State regulators have approved a contract between Boston-based First Wind and Hawaiian Electric Co. for a 69-megawatt wind farm that will be located five miles north of Haleiwa on lands owned by Kamehameha Schools.
This is First Wind’s fourth wind farm in Hawaii and will be the state’s largest. It is slated to begin construction this month and be in operation by the end of 2012, according to a statement form Hawaiian Electric. The 30 wind turbines will power approximately 14,500 homes.
The PUC approved a rate of 23 cents to 24 cents a kilowatt hour for ratepayers. The Kawailoa project has been in the works for three years.
HECO and First Wind won’t disclose the total cost of the project. But the company is seeking a federal grant that would reimburse it for 30 percent of the project cost. The PUC was under pressure to approve the contract by mid-December to ensure that First Wind could take advantage of the grant, which would lower consumer rates.
The cost of energy from the Kawailoa project is in line with other wind farm pricing in Hawaii in recent years. But it is significantly higher than on the mainland, where First Wind also operates projects.
While wind energy has averaged 3 cents to 7 cents a kilowatt hour on the mainland, according to U.S. Department of Energy data, the negotiated costs for Hawaii wind energy have been much higher.
Darren Pai, a spokesman for Hawaiian Electric, told Civil Beat that the reasons for the higher costs for wind energy are because the state has higher construction, land and financing costs. He said that there were also added expenses of integrating the energy into Hawaii’s small electric grids to maintain system reliability.
First Wind’s initial project in Hawaii in 2006 – Kaheawa I on Maui – was 8 cents a kilowatt hour.
Here’s the breakdown of the costs for wind energy projects in Hawaii since then.
wind energy costs
The PUC decision to award the new contract to First Wind follows concerns that Civil Beat raised last month about whether regulators had access to important project financial data to ensure that Hawaii residents were getting reasonable rates for the wind energy.
After Civil Beat reported that state regulators lacked information such as project costs, tax incentives and projected investor returns when reviewing renewable energy contracts, HECO submitted financial information from First Wind to state regulators last week.
Exactly what new information HECO submitted is confidential and still not available to the public.
But the consumer advocate – whose job it is to protect the interests of ratepayers – had already decided to support the project.
National energy industry experts and consumer advocacy groups told Civil Beat last month that state regulators’ lack of access to such data is unusual and troubling.
Jeffrey Ono, the consumer advocate, said last month that his office could not compel such information from project developers.
However, Robert Thormeyer, a spokesman for the National Association of Regulatory Utility Commissioners said regulators should have this information. “That’s their job, to get the documents,” he said.
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