37707 - hawaii
TRANSCRIPT
BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF HAWAII
In the Matter of the Application of )
HAWAII ELECTRIC LIGHT COMPANY, INC. ) DOCKET NO. 2019-0333
For Approval of an Amended and Restated Power Purchase Agreement Between Hawaii Electric Light Company, Inc. and Puna Geothermal Venture.
ORDER NO. 37707
SUSPENDING THE DOCKET
BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF HAWAII
In the Matter of the Application of )
)
HAWAII ELECTRIC LIGHT COMPANY, INC. )
)
For Approval of an Amended and )
Restated Power Purchase Agreement )
Between Hawaii Electric Light )
Company, Inc. and Puna Geothermal )
Venture. )
DOCKET NO. 2019-0333
ORDER NO. 37707
SUSPENDING THE DOCKET
By this Order,^ the Public Utilities Commission
("Commission'') suspends the instant docket regarding the
Application filed by HAWAII ELECTRIC LIGHT COMPANY, INC. on
iThe Parties are HAWAII ELECTRIC LIGHT COMPANY, INC. ("Hawaiian Electric") and the DIVISION OF CONSUMER ADVOCACY ("Consumer Advocate"), an officio party, pursuant to Hawaii Revised Statutes ("HRS") § 269-51 and Hawaii Administrative Rules ("HAR") § 16-601-62(a). The Commission admitted, as participants, TAWHIRI POWER, LLC ("Tawhiri"); PUNA GEOTHERMAL VENTURE ("PGV"); PUNA PONO ALLIANCE ("Puna Pono"); BIG ISLAND COMMUNITY COALITION; and HU HONUA BIOENERGY ("Hu Honua"), pursuant to Order No. 37090, "(1) Granting Puna Geothermal Venture's and Big Island Community Coalition's Motions to Participate; (2) Granting Tawhiri Power LLC, Puna Pono Alliance, and Hu Honua Bioenergy Participant Status in Lieu of Intervention; (3) Establishing a Statement of Issues to Govern this Proceeding; and; (4) Instructing the Parties to File a Stipulated Procedural Schedule," filed April 20, 2020 ("Order No. 37090").
December 31, 2019,2 pending the completion of supplemental
environmental review. In so doing, the Commission also dismisses.
as moot, Hu Honua's
Information Reguests.^
pending Motion to Compel Answers to
I.
BACKGROUND AND RELEVANT PROCEDURAL HISTORY
The Commission opened this docket to facilitate its
review of the amended and restated power purchase agreement ("PDA'')
between Hawaiian Electric and PGV.^ Pursuant to Order No. 36573,
Hawaiian Electric filed its Application on December 31, 2019.^
The Application proposes a project ("Project'') to expand PGV's
generation capacity from 38 megawatts ("MW") to 46 MW, extend the
PPA term by 30 years, and decrease pricing, among other things.^
^"Application of Hawaii Electric Light Company, Inc.; Exhibits 1-10; Verification; and Certificate of Service," filed on December 31, 2019 ("Application").
2"Hu Honua Bioenergy, LLC's Motion to Compel Answers to Information Reguests; Memorandum in Support of Motion; and Certificate of Service," filed August 26, 2020 ("Hu Honua Motion to Compel").
^See Order No. 36573 a Docket to Review an
Amended and Restated Power Purchase Agreement Between Hawaii Electric Light Company, Inc. and Puna Geothermal Venture," filed on October 4, 2019 ("Order No. 36573").
^The PPA is attached as Exhibit 1 to the Application.
^See Application at 2-5.
2019-0333 2
Pursuant to Order No. 37090, the Commission admitted participants
in this proceeding.
On January 16, 2020, the Commission filed copies of
correspondence between Senator Russell Ruderman and
Governor David Ige, relating to PGV.^
On August 4, 2020, the Commission received a public
comment from Senator Ruderman, urging the Commission
"to reconsider action, including approval of any PPA,'' until an
environmental impact statement ("EIS'') is completed.®
Pursuant to the procedural schedule established by
Order No. 37121,^ on August 31, 2020, Puna Pono,i'® Hu Honua,ii
From: Commission To: K. Katsura Re: Docket No. 2019-0333, For Approval of an Amended and Restated Power Purchase Agreement Between Hawaii Electric Light Company, Inc. and Puna Geothermal Venture, filed on January 16, 2020 (individually, "Senator Letter'' and "Governor Response," together, "PGV Letters").
^Letter From: R. Ruderman To: Commission Re: "Docket No. 2019-0333; Puna Geothermal Ventures (PGV)," filed on August 4, 2020.
