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Home My WebLink AboutRES 297 Draft 02 2010-2012eJNSY Gs M, COUNTY OF HAWAII STATE OF HAWAII M.. RESOLUTION NO. _ 297 12 (DRAFT 2) A RESOLUTION URGING HAWAII ELECTRIC LIGHT COMPANY TO RENEGOTIATE ITS PURCHASE POWER AGREEMENT CONTRACTS WITH ALL INDEPENDENT POWER PRODUCERS USING RENEWABLE RESOURCES SO THAT THE COST TO THE CONSUMER IS NOT BASED ON AVOIDED COSTS. WHEREAS, a Purchase Power Agreement is a legal contract between an independent power producer and a power purchaser (Hawai`i Electric Light Company) and defines all of the commercial terms for the sale of electricity between the two parties; and WHEREAS, avoided cost is the cost the utility would have incurred had it supplied the power itself or obtained it from another source; and WHEREAS, on December 30, 2011, the Public Utilities Commission approved an amended Purchase Power Agreement between Hawaii Electric Light Company (HELCO) and Puna Geothermal Venture (PGV) to allow HELCO to purchase an additional 8 megawatts (MW) from PGV for a total of 38 MW of on -peak firm capacity; and WHEREAS, HELCO estimates that the proposed 8 MW expansion project will reduce the monthly bill of a typical HELCO residential customer by approximately -$1.67 for 2015, -$1.89 for 2020, and -$1.61 for 2025; and WHEREAS, although the Public Utilities Commission approved the amended Purchase Power Agreement, it was disappointed that HELCO and PGV were unable to negotiate an increased reduction in the avoided cost -based payments that PGV will receive, and as a consequence, the vast majority of the annual energy procured from the existing facility would still occur at pricing that is linked to fossil fuels and, thus, provides no price advantage or stability benefits to HELCO's customers; and WHEREAS, the Public Utilities Commission further stated that the 8 MW expansion was the opportunity to renegotiate the underlying contract terms for the existing facility, but HELCO and PGV failed to produce a better economic result for customers; and WHEREAS, HELCO also has Purchase Power Agreements with other independent power producers that are paid at avoided cost that include Apollo Energy Corporation/Tawhiri Power, LLC (wind farm), Wailuku Holding Company, LLC (hydroelectric), and enXco/Hawi Renewable Development, LLC (wind farm); now, therefore, BE IT RESOLVED BY THE COUNCIL OF THE COUNTY OF HAWAII that it hereby urges Hawaii Electric Light Company to renegotiate its Purchase Power Agreement contracts with all independent power producers using renewable resources so that pricing is not based on avoided costs to ensure that the residents of Hawaii County receive increased savings on their electric bills. BE IT FURTHER RESOLVED that Hawaii Electric Light Company shall appear before the Council at the West Hawaii Civic Center for the scheduled October 17, 2012, Council Meeting, to report the results of its efforts to renegotiate its Purchase Power Agreements with all independent renewable energy power producers, and specifically if Puna Geothermal Venture was amenable to lowering the price rates for payers and the amount of the new negotiated price, if one has been agreed upon. BE IT FINALLY RESOLVED that the County Clerk shall forward a copy of this resolution to the Honorable Mayor William P. Kenoi; Jay Ignacio, President of HELCO; Paul Thomsen, Director of Ormat/PGV; Dennis Melstad, President of Wailuku Holding Company, LLC; Steven Pace, Apollo Energy Corporation/Tawhiri Power, LLC; Richard Horn, Chief Operating Officer of Hawi Renewable Development, LLC; Jay L. Temple, Asset Manager of enXco; and Public Utilities Commission Chair Hermina Morita. Dated at Hilo , Hawai`i, this 19th day of September , 2012. INTRODUCED BY: COUNCI MBR , COUNTY OF HAWAII COUNTY COUNCIL County of Hawaii Hilo, Hawaii I hereby certify that the foregoing RESOLUTION was by the vote indicated to the right hereof adopted by the COUNCIL of the County of Hawaii on September 19, 2012 ATTEST: V (T--�— OUNTY CLERK CHAIRPERSON & PRESIDI FICER K ROLL CALL VOTE AYES NOES ABS EX BLAS X - FORD X HOFFMANN X IKEDA X ONISHI PILAGO X SMART X YAGONG X YOSHIMOTO X 9 0 0 0 Reference RESOLUTION NO C-822.3/AWESC- 4 297 12 (DRAFT 2)