State PUC blocks biofuels deal

[Bullwinkle]

"HONOLULU (AP) — A Big Island electric utility's plan to buy liquid biofuel is too expensive, the state Public Utilities Commission said in a ruling blocking the deal.

It's the second time in two years state regulators rejected Hawaii Electric Light Co.'s plan to buy 16 million gallons of the alternative fuel a year from the developer of a proposed Big Island biofuel production facility.

The ruling says the contract price for Aina Koa Pono-produced biofuel is "unreasonable and inconsistent with the public interest," and too expensive when compared with the fossil fuel it would replace, the Honolulu Star-Advertiser (http://ow.ly/s65N5 ) reported Friday."

http://www.chron.com/business/energy/art...096330.php

[Justin]

I can't speak to the specifics of this particular plan, but in general I'm against bio-fuels, particularly here in Hawaii. Reason being, after traveling to areas that make a lot of biofuels (Brazil, Malaysia, Indonesia), it's really replacing taking one scarce resource (fossil fuels) with taking another scarce resource (native rainforests). Most if not all of the biofuels are grown in areas where native rainforests are cut down to plant crops (corn, soy, oil palms) that are used for biofuel. Well, I'd prefer to take oil out of the desert than trees out of the rainforest, particularly so in Hawaii where the rainforest is so small.

I recognize there is an impetus to get more renewable energy, but I'd much prefer to put solar panels in the middle of an unforested area than some crop in the middle of the rainforest.

[Frank]

taken from BigIslandnow article ... "Aina Koa Pono founder Kenton Eldridge told PBN that the company is negotiating with a Georgia firm for purchase of 24 million gallons of bio-diesel and that plans for the Kau production plant would go forward despite the PUC’s ruling."

soooo... tha cost is to expensive for HELCO but no for GEORGIA firm...i'm fail'in economics class ??

[Bullwinkle]

This also may be the reason the geothermal contract awards were delayed

"The PUC also said in a section of their decision entitled “Ratepayers Are Not Required to Ensure the Development of Biofuel Projects That Do Not Provide Them with Quantifiable Benefits” that “ratepayers should not be required to “ensure the economic returns [that are] necessary to attract project financing” for the construction and development of AKP’s bio-refinery on the island of Hawaii to produce and supply biofuel for the generation of electricity."

http://www.bigislandvideonews.com/2013/1...puc-again/

another good (much better) read.

I'm no lawyer - but my gut feeling is this is a huge ruling

[Guest]

quote:

---

Originally posted by Justin

I can't speak to the specifics of this particular plan, but in general I'm against bio-fuels, particularly here in Hawaii. Reason being, after traveling to areas that make a lot of biofuels (Brazil, Malaysia, Indonesia), it's really replacing taking one scarce resource (fossil fuels) with taking another scarce resource (native rainforests). Most if not all of the biofuels are grown in areas where native rainforests are cut down to plant crops (corn, soy, oil palms) that are used for biofuel. Well, I'd prefer to take oil out of the desert than trees out of the rainforest, particularly so in Hawaii where the rainforest is so small.

I liked Rob Tucker's idea about bringing some of the Indian electric car companies to Puna. We have lots of folks with solar panels. These would be great jobs.

I recognize there is an impetus to get more renewable energy, but I'd much prefer to put solar panels in the middle of an unforested area than some crop in the middle of the rainforest.

---

[Rob Tucker]

It is interesting how the NIMBY stuff works everywhere. Solar arrays proposed for the Mojave and Owens Valley have the locals protesting and insisting the projects should go elsewhere. Seems most everyone wants the energy as long as it is produced in someone else's back yard.

[Seeb]

The company wanted a guarantee of $200 a barrel. I checked when a few months ago and plan oil was trading for $45 a barrel

[Rob Tucker]

I recall reading HELCO's PUC application a couple years back and noticing that HELCO was wanting to abandon geothermal expansion and was planning on biodiesel at a very, very high rate per barrel. My assumption was that HELCO makes a percentage of profit based on costs and their profit is higher if the costs are higher.

HELCO is not much concerned with the rate payers.

[wax]

The contract guaranteed that HELCO would purchase all of their oil at $200/barrel for 20 years regardless of the market value of that oil. To ensure that HELCO could pay the premium all Hawaii Island and Oahu rate payers were to pay a surcharge. At the same time it was clear that far less expensive renewable resources were available at or below current costs - where oil is about $100/barrel. These include solar biomass and geothermal.

It left begging the question of why HELCO would even entertain such a contract. The PUC saw that a reasonable answer to that question was NEVER provided. Hence, after a year of deliberation the contract request was denied.

[Rob Tucker]

We can all be grateful to the PUC for that.