^See Order No. 37121, "(1) Establishing a Procedural Schedule; and (2) Rescinding Big Island Community Coalition's Participation," filed on May 1, 2020 ("Order No. 37121").
i0"puna Pono Alliance's Position Statement; and Certificate of Service," filed on August 31, 2020 ("Puna Pono SOP").
ii"Hu Honua Bioenergy LLC's Statement of Position; and Certificate of Service," filed on August 31, 2020 ("Hu Honua SOP").
2019-0333
Tawhiri,^2 and the Consumer Advocate^^ filed statements of
position. As discussed below, both Puna Pono and the
Consumer Advocate raised questions and concerns regarding
environmental review for the Project.On September 30, 2020,
Hawaiian Electric filed its reply statement of position.^®
On September 23, 2020, the State Department of Health
("DOH"), Office of Environmental Quality Control ("OEQC") issued
a determination in the Environmental Register indicating that DOH
is not required to conduct a new or supplemental environmental
review for PGV's air permit renewal (permit no. 0008-02-N) .
On October 2, 2020, the Commission issued information
requests ("IRs") to Hawaiian Electric and PGV, asking their
i2"Tawhiri Power LLC's Statement of Position; and Certificate of Service," filed on August 31, 2020 ("Tawhiri SOP").
^^"Puna Geothermal Venture's Statement of Position; and Certificate of Service," filed on August 31, 2020 ("PGV SOP").
^^"Division of Consumer Advocacy's Statement of Position; and Certificate of Service," filed on August 31, 2020
("Consumer Advocate SOP").
^^See Puna Pono SOP at 5-11; Consumer Advocate SOP at 2, 49-51.
^^"Hawaii Electric Light Company, Inc.'s Reply Statement of Position; and Certificate of Service" filed on September 30, 2020 ("Hawaiian Electric RSOP").
^~^See "The Environmental Notice, September 23, 2020," at 6
("DOH Determination"), available at
http://oeqc2.doh.Hawaii.gov/The Environmental Notice/2 02 0-0 9-2 3- TEN, pdf . The Hawaii Environmental Protection Act ("HEPA"), set forth in HRS §§ 343-1 through -8, governs environmental review.
2019-0333
positions on whether any environmental review is necessary
before the Commission issues its decision in this docket.
Hawaiian Electric and PGV to these IRs on
October 12, 2020.
Between October 21, 2020, and October 23, 2020,
three lawsuits were filed relating to DOH's September 23 decision
regarding PGV and environmental review.On November 13, 2020,
the Commission issued IRs to Puna Pono, PGV, and Hawaiian Electric
related to the Lawsuits, and seeking information on how the
Lawsuits might affect the Application. Puna Pono responded to
these IRs on November 23, 2020. PGV and Hawaiian Electric
responded to these IRs on November 30, 2020.
On January 21, 2021, the Commission contacted OEQC,
pursuant to HRS § 343-5(f), seeking guidance on whether HEPA
reguires an environmental review for PGV's proposed expansion,
and if so, which agency is the appropriate accepting authority.
On February 16, 2021, OEQC responded, providing general
guidance that the Commission should itself first "determine if an
^^See Puna Pono All, v. Dep't of Health, 3CCV-20-0000390, 21, 2020); Kon v. Dep't of Health, 3CCV-20-0000394,
(Oct. 21, 2020); and Steiner v. Dep't of Health, 3CCV-20-0000398, (Oct. 23, 2020) (collectively, "Lawsuits").
^^See Letter From: Commission To: K. Kawaoka Re: Public
Utilities Commission Docket No. 2019-0333, "Inguiry Regarding Environmental Review Pursuant to Hawaii Revised Statutes ("HRS") Chapter 343," filed on January 21, 2021; see also HRS Chapter 343.
2019-0333 5
EIS or Supplemental EIS is required.OEQC further explained
that would only become involved in addressing this issue
"when an applicant requests approval for a proposed action and two
or more state or county agencies with jurisdiction are unable to
determine which agency should be the accepting agency.
II.
DISCUSSION
A.
Environmental Review
HEPA governs environmental review in Hawaii.
HEPA states, in relevant part:
§343-5 Applicability and requirements.
(a) Except as otherwise
an environmental assessment shall be required for actions that:
Propose the use of state or county lands or the use of state or county funds, other than funds to be used for feasibility or planning studies for possible future programs or projects that the agency has not approved, adopted, or funded, or funds to be used for the acquisition of unimproved real property; provided that the agency shall consider environmental factors and available alternatives in its feasibility or planning studies; provided further that an
^^Letter From: K. Kawaoka To: Commission Re: Docket
No. 2019-0333, filed on February 16, 2021 ("OEQC Letter").
21QEQC Letter (emphasis in original).
