The Japanese energy company JERA wants to build a natural gas plant on Oʻahu that could supply more than a third of the island's electricity demand.
Normally, a new energy project of this scale would have to go through a competitive bidding process. Hawaiian Electric would put out a request for a proposal, get a bunch of bids from different developers, and then choose the one that best meets the utility and the ratepayers' needs in terms of costs and reliability.
But Erik Montague, the vice president of development at JERA Americas, told HPR that its natural gas plant isn't suited for that framework.
"We would propose that this is all done under a regulated framework, but a little bit different than maybe how power is currently procured today in Hawaiʻi," he said.
Montague didn’t specify exactly how JERA intended to bypass the competitive bidding process, which was established two decades ago by the Hawaiʻi Public Utilities Commission.
Typically, the only option would be for HECO to request a waiver on behalf of the project. The commission would then have to approve that waiver.
It used to be commonplace for the commission to grant such exemptions, but not so much anymore. The commission told HPR that it last approved a waiver in 2017 for the West Loch PV Project, a 20 MW solar farm at Joint Base Pearl Harbor-Hickam.
In a statement to HPR, the commission said that the competitive bidding process promotes lower energy costs for ratepayers and that waivers are "approved only in specific and limited circumstances."
JERA has an ambitious timeline for its natural gas project, with a 2030 target date for commercial operations. That timeline is key to JERA realizing a return on investment for the project and delivering energy savings to ratepayers.
Some say Hawaiʻi's slow-moving regulatory and permitting apparatus may put that target date out of reach.
"That is an unrealistic time frame for the PUC alone," said Henry Curtis, the vice president of consumer issues for the nonprofit Life of the Land, which regularly advocates before the commission.
A waiver won't necessarily offer JERA a more streamlined path. In the past, big-budget energy projects that received waivers have still hit roadblocks.
That includes Hū Honua, a proposed biomass plant on Hawaiʻi Island. It was one of the first major energy projects to receive a waiver in 2008. Almost 20 years later, the project has not come online, having been mired in numerous legal battles.
Life of the Land sued the commission in 2017 over its approval of the Hū Honua project, alleging that the plant's climate pollution was incompatible with the state’s efforts to decarbonize. The commission ultimately reversed its decision.
With JERA now proposing a natural gas plant that would tether Oʻahu’s grid to a new fossil fuel, Curtis said Life of the Land is keeping a close eye on the project's regulatory path.
"Whether it's the waiver, whether it's a power purchase agreement, we will intervene wherever JERA pops up in the process," he said.
