Wednesday, February 5, 2014

Maui Coal & the Sierra Club

By Henry Curtis

On January 15, 2014 Maui Electric Company (MECO) filed a request with the Public Utilities Commission (PUC) to extend and modify its Power Purchase Agreement (PPA) with Hawaiian Commercial & Sugar Company (HC&S).



Pu`unene Mill


MECO wants an exemption from the PUC’s Competitive Bidding Framework.

This isn’t surprising.

Since the PUC instituted Competitive Bidding in 2006 the process has only been used on proceedings which are currently stuck in the regulatory boneyard.

The Sierra Club filed a Motion to Intervene on the “grounds that the proposed extension of MECO's PPA with HC&S will impact Sierra Club members' health, aesthetic and recreational interests.”

The Club does not want a hearing on their Motion to Intervene. However, they do want a hearing on the Application itself.

The Club asserts there are unresolved legal and factual questions regarding whether HC&S is a "non-fossil fuel producer."

The Club notes that the “Competitive Bidding Framework allows for exemptions for ‘qualified facilities’ and ‘non-fossil fuel producers.’ MECO claims that HC&S qualifies for the exemption because HC&S is a ‘non-fossil fuel producer.’ MECO's sole support for this claim is the following statement: ‘HC&S has represented that it bums, and will continue to bum, primarily non-fossil fuels. Therefore, HC&S Facility qualifies as a non-fossil fuel producer of electricity.’"

HC&S' Energy Generation by Source (%)

Year
Bagasse %
Coal %
Hydro %
Petro %
Cooking Oil %
Wood %
2010
64.3
24.4
9.4
1.8
0.01
0.01
2011
66.1
23.6
9.1
1.2
-
-
2012
66.3
20.1
11.5
2.1
-
-

Specifically, the Club wants to know whether HC&S qualifies for the exemption; are they a non-fossil fuel producer and how much fossil fuel can a renewable facility burn and yet still qualify for the exemption?

The Club also wants to know whether HC&S is a baseload or intermittent source. “Given that Pu'unene facility was mostly shut down for three months in 2012, can Pu'unene be considered reliable for emergency power?”


The Sierra Club also raised another key issue. If the facility can run on bagasse for its own internal needs, but adds coal to produce stable power for the MECO grid, then “buying power from HC&S is actually increasing the state's reliance on fossil fuels even though Pu'unene burns ‘primarily’ bagasse.”

The History of Hawaiian Commercial & Sugar Company

HC&S was built by Claus Spreckels. The company dates from the 1870s.

Predating electricity in Honolulu, sugar baron Claus Spreckels installed the first electric generating equipment in the Hawaiian kingdom. On the night of September 22, 1881 lights went on at Spreckels’ Mill in Spreckelsville.

Spreckels built the first skyscraper in San Francisco, incorporated the first steam line to offer regular service between Honolulu and San Francisco, dabbled in real estate and build vertically integrated sugar operations including growing, harvesting, refining, transportation and financing sugar operations.

Spreckels was one of the ten richest Americans of his time and one of the fortieth of all time“He fought against the U.S. annexation of Hawaii, arguing, ‘the people of Hawaii want to be free to manage their own affairs in their own way.’”

In 1898 A&B bought a controlling interest in HC&S.

In the late 1990s HC&S generated 55 MW of electricity. The electricity was produced from several sources: the Pu`unene power plant (38 MW), the Paia Mill (11 MW) and three hydro power stations (6 MW). HC&S maintained 50 miles of distribution lines to power irrigation pump stations and drip stations. End-users of the electricity included the Pu`unene Mill (10 MW), the Paia Mill (4 MW), Irrigation (12 MW) and MECO (16 MW).

The Modern Arrival of Coal

The 1980s saw several coaling operations come into existence in Hawai`i. In the early 1980s cement companies began importing coal to power rock smashers. At the end of the decade two biomass generators - - HC&S and the Hilo Coast Power Company - - converted their boilers to handle coal.  The AES coal generation station was built in Campbell Industrial Park. AES is now the largest electricity generator in the state.

AES Facility


Cane Burning

Every year sugar cane fields are burned and the smoke travels over South Maui. In October 2013 black ash blanketing cars, sidewalks and the parking lot at the Kihei Villages Condominiums.

 The Future

Today visionaries are talking about the time when Hawai`i will end its love of fossil fuel. 
 
Meanwhile HECO and its subsidiary MECO are working to extend contracts with coal generators AES and HC&S.
 
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