2019-0333
environmental assessment for under section 205-2(d)(11) or 205-4. shall only be section 205-5(b);
uses a)(13)
any use within any land classified as a conservation district by the state land use commission under chapter 205;
Propose any use within a shoreline area as defined in section 205A-41;
Propose any use within any historic site as designated in the National Register or Hawaii Register, as provided for in the Historic Preservation Act of 1966, Public Law 89-665, or chapter 6E;
Propose any use within the Waikiki area of Oahu, the boundaries of which are delineated in the land use ordinance as amended, establishing the "Waikiki Special District'';
(6) Propose any amendments to existing county general plans where the amendment would result in designations other than agriculture, conservation, or preservation, except actions proposing any new county general plan or amendments to any existing county general plan initiated by a county;
Propose any reclassification of any land classified as a conservation district by the state land use commission under chapter 205;
(8) Propose the construction of new or the expansion or modification of existing helicopter facilities within the State, that by way of their activities, may affect:
(A) Any land classified as a conservation district by the state land use commission under chapter 205;
(B) A shoreline area section 205A-41; or
as defined in
2019-0333
historic site as designated in the National Register or Hawaii Register, as provided for in the Historic Preservation Act of 1966, Public Law 89-665, or chapter 6E; or until the statewide historic places inventory is completed, any historic site that is found by a field reconnaissance of the area affected by the helicopter facility and is under consideration for placement on the National Register or the Hawaii Register of Historic Places; and
(9) Propose any:
(A) Wastewater treatment unit, except an individual wastewater system or a wastewater treatment unit serving fewer than fifty single-family dwellings or the eguivalent;
(B) Waste-to-energy facility;
Landfill;
(D) Oil ; or
(E) Power-generating facility 22
"HEPA's purpose is to establish a system of
environmental review which will ensure that environmental
concerns are given appropriate consideration in decision making
22hRS § 343-5. The Commission notes that HEPA defines Power generating facility as "(1) A new, fossil-fueled, electricity-generating facility, where the electrical output rating of the new eguipment exceeds 5.0 megawatts; or (2) An expansion in generating capacity of an existing, fossil-fueled, electricity-generating facility, where the incremental electrical output rating of the new eguipment exceeds 5.0 megawatts.'' HRS § 343-2.
2019-0333
along with economic and technical considerations .''^3 hEPA requires
an environmental assessment if the following four conditions are
met: (1) the proposed activity is an "action'' under HRS § 343-2;
the action proposes one or more of the nine categories of
land uses or administrative acts enumerated in HRS § 343-5 (a);
the action is not declared exempt pursuant to
HRS § 343-6(a)(2); and (4) in cases where the proposed action is
initiated by a private party for approval by a government agency,
that the agency exercises discretionary consent in the
approval pro cess.
HAR § 11-200.1-30 governs supplemental EIS
It states, in relevant part:
An EIS that is accepted with respect to a particular action is usually qualified by the size, scope, location, intensity, use, and timing of the action, among other things.An EIS that is accepted with respect to a particular action shall satisfy the requirements of this chapter and no supplemental EIS for that proposed action shall be required, to the extent that the action has not changed substantively in size, scope, intensity, use, location, or timing, among other things. If there is any change in any of these characteristics which may have a significant effect, the original EIS that was changed shall no longer be valid because an essentially different action would be under consideration and a supplemental EIS shall be
r V. Dep't of Land & Nat. Res., ( 140 Hawaii 500, 515 (2017) (citation omitted).
2^See Umberger, 140 Hawaii at 512.
2019-0333 9
prepared and reviewed as provided by this chapter (emphasis added).
"For an EIS to meet its intended purpose, it must assess
a particular project at a given location based on an explicit or
implicit time frame."^5
B.
Positions Regarding Environmental Review
1.
Puna Pono
Puna Pono argues that "[t]he Commission may issue an
order approving the PPA only after completion of the HEPA review
process."26 Puna Pono further argues that although PGV voluntarily
submitted an EIS to the County of Hawaii in 1987 ("1987 EIS") ,
the 1987 EIS is not relevant to the proposed expansion. Puna Pono
states that HAR § 11-200.1-11(d) "provides that agencies
'shall not, without careful examination and comparison, use past
determinations and previous EISs to apply to the action at hand'
and requires the thorough review of previous determinations to
25Unite Here! Local 5 v. City & County of Honolulu, ("Unite Here") 123 Hawaii 150, 177 (2010).
26puna Pono SOP at 8 (emphasis added).
2~^See Puna Pono SOP at 8. A copy of the 1987 EIS is available at http://oeqc2.doh.hawaii.gov/EA EIS Archive/1987-ll-23-HA-EIS- Puna-Geothermal-Venture-Proj ect.pdf.
2019-0333 10
assure that they are substantially relevant to the action being
considered.Puna Pono explains that many changes have occurred
in the decades since the 1987 EIS, including geological changes
related to the 2018 Kilauea eruption, associated seismic activity,
and greenhouse gas considerations.
