Renewable Energy Proposal Changes Direction

Ikehu Molokai — the project proposed jointly by Princeton Energy and Molokai Ranch with the goal of lowering the island’s electricity rates and creating a 100 percent renewable energy source – has changed directions since its inception. Steve Taber, the CEO of California-based company Princeton, now says after community concerns, plans do not include the stored hydro energy system above Manila Camp originally proposed.

Taber said now that meetings have been held with Manila Camp residents and other groups around the island, two major concerns arose with the company’s project. The original intention involved installation of nearly 100 acres of solar panels, an approximately 10-acre water reservoir, and a pumping and turbine station located above or near Manila Camp. While the solar panels charge during the day, energy would be used to pump about 19 million gallons of water uphill to Molokai Ranch’s existing reservoirs, according to Taber. At night, the water would run back down through the turbines to generate a constant flow of electricity.

But residents did not support the impacts the project could have on the Manila Camp community, including noise from the generation station, and idea of large reservoir above their homes made them worried in the case of earthquake or other natural disasters that might cause a breach in the reservoir.

Others expressed concern about the impact the project could have on Molokai’s water supply. While Taber said the closed pumping system would not take any water from general use, he acknowledged the anxieties.

“We felt the impacts could be mitigated but we heard [the concerns] loud and clear,” he said.

As a result of the concerns, Princeton and Molokai Ranch have “gone back to the drawing board” and decided to take the pumped hydro out of the equation, Taber said. Currently they are proposing solar array be moved to a new location in the industrial area near Maui Electric’s power plant. Instead of pumped hydro to supply energy at night when solar panels are not generating electricity, the system would rely on battery storage.

Tabor said under the proposed system, Princeton would sell electricity to Maui Electric and ratepayers’ bills would still come from the utility.

“This is a community-based project for us and still a work in progress,” Taber emphasized. He and his wife and business associate, Andrea, attended a meeting of the Molokai Clean Energy Initiative (MCEI) two weeks ago.

The MCEI was developed by I Aloha Molokai (IAM), a local group advocating community-based renewable energy solutions for Molokai. The group has been meeting regularly and has included state and county energy officials, potential energy developers, representatives from Hawaii and Maui Electric utilities, state-wide energy experts and Molokai residents.

State Bonds for Project
Taber said Ikehu Molokai depends on federal tax credits of 30 percent that expire in 2016 to make the project finally feasible to offer rate relief for residents. That deadline has caused the company to seek a fast track for breaking ground on the project.

In addition to those tax credits, Ikehu organizers have sought the assistance of Hawaii legislators to pass two concurrent bills through the state House and Senate that would authorize the state’s issuance of up to $50 million in special purpose revenue bonds to help fund the project if it moves forward.

“Bonds are important for maximizing the project for residents… and will translate to rate relief,” said Taber, emphasizing that the bonds come from private sources and not public money. “It’s not a permit or approval of project. It just says if the project is approved and supported, only then will it be eligible for bonds.”

But IAM has officially opposed the bill because members say the bill was introduced without their input.

“…We were taken aback when we were asked to support these bills… Where was our participation in this?” said Kanohowailuku Helm, IAM president.

Taber said there was only a short window to submit the bills and Princeton and Molokai Ranch planners didn’t have time to come to the community before the legislative process moved forward. He said while they could have waited until next legislative season to submit the request for bonds, which would have significantly set back the project’s tight timeline.

Taber said he was astounded when IAM didn’t support the bills.

“We were shocked that you would oppose this,” said Taber. “I was hurt. This project is a labor of love for us… We love this island even though we don’t live here.”

The conversation became heated as IAM members questioned Princeton’s financial motivation for Ikehu. Taber said he doesn’t know yet the revenue the company will make but expects it to be “standard,” adding that “we’re not a profit-maximizing group.”

“If the project isn’t welcome here, that’s fine – we could make more money elsewhere,” Taber said.

Zeke Kalua, executive assistant in the mayor’s office but born and raised on Molokai, shed some perspective on the conflict.

“People like Kanoho [Helm] have been here their whole life,” he continued. “I would not take their decision not to support [the bill] as being personal. Because… [his kids] need to make sure their kids’ kids can grow up like they did. Any new technology… still needs to pass the muster of the people that are here…. deep down, everyone just wants to do the best for the island.”

Kalua advised Taber to be patient and try to work with the community as much as possible.

Helm said there’s uncertainty regarding the project for residents because Princeton cannot offer assurance of their goals becoming reality.

“You don’t set rate relief. In the end, it’s the PUC [Public Utilities Commission] that sets [rates],” he said. “So how are we assured that we’re going to get rate relief and that this project will be community-driven? We don’t have that assurance and that’s why we didn’t support [the bill].”

IAM issued a statement saying that Princeton has not been able to supply engineering reports, financial projection or other plans, and for that reason, it opposed the bills.

Taber said his company made a conscious decision to bring the project to the community early in the planning process.

“We don’t have answers to all the questions yet,” he said. “[We want the plan] to develop collaboratively.”

He also said in order to make financial projections for Ikehu, they would need to know if the bonds will be available.

Of the two concurrent bills, House Bill 1942 passed the first reading in the House on Feb. 28, and accompanying Senate Bill 2754 has been referred to the Ways and Means and Energy and Environment committees.

Unrealistic Timeline?
With a project timeline that currently relies on breaking ground before 2016 to utilize the federal tax credits, some energy experts and Molokai residents have said Ikehu’s tight deadline is unrealistic.

“Sixteen to 18 months might sound like a lot of time right now, but on Molokai… even small things sometimes take 16 to 18 months,” said resident Matt Yamashita, who works with Rising Sun Solar to install rooftop solar panels on the island. “[That’s] going to be really rushed for this community.”

Yamashita encouraged Taber to consider a plan B, assuming the 2016 deadline may not be met. He suggested Taber make an outline for the community laying out various options and timeframes, and let residents add input on whether or not they want to help fast-track the project.

Taber agreed, but added that if the deadline is missed, there’s no guarantee of federal subsidies after that. If more subsidies do become available, he said, they’re likely to be much smaller.

“The tax credit expiring in 2016 brings down the cost by 30 percent,” he said. “If you lose that subsidy, have to increase the price by the same amount… [though] there may be other ways.”

IAM member and engineer Peggy Bond advised both developers and residents to be careful of rushed projects, which sometimes don’t function as well as planned.

“I’m concerned when the motivation for a hurry is the money and not the technology,” said Bond.

In order for the project to move forward, a number of permitting steps need to take place that are known to be lengthy. One of those is a Power Purchase agreement with Maui Electric, and another is permitting through the PUC.

“PUC approval has never happened in less than a year,” said Henry Curtis, executive director of Hawaii environmental nonprofit Life of the Land. “I don’t think the timeline is realistic.”

Curtis said Maui County is cutting edge compared to the rest of the nation in terms of the amount of incorporated renewable energy, but added that solutions to the challenges of the modern electric grid remain unsolved.

Despite challenging the project, many MCEI attendees advocated continued discussions with the Ikehu team and acknowledged the tough position outside groups have in offering proposals to the community.

“When people come in like this, we have to have an open mind,” Yamashita reminded fellow residents. “Yes, new projects and technologies make us concerned – that’s part of the process. But as a community we have to remember there are a lot of other solutions better than what we have now. We don’t want to chase opportunity off the island or we’ll be stuck with a dinosaur [the current electric grid].”

Andrea Taber said they plan to come back to the island at the end of March or early April to hold meetings with the entire community. She said they will advertise the meetings in mass mailers, on their website, ikehumolokai.com and in the Dispatch.