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State regulators have instructed Hawaiian Electric Co. to strike all references to undersea cables and the proposed Lanai wind farm from the utility’s long-awaited request for large-scale renewable energy projects that will serve Oahu.

Hawaii consumer advocate Jeff Ono announced the decision at a conference of energy developers and policymakers celebrating Hawaii Clean Energy Day in downtown Honolulu on Friday.

The move by the Public Utilities Commission signals an increased focus on lowering electric bills and more careful renewable energy planning. The decision also means further delays for the 200 megawatt (or more) call for solar and wind energy, which state regulators instructed HECO to issue nearly two years ago.

The order comes on the heels of HECO’s recently released energy plan, which says Oahu has enough renewable energy resources on island to meet energy mandates, including 40 percent clean energy by 2030. The findings mark a sharp reversal from the utility’s prior stance that neighbor island renewable energy sources needed to be tapped for Oahu to meet energy targets.

Ono also announced that the PUC has rejected two additional HECO proposals for renewable energy for Maui and Oahu. The proposals sought “firm” sources of renewables, such as biofuel or geothermal energy. Ono said that Oahu and Maui don’t need the additional energy at this time.

Increasing Insecurity for Lanai Wind Farm

In striking the Lanai wind farm from the upcoming bid, state regulators simultaneously opened a separate case to investigate the progress of the wind farm and whether it is in the best interest of consumers.

Castle & Cooke’s David Murdock sold the island of Lanai to billionaire Oracle CEO Larry Ellison last year. Castle & Cooke said it retained the development rights for the wind farm.

However, in their written order, state regulators stressed that the company’s agreement with HECO to build the wind farm was no sure thing and subject to approval by the PUC.

“To be clear, the commission does not believe that any ‘development rights’ have been extended to Castle & Cooke to complete its Lanai wind project,” commissioners wrote.

Castle & Cooke had negotiated a number of benefits with the Lanai community in exchange for hosting the wind farm, which would supply power only to Oahu. Since the sale, it’s unclear whether the company could deliver on these promises. It’s also unclear what access Castle & Cooke has to important infrastructure needed to build and connect the wind farm to undersea cables.

“With regards to the Lanai project, the circumstance have changed dramatically for Lanai, where Castle & Cooke no longer owns key assets on Lanai,” said PUC Chair Hermina Mortia, during the conference. “So the commission is asking for an update on the status of the wind project.”

Commissioners, in their written order, questioned whether the Lanai wind farm would prove cost effective for ratepayers given declining solar prices and said that the Oahu grid may not be able to accept large amounts of energy from neighbor island wind farms without dumping increasing amounts of excess energy.

Maui-to-Oahu Cable Still On The Table

Commissioners also will investigate separately whether a cable between Maui and Oahu is in best interest of residents.

The commission noted that there could be cost benefits for ratepayers in connecting the two island grids, but they need more information to decide whether moving forward with a cable is good policy.

Energy developers have been scoping out wind and solar projects that can be sited on Maui and brought to Oahu via undersea cables.

The commission is seeking additional information from cable developers and the utility about permitting and infrastructure requirements. After the review, which Morita said will take at least several months, the PUC will decide whether or not the utility should seek a bid for a cable system.

Meanwhile, the search for renewable energy projects for Oahu will proceed. HECO will need to amend the request for proposals, now about 900 pages long, and resubmit it to state regulators for approval.

The PUC said that ultimately the strategy is to ensure that ratepayers get good prices on renewable energy.

“Achieving competitive pricing for new renewable energy projects is essential in order to ensure a ‘no regrets’ economic development of renewable energy projects,” the commission wrote.