2 .
Consumer Advocate
The Consumer Advocate does not oppose Commission
approval of the Application, provided that Hawaiian Electric
engages "in meaningful two-way communications regarding
environmental studies and possible mitigation measures to address
concerns that may have resulted from the 2018 volcanic activity.
The Consumer Advocate notes that there are actions pending before
State agencies "related to whether an Environmental Impact
Statement ('EIS') is necessary for PGV's project, as well as PGV's
application to amend its noncovered source permit with the
Department of Health ('DOH') for its new expanded 46 [MW]
The Consumer Advocate proposes that Hawaiian Electric
2®Puna Pono SOP at 8 (guoting HAR § 11-200.1-11(d))
^^See Puna Pono SOP at 9-10.
^‘^Consumer Advocate SOP at 59.
^^Consumer Advocate SOP at 2.
2019-0333
file quarterly reports with the Commission on "the status of the
determination of whether an EIS is required'' for the Project. 32
3.
PGV
PGV believes that the Commission can rule on the
Application without triqqerinq environmental review pursuant to
HEPA. PGV states that HEPA requires environmental assessments for
"actions," which are defined as "any proqram or project to be
initiated by any aqency or applicant.PGV quotes the definition
of "project" in HAR § 11-200.1-2 as "a discrete,
planned undertakinq that is site and time specific, has a specific
qoal or purpose, and has potential impact to the environment[,]"
and the definition of "proqram" as "a series of one or more
projects to be carried out concurrently or in phases within a
qeneral timeline, that may include multiple sites or qeoqraphic
areas, and is undertaken for a broad qoal or purpose.
PGV arques that Hawaiian Electric's requests in the
Application (i.e., (1) a Commission rulinq that the PPA is exempt
^^Consumer Advocate SOP at 51.
33PGV Responses to PUC-PGV-IR-114, at HRS §§ 343-5(a), 343-2).
3^PGV Responses to PUC-PGV-IR-114, at 1 n HAR § 11-200.1-2).
2019-0333 12
from the competitive bidding framework ("Framework''), or.
a waiver from the Framework;
Commission approval of the PPA; (3) a Commission ruling that
the PPA, and the payment
in the public interest; and
thereunder, are prudent and
approval of Hawaiian Electric's
proposed cost recovery) "are not 'actions' as defined in
HAR § 11-200.1-2 since they do not constitute an 'undertaking that
is site and time specific,' or have a 'potential impact to the
environment.'"^^ PGV further argues that any Commission ruling on
the Application would not constitute an "action" because
decision essentially deals with the receipt by
[Hawaiian Electric] of, and payment to PGV for, energy and firm
capacity, which again do not constitute an undertaking or pose a
potential impact to the environment."^^
4 .
Hawaiian Electric
Hawaiian Electric addresses the PGV Letters, noting that
Governor Ige "stated definitively that the Department of Land and
Natural Resources [("DLNR")] considered the issue and
35pGV Responses to PUC-PGV-IR-114, at 2 HAR § 11-200.1-2).
36pGV Responses to PUC-PGV-IR-114 at 3.
2019-0333 13
'concluded that a new or supplemental environmental review
is not required. r //37 Hawaiian Electric also addresses the
DOH Determination, which indicated that "that no further
compliance with Chapter 343 was required with respect to
the Air Permit.''^® Based on the Governor Response and the
DOH Determination, Hawaiian Electric states "[a]s an EIS has been
determined not to be required for the Project, [Hawaiian Electric]
believes this issue to be moot and does not intend to file any
further determination as to whether an EIS is required for
the Proj ect.//39
In response to Commission IRs, Hawaiian Electric
indicates that the Governor Response "does not expressly address
the expansion or PPA'' (i.e., the Project).Hawaiian Electric
further indicates that DOH's Clean Air Branch "is aware of the
pendinq chanqes to the project and a permit amendment would be
required to reflect the chanqes in equipment and the increased
power capability, consistent with past practice even prior to
^^Hawaiian Electric RSOP at 13 (quotinq Governor Response at 1) .
^^Hawaiian Electric RSOP at 13 (citinq DOH Determination).
^^Hawaiian Electric RSOP at 13.
^'^Hawaiian Electric Response to PUC-HELCO-IR-122 (a) at 1.
2019-0333 14
the 2018 eruption.Nevertheless, Hawaiian Electric states its
"understanding that Chapter 343 compliance has not been required
for such amendments in the past.''^^ Finally, Hawaiian Electric
states that in making the DOH Determination, DOH "reviewed and
incorporated all of the records, documents, demands, opposition to
demands, and comments into the record decision and additionally
incorporated into the record the DLNR's previous decision of
September 8, 2019 that a new or supplemental environmental review
is not required for PGV's operations.
