Feed-In-Tariff Mangers Purge Flawed Projects from Queue

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This month, the Hawaiian Electric Company is expected to submit its report to the state Public Utilities Commission re-examining the initial phases of its feed-in-tariff program, which guarantees participants that HECO, Maui Electric Company, and the Hawai`i Electric Light Company will buy electricity generated by renewable sources at a fixed rate for 20 years.

The PUC capped the program at 80 megawatts statewide. The PUC-appointed independent observer for the program, Harry Judd of Accion Group, began accepting applications for Tier 1, for projects 20 kW or smaller, and Tier 2, for projects producing up to 500 kW, in November 2010. Tier 3, which opened in late 2011, allows for projects as large as 5 megawatts (MW).

The vast majority of the applications submitted to date has been for solar photovoltaic projects.

HECO’s report, which was originally due on February 1, will help the PUC decide whether to add more capacity to the program. Last month, the PUC granted HECO’s request for more time to complete the report.

Among other things, the report is expected to address the management of the program’s active and reserve queues. Last year, shortly after the opening of Tier 3, some applicants eagerly waiting in the reserve queue accused several of the projects in the active queue of squatting, claiming that some of them should never have been accepted to the FIT program. After receiving a report from Judd confirming some of the problems with the queue and raising a number of his own concerns, the PUC ordered Judd and HECO to freeze the queue until all ineligible projects were purged.

After review by HECO and Judd, 58 projects totaling 52 MW were removed from the queues on October 8, according to a January 14 joint status report on the clean-up by HECO and Judd. Most of the projects were for Maui and O`ahu. Only one Big Island project was removed; it was a 250 kW project in the reserve queue. None of the projects were from Tier 1.

The report indicates that projects were removed for various reasons, but mostly for failure to submit a timely building permit application or for having multiple projects on the same lot.

The purge freed up a fair chunk of space in the active queue — a little more than 14 MW. All but a small fraction of that came from projects proposed for O`ahu and Maui. Once the queues were reopened, the program received 57 new applications, the report states. As of January 10, the active queue had about 16 MW of capacity left and more than 100 projects totaling 91 MW sat in the reserve queue.

Despite the program’s growing pains, it has managed to make some headway. As of January 10, 81 Tier 1 and Tier 2 projects generating a little more than 8 MW (or 10 percent of the program’s capacity) had been installed. No Tier 3 projects had yet been installed, but about 63 applications for projects totaling about 27 MW were in the active queue.

Teresa Dawson

Volume 23, Number 9 — March 2013