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AWESC-4 Page 2 September 5, 2012 <br />Mr. Yoshimoto asked Jay Ignacio, President of HELCO, to come forward. He was accompanied <br />by Norman Verbanic, Production Manager. Mr. Ignacio stated that he agrees with the resolution <br />and has already made contact with the independent power producers (Puna Geothermal Venture <br />(PGV); Apollo Energy Corporation/Tawhiri Power, LLC; Wailuku Holding Company, LLC; and <br />enXco/Hawi Renewable Development, LLC) to renegotiate existing contracts. In fact, PGV has <br />already approached HELCO to negotiate a new contract. Mr. Yoshimoto asked Mr. Ignacio if he <br />was able to share any details of the negotiations. Mr. Ignacio replied that the information is <br />confidential. Mr. Yoshimoto wanted to know how many years are left in the contract with PGV. <br />Mr. Verbanic replied that it ends in 2027, so 15 years. Mr. Yoshimoto asked if HELCO and <br />PGV are negotiating the entire Purchase Power Agreement. Mr. Ignacio explained that the <br />original contract with PGV was for 25 megawatts (MW), then they amended their contract to <br />expand to 30 MW and, most recently, to 38 MW. During the last amendment, they renegotiated <br />only five of the 30 MW, so now they are currently negotiating for the 25 MW. If negotiations <br />fail, then they will stay with the terms of the existing contract. <br />Mr. Yoshimoto then inquired as to when the contracts will end for the other independent power <br />producers. Mr. Verbanic replied that Wailuku Holding Company, LLC has a 30 -year contract to <br />end in the mid 20's; Apollo Energy Corporation/Tawhiri Power, LLC has a 20 -year contract to <br />end 2026; and enXco/Hawi Renewable Development, LLC has a 20 -year contract to end 2027. <br />Mr. Yoshimoto asked if all these contracts are based on avoided cost. Mr. Verbanic confirmed <br />that they are. <br />Ms. Smart expressed concern over the HELCO ads that ran in the newspaper. HELCO spent <br />$16,770 for four colored ads. She feels that this is money that could have been better spent, like <br />going back to the customers. Mr. Ignacio explained that Hawai`i's PUC does not allow the cost <br />for ads to be passed on to the customers; they were paid for by the shareholders. <br />Mr. Yagong submitted the following amendment via Communication No. 822.1: <br />"BE IT FURTHER RESOLVED that Hawai `i Electric Light Company shall appear <br />before the Council at the West Hawai `i Civic Center for the scheduled October 17, 2012, <br />Council Meeting to report the results of its efforts to renegotiate its Purchase Power <br />Agreements with all independent renewable energy power producers, and specifically if Puna <br />Geothermal Venture was amendable to lowering the price rates for payers and the amount of the <br />new negotiated price, if one has been agreed upon. " <br />Mr. Yagong explained that the purpose of this amendment is to strengthen the resolution by <br />requiring HELCO to report back to the Council, which was suggested by Ms. Mililani Trask <br />(Indigenous Consultants, LLC) in her written testimony (Communication No. 822.2). This <br />resolution will also help to keep the public in the loop. <br />Mr. Yoshimoto asked Mr. Ignacio if this proposed amendment provides enough time for him to <br />report back based on the status of the negotiations with PGV. Mr. Ignacio said they would be <br />willing to provide an update, but the contents of the negotiations are confidential, so he is not <br />sure how much information he will be able to share with the Council. He noted that the last <br />negotiations for the eight megawatts -expansion took three years; however, both sides understand <br />