UPDATED 8/26/11 10:25

It’s an unequivocal no.

The state Public Utilities Commission has denied Hawaiian Electric Co.’s request to reconsider a July ruling requiring the utility to rebid 200 megawatts – or half – of the Big Wind project.

“The commission is not convinced that any of the arguments raised by HECO demonstrate that the commission’s order is ‘unreasonable, unlawful or erroneous,’” as Hawaiian Electric had argued, according to a PUC document made public today.

The PUC decision is the latest development in an ongoing saga surrounding the estimated $2.3 billion project that aims to bring 400 mw of wind energy from Lanai and Molokai to Oahu via an undersea cable.

The project suffered a major setback when Boston–based First Wind missed a March deadline to secure land on Molokai to develop half of the project after Molokai Ranch refused to negotiate with company executives.

Hawaiian Electric, with the support of Castle & Cooke, had requested that commissioners allow Castle & Cooke to cede 200 mw of wind energy to a new Molokai developer, Molokai Renewables, or allow the company to develop the full 400 mw of wind energy on Lanai.

A full account of subsequent events can be found here.

PUC commissioners didn’t pull any punches in denying HECO’s request, at one point writing the the commission declines to engage in the utility’s “faulty logic.”

This was in reference to HECO’s argument that the utility and Castle & Cooke, the developer for the Lanai portion of the project, had “detrimentally relied” on an earlier PUC ruling. The utility argued that Castle & Cooke was afforded the right to assign 200 mw of its “development rights” to Molokai Renewables to develop a wind farm on Molokai.

The PUC denied that this authority was ever granted to Castle & Cooke.

Commissioners also said it was premature for the utility to argue that extensive expenditures and efforts related to the Molokai project had been lost.

UPDATED The Molokai wind farm is still a possibility. But Hawaiian Electric must put out a RFP for 200 mw or more of renewable energy, which can now be sited on any island that can reasonably reach Oahu via a cable, or on Oahu itself. The RFP also must be open to any technology, not just wind. The 200 mw Lanai portion of the project is permitted to proceed, but must gain final PUC approval.

Hawaiian Electric could still appeal the decision in court.

Related stories on recent Big Wind developments can be found here:

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