Hawaiian Electric states that the Application does not
constitute an action as defined by HAR § 11-200.1-2 "because the
[A] pplication is for neither a program nor a project.
Essentially, Hawaiian Electric argues that when the Commission
approves a PPA it is not approving the construction of generation
facilities associated with that power purchase agreement,
and although construction and/or operation could trigger
environmental review under HEPA, Commission approval of a PPA is
^^Hawaiian Electric Response to PUC-HELCO-IR-122(b) at 2 (citing Declaration of Darin W.C. Lum, Department of Health State of Hawaii, In Re Puna Geothermal Venture, NSP NO.0008-02-N, Application for Renewal No. 0008-13, Docket Nos. 15-CWBN-8-13, 19 CWBN-5-24).
^^Hawaiian Electric Response to PUC-HELCO-IR-122(b) at 2.
^^Hawaiian Electric Response to PUC-HELCO-IR-122(b) at 2.
^^Hawaiian Electric Response to PUC-HELCO-IR-123(a) at 1.
2019-0333 15
too attenuated from construction and/or operation to trigger
environmental review.
C.
Analysis
1.
HEPA
The Hawaii Supreme Court's 2017 Umberger decision held
that the term "action" should be construed broadly to effectuate
HEPA's purpose. The Court stated that "the word 'action' has not
been (and should not be) narrowly construed. The Court also
broadly construed the term "state lands," as set forth in
HRS § 343-5 (a) (1), to include "lands and State marine waters
seaward of the shoreline under the State's jurisdiction [.]"^^
^^See Hawaiian Electric Response to PUC-HELCO-IR-123 (a) at 2-4 (citing Niagara Mohawk Power Corp. v. Pub. Serv. Comm'n of State of N.Y., 138 A.D.2d 63 (N.Y. App. Div. 1988); the California Public Utilities Commission's Resolution E-4851 (2017), available at
https://docs.cpuc.ca.gov/PublishedPocs/Published/GOOD/Ml 91/K484/ 191484091.PDF; and In re Hawaiian Elec. Co., Docket No. 2013-0423, Order No. 32600, filed on December 31, 2014 ("Order No. 32600").
^^See Umberger, 140 Hawaii at 515 (stating "[t]he purpose of HEPA and the legislature's intent in enacting HEPA indicate that it was not meant to be applied only to a narrow set of activities.") .
^~^See Umberger, 140 Hawaii at 516.
^®See Umberger, 140 Hawaii at 522.
2019-0333 16
With this explicit direction from the Court to broadly interpret
the meaning of "action'' and the Court's similarly broad
interpretation of "state lands," the Commission views the Project
as follows.
HEPA requires an environmental assessment if the
following four conditions are met: (1) the proposed activity is an
"action" under HRS § 343-2; (2) the action proposes one or more of
the nine categories of land uses or administrative acts enumerated
in HRS § 343-5(a); (3) the action is not declared exempt pursuant
to HRS § 343-6(a)(2); and (4) in cases where the proposed action
is initiated by a private party for approval by a government
agency, that the agency exercises discretionary consent in the
process.
Whether the proposed activity is an "action" under
HRS § 343-2, Pursuant to HRS § 343-2, "action" means any program
or project to be initiated by any agency or applicant.
"Agency" means any department, office, board, or commission of the
state or county government which is a part of the executive branch
of that government. "Applicant" means any person who, pursuant to
statute, ordinance, or rule, officially requests approval for
a proposed action. Here, Hawaiian Electric has requested
Commission approval of the PPA, which, if granted, would allow
Hawaiian Electric to purchase additional electricity
from PGV that PGV could only generate by expanding its generator
2019-0333 17
(i.e., constructing the Project). Pursuant
direction to broadly interpret HEPA actions, the Commission cannot
conclude, based on these circumstances, that PPA approval is too
attenuated from the Project's construction to trigger
environmental review. Using this broad interpretation of HEPA
actions, Hawaiian Electric constitutes an "applicant," and its
reguest to purchase power from an expanded power generating
facility an "action" under the statute. Therefore, the first
condition reguiring environmental review under HEPA is met.
Whether the action proposes one or more of the
nine categories of land uses or administrative acts enumerated in
HRS § 343-5(a). HRS § 343-5(a)(1) requires environmental
assessments for actions that use State or county lands.
Although PGV is on private property, as PGV acknowledges,
"'[a]11 minerals in, on, or under state lands or reserved lands
are reserved to the State[,]'" and PGV's operations have been
conducted pursuant to a "geothermal mining lease on reserved lands"
as provided under HRS §§ 182-5 and 182-7.^9 other words,
PGV's operations are dependent on geothermal resources that are
reserved for the State, which PGV can only access via a special
State lease.Given Umberger' s broad interpretation of
^SpGV Response to PUC-PGV-IR-115(b).
