Board Talk: Second Kahuku Wind Farm Gets Approval

On December 13, the state Board of Land and Natural Resources approved the general form of a development agreement for a wind farm that Na Pua Makani Power Partners, LLC, plans to construct on 232 acres of agricultural land in Kahuku, O`ahu.
The agreement gives the Santa Barbara-based company an exclusive option to lease the land.

At the Land Board meeting, attorneys representing Na Pua Makani said the development agreement needed to be approved before the end of the year for the wind farm to be eligible for federal renewable energy production tax credits. (The company is potentially eligible for nearly $20 million in tax credits just for Phase 1 of its project.)
As of press time, final language was still being revised to address concerns, raised by a state deputy attorney general minutes before the Land Board meeting, about how the lease will be structured.

The Department of Land and Natural Resources’ Land Division administrator Russell Tsuji told the board he hoped the agreement could be finalized in time to meet the end-of-year deadline. The board delegated authority to its chair, William Aila, to sign the final agreement.

The agreement fortifies an approval-in-principle the Land Board gave to the project in August 2008. At the time, the developer, Na Pua Makani predecessor West Wind Works, LLC (3W), proposed a wind farm consisting of up to 10 turbines and producing up to 25 megawatts.

The current developer, a wholly owned subsidiary of Champlin Windpower, is proposing a 45 MW wind farm to be built in two phases across state and private lands. The development agreement covers only the first phase, which will consist of eight 3 MW turbines. The full build-out could involve up to 15 turbines.

Under the agreement, Na Pua Makani must meet several conditions before it can exercise its option to obtain a lease from the Land Board. The company must:

    • conduct appropriate due diligence;
    • obtain a Conditional Use Permit from the City and County of Honolulu (if required);
    • prepare a Habitat Conservation Plan and Incidental Take License for the state Division of Forestry and Wildlife (if required);
    • prepare and process all environmental documents required under the state’s environmental review law (Chapter 343,Hawai`i Revised Statutes);
    • enter into a power purchase agreement (PPA) with Hawaiian Electric Company, Inc., or another qualified buyer;
    • secure financing commitments;
    • reach agreement with the state on the lease form;
    • pay all required fees; and
  • deliver a written “Exercise Notice.”

The company already entered into a PPA with HECO on October 3 and sought approval from the state Public Utilities Commission on December 12. If the PUC fails to approve the PPA by June 30, 2015, however, the development agreement allows the state to terminate it.

According to Tsuji, HECO’s requirement that Na Pua Makani have control of the wind farm site necessitated the agreement.

“This document is intended to put in writing certain timelines and conditions to allow the developer to have the right to lease the property within a certain time period. … The developer is spending way over a million dollars to get to the final point of the lease. They want some assurance they’re going to get the land,” Tsuji told the board.

Although not explicitly stated in the agreement, the final lease will have to receive Land Board approval, says Land Division planner Gary Martin. The Land Board must also approve the final environmental impact statement and any habitat conservation plan and incidental take license.

Hawai`i island Land Board member Robert Pacheco asked how the development agreement is different from the approval-in-principle.

“Some entities are comfortable with approval-in-principle,” Tsuji said, noting that First Wind, another wind farm developer using state land, was satisfied with this. A development agreement, however, prevents competition over the land.

It takes five years to get all the necessary entitlements and at any time during that process, “theoretically, someone could come in and say I have a better project [and] there is no obligation for the state to hold the land,” Tsuji said.

Kahuku resident and Ko`olauloa Neighborhood Board member Kent Fonoimoana was the sole member of the public to testify on the development agreement. He said he lives about three-quarters of a mile from First Wind’s wind farm and doesn’t want to see any more built.

He said while he supported the first wind farm, the new farm would place wind turbines less than half a mile from where he lives. Anyone living within one and a quarter mile of the turbines could be impacted by infrasound, he said, referring to an ultra-low frequency sound that can travel long distances and has been linked to a variety of health problems.

“They need to be placed in the proper location,” he said of the turbines, adding that Na Pua Makani also needs to have the community’s support before it goes any further.

