04-08-2012, 05:14 AM
The main reason our power bills have not been lowered by the current geothermal production is the "avoided cost" formula of pricing. This state regulatory policy pays the geothermal producers the same amount that the electricity would cost if produced by the non-geothermal means, which in our case is oil. The rationale for this was to insure that somebody would take the risk to invest in geothermal. It worked, and we have a working, financially viable system in place, but the regulatory process needs to be changed to reflect a more reasonable profit margin on geothermal production. I understand that even the producers have agreed to price new geothermal on a cost plus margin basis vs. avoided cost. The fossilized and HELCO-dominated Hawaii regulatory bodies have not been quick to embrace this change, however, and I'm not sure whether the changes have been formally enacted. Perhaps someone could enlighten us.
Bottom line for me is that geothermal has proven its financial advantages, but is locked into a pricing structure that is outdated. Safety and environmental issues can and have been addressed. The existing facility had a blow-out twenty years ago, but, as Mr. Ha notes, the technology has progressed considerably in that time. Still, I think that with an island that is indeed "big," we should look to locating new geothermal plants as far away from heavily populated areas as possible. Geothermal can be done right. My biggest question is whether the Hawaii policitians on both sides of this can be objective and fair enough to do it and do it right.
Bottom line for me is that geothermal has proven its financial advantages, but is locked into a pricing structure that is outdated. Safety and environmental issues can and have been addressed. The existing facility had a blow-out twenty years ago, but, as Mr. Ha notes, the technology has progressed considerably in that time. Still, I think that with an island that is indeed "big," we should look to locating new geothermal plants as far away from heavily populated areas as possible. Geothermal can be done right. My biggest question is whether the Hawaii policitians on both sides of this can be objective and fair enough to do it and do it right.