Laserfiche WebLink
REPORT OF THE <br />COMMITTEE ON AGRICULTURE, WATER AND ENERGY SUSTAINABILITY <br />DATE: September 5, 2012 RE: Comm. No. 822/Res. No. 297-12 <br />PLACE: Council Chambers <br />Hilo, Hawaii <br />TIME: 5:46 p.m. <br />Council Chair and Members <br />Hawaii County Council <br />Hilo, Hawaii 96720 <br />Your Committee on Agriculture, Water and Energy Sustainability, to which was referred <br />Resolution No. 297-12, reports as follows: <br />Resolution No. 297-12, transmitted by Council Member J Yoshimoto via Communication No. 822, <br />dated August 28, 2012, urges Hawaii Electric Light Company (HELCO) to renegotiate its <br />Purchase Power Agreement (PPA) contracts with all independent power producers using renewable <br />resources so that the cost to the consumer is not based on avoided costs. <br />There were nine testifiers from the Hilo Council Chambers: six spoke in support and three <br />provided comment. There was one testifier from the Pdhoa Council Office who spoke in <br />support. <br />After the public testimony, Mr. Hoffmann assumed the Chair to allow Mr. Yoshimoto to speak on <br />his resolution. <br />Mr. Yoshimoto read a section of a report from the Public Utilities Commission (PUC), which <br />states, "Although it has approved the Application, the commission is disappointed that HELCO <br />and PGV were unable to negotiate an increased reduction in the avoided cost -based payments <br />that PGV will receive under the Fifth Amendment. As a consequence, the vast majority of the <br />annual energy procured from the Existing Facility would still occur at pricing that is linked to <br />fossil fuels and thus provides no price advantage or stability benefits to HELCO's customers. <br />The 8 MW Expansion was the opportunity to renegotiate the underlying contract terms for the <br />Existing Facility, but HELCO and PGV failed to produce a better economic result for customers. <br />By approving this Application, the commission is not approving the underlying avoided cost - <br />based PPA, as that contract was developed and approved prior to the implementation of HRS <br />§269-27.2(c), which required all new generation pricing to be de -linked from the price of fossil <br />fuel. Existing law prevents the commission from unilaterally amending the underlying PPA, and <br />as such the commission can only approve the incremental increase in generation that is de -linked <br />and the amendment to the Existing PPA, which de -links a portion of those energy charges. <br />While disappointed by the results of the Contracting Parties with respect to avoided costs in the <br />Existing PPA, the commission approves this Application because, as a whole, the proposed <br />project will provide benefits over the status quo." <br />AWESC Report No. 4 <br />