Biofuel Contact’a Rejection Stirs Columnist’s Ire, but Questions Still Need Asking about Renewables’ Costs

It wouldn’t be accurate to say nothing’s been happening re energy issues in Hawaii since our most recent post. Just the opposite has been true, but our involvement with the Honolulu rail project hasn’t exactly been on hiatus since then either.

We were jogged back into action here at Hawaii Energy Options by the ThinkTech column in today’s Star-Advertiser (subscription required). Author Jay Fidell argues that the Public Utilities Commission’s rejection of the Aina Koa Pono biofuels contract – subject of our post immediately below – was a huge setback for the cause of renewable energy in Hawaii.

Fidel writes: ”It was a dream deal: local company, local investment,local labor, local feedstock, sending less money overseas, increasing energy security, reducing vulnerability to oil volatility, producing utility-scale renewables that can be shipped anywhere in the state without waiting for an undersea cable, building the economy and making us look good. So good, uyou’d think we’d snap it up.”

Sounds like the deal had everything Hawaii citizens could want – except a price the PUC could accept. According to the PUC’s decision, the price premium residents and businesses would have paid over the anticipated cost of oil during the 20-year contract would have been somewhere between $100,000,000 and $999,999,999.

The deal would have added only $2 a month to the average consumer’s electric bill, according to Aina Koa Pono. With its line-in-the-sand ruling, the PUC says two bucks a month over 240 months is too much.

Best Use of Biofuel?

Some in Hawaii question whether burning biofuel in power plants in place of residual fuel oil or diesel is its highest and best use. With the state’s tourism industry 100-percent dependent on petroleum to bring visitors here in planes and ships, the argument is made that biofuels should be reserved for transportation. Another sharp spike or even a gradual rise (see chart at right) to 2008 oil prices would put the entire industry and everything dependent on it in the tank.

Clearly, the PUC’s decision sent a signal – or fired a shot across the bow – to those who believe renewable energy’s costs have no limit. Reasonable limits must be imposed on how much local residents and businesses are expected to pay to get off oil, and that includes the physical impacts these projects would impose.

If you also think Big Wind when you hear "impacts," we’re on the proverbial same sheet of music.