gaynor said “stunned” First Wind. (The announcement of an agreement between Castle & Cooke and Pattern Energy followed shortly afterward.)

“Despite concerted efforts, First Wind has been unable to secure the rights to lease land needed for a wind farm” on Molokai, said Hawaiian Electric spokesman Peter Rosegg, in a statement. “Without that fundamental step by the deadline, they were unable to negotiate a term sheet with an agreement on major issues like pricing.”

That said, Rosegg added that HECO still considers First Wind “a good partner” for Hawaii and Hawaiian Electric, noting that the utility has been “pleased” with its relationship on the Kaheawa and Kahuku wind farms.

Gaynor’s letter urges the PUC to rule that Castle & Cooke has no right to assign any wind development opportunity on Molokai to Pattern Energy, and that 200 mw of the wind project be put out to competitive bid. The 200 mw to which First Wind refers includes 150 mw which Castle & Cooke has chosen not to develop on Lanai and the 50 mw which was originally intended to be competitively bid if development plans for one of the wind farms fell through.

According to Gaynor, First Wind officials “would be happy to work with Hawaiian Electric, as well as the commission” on this matter.

Officials from Castle & Cooke and Molokai Ranch could not immediately be reached for comment. A Pattern Energy spokesman is working to respond to questions from PBN related to its understanding of the agreement.

John Lamontagne, a spokesman for First Wind, made this response by email: “The letter speaks for itself. We have communicated with the PUC and expect that they and other state leaders will determine how to move forward from here on the interisland cable.”

First Wind officials also told PBN in early April that they hoped that the island of Maui would be included “as the ‘third leg of the stool’ to improve the overall likelihood of success of the interisland cable project.” The island of Maui was not included in the original agreement.

Lamontagne told PBN Tuesday that “we are not suggesting that Maui be included in the interisland cable project instead of either of the other islands, just that it be added to the process.”

Source:  by Sophie Cocke, Pacific Business News , bizjournals.com 26 April 2011

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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