Two years after HELCO’S RFP, the utility has finally made its decision

PUNA – The Hawai‘i Electric Light Company has made its choice for the company that will expand geothermal energy on Hawaii Island.

Israel-based Ormat Industries Ltd, the owner of Puna Geothermal Venture operating in Pohoiki, has been selected to provide an additional 25 mega-watts of geothermal energy to the Big Island grid. PGV already has an existing contract with HELCO to produce 38 mega-watts.

The selection was the result of a lengthy Request-For-Proposals – or RFP – initiated by HELCO in early November 2012. The utility was interested in an expansion of 50 mega-watts, but they now plan to tap Ormat for only half that amount.

The news was not welcome among the many Puna residents who took a stand against the RFP about a year and a half ago.

In 2012, the Geothermal Working Group, convened by the state legislature, reported that the resource has a significant potential to be Big Island’s primary energy resource. Other companies interested in developing in Puna began to present their ideas… most notably was the Innovations Development Group, or IDG, touting a proprietary “Native to Native” Model, and a different way to do geothermal on Hawaii Island. They were eyeing a 400-acre parcel of Kealoha Estate land in Pohoiki, not too far from existing power plant. Discussion on geothermal development became a hot topic, and pressure mounted for HELCO to expand its portfolio. State lawmakers passed laws enabling the industry to fast track geothermal development. IDG secured wide ranging support and investment, including $600,000 advance on $1.25 million dollar investment from the Office of Hawaiian Affairs, and a $10 million investment from a New Zealand subsidiary company Eastland Hawaii Inc.

Meanwhile, the Puna community spoke out. The Pele Defense Fund was resurrected, and another group called the Puna Pono Alliance was formed. In order to address their concerns, a study group was convened at the request of the mayor, producing a Geothermal Public Health Assessment, which recommended that the county undertake a comprehensive health effects study.

On August 17, a large group gathered in Pahoa to protest the proposed expansion of the geothermal industry in Puna. Led by the Puna Pono Alliance community organization, demonstrators marched from Pahoa to Hilo over the course of three days, camping out at night along the way, and eventually arriving at the HELCO headquarters where they demanded to meet with president Jay Ignacio.

In December of 2013, HELCO’s RFP process had stalled. Puna Pono Alliance saw it as a victory. After that, things were quiet for a few years.

Then suddenly, at the start of the new year, Puna Geothermal Venture announced their plans to drill a new production well. Ormat announced it was selling equity interest in various geothermal power plants – including Puna Geothermal Venture – to Northleaf Capital Partners. The deal will raise $175 million for Ormat. And last month, Eastland pulled the plug on it’s investment in IDG, one of Ormat’s competitiors in the bid process.

The news of HELCO’s selection of Ormat soon followed. In a statement, HELCO president Jay Ignacio stated that “Ormat was selected based on numerous criteria, including attractive pricing, technical design and capability, financial soundness, as well as commitment to resolving all environmental issues and to working with our Hawai‘i Island communities.”

HELCO had hoped to find a company willing to tap a geothermal resource in West Hawaii, where the power demand is greatest. That is one reason why the decision to go with Ormat involves 25 MW instead of the entire 50 MW as originally requested.

Video credits for file footage include David Corrigan, the State of Hawaii and Pono Kealoha.