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NextEra subsidiary pulls out of Kahikinui wind project

A subsidiary of NextEra Energy, whose attempt to purchase Hawaiian Electric Co. failed last month, has pulled out of a Department of Hawaiian Home Lands wind energy project in Kahikinui, the deputy director of the department said Thursday.

In November, the Hawaiian Homes Commission awarded a right-of-entry permit and general lease to Boulevard Associates LLC, an affiliate of Florida-based NextEra, to survey 500 acres at Kahikinui on the southern flank of Haleakala to determine if it is feasible for wind power development and, if so, where would be the best site to build 20 wind turbines on about 30 acres. The department controls 22,860 acres in Kahikinui.

The company had three to five years to assess the area and to conduct cultural, environmental and archaeological studies as well as wind and engineering analyses. The Florida utility agreed to pay the department $175,000 per year for the first three years and $200,000 per year for an additional two years, if needed.

If NextEra deemed the 60-megawatt wind project feasible at that point, it would enter into a 20-year general lease with the department and apply for a power purchase agreement with Maui Electric Co. and the Public Utilities Commission. Though the lease rent had not been determined, NextEra representatives said at hearings that its “community benefits package” would top $300,000 each year of the lease.

Department Deputy Chairman William Aila Jr. said Thursday that the department was notified about two weeks ago that the NextEra subsidiary would be withdrawing from the project. That was a few weeks after the PUC rejected Next-Era’s $2.63 billion bid to purchase Hawaiian Electric Co.

NextEra had been collecting meteorological, archaeological and biological data to try to determine the best site for the wind power project, said Aila.

He said that the department may not have to go back to square one because there was another qualified bidder – Sempra Energy. The company has experience in the area, having put up the 21-megawatt Auwahi Wind project on Ulupalakua Ranch land in December 2012.

“We are waiting for advice from the attorney general’s office on how to proceed,” Aila said.

If the attorney general’s office does not allow the department to switch to Sempra, then another request for proposals will have to go out, which will set back the project a year to 18 months, he said.

If negotiations with Sempra were allowed to proceed, Aila said that there would be no need for more public hearings, though beneficiaries of the contract would be consulted during negotiations. If a full request for proposals is required, there will be public hearings.

Some residents had expressed concerns about desecration of the area and environmental damage at hearings on the wind farm project. However, many Kahikinui homesteaders supported the project as a way to bring much-needed resources and improvements to the area.

“Our general feeling is we continue to have the premier wind location, premier site, for wind power generation on Maui, and we will eventually find a partner to make use of those resources,” Aila said.