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Geothermal plant in Hawaii must overcome lava, regulatory flows to reopen

Repairing damage from the May 2018 Kilauea Volcano eruption on the Island of Hawaii is not the only challenge facing the Puna Geothermal Venture I geothermal power plant.

Lava-covered wells are being cleared and transmission equipment is being replaced, but state regulators are demanding that Hawaii Electric Light Co. Inc. and Puna Geothermal Venture comply with certain regulatory requirements before the facility reopens as well.

The 38-MW plant provided 25% of the Island of Hawaii's electricity before it was shut down after Kilauea erupted on May 3, 2018. Puna Geothermal, a subsidiary of Ormat Technologies Inc., aims to put the plant back into operation by the end of 2019, Ormat CEO Isaac Angel said in a Feb. 27 earnings call.

To that end, HELCO, a Hawaiian Electric Industries Inc. subsidiary, in a March 8 letter told the Hawaii Public Utilities Commission that it had reached an agreement with Puna to rebuild an electric substation and replace two transmission lines connecting the plant that were destroyed by lava flows. Also, the companies continue to negotiate a possible amended power purchase agreement that would cut the link between prices HELCO pays for electric power from the plant and the cost of fossil fuel, the utility said. The negotiations, which started prior to the Kilauea eruption, could lower costs for utility customers, HELCO wrote.

SNL Image

Lava fountain shoots from a fissure on Kilauea volcano.
Source: U.S. Geological Survey

PUC Chair James Griffin responded that a regulatory proceeding and public hearing are required for the transmission line replacements. Moreover, if HELCO intends to file a re-negotiated power purchase agreement for the commission's review, the agreement must set pricing at a level that is competitive with currently-priced renewable energy, Griffin said in a May 9 letter.

HELCO may propose a shared-savings mechanism that allows it to keep a percentage of the ratepayer savings attributable to the renegotiated contract, according to Griffin. "If [Puna Geothermal] does come back online, it should be under circumstances that take advantage of this opportunity to benefit HELCO ratepayers by lowering the costs of the [power purchase agreement]."

On May 20, HELCO replied that it intends in June to file a transmission restoration application consistent with the commission's direction. While HELCO initially took the view that such regulatory proceedings were not required, the utility said it immediately ceased work on the lines, disconnected newly installed wires, and removed transmission conductors from poles outside the plant property as a result of the commission's directives. The utility said that four of the new wooden poles it installed on the plant site began to smolder due to residual underground heat, so the company plans to replace them with steel poles.

The facility is scheduled to come back on-line by Dec. 31, but it may take another year to get the plant up to "normal commercial operations," according to a rebuild agreement between HELCO and Puna.

In the 12 months prior to the volcanic eruption, Puna generated $43.7 million in revenue, Ormat's CEO said.