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Ed LJ The Honorable Keith W. Ahue Page 2 December 8, 1993 Under these circumstances, we must not allow the residents of the Island of Hawaii to face the risks that would arise from waiting until late 1996 or beyond for power provided by an IPP. HELCO has learned, from the delays encountered by Puna Geothermal Venture, that the best -laid plans can go awry. So far, all of the IPPs with which HELLO has existing firm power purchase contracts have either encountered delays in developing their projects or have had unexpected periods in which they have ceased production. Especially in light of this experience, HELCO believes that it is in the public's best interest, first, to build the 1995 generation unit at Keahole, and, second, to plan for the following generation unit through concurrent planning by HELCO for a utility - constructed addition along with discussions with IPPs proposing units in that time frame. In this way, the public will have better assurances that a reliable source of generation, providing power at a reasonable cost to the consumers, will be available when it is needed. I would like to address the fourth paragraph of your comment letter, which states: "... the statement on page 3-44 that the proposed expansion is consistent with the State's land use classification is misleading. A generator station belongs in the urban district. The existence of the generator station in the Conservation District is a result of unplanned historical circumstances. It would be appropriate to petition the Land Use Commission to remove the parcel from the `Conservation District.' ' HELCO believes that the proposed expansion of the Keahole Generating Station should be permitted in this instance. This conclusion is based, among other things, on the following: HELCO constructed its generating station at Keahole in reliance upon a Conservation District Use Permit issued by the Board of Land and Natural Resources in December 1973. Subsequently, three CDUP amendments were issued by the Land Board in February 1984, February 1987, and September 1988. Since 1973, excluding operating costs, HELCO has invested more than $10 million in the Keahole Generating Station in reliance upon the CDUP approval and amendments granted by the Land Board over the last 20 years. We believe it would be unfair and unreasonable to now require HELCO to pursue the State Land Use and County rezoning approvalsefore undertaking the proposed expansion of the Keahole Generating Stat fon. a also believe that this would be very detrimental to HELCO and would prejudice HELCO's