Lanai wind farm term agreement negotiated

Hawaiian Electric Co. and Castle & Cooke Resorts officials contend that Lanai residents could see some benefits ranging from lower electric rates and guaranteed employment to hunting access and water rights as part of agreements they reached Friday on pricing terms for a Lanai wind farm.

But at least some Lanai residents say the agreement isn’t fair and would turn the island into “an industrial park” to provide electricity for Oahu.

The proposed wind farm by Interisland Wind would transmit as much as 400 megawatts of electricity to Oahu via an undersea cable from wind farms on Lanai and Molokai.

Friday’s agreements were for the Lanai facilities, not those proposed for Molokai, the companies said in a joint announcement.

“Castle & Cooke and Hawaiian Electric recