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Last week, your electric bill went up approximately thirteen cents per month. On May 15th the Hawaii Public Utilities Commission (PUC) quietly gave a green light to the recovery of over $4,000,000 in Big Wind “study” costs from HECO ratepayers through the Renewable Energy Infrastructure Program (“REIP”).

To be exact, the amount is $4,405,142, (slightly less than HECO’s CEO Connie Lau’s in 2012) since, in addition to $3.9 million in study costs, the utility will pay itself $101,873 in “carrying charges” and $391,345 in “revenue taxes.” This means that each of you will pay HECO back to the tune of an additional 13 cents per month on your bill for the next three years, assuming you use the average of 600 kWh per month.

How did this happen?

We have to go back to 2007 when negotiations began for what ultimately became Hawaii’s when Linda Lingle, DBEDT, the Consumer Advocate and HECO (with the Department of Energy and Castle & Cooke’s David Murdock looking on) signed a deal to turn Molokai and Lanai into power plants for Oahu. There were other things agreed to in that Agreement, but clearly Big Wind was the Big Answer, the centerpiece.

In 2009, then Rep. Hermina Morita (representing Kauai but born and raised on Lanai) introduced that attempted to make the goals of the Agreement stronger. It did not pass, but its substance, along with the substance of , were slipped into (both also introduced by Rep. Morita) which in turn became Act 155 — which did pass, thereby incorporating an increase in the Renewable Portfolio Standards (RPS) of achieving 40 percent of electricity sales from renewable sources by 2030 (and achieving 30 percent reduction from conservation measures) into Hawaii law.

Not more than two months after the 2009 legislative session ended, HECO was knocking on the PUC’s door (at the time comprised of Carlito Caliboso, John Cole and Leslie Kondo) for after-the-fact approval to:

“defer the costs of outside services incurred in 2009 and 2010 to conduct the studies and analyses necessary (a) to reliably and effectively integrate large amounts of wind- generated renewable energy potentially located on the islands of Molokai and Lanai (the “Big Wind Projects”) to the Oahu electric grid, and (b) to assess the potential routes and permitting requirements for the Oahu transmission lines and facilities necessary to interconnect undersea cables delivering power from the Big Wind Projects to Oahu; and (2) to recover the expenses for these ‘Big Wind Implementation Studies’ through a surcharge mechanism.”

Mind now, not a single environmental review had been started or permit issued (this is still true today) and the PUC was careful to remind the utility that the Big Wind studies were “undertaken without prior Commission review.” Further, the Consumer Advocate (at the time Catherine Awakuni, a signatory to the 2008 Energy Agreement who is now PUC Chief Counsel — a potential conflict?) was careful to reserve a right to a future “prudence” review and expressed concern that:

“[T]he studies might reflect efforts that are so tightly focused on achieving certain objectives (i.e., 400 MW of wind from Molokai and Lanai through undersea cables), that even if initial findings suggest that such alternatives are not practical or feasible, additional monies will continue to be spent to determine a way, any way, to realize the objectives[;] in order to comply with the Energy Agreement, the Company might ‘throw good money after bad’.”

Nonetheless, HECO and the Consumer Advocate negotiated a “settlement” that allowed the CA to join HECO in supporting recovery of the Big Wind study costs; the CA accepted HECO’s estimate of 23 cents per kWh as a levelized cost of the Inter-Island Wind project. But they forgot the Big Wind study costs, which will now add 2 cents per kWh to your rates starting this month.

What is the cost of energy per kWh on the mainland? According to this Civil Beat paper not so long ago, rates can be as low as 8 cents per kWh, to the average of 11 cents per kWh. So let’s do some math. If Oahu’s rates are somewhere around 35 cents per kWh now and you add 23 cents of additional cable and Big Wind costs to that, the total will be 58 cents per kWh. Given the current cost of 46 cents per kWh for electricity on Molokai and Lanai, HECO’s attempt to “buy off” the opposition on our islands by saying our rates would be “levelized” to Oahu rates is sheer nonsense: your rates will really go UP, bringing them past our level.

And a funny thing happened on the way to studying and building those hundreds of massive turbines: Molokai fell off the table. With little fanfare, press coverage or discussion at all, Big Wind on Molokai simply died. Undaunted, in the on-going, PUC-mandated Integrated Resource Planning process, HECO is now focusing with laser-like intensity on pretending that it doesn’t matter; that Lana`i is still a go despite losing over half of the energy the Big Wind Studies proposed.

In a recent interim filing with the PUC, the independent “observer” to the IRP process found there were many problems with HECO’s relentless pursuit of Big Wind:

“For several reasons, the analyses presented so far in the IRP process do not provide meaningful information regarding the comparative economics of the Lanai Wind project. In particular, the analyses comparing the economics of the Lanai Wind option to other wind options that do not include an undersea cable are not performed using consistent assumptions and are not meaningful as currently analyzed.

One seemingly-essential consideration that is not discussed or investigated is whether inter-island transmission is necessary for the HECO Companies to meet the RPS. Several resource plans are identified that meet the RPS without inter-island transmission that feature large amounts of wind generation sited on Oahu. There has been no discussion or presentation of information that would address the feasibility or issues associated with siting wind or other renewable generation resources on the Island of Oahu versus siting on other islands.”

We’ll see whether Big Wind is a go on Lanai, since every day that it’s still “out there” the opposition grows stronger.

But for now? You are already paying for Big Wind, like it or not. Even though half of it has blown away.

About the author: Robin Kaye is the spokesman for Friends of Lanai.

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