5QSee PGV Responses to PUC-PGV-IR-115(b)-(c
2019-0333 18
state lands, the Commission believes that PGV's use of geothermal
resources is a use of state lands within the meaning of
HRS § 343-5(a)(1). Therefore, the second condition reguiring
environmental review under HEPA is met.
Whether the action is not declared exempt pursuant to
HRS § 343-6(a)(2). HRS § 343-6(a)(2) refers to rules promulgated
by the environmental council, i.e., HAR §§ 11-200.1-15-17.
HAR §§ 11-200.1-15 lists many types of exemptions, but none
applies to the facts at hand. Therefore, the third condition
reguiring environmental review under HEPA is met.
Whether the Commission exercises discretionary consent
in the approval process. Hawaiian Electric, a private party,
reguests that the Commission, a government agency, approve the
PPA. HRS Chapter 269 gives the Commission the discretion to
approve or deny Hawaiian Electric's reguest.Because the
Commission has the discretion to approve or deny
Hawaiian Electric's reguest, the fourth condition reguiring
environmental review under HEPA is met.
In sum, all four HEPA conditions are met, and the
Commission finds that HEPA applies to the Project and
Hawaiian Electric's Application.
siSee HRS §§ 269-16.22, 27.2.
2019-0333 19
2 .
HAR § 11-200.1-30
In 1987, PGV
which the County of Hawaii approved
an EIS,
The 1 987 EIS would
otherwise HEPA's environmental review requirements, but.
as discussed below, changes to PGV's generator proposed in the PPA
- specifically the expanded generation capabilities and the new
30-year PPA term - require supplemental environmental review.
"For an EIS to meet its intended purpose, it must assess
a particular project at a given location based on an explicit or
implicit time frame.The 1987 EIS contemplated a 35-year useful
life of PGV's generator - from 1 987 until 2022.^^ The 1987 EIS
specifically contemplated decommissioning PGV at the end of its
useful life.^^ The Application proposes to extend PGV's useful
life until 2052.^^ The 1987 EIS does not cover the new PPA
because the new PPA's time frame - from the date of approval
until 2052 - goes three decades the action covered by
^^Letter From: G. Sumida K. Kawaoka Re: Public Utilities
Commission Docket No. 2019-0333, "Inquiry Regarding Environmental Review Pursuant to Hawaii Revised Statutes ('HRS') Chapter 343," filed on January 27, 2021.
^^Unite Here, 123 Hawaii at 177.
5^See 1987 EIS at ES-2, 2-45.
55see 1987 EIS at 2-45.
5^See Application at 16.
2019-0333 20
the 1987 EIS.^^ HAR § 11-200.1-30 states that an EIS, "is usually
qualified by the size, scope, location, intensity, use, and timing
of the action, among other things.UAR § 11-200.1-30 further
states that "[i]f there is any change in any of these
characteristics which may have a significant effect, the original
EIS that was changed shall no longer be valid because an
essentially different action would be under consideration.
In light of the new proposed 30-year term of the PPA,
which reflects a significant change in timing, requiring
supplemental environmental review pursuant to HAR § 11-200.1-30 is
reasonable under the circumstances.
Significant changes in project scope and/or intensity
may also trigger new or supplemental environmental review pursuant
to HAR § 11-200.1-30, independent of the timing factor. Here,
the Application proposes to increase PGV's maximum generating
^^See Unite Here, 123 Hawaii at 178, finding that a resort expansion project was not covered by its original EIS, due to a change in timing, even though project was unchanged in terms of size, scope, location, intensity (stating "over twenty years have passed since the approval of the 1985 EIS; (2) the evidence demonstrates that environmental impacts were examined only through 2000; and (3) the project is not yet completed, we conclude that the project, although unchanged in terms of size, scope, location, intensity, and use, is — due to the change in timing — an essentially different action, thereby rendering the original statement no longer valid.'') (internal citations and
^®HAR § 11-200.1-30 (emphasis added)
^^HAR § 11-200.1-30 (emphasis added)
2019-0333 21
capacity from 38 MW to 46 MW by replacing the existing ten energy
converters with two larger energy converters. Replacing PGV's
existing energy converters with new, larger energy converters is
expected to increase PGV's scope (due to the larger eguipment),
as well as its intensity (due to the increased generating
, HAR § 11-200.1 does not define the terms
"scope" or "intensity," the proposed changes to PGV are of such
significance that they can be reasonably construed to fall under
the language and purpose of HAR § 11-200.1, thus triggering
supplemental environmental review.
