HECO gains
coal plant option

It could build an electricity facility
at Campbell Industrial Park, subject
to regulatory approvals

Hawaiian Electric Co. has received an option to build a second 180-megawatt coal-fired electricity plant at Campbell Industrial Park on Oahu.

Hawaiian Electric Industries AES Hawaii Inc., which operates the existing 180-megawatt coal-fired plant and sells power to Hawaiian Electric, has granted an exclusive option for Hawaiian Electric to acquire an interest in part of its property for a second coal unit, according to a filing with the state Public Utilities Commission.

HECO, in its 2002 Integrated Resource Plan, contemplated building such a plant by 2016, though the company's plans are not final.

"It just seemed like a reasonable thing to allow for an option down the road if and when we ever decided to pursue something like that," said Hawaiian Electric Co. spokeswoman Lynne Unemori. "It certainly doesn't mean there's a coal plant right on the horizon."

Coal burning produced 19.1 percent of HECO's electricity last year on Oahu, while oil produced 77 percent and biomass, or organic matter, produced 3.9 percent.

Unemori said if Hawaiian Electric decides to exercise the option to build a coal facility, the company would still face permitting hurdles and need approval of the Public Utilities Commission. Hawaiian Electric would have to negotiate a definitive acquisition agreement of an interest in the site, which is leased to AES Hawaii by Campbell Estate.

The option also depends on HECO consenting to a proposal by AES Hawaii to refinance its existing coal-fired facility. The refinancing would lead to a slight reduction in electricity rates for Oahu residents. Both sides have agreed to the terms and conditions under which HECO would consent, but the refinancing hinges on further steps, including approval by the Public Utilities Commission.

The existing AES coal-fired plant was among the top 10 releasers of toxic chemicals in Hawaii in 2000, releasing 87,162 pounds of chemicals into the land, air and water, according to the U.S. Environmental Protection Agency.

Henry Curtis, executive director of the Life of the Land nonprofit environmental group, was not pleased with Hawaiian Electric's new option. "We absolutely oppose the use of fossil fuel on Oahu. We have enough already. We have every form of renewable energy you can think of," Curtis said. "We should be aggressively pursuing renewable energy."

Hawaiian Electric believes that a long-term energy plan for Hawaii needs to have several options, including renewable sources of energy, conservation measures and new technology, Unemori said.

It's unrealistic to think that conventional sources of power, such as oil and coal, can be eliminated, she said. "You can't put all your eggs in the renewable basket."

A Hawaiian Electric subsidiary, Renewable Hawaii, is seeking proposals for renewable energy projects on Oahu, and is willing to invest $10 million as a minority partner. Such projects could include the use of hydro, wind, solar, biomass or geothermal energy to produce power.

In its state filing, Hawaiian Electric said it and its 250,000 Oahu customers could benefit from a second coal-fired electricity plant, which could use some structures of the existing coal plant. That plant was built in 1992 at a cost of about $380 million.


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