FERC on Lanai, Maui & Kauai

SOURCE: Ken Taylor (taylork021@hawaii.rr.com)
SUBHEAD: Spate of FERC hydro project permit applications by U.S. mainlanders are causing a stir.

By Sophie Cocke on 3 June 2011 for pacific Business News -

Image above: View looking south-west of Maliko Gulch on Maui. Site of a FERC permit application. From GoogleEarth.

There hasn’t been much talk about hydropower as the state works to transition away from oil to locally produced, renewable sources of energy. But a recent spate of proposed hydro projects have, for better or worse, been causing quite a stir. And in large part it’s because Mainland companies have been filing applications for preliminary permits for hydro projects with the Federal Energy Regulatory Commission. Federal oversight of Hawaii’s waterways was fought vigorously by the state two decades ago, with mixed results.

But in the end, three proposed projects on Kauai didn’t move forward. The pushback was centered in large part over concern that federal regulators didn’t have the specialized knowledge of local waterways and ecosystems to make decisions such as how much water can be diverted from a stream or river to turn a turbine without having harmful environmental impacts. On Kauai, where executives of the Kauai Island Utility Cooperative are hoping to make small hydro projects a cornerstone of the island’s transition to renewables, this issue has presented a stumbling block.

A company called Free Flow Energy, based in Boston, filed six permits with the federal agency to develop hydro projects on Kauai, which the utility has now assumed control of, and is working in conjunction with the company to develop. David Bissell, CEO of the KIUC, has made strong arguments for why these projects are a good source of energy for the island, providing residents with low-cost, stable rates for years to come. And he has expressed a commitment to ensuring that they are carried out in ways that don’t harm the fragile waterways. But the strategy of going through FERC to develop the projects has not proven a smooth one, with some members of the community, and now state agencies, sounding alarm bells.

But the more startling hydro projects have been ones proposed for Maui and Lanai. Not only are they huge in scale, the Mainland developers who filed the applications through FERC don’t seem to have much knowledge of the local landscape — topographical or political. Idaho resident Matthew Shapiro filed an application for a 57-acre pumped storage hydro project on Lanai that would ideally work in tandem with the Big Wind project. The technology of the proposed project is in and of itself intriguing. With the benefit of a 1,700-foot drop, seawater would be pumped upward and then released back down to drive a turbine to generate electricity.

There’s only one other project like it in the world — a 30 megawatt plant in Okinawa, according to Shapiro. The project on Lanai would be 10-times the size, turn the wind energy into a reliable source of electricity and the cost to ratepayers would be marginal, according to his plan. But it hasn’t gotten much traction. Not from Castle & Cooke, which has publicly said that they have no relationship with his company, and not from Hawaiian Electric Co., whose officials Shapiro said weren’t returning his calls. He described the lack of response as “puzzling.”

Part of the problem could be that Shapiro, as he told PBN, had never been to Lanai, or Hawaii, and never consulted with local officials before filing the application, which is still pending. While he described the project to PBN as “quite small,” for local residents it doesn’t seem so modest. Lanai resident Robin Kaye told PBN that the project would encompass “a very, very large area in a very accessible part of the island — right in the middle of a hunting ground.” “It’s a huge project, and it came out of the blue,” said Kaye. “We were as stunned as everyone else.”

 On Maui, two proposed projects by the same developer — one which would dam up the Maliko Gulch on the North Shore and a second on the west side near Lahaina, aren’t going over so well, either. As on Lanai, residents and local officials found out about the projects when legal notices were filed in newspapers. Doug McLeod, Maui’s energy commissioner, told PBN that the project on Maliko Gulch was “the single worst idea we have seen in a long time” and that “we’d like to see it die an early death.”

Rob Parsons, executive assistant to Maui‘s mayor, Alan Arakawa, said the project on the west side, which proposes to use wastewater, could potentially be a very good idea. But he said “it’s just perplexing that these things would go forward without any communication with anyone locally. A few phone calls could have helped smooth things out,” he added.



Matthew Shapiro said...

Just a few clarifications:

1. The Lanai project was never characterized as a small one. It would have tremendous energy storage capability due to the availability of a 1,700 foot elevation difference. But it does have a small surface footprint - 57 acres - when compared to the more than 10,000 acres that the wind project that would be made more useful by the storage project. That was the key comparison being made.

2. The article incorrectly states that the preliminary permit application was filed by an Idaho resident. It was filed by Gridflex Energy, LLC, a company that is seeking to develop pumped storage projects in eight states across the country.

3. The wording "On Maui, two proposed projects by the same developer..." suggests to a reader that the Maui projects were proposed by Gridflex Energy, which they were not.

4. The article doesn't make it clear that hydro projects have no choice but to go through FERC. That, for better or worse, is federal law.

5. The filing of a preliminary permit with FERC does not mean that a project is going to be developed. It only means that if the property owner agrees and the market is worthwhile, the project's feasibility will be studied and a FERC license might eventually be applied for. A preliminary permit is also essential to protect the significant investment of time and energy that a firm might put into putting an option on the table; without it, there is a danger than someone else can come in and develop the site after much work and money has been invested.

6. I understand that the article's focus is controversy, rather than the merits of the projects themselves. However, by omitting any of the rationale behind the projects or potential benefits, the article could merely inflame the "Mainlanders vs. Hawaiians" theme. The project needs to be assessed on its merits, and a focus on the Mainlanders vs. Hawaiians theme makes that simply more difficult.

Gridflex looks forward to discussions of the Lanai Pumped Storage Project on its merits in the context of energy supply, grid reliability, and new options for supporting the integration of renewable resources.

Matthew Shapiro
Gridflex Energy, LLC

Juan Wilson said...

Aloha Matthew,

Details. Details. The Big Wind is firmly rejected by the people of Lanai. It's only value is to the unsustainably overpopulated Oahu.

And by the way 57 acres is huge on Lanai. I have property on western NY. You're lucky if it fetches $1,000 an acre. Here property with land is worth 200 times as much. That's how rare it is in the middle of the Pacific.

You don't seem familiar with the lay of the land or its culture here. That's a non-starter if you want to get engaged. From where I stand Hawaii is a sovereign nation and the sooner it's out from under the thumb of the US the better.

And by the way... out from under is coming sooner than later. Financial ruin looks on deck and ready to bat this fall. You'll never get your plans off the ground. My advise is invest in where you live.

On Kauai we were doing hydro-elecric 100 years ago. In the future we'll do more hydro when we want without the banksters, FERC, or mainland opportunists.

As a reference you would be wise to look into the fate of the Hawaii Superferry. We sunk it to the bottom.

Juan Wilson
Publisher Island Breath

Mauibrad said...

Oh, wow, Juan. By next Fall, huh? Yeah, it'll be hard to get that kind of stuff off the ground if the SHTF by Fall this year...

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