Hawaiian Electric Co. has selected five wind and solar projects proposed for Oahu, out of 25 projects submitted to the utility in response to a request for low-cost renewable energy sources.

The utility is seeking to circumvent the competitive bidding process that’s required for projects that are larger than 5 megawatts.

The utility said in a press release that it has asked Hawaii’s Public Utilities Commission for permission to proceed with negotiations with the project developers in order to speed up the development of low-cost renewable energy. 

The average, combined price of the projects is 15.9 cents per kilowatt hour, about one-third less than other solar and wind projects on Oahu. The projects total 64 megawatts. 

HECO declined to release further information about the projects. 

“At this stage, many of the specifics of these projects are still proprietary so it’s not appropriate for us to discuss them in more detail,” HECO spokesman, Darren Pai, told Civil Beat by email. “At this point, we are only asking the PUC to allow us to enter formal contract negotiations. More information will become public when the contracts to buy power have been negotiated and go to the PUC for review.”

From a HECO press release: 

“These projects represent an important first step as we are starting to see lower market prices for renewable energy,” said Scott Seu, Hawaiian Electric vice president for Energy Resources and Operations. “The strong response we received demonstrates the high level of competition in our market. That’s good news for our customers.”

 Based on preliminary estimates, Hawaiian Electric expects the combined effect of all five of these projects could reduce generation costs by approximately $7.4 million a year, compared to today’s cost of generation. Hawaiian Electric’s goal is to have as many of these projects as possible in service by the end of 2015.

“Every step we take toward reducing our customers’ bills helps. We can’t control the cost of oil, but we can try to accelerate the addition of more low cost renewable energy resources,” said Seu.

 In addition, 20 projects that originally provided proposals but were not selected will be given the opportunity to update and resubmit their pricing proposals. If those projects meet lower pricing and other criteria such as site control, they could be considered in a supplemental request to negotiate power purchase agreements. 

 In February, Hawaiian Electric issued a call for low-cost renewable energy projects on Oahu that could qualify for a waiver from competitive bidding. Hawaiian Electric narrowed the responses to five projects based on prices and other criteria such as site control and development experience.

 Under PUC rules, Hawaiian Electric normally must use competitive bidding to select generation projects larger than 5 megawatts. To accelerate the benefits of these low cost projects to customers, Hawaiian Electric is asking the PUC to waive competitive bidding for these five projects. After power purchase agreements are negotiated, each one must be submitted to the PUC for individual review and approval before it goes forward. The individual developers are also responsible for other key steps including environmental review, permitting and community outreach.

 

— Sophie Cocke