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Hawaiian Electric might pull the plug on a proposed energy storage project designed to help replace a coal-burning power plant that is Oahu’s largest single source of electricity, the company said in response to an order from regulators allowing the storage project to go forward but with numerous conditions.

The large energy storage system, essentially a giant battery, would help ensure Oahu has a stable supply of electricity when AES Corp. closes its coal plant late next year.

But regulators have expressed concerns that Hawaiian Electric intends to charge the battery with electricity produced by oil-fired power plants and not renewable resources.

The state Public Utilities Commission approved plans for the battery, which would be located in Kapolei, on April 29 but castigated Hawaiian Electric for using oil to charge the battery, at least in the short term until it can bring more renewable projects on line.

PUC Chairman Jay Griffin previously said Hawaiian Electric’s plan of switching from coal to oil was like “going from cigarettes to crack.”

The AES coal plant produces about 20% of Oahu’s power, and the commission’s order said the battery project will be needed to make sure the island doesn’t suffer power shortages when the facility closes in September 2022.

“The Commission is approving this Project to provide further assurance that the ‘lights will stay on’ during the retirement of the AES coal plant in 2022 and future retirements of aging fossil-fueled plants in the next several years,” the commission wrote. “However, despite the Commission’s multiple admonitions to utilize standalone storage fueled by fossil fuels as a last resort, Hawaiian Electric appears to continue ignoring the high costs of this Project and attendant risks of further dependence on fossil fuel.”

Keeping The Lights On

The approval came with several conditions including requiring Hawaiian Electric to make it easier for homeowners with rooftop solar to send excess power to the grid to help charge the battery. The same goes for remotely located wind and solar farms that people who live in apartments and condos can subscribe to buy power from, projects known as “community based renewable energy” projects.

The utility responded by saying it may have to abandon the project.

“While technically an approval, the order imposes such unprecedented conditions that the company and the developer may be prevented from moving forward with this innovative and cost-effective project,” Hawaiian Electric said in a statement.

Renewable energy advocates applauded the PUC for imposing conditions, which they said will promote the use of green energy, even though the battery will be charged with fossil fuels for at least a year or two.

“Hawaiian Electric should consider this a gut check to start making meaningful moves toward �Ჹ�ɲ���ʻ��’s renewable energy goals and to provide clean, truly affordable energy to its customers that doesn’t come at the cost of public and environmental well-being,” Lauren Ballesteros-Watanabe, chapter organizer for the Sierra Club of Hawaii, said in a statement.

“I think the commission did all it could do considering the circumstances,” said . “HECO really backed them into a corner. When you’re talking about turning peoples’ lights off and having rolling blackouts, they just can’t allow that.”

Jeff Mikulina, executive director of the , agreed.

“We’re pleased that the PUC has taken this opportunity to identify a path forward that helps accelerate our clean energy goals while making sure the lights stay on,” said Mikulina, whose organization pursues solutions to climate change. “It was really a challenging situation because of the delays in the renewable energy projects.”

The giant battery is one of numerous projects in various stages of development as part of a state policy to effectively wean Hawaii from using fossil fuels to generate electricity by 2045. In addition to promoting resources like rooftop solar, the energy policy calls for Hawaiian Electric to work with third-party developers to build large-scale renewable energy resources – solar farms, wind farms and the like – and sell the power wholesale to Hawaiian Electric.

The battery storage project is one such resource, being developed by a subsidiary of , which operates battery projects across the United States.

The problem is that, while the battery can store energy, Hawaiian Electric doesn’t have enough of the large-scale renewable projects online yet to charge the battery.

In addition to the other conditions, the PUC’s order says Hawaiian Electric can no longer require community-based renewable energy programs to have battery storage to keep excess power.

Other conditions imposed reporting requirements that will let the public and regulators more closely track Hawaiian Electric’s progress toward the state’s renewable energy goals.

Murray Clay studies Hawaii energy issues as president of the , which invests in Hawaii projects supporting locally produced food, renewable energy, clean transportation and management of freshwater and waste.

Clay said the only troubling condition imposed by the PUC is one that would take away incentives Hawaiian Electric is supposed to be awarded for helping get some renewable projects on line.

“The order imposes such unprecedented conditions that the company and the developer may be prevented from moving forward with this innovative and cost-effective project.” — Hawaiian Electric

Clay noted that the utility is not the only entity that can at times be blamed for delays, which could also be the fault of the third-party developers or government red tape that can slow construction.

Clay said he understands the PUC’s frustration with Hawaiian Electric but said it could send the wrong signal for the commission to offer an incentive for Hawaiian Electric to get things on line, then to take it away later. The utility could come to think the PUC would take back other awards, he said.

“Does this train the utility to think they’ll pull this back if we do it?” he said.

Hawaiian Electric responded to a request for comment with a short, four-sentence statement. In addition to saying it might abandon the project, the company said it was “disappointed by some of the characterizations made by the commission and we disagree with them.”

The utility didn’t elaborate but indicated it will pursue remedies as allowed by the regulatory process.

“The regulatory process allows us to raise these concerns to the PUC and so we will follow the process to the fullest extent to achieve an outcome that’s in the best interest of customers,” the company said.

The Ulupono Initiative was founded by Pierre and Pam Omidyar. Pierre Omidyar is the CEO and publisher of Civil Beat.