KIUC premature P.R. for "Just a Concept"

From: http://www.kauaiworld.com/articles/2009/10/16/news/kauai_news/doc4ad82a3b7983e385229947.txt

"KIUC biomass deal ‘just a concept’"
By Coco Zickos - The Garden Island

Published: Friday, October 16, 2009

LIHU‘E — The agreement between the Kaua‘i Island Utility Cooperative and Pacific West Energy to potentially bring a 20-megawatt biomass-to-energy project to Kaua‘i is a “major” advancement and “something we’ve been working on for years,” but “several steps” still remain, KIUC President and CEO Randall Hee said Thursday.

Obtaining 15,000 acres of land would be “optimum,” Pacific West Energy President William Maloney said Thursday, but no land commitments have been secured as of yet for the growth of sugar cane and woody biomass, though it is a “great priority,” he said.

Gay & Robinson, owner of 7,500 agricultural acres, could not be reached for comment Thursday. A representative for Alexander and Baldwin, another large Westside landowner, said there is no agreement for use of the company’s land for a biomass operation.

“Obtaining lands to grow is very critical,” Hee said. “We will need help from all state land agencies and private land owners.”

Some residents have questioned why the transaction was announced prior to a finalized purchase power agreement and approval by KIUC’s board of directors, the Hawai‘i Public Utilities Commission and Rural Utilities Service — the “major lender,” according to Hee.

“This is still just a concept. Without the financing and leases, it still remains in question as to whether this whole project will even prove to be viable,” said Brad Parsons of Kauaians for a Bright Energy Future. “The concept may be commendable, but we will be waiting for the press release after the signed PPA and PUC approval.”

KIUC’s Wednesday’s press release said a PPA would be completed within 60 days.

Chief Financial Officer David Bissell declined to comment on the deal’s financial terms Thursday, but said “depending on the fuel,” the “capital cost would be similar” to the proposed Kapaia Unit Two Combustion Turbine project, which has now been placed on the back burner.

“A renewable plant was always our preference,” said Bissell, adding that KIUC will be “keeping the Kapaia project around ... in case biomass does not succeed.”

Expecting a 1.5 to 2 percent increase in energy capacity per year and a “problem around 2012 to 2015,” this new project would help maintain about 30 percent of the island’s annual electrical use and would do so with cleaner, renewable energy, Bissell said.

Rather than “predominantly” rely on fossil fuels, the production of biofuels would increase the island’s self-sufficiency and “decouple us from petroleum pricing,” he said.

“We would be exporting less of our dollars and keeping what we spend for fuel on the islands,” Hee said, adding that it could create jobs for displaced sugar workers even though the “timing is not quite right.”

Maloney predicts some 300 jobs would be produced, but does not expect crop planting to begin until at least April 2010. The first conversion of biomass to energy would not take place for at least another year after that.

“It depends upon permitting and the commitments on land and the PUC approval of the power purchase agreement,” he said. “We hope to begin construction by September 2010 and then begin processing nine to ten months later.”

If the “fast-track plan” comes to fruition, approximately five years down the line, around $40 million a year could remain in the island’s economy “as opposed to being exported as diesel,” Maloney said.

“It would have a huge economic effect to the island,” he said.

Clean energy?

“Biomass power equals green power,” Maloney said.

Sugar cane absorbs carbon dioxide as it grows and releases carbon dioxide as it is burned, “theoretically” canceling each other out, said Bissell, adding that biomass is considered “neutral” as far as green house gas emissions are concerned.

The ultimate goal would be to reuse the carbon dioxide released as feedstock for the construction of algae, which would in turn be converted to a renewable diesel product, Maloney said.

“This is something that needs to happen, but I question the figures and the reality of it,” said Kekaha resident and community activist Bruce Pleas regarding the agreement. “I fully support it, but I would like these entities proposing projects to put out a conceptual design of the plant that would give an idea of the lands they’re going to use to support the facility.”

KIUC has signed multiple renewable energy purchase power agreements over the years, according to KIUC spokeswoman Shelley Paik. A 20-year purchase power agreement with Green Energy Team was signed in March 2007 for a 6.4 mega-watt biomass-to-energy facility. Another purchase power agreement was signed this year with Green Energy Hydro to produce 130 kilowatts, which KIUC has been receiving “in the past couple of months.”

The PacWest deal could be considerably larger than either of those arrangements.

“This is a big project. It’s got positives and it’s got negatives like any big project,” said first-year KIUC Director Ben Sullivan Thursday, adding that he’s eager to deliberate with the rest of the board to arrive at a decision that is “in the best interest of our members.”

“I’m happy to hear that they feel they have taken the next step,” said Sullivan, who earned the most votes in the March election after campaigning on a platform of renewable energy. “There are definitely questions I’m waiting to ask, but I’ll save those for my fellow directors.”

The agreement also earned the praise of the chief executive of KIUC’s largest customer: the county government.

“This project is extremely important to Kaua‘i for the renewable energy it can produce and the agricultural and ‘green’ jobs it can create,” wrote Mayor Bernard Carvalho Jr. in an e-mail Thursday. “I met just two weeks ago with representatives from PacWest and Gay & Robinson to see how the county can support this project. It was a very positive discussion and I’m hopeful that all of the pieces of the puzzle will come together soon so we can truly get this partnership off the ground.”