The Honolulu Advertiser broke the news of a 120-acre, 20-megawatt solar farm proposed by Mililani landowner Castle & Cooke.

Andrew Gomes’ Thursday story included some details of the plan and reaction from Ted Peck of the state’s energy office, but I think the piece glossed over one of the more important points — the impact to Hawaiian Energy Company ratepayers.

The proposal is laid out in a 62-page petition (PDF) from HECO filed with the Public Utilities Commission on May 6. The petition asks the PUC for a declaratory order to determine whether four distinct five-megawatt facilities in one solar energy park are exempt from competitive bidding.

In a 122-page decision and order (PDF) handed down Dec. 8, 2006, the PUC established a framework requiring that new generation facilities five megawatts or larger go through a competitive bid process. It’s unclear if each of the four smaller systems — owned and operated by separate companies — is exempt, or if the 20-megawatt project as a whole will be subject to the rules.

Competitive bid systems are used by many governmental and public organizations to ensure there are multiple bidders for contracts, encouraging competition, keeping costs down and eliminating the possibility of backroom deals. But HECO says that forcing a competitive bid for this project will hurt, not help, because it will cause delays. And with Oahu and Hawaii in need of renewable energies and now a good time to invest, those delays could prove costly.

The Division of Consumer Advocacy added its thoughts in a short filing, but didn’t add much. DCA Executive Director Dean Nishina wrote Wednesday that the division was “unable to presently state its position on the merits of the application and whether the application should be approved by the Commission.” Repeated requests for clarification from the consumer advocate have not been met.

This debate is particularly germane for renewable energy proposals because they generally will increase the cost of electricity in the short run. Renewables make up for that short-term pain by providing stability to the utility and benefits to the environment.

The presumption is that someday soon, oil will be so expensive that solar or wind will be cheaper by comparison, so it’s wise to invest now. But there will be a short-term impact on HECO ratepayers, whether the competitive bid rules are enforced or not. And it’s worth talking about.

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