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eJNSY Gs M, <br />COUNTY OF HAWAII STATE OF HAWAII <br />M.. <br />RESOLUTION NO. _ 297 12 <br />(DRAFT 2) <br />A RESOLUTION URGING HAWAII ELECTRIC LIGHT COMPANY TO <br />RENEGOTIATE ITS PURCHASE POWER AGREEMENT CONTRACTS WITH ALL <br />INDEPENDENT POWER PRODUCERS USING RENEWABLE RESOURCES SO THAT <br />THE COST TO THE CONSUMER IS NOT BASED ON AVOIDED COSTS. <br />WHEREAS, a Purchase Power Agreement is a legal contract between an independent <br />power producer and a power purchaser (Hawai`i Electric Light Company) and defines all of the <br />commercial terms for the sale of electricity between the two parties; and <br />WHEREAS, avoided cost is the cost the utility would have incurred had it supplied the <br />power itself or obtained it from another source; and <br />WHEREAS, on December 30, 2011, the Public Utilities Commission approved an <br />amended Purchase Power Agreement between Hawaii Electric Light Company (HELCO) and <br />Puna Geothermal Venture (PGV) to allow HELCO to purchase an additional 8 megawatts (MW) <br />from PGV for a total of 38 MW of on -peak firm capacity; and <br />WHEREAS, HELCO estimates that the proposed 8 MW expansion project will reduce <br />the monthly bill of a typical HELCO residential customer by approximately -$1.67 for 2015, <br />-$1.89 for 2020, and -$1.61 for 2025; and <br />WHEREAS, although the Public Utilities Commission approved the amended Purchase <br />Power Agreement, it was disappointed that HELCO and PGV were unable to negotiate an <br />increased reduction in the avoided cost -based payments that PGV will receive, and as a <br />consequence, the vast majority of the annual energy procured from the existing facility would <br />still occur at pricing that is linked to fossil fuels and, thus, provides no price advantage or <br />stability benefits to HELCO's customers; and <br />WHEREAS, the Public Utilities Commission further stated that the 8 MW expansion <br />was the opportunity to renegotiate the underlying contract terms for the existing facility, but <br />HELCO and PGV failed to produce a better economic result for customers; and <br />WHEREAS, HELCO also has Purchase Power Agreements with other independent <br />power producers that are paid at avoided cost that include Apollo Energy Corporation/Tawhiri <br />Power, LLC (wind farm), Wailuku Holding Company, LLC (hydroelectric), and enXco/Hawi <br />Renewable Development, LLC (wind farm); now, therefore, <br />