In summary, the PPA proposes to significantly change the
timing, scope, and/or intensity of the original action covered by
the 1987 EIS. Pursuant to HAR § 11-200.1-30, these changes require
supplemental environmental review. This conclusion is consistent
with DOH's conclusion that "a permit amendment would be required
reflect the in equipment and the increased
power capability, consistent with past practice even prior to the
2018 CiV-lll-l-h-i r-lT-1 ''61
^^See Application at 20-21.
^^Hawaiian Electric Response to PUC-HELCO-IR-122(b) (citing Declaration of Darin W.C. Lum, Department of Health State of Hawaii In Re Puna Geothermal Venture, NSPNO.0008-02-N, Application for Renewal No.0008-13, Docket Nos. 15-CWBN-8-13, 19-CWBN-5-24).
2019-0333 22
D.
Next Steps
Suspending the Docket
HRS § 269-16.22 gives the Commission broad authority to
review power purchase agreements. In exercising this authority,
the Commission typically reviews the contract price, whether the
purchased power arrangements are in the public interest
(including consideration of the effect of the State's reliance on
fossil fuels, fossil fuel price volatility, the export of funds
for fuel imports, fuel reliability and supply risk, and greenhouse
gas emissions, as reguired by HRS § 269-6), the utility's proposed
cost recovery, and the utility's proposed ratemaking treatment.
The Commission does not review the environmental issues related to
the power purchase agreement, such as land use and air permits.
Likewise, for power purchase agreements for electricity generated
from non-fossil fuels, HRS § 269-27.2 reguires the Commission to
"de-link" the "price of fossil fuels and the rate for the nonfossil
fuel generated electricity" and approve power purchase agreements
that the Commission finds to be: "(1) Just and reasonable;
Not unduly prejudicial to the customers of the public utility;
^^See, e . g. , Order No. 37090 at 21-22
^^See Order No. 32600 at 79-80.
2019-0333 23
Promotional of Hawaii's long-term objective of energy
self-sufficiencv; (4) Encouraaina to the maintenance or
development of nonfossil fueled sources of electrical energy;
and (5) In the overall best interest of the general public.
Nothing in HRS Chapter 269 explicitly authorizes the Commission to
be an accepting authority for environmental review. 65
The Commission is concerned about assuming powers not
granted by law, and especially concerned about assuming
responsibilities that are granted to other agencies (such as DOH's
responsibility for air permit review, DLNR's responsibility for
geothermal leases,and the County of Hawaii's responsibility for
construction and building permits^®). Moreover, as a practical
matter, DOH, DLNR, and the County of Hawaii have significant
relevant expertise to perform the necessary environmental review
for PGV that the Commission lacks.
s^HRS § 269-27.2.
^^Contra HRS § 269-6(b), which explicitly reguires the
Commission to consider the State's reliance on fossil fuels, fossil fuel price volatility, the export of funds for fuel imports, fuel reliability and supply risk, and greenhouse gas emissions.
^^See HRS Chapter 342B.
^~^See HRS Chapter 182.
^^See HRS §§ 46.4 , 444-9.1.
^^DOH reviews PGV's air emissions permit, DLNR reviews PGV's geothermal permits, and the County of Hawaii reviewed PGV's 1987 EIS.
2019-0333 24
Given the Commission's lack of express statutory
authority and subject matter expertise, the Commission cannot be
the accepting authority for PGV's supplemental environmental
review. Given the presence of at least three agencies with
authority and relevant expertise, the Commission directs
Hawaiian Electric to work with PGV, DOH, DLNR, and the
County of Hawaii to determine the appropriate accepting authority
for supplemental environmental review. Hawaiian Electric and PGV
can reach out to OEQC, pursuant to HRS § 343-5(f), to resolve any
guestions regarding the appropriate accepting authority.
Conseguently, the Commission will suspend this
proceeding pending the acceptance of a supplemental environmental
review for the Project by the appropriate accepting authority.
Notwithstanding this suspension, Hawaiian Electric shall keep the
Commission updated as to the status of the
environmental review for the Project via guarterly reports in this
docket, beginning on July 1, 2021. These guarterly
identify the lead party responsible for
reports shall
the
environmental review, the accepting agency, the timeline for the
environmental review, and all subseguent permits, including each
permit reguired for the Project, the
obtaining that permit approval, the
granting that permit approval, and the
receiving that approval.
responsible for
responsible for
projected timeline for
2019-0333 25
In light of the Commission's suspension of this
it dismisses Hu Honua's pending Motion to Compel
Answers to Information Reguests, filed on August 26, 2020, as moot.
2 .
