Idle Kahuku Wind Farm Still Costing Ratepayers

Hawaiian Electric Co.

Hawaii ratepayers are on the hook for $2.4 million in infrastructure costs for Oahu’s Kahuku wind farm, even though it’s only produced a fraction of the energy it was expected to and is now shut down due to a fire that devastated its battery storage facility earlier this month.

During the first half of this year, the wind farm only produced about 15 percent of the energy it was contracted to sell to Hawaiian Electric Co., according to state regulators.

Now, all 12 wind turbines have been taken offline and it could be months before they are back up, said First Wind’s CEO Paul Gaynor at last week’s Asia Pacific Clean Energy Summit and Expo in Honolulu. The wind farm went online in March of last year.

But Oahu's 300,000 ratepayers are still required to pay for the microwave system and switching station.

HECO defended the consumer costs, saying that the grid improvements held additional benefits to customers and the utility and that it can be difficult for developers to get financing for such costs.

It “is reasonable for the utility to manage these upgrades to make sure customers get the maximum value from the work, not just more renewable energy,” HECO spokesman Darren Pai said in an email.

But in 2010, when the contract was approved, one of the three commissioners at the Hawaii Public Utilities Commission raised an alarm about the contract, envisioning just the situation that the plant is in today. At the time, then-commissioner Les Kondo said that shifting $2.4 million in wind farm costs to ratepayers didn’t make any sense.

“HECO is unreasonably and unnecessarily shifting risk to its ratepayers,” he wrote in a dissenting opinion. “Rather than the risk of cost recovery being on Kahuku Power, HECO's ratepayers will pay for the interconnection facilities through rates whether or not Kahuku Power's output is equal to the Annual Contract Energy and will continue to pay those costs even if Kahuku Power generates no energy. And, should Kahuku Power's facilities cease operation, HECO will likely seek to continue recovering its costs for the facilities from ratepayers.”

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