(BIVN) – The Hawaiʻi Public Utilities Commission on Wednesday suspended docket (2019-0333) – an application for approval of an amended and restated power purchase agreement (PPA) between Hawaiʻi Electric Light Company and Puna Geothermal Venture – pending the completion of an environmental review.

PGV and Hawaiian Electric are proposing to expand the geothermal generation facility’s capacity from 38 megawatts to 46 megawatts, extend the PPA term by 30 years, and decrease pricing, among other things.

Puna Geothermal Venture announced it was back online in November 2020, following the 2018 eruption of Kīlauea on the East Rift Zone that forced the facility to shut down. While a previously approved PPA is in place, Hawaiian Electric and PGV are working on a new deal. The new agreement will need to be approved by the Hawaiʻi Public Utilities Commission.

In its March 31 order, the PUC gives the background, reporting that on August 4, 2020, the Commission received public comment from State Senator Russell Ruderman, urging it “to reconsider action, including approval of any PPA,” until an environmental impact statement, or EIS, is completed. From the PUC:

Pursuant to the procedural schedule established by Order No. 37121, on August 31, 2020, Puna Pono, Hu Honua, Tawhiri, and the Consumer Advocate filed statements of position. As discussed below, both Puna Pono and the Consumer Advocate raised questions and concerns regarding environmental review for the Project. On September 30, 2020, Hawaiian Electric filed its reply statement of position.

On September 23, 2020, the State Department of Health (“DOH”) Office of Environmental Quality Control (“OEQC”) issued determination in the Environmental Register indicating that DOH is not required to conduct new or supplemental environmental review for PGV’s air permit renewal (permit no. 0008-02-N).

On October 2, 2020, the Commission issued information requests (“IRs”) to Hawaiian Electric and PGV, asking their positions on whether any environmental review is necessary before the Commission issues its decision in this docket. Hawaiian Electric and PGV to these IRs on October 12, 2020.

Between October 21, 2020, and October 23, 2020, three lawsuits were filed relating to DOH’s September 23 decision regarding PGV and environmental review. On November 13, 2020, the Commission issued IRs to Puna Pono, PGV, and Hawaiian Electric related to the Lawsuits, and seeking information on how the Lawsuits might affect the Application. Puna Pono responded to these IRs on November 23, 2020. PGV and Hawaiian Electric responded to these IRs on November 30, 2020.

On January 21, 2021, the Commission contacted OEQC, pursuant to HRS 343-5(f), seeking guidance on whether HEPA requires an environmental review for PGV’s proposed expansion, and if so, which agency is the appropriate accepting authority.

On February 16, 2021, OEQC responded, providing general guidance that the Commission should itself first “determine if an EIS or Supplemental EIS is required OEQC further explained that would only become involved in addressing this issue “when an applicant requests approval for proposed action and two or more state or county agencies with jurisdiction are unable to determine which agency should be the accepting agency.”

Puna Pono Alliance has long opposed the expansion of geothermal production in the Puna area. As part of a February 5, 2021 letter to the commission, Puna Pono Alliance president Robert Petricci wrote:

Maybe PGV and DOH are trying to postpone the day of reckoning regarding PGV’s plans to expand its facility with new equipment designed for a steam-dominated resource and a higher level of production, excluding those plans from the ongoing contested case and keeping them out of the DOH determination on HEPA applicability to the renewed air pollution permit because the permit renewal application has not been amended to include them.

PGV has included its plans to expand its facility with new equipment in the PUC where those plans are actively being considered. The January 27, 2021, letter from PGV’s attorneys reverberates with arguments from PGV’s position in the ongoing DOH litigation. It is especially important how PGV’s argument seems to fudge distinctions between a new EIS and the present situation. PGV’s project was the subject of a 1987 EIS. No one is asking them to prepare a new EIS. Instead, applicable law and rules require consideration of whether a supplemental review is required – whether the 1987 EIS is still sufficient. Omitting the wholesale installation of new generating equipment designed to function in the steam dominated resource that resulted from the recent Kilauea eruption definitely diminishes the scope of that question. Therefore, those somewhat misleading arguments PGV has presented in the DOH cases need to be recognized for what they are, and what they are not. They are not sufficient for the PUC proceeding. They are in need of supplementation to address new facility PGV plans that will replace the old equipment designed for a brine dominated resource.

In its order, the PUC said the law does not explicitly authorize it to be an accepting authority for environmental review, and is “concerned about assuming powers not granted by law.” However, the Hawaiʻi Department of Health, Hawaiʻi Department of Land and Natural Resources, and the County of Hawaiʻi “have significant relevant expertise to perform the necessary environmental review for PGV that the Commission lacks.” From the order:

Given the Commission’s lack of express statutory authority and subject matter expertise, the Commission cannot be the accepting authority for PGV’s supplemental environmental review. Given the presence of at least three agencies with authority and relevant expertise, the Commission directs Hawaiian Electric to work with PGV, DOH, DLNR, and the County of Hawaii to determine the appropriate accepting authority for supplemental environmental review. Hawaiian Electric and PGV can reach out to OEQC, pursuant to HRS 343-5(f), to resolve any questions regarding the appropriate accepting authority.

Consequently, the Commission will suspend this proceeding pending the acceptance of supplemental environmental review for the Project by the appropriate accepting authority.

The PUC noted that Hawaiian Electric must provide the commission “notice no later than December 31, 2022 if it desires to terminate” the original power purchase agreement with Puna Geothermal Venture. The PUC directed Hawaiian Electric to continue its PGV renegotiation efforts “in parallel with the pending environmental review.” The PUC noted that although the pricing terms proposed in the application “are significant improvement” over the terms in the current agreement, “they are not as advantageous to customers as the recent solar plus storage pricing seen in the Phase 1 and 2 procurements.”

“Hawaiian Electric must strive to negotiate and propose demonstrably beneficial pricing structure for its customers, which the Commission will review as part of any new or revised application,” the PUC wrote.

Mike Kaleikini, Senior Director of Hawaiʻi Affairs for Puna Geothermal Venture, said they are reviewing the PUC order and have no comment at this time.