PPA Renegotiations
The Commission is aware that Hawaiian Electric
"must provide notice no later than December 31, 2022 if it desires
to terminate the Original PPA upon the end of its stated term,"
and that renegotiation "is warranted at this ^ "lo
of this deadline, the Commission directs
Hawaiian Electric to continue its renegotiation efforts in
parallel with the pending environmental review. Hawaiian Electric
shall make every reasonable effort to have a new or
revised application for an amended PPA ready to file with the
Commission immediately upon completion of the supplemental
environmental review. In conducting its renegotiation efforts,
Hawaiian Electric shall explicitly consider the following factors:
new pricing should go in effect on a date certain and not be
to tied contract milestones where the date could vary,
such as completed construction; (2) reduced pricing should reflect
market conditions; and (3) firm commitments to retire
^'^Application at 10.
2019-0333 26
existing fossil generation and actionable plans for
beneficial electrification.
Effective date of new pricing. The Application
indicates that the transition to new, lower pricing would be
complete only after the Project is completed.This appears to
leave terms of the current PPA open-ended if new upgrades are not
finished. Although this outcome may be unlikely, it appears that
if PGV never initiates or completes the new upgrades, the current
pricing terms could remain for the full term of the PPA. In any
renegotiated contract with PGV, Hawaiian Electric shall include a
definite end date to the existing contract pricing, so that the
Commission can accurately determine when that new contract could
start delivering benefits to Hawaiian Electric's customers.
Updated pricing. The pricing terms
are a significant improvement over the terms
in the PPA
in effect.
However, they are not as advantageous to customers as the recent
solar plus storage pricing seen in the Phase 1 and 2 procurements .
The Commission recognizes the technology differences inherent in
these PPAs, as well as system benefits that result from resource
Nevertheless, Hawaiian Electric must strive to
negotiate and propose a demonstrably beneficial pricing structure
’^^See Application at 14.
’^^See generally. Docket No. 2017-0352
2019-0333
for its customers, which the Commission will review as part of any
new or revised application.
Fossil retirements and beneficial electrification.
Hawaiian Electric must also provide clear, firm commitments to
retire specific fossil generation units. The proposed PGV
expansion, among other renewable generation projects, would make
Hawaii Island an ideal location to realize the near-term promise
of an affordable, low-carbon future for electricity, as well as
other sectors. Recent discussions regarding the Phase 3 RFP for
renewable generation for Hawaii Island seem to indicate
Hawaiian Electric's reluctance to expand beyond current plans that
anticipate reaching 80% of its Renewable Portfolio Standards
("RPS"). Realizing significant decarbonization of other sectors
from clean electricity will reguire shooting well past 100% of
today's and future projected needs, Hawaiian Electric must plan to
build for much higher levels of demand for clean electricity.
Overall, the significant renewable energy potential under the PPA,
in addition to other projects slated for Hawaii Island, make the
most sense when coupled with aggressive plans to
other sectors that can be fueled by competitively priced,
excess low-carbon electricity. Transportation is a prime
candidate, but there are other industries that could similarly
benefit from cost-competitive clean electricity. At a minimum,
Hawaiian Electric should develop actionable plans for
2019-0333 28
transportation, creating and using hydrogen from
excess low-carbon electricity, and promoting electricity-intensive
(e.g., water pumping or
Hawaiian Electric should also consider any other beneficial use of
excess clean electricity.
Ill.
ORDERS
THE COMMISSION ORDERS:
1. This docket is suspended pending completion and
acceptance of a supplemental environmental review by the
2. Hawaiian Electric shall work with PGV, DOH,
DLNR, the County of Hawaii, and/or any other relevant agency to
determine the appropriate accepting authority for supplemental
environmental review.
3. Hawaiian Electric shall continue negotiations
towards a new or revised amended and restated power
agreement with PGV and make every reasonable effort
that new or revised amended and restated power purchase
upon the completion and acceptance of the
environmental review.
4. Hu Honua's Motion to Compel is dismissed as moot.
file
2019-0333 29
5. Notwithstanding the suspension of this docket,
Hawaiian Electric shall provide quarterly updates on the status of
the supplemental environmental review and permitting in this
docket, beginning on July 1, 2021.
DONE at Honolulu, Hawaii MARCH 31, 2021
PUBLIC UTILITIES COMMISSION OF THE STATE OF HAWAII
2019-0333.ljk
s P. Griffin Chair
Jennifer Potter
Leodolaff R. Asunc Commissioner
APPROVED AS TO FORM:
Mike S. Wallerstein Commission Counsel
2019-0333 30
CERTIFICATE OF SERVICE
Pursuant to Order No. 37043, the foregoing Order was
served on the date it was uploaded to the Public Utilities
Commission's Document Management System and served through the
Document Management System's electronic Distribution List.
FILED
2021 Mar31 PM 15:17
PUBLIC UTILITIES COMMISSION
The foregoing document was electronically filed with the State of Hawaii Public Utilities
Commission's Document Management System (DMS).