Wednesday, February 16, 2011


PUC Approves Second Maui Windfarm

By Henry Curtis

The Public Utilities Commission has approved a Power Purchase Contract between Kaheawa Wind Power II LLC (KWPII) and Maui Electric Company (MECO).

FirstWind is the primary owner of KWPII. FirstWind succeeded where other windfarm proposals on Maui failed because FirstWind teamed up with politically connected Makani Nui Associates, LLC (Kent R. Smith, Hilton Unemori). Makani which was given an 8% share in KWPII.

The proposed wind farm will include a Battery Energy Storage System (10 MW/20 MWh)

To “protect” Maui ratepayers from knowing the price of wind energy, the pricing scheme is sealed under a Protective Order.

The Power Purchase Agreement uses a complex 3-tiered pricing structure. As MECO purchases more wind, the price decreases. As MECO fails to alter its practices to allow higher penetration of wind, the price rises. As the battery works the price drops. The price will increase if MECO fails to implement five Maui Operational Measures ("MOMS").  All changes in the prices are confidential.
The secrecy surrounding the price may change in the near future. A Senate bill (SB 656 SD 1) would require the public utilities commission to publish contracts, including price information, for the purchase of renewable energy by energy utilities on a publicly-accessible portion of the commission's website. The bill passed the Senate and is now in the House. In Senate Committees and on the floor, all Senators present voted YES.  Not one legislator voting either "NO" or "YES WITH RESERVATIONS".  The House has assigned the bill to EEP, CPC/JUD, FIN.

Curtailment is a major issue for windfarms. This occurs when the windfarm can produce wind energy but the utility will not buy the wind energy.  MECO has established a wind-farm curtailment priority list. The order is: (1) KWP I; (2) Ulupalakua Ranch Windfarm; (3) KWP II. Thus the output of the KWPII will be curtailed before the output of Ulupalakua Ranch and KWP I are curtailed. Any disputes arising out of the curtailment of energy will be submitted to an Independent Curtailment Evaluator outside of any public disclosure process.

The Maui Operational Measures are complex:

1. Reduction of MECO System Must-Run Rules

Currently MECO's Kahului Generating Station Unit 1 ("Kl") and Unit 2 ("K2") both run two shifts a day. From the Commercial Operations Date, Kl and K2 will no longer be considered daily "must run" and will instead run for one shift on one day for Kl, and one shift on the next day for K2 (i.e., on an every other day, alternating schedule), unless MECO's system operator determines that one or both of Kl and K2 must be run more frequently to meet the system requirements.

2. Limit of System Up Reserve

"Up Reserve" is the amount of available generation capacity in mega-watts ("MW"), under the control of MECO's automatic generator control ("AGC"), on generating units that are synchronized to MECO's system and ready to be increased in response to variations in system demand and/or generation. The need to run MECO units to provide Up Reserve will be reduced because the MECO system Up Reserve requirement for Maui will be reduced to a target of 50 MW.   Without the 50 MW limit, the Up Reserve target if there was 72 MW of wind power on the system would be 57 MW.

3. Allocation of Up Reserve to BESS

The need to run MECO units to provide Up Reserve will be further reduced because MECO will allocate a portion of the Up Reserve requirement to the KWPII Wind Farm BESS based on (A) the BESS' "state of charge," or (B) if MECO chooses in its discretion, the actual Up Reserve capability of the BESS as telemetered from the KWPII Wind Farm to MECO. In either case, the amount of Up Reserve MECO will allocate to the BESS will not exceed 10 MW.

4. Allocation of Down Reserve to BESS

"Down Reserve" is the amount of generation, under the control of the AGC that is ready to respond to decreases in demand on the MECO system and/or increases in system generation. The Down Reserve requirement for MECO's system will be 6 MW, subject to the discretion of MECO's system operator to increase this requirement when there is an increased risk of sudden loss of load events, such as during storms.

5. System Modifications to AGC

MECO will configure the AGC so that it will adjust the minimum power settings of MECO's combustion turbines to account for the BESS' ability to meet MECO's Down Reserve requirement, based on a signal provided from the KWPII Wind Farm BESS.  MECO will configure the AGC to control the KWPII Wind Farm and the BESS as separate units. MECO will configure the economic dispatch function in the AGC to meet the revised Up Reserve requirement.  MECO will implement in the AGC the automatic generation of a daily curtailment log showing the curtailment set point, the actual output and the potential output for each as-available generating system asset.  MECO will implement in the AGC an automatic curtailment protocol among multiple generating system assets.

Further information on Docket 2010-0279 is available via the partially redacted Power Purchase Contract available on the PUC Data Management System.
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