He claimed that the project’s original developer, West Wind Works, did a poor job of inviting the public to comment on a draft environmental assessment done for the project in 2009. (A final EA was never completed.)

Na Pua Makani has hired Tetra Tech to prepare an environmental impact statement needed to obtain an incidental take permit from the U.S. Fish and Wildlife Service, which would shield it from prosecution in the event of any harm caused to an endangered species by the wind farm. Na Pua Makani is also preparing an EIS for the use of state land.

To Na Pua Makani’s promise that anyone living within 300 feet of the facility site will receive notices to comment on these documents, Maui Land Board member Jimmy Gomes argued that was a small distance, considering the magnitude of the turbines.

Fonoimoana added, “That’s pretty much notifying nobody.” He also pointed out that Phase 2 of the project, for 21 MW, is proposed to be built 1,200 feet from Kahuku High and Intermediate School.

Despite Fonoimoana’s concerns, the Land Board unanimously approved the Land Division’s recommendation that the development agreement be added as an exhibit to the 2008 approval-in-principle.

* * *
University Seeks Deferral on New Mauna Kea Leases

In a surprising and, to some, refreshing turnaround, the University of Hawai`i asked the Land Board on December 13 to hold off on deciding whether or not to cancel the university’s current leases for more than 11,000 acres on Mauna Kea and issue new ones.

The reason: So the university could prepare an environmental impact statement on its use of state land.

When the UH came to the Land Board on November 8 seeking rent-free, brand new 65-year leases for the Mauna Kea Science Reserve and Hale Pohaku, as well as a 45-year extension of its easement over 71 additional acres, opponents packed the Land Board meeting room and testified for hours, alleging that the proposal was not only unreasonable, it was illegal.

The university had argued that having a longer tenure on the mountain would help with management, including providing a basis for developing subleases with current and future telescope projects.

Michael Kumukauoha Lee, Kalani Flores, Paul Neves, Laulani Teale, and Hanalei Fergerstrom requested a contested case hearing on the proposal, for which the DLNR’s Land Division had recommended approval.

The Native Hawaiian Legal Corporation, representing Flores, had argued that, among other things, the Hawai`i Environmental Policy Act required the university to conduct an environmental assessment for its proposed use of state land.

The Land Board lost quorum before it could vote; it resumed discussion of the matter at its December 13 meeting.

At the meeting, a UH representative said, “We’ve reflected on the testimony [and found] the public’s interest is best served if UH engages in an environmental review.” He then asked that the Land Board defer voting until after the university completes the process.

“Quite an interesting development,” said at-large Land Board member Sam Gon.

David Goode, another at-large member, asked why the university isn’t simply rescinding its request.

Attorney Ian Sandison, representing the university, responded, “So we can come back on the same issue.”

“You don’t anticipate any changes in the action?” Gon asked.

Again, Sandison was brief: “UH wants to move forward.”

Land Board chair William Aila argued that because a number of people had asked for a contested case hearing, it would be a disservice to them to withdraw the matter.

Although he had closed public testimony on the agenda item, Aila allowed those who had requested a contested case hearing to speak on whether or not they wished to proceed given the university’s change of course.

Fergestrom opted to withdraw his request.

“I’m very glad the university has decided to hold back for a bit. This matter is of such a large importance,” he said.

Lee also withdrew his request.

Teale, Neves, and Flores, however, did not withdraw theirs. Native Hawaiian Legal Corporation attorney David Kopper said he agreed that the university’s decision to start the environmental review process was a good thing. However, he added, it would be best for the university to rescind or for the Land Board to deny the new lease/lease extension request.

“They [the university] would have to come back here anyway. … Why have an application sitting out there?” he asked, adding that the environmental review process is going to provide information that can be included in a new staff report to the board and can be included in public testimony.

Board member Goode agreed.

The EIS process will take a minimum of one year, probably two, he said, and there will probably be new Land Board members by then and new information to incorporate into a new staff submittal.

“Withdraw it and come back fresh,” he told the university, adding that he was not inclined to vote for a deferral.

“The existing [rent] request is for zero dollars … I find that totally unacceptable. I know we won’t be dealing with that for a year or two. I may not be on the board,” he said.

Gon said he agreed wholeheartedly that “such a globally significant place should attract the funds that are needed to properly manage it.” He also said it was very wise for the UH to decided do an environmental review, since the last time one was done for Mauna Kea, a full cultural assessment was not required.

In the end, the Land Board voted to defer the matter. Goode was the sole dissenter. Hawai`i island member Robert Pacheco, whose tour company has a permit from the UH to visit Mauna Kea, recused himself from the matter.

* * *
Hokukano Easement Gets Preliminary Approval

On December 13, the Land Board gave its approval in principle for the purchase of a conservation easement over roughly 1,000 acres in Kealakekua, South Kona, owned by Hokukano Ranch, Inc.

The cost will be $3.225 million or fair market value, as determined by a state-contracted appraiser, whichever is less. Funds have already been acquired from the U.S. Forest Service’s Forest Legacy Program.

The approval-in-principle allows the state to proceed with its due diligence work.

Although the aim of the easement is to protect native forest, the landowner would be allowed to log. Irene Sprecher of the DLNR’s Division of Forestry and Wildlife said her agency is working with the ranch on “a more sustainable harvest plan.”

Hokukano Ranch’s advisor Greg Hendrickson explained to the Land Board that the Forest Legacy Program aims to protect traditional forest uses, including recreation, education, and “the production of high quality wood resources.”

“Do you know if the easement fee … is going into restoration efforts?” Land Board member Sam Gon asked.

Hendrickson said that, generally, a forest management plan for such a property requires a certain amount of restoration work.

“Money will be invested,” he said.

Although the Land Board unanimously approved the purchase in principle, Gon said, “I will point out, it would have been great to see conservation easement attached” to the DOFAW report to the board.

Sprecher said the easement terms are still being negotiated.

Pacheco requested that the Land Board receive updates on such easements and “what’s going on there.”

* * *
Abercrombie Signs West Hawai`i Fishing Rules

After a long and controversial meeting, the Land Board narrowly approved new fishing rules for the West Hawai`i Regional Fisheries Management Area on June 28. The rules ban spearfishing with SCUBA gear, a practice employed by many commercial fishermen but which has also been linked to the depletion of fish stocks here and abroad. They also limit aquarium collecting to some 40 species of marine life and prohibit the take of nine other species, including the spotted eagle ray.

After the Land Board’s decision, supporters and opponents of the rules pleaded their cases to Governor Neil Abercrombie, whose signature was needed for the rules to take effect. For months, nothing happened.

Finally, in early November, Kona resident Doug Perrine sent Abercrombie a letter asking for him to sign the rules. Perinne attached two pictures, one of a flock of rays, another of a speared ray lying on pavement.

“Attached to this message are two photographs of spotted eagle rays, both taken at Honokohau Harbor, Hawai`i Island. One shows a school of live rays flocking like undersea butterflies, demonstrating the beauty and grace that makes these animals one of the big attractions drawing scuba divers to Hawai`i, and fueling a multi-million dollar per year non-extractive, sustainable wildlife viewing industry. What’s wrong with the second picture? Answer: no laws were broken in the conversion of a beautiful living animal, worth many thousands of dollars as a live resource for eco-tourism, and also an essential component of a healthy coral reef ecosystem, into a glob of rotting flesh floating in the harbor. There would be no laws broken if the same abomination occurred tomorrow due to your failure to sign the WHRFMA rules that would protect four species of rays, five species of sharks, and over a hundred species of ornamental reef fish,” Perrine wrote.

“By declining to sign these rules – an act that should have been a mere formality six weeks ago – you are disrespecting Hawai`i’s natural environment, disrespecting the people of West Hawai`i who overwhelmingly supported the adoption of these rules, disrespecting the scientific community that unanimously endorsed the rules, disrespecting your own scientists who conducted the studies that proved the necessity of the rules, and disrespecting the Board of Land and Natural Resources which is given the authority to adopt such rules by the Hawaii State Constitution and which voted to adopt the rules by a large majority,” he wrote.

Gov. Abercrombie finally signed the rules on December 14.

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