The owners of Oahu’s large coal-burning electric plant now want to switch to burning wood pellets instead of shutting the plant down as scheduled next year.

AES Hawaii submitted its request to Hawaii utility regulators last week as part of a proceeding exploring ways to deal with the closing of AES’s Barbers Point Coal Plant, which is scheduled to shut down in September 2022.

Shuttering the coal-burning plant poses a considerable challenge for Oahu’s power utility, Hawaiian Electric, as well as public utility regulators and supporters of Hawaii’s mandate to wean the state from using fossil fuel to produce electricity by 2045.

AES Hawaii Power plant coal burning electric powerplant located in Kalaeloa.
AES Hawaii has proposed to convert its coal-burning power plant into one that burns wood instead. Cory Lum/Civil Beat/2019

The facility produces about one-fifth of Oahu’s electricity. And, while industrial-scale solar and wind farms are expected eventually to provide ample power for the island, those aren’t built yet. The question is how to keep the lights on in the meantime.

In its request, AES called shifting from coal to wood “an option that will help maintain system reliability and enhance grid services, reduce reliance on fossil fuels, minimize financial impacts to Oahu’s customers, and help ensure the state’s responsible transition to a 100% renewable energy future.”

In an email, Sandra Larsen, AES Hawaii’s market business leader, noted AES was asked by state officials to explore using wood to replace coal in 2022.

“AES is working with the State to evaluate this option and to determine if it is, in fact, in the best interest of ratepayers and, importantly, the environment,” she said.

The current short-term plan to replace the coal-burning plant centers on a giant battery that is proposed for a site in Kapolei. But that plan has come under criticism from regulators who note that until more large renewable projects can be finished, the battery still would have to be charged with electricity generated by oil-fired power plants.

Jay Griffin, chairman of the Hawaii Public Utilities Commission, has called that plan the equivalent of “going from cigarettes to crack,” and the PUC has imposed numerous requirements on the battery project as a consequence.

AES’s proposal to burn wood instead of coal would mean a switch from fossil fuel consistent with the state’s energy policy. The wood pellets AES envisions using, known as “biomass” in energy parlance, are considered a renewable resource under Hawaii’s energy law. But green energy advocates oppose the idea because burning stuff to make electricity still produces carbon dioxide.

Henry Curtis, executive director of Life of the Land, and a staunch advocate for reducing carbon emissions, said the organization would oppose AES’s proposal.

“Life of the Land would fight in every regulatory process any attempt to switch AES from coal to wood,” he said in an email.

Sierra Club Director Marti Townsend says HB 2501 This bill seeks to circumvent a recent court ruling against Alexander & Baldwin’s diversion of millions of gallons of water from East Maui streams. 3 may 2015
Marti Townsend, director of the Sierra Club of Hawaii, said shutting down the AES plant entirely is an issue about environmental  justice. Cory Lum/Civil Beat

Marti Townsend, director of the Sierra Club of Hawaii, echoed Curtis’s opposition to incineration to produce electricity but added there is an environmental justice component as well.

West Oahu has long borne a disproportionate share of Oahu’s unwanted projects, and shutting down the AES coal plant promised to mitigate that. Prolonging the power plant’s life, even burning wood instead of coal, would continue the injustice, she said.

“For this facility on the west side of Oahu where the majority of locally unwanted land uses are sited — landfills, military weapons storage and training facilities, and fossil fuel energy production — doubling down on incineration is doubling down on the environmental injustices suffered in these communities,” she said in a text message.

Still, that AES has come forward with the proposal shows how worrisome the situation is for Oahu. The letter was submitted to the utilities commission as part of a proceeding seeking ideas on how to address the shutdown of the coal plant. What’s more, AES said it submitted the proposal at the request of Scott Glenn, who serves as Hawaii’s chief energy officer overseeing the State Energy Office.

In an interview, Glenn said he reached out to AES not because the energy office necessarily supports the coal-to-wood idea but as part of an effort to assess all ideas.

“We’re doing our due diligence to seek out all options for energy reliability and energy supply,” Glenn said.

Hawaiian Electric also is welcoming ideas.

“Keeping the lights on is our top priority and we’re open to discussing options that enhance reliability as long as they’re good for our customers, consistent with our system needs and decarbonization goals, and compare favorably against alternatives,” Jim Kelly, Hawaiian Electric’s vice president for government and community relations and corporate communications, said in an emailed statement.

AES Proposes To Keep Burning Coal Past September 2022

Isaac Moriwake, an attorney with Earthjustice in Honolulu, said that even if switching from coal to wood isn’t the best idea, it’s good that Glenn and the PUC are encouraging discussions.

“They’ve got to do their job in terms of keeping the lights on, so it makes sense to get all the options on the table,” he said.

At the same time, he said, one of AES’s ideas is almost sure to anger people: a proposal to keep burning coal after September 2022.

In 2020, facing the impending shutdown of the Oahu coal plant but without any law mandating its closure, the Hawaii Legislature passed a law intended to ensure the end of coal to generate electricity. The law says that after June 30, 2020, the PUC can’t approve any new power supply contract, known as a PPA, proposing to use coal for electricity. The law also says the PUC can’t modify an existing PPA to extend the use of coal.

AES, meanwhile, says that it would like to keep burning coal for four months past the end of its current PPA with Hawaiian Electric, which terminates in September 2022.

AES argues this would not violate the statute because of a provision in its PPA. This “evergreen” term lets AES keep selling coal-generated electricity to Hawaiian Electric if the parties are “actively negotiating for the purchase of the Facility or the Net Electric Energy Output of the Facility” in good faith.

“As the ‘evergreen’ provision is part of the current PPA already approved by the Commission, the automatic month-to-month extension does not require a new, renewed, or modified PPA and it does not propose to extend the term beyond what was already contemplated in the current PPA,” AES says in the letter.

In other words, the company says, it can keep burning coal past the PPA deadline – indefinitely, it would seem — without violating the statute.

Moriwake said he’s not convinced AES’s analysis is correct. But even if it is, Moriwake said the plant’s continuing to burn coal probably would not sit well with renewable energy advocates and lawmakers who supported the anti-coal bill.

“That would be an enormous scandal, and there would be rioting in the streets from the green energy community,” he said. “Whatever the law says, there’s a whole political issue they’re going to have to deal with. It would be quite an outrage.”

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