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The state Department of Hawaiian Home Lands is asking the Legislature for $6 million to investigate whether geothermal power can be developed on land under its control on the Big Island, an undertaking that may prove to be controversial.

Kali Watson, chairman of the Hawaiian Homes Commission, told members of the Senate Ways and Means Committee Tuesday at a briefing in Hilo that DHHL needs new revenue streams to develop more housing for Native Hawaiians.

Harnessing volcanic heat beneath land set aside for Native Hawaiian beneficiaries to produce and sell electricity to the Big island electric utility — or the rest of the state — is “a tremendous opportunity,” he said. But he acknowledged the department must proceed carefully.

“We’re optimistic. We think it will work out, but we’re very sensitive to our beneficiaries, so we’re going to have outreach, we’re going to make sure that we have input. We’re hopeful that they’re supportive,” Watson said.

Ways and Means Chairman Donovan Dela Cruz refused to say after the Hilo briefing if he will support DHHL’s request for $6 million, or to discuss the presentation.

The near the Leilani Estates subdivision outside Pahoa has been producing power since 1993, and has been a successful business venture. In fact, PGV is now trying to increase its capacity from 38 megawatts to 46 megawatts, with plans to increase later to 60 megawatts.

Health And Safety Issues

But accidents at the plant over the years have released hydrogen sulfide gas, triggered fines by the state Department of Health and infuriated some of its neighbors. Its expansion plans faced bitter opposition from some community members this year.

“There’s a health and safety issue that we need to address, and unless that is addressed appropriately, we’re not going to move forward,” Watson said of his department’s new proposal to develop geothermal power on Hawaiian Home Lands.

Lawmakers passed to provide $500,000 to investigate the possibility of using geothermal to generate electricity on DHHL lands, and that research has zeroed in on three areas deemed to be “of high interest” for possible geothermal development.

Those areas are at Humu’ula on the eastern flank of Mauna Kea near Mana Road, another property on the north side of Mauna Kea east of Waimea and the Kawaihae area.

Ryan Matsumoto, project manager for Waika Consulting, told the committee a review of the existing research identified the southeastern flank of Mauna Kea as a particularly likely site. He also cited testing along Mana Road in that general area that produced results that were “a good sign for a geothermal resource.”

Watson said the $6 million will allow the department to determine if “a site we are thinking of using is viable.” He said there is one site that “looks very, very promising,” but declined to identify it.

Sufficient Capacity Needed

Part of the pitch for the $6 million was delivered to the committee by , senior director of Hawaii affairs for Ormat owns and operates the Puna Geothermal Plant.

Kaleikini, who has worked at PGV for 28 years, was a member of a permitted interaction group set up by the commission to investigate the possibility of tapping into geothermal on Hawaiian Home Lands.

Kaleikini said the $6 million would be used to hire consultants, conduct technical surveys and drill a water well for about $2 million. The money would also be used to drill exploratory “slim holes” to test for the geothermal resource, which would cost about $3.5 million.

As for the potential revenue from a geothermal development, Kaleikini said the history of PGV suggests a 50-megawatt facility on Hawaiian Home Lands could generate royalties and lease payments for the department in the $5 million to $7 million range per year.

Such a project would also create jobs for about 300 construction workers for at least two years to build the plant and another 40 full-time employees to operate the plant, he said.

Watson said the first steps will be “island focused,” meaning the project would initially be aimed at producing power for the Big island. “We can go from there. These things are expandable,” he said.

One concept that was briefly described to the Senate committee Tuesday was a $3 billion project to develop geothermal power in quantities that could be delivered to the other islands via an undersea cable. That idea was pitched to the commission last year.

Watson said that is “not realistic at this point” but could someday turn out to viable if an adequate geothermal resource can be tapped, and money can be raised for a cable.

“I mean, that’s going to be expensive,” Watson said. “Unless there’s sufficient capacity, I don’t see that happening, but I’m very optimistic there should be sufficient capacity.” Part of DHHL’s plan is to try to tap into federal funding that is available for alternative energy projects, Watson said.

But he said Hawaiian Homes must acknowledge both cultural issues and safety concerns Hawaiians may have about geothermal development.

“The only way we can do it and have them be supportive is if we not only acknowledge the cultural side of it, the sensitivity, but more importantly how it’s set up operationally,” he said. “Our beneficiaries, there’s just so much tremendous need, not only in housing. You look at all the different areas that need to be addressed, it takes money.”

“The key is the revenue stream. I’m not going to ignore that potential revenue stream because of certain objections. I’ll listen to it, I’ll address the specific concerns, but then from there, if we can do it in a way that’s appropriate, and it generates significant revenues, we’re definitely going to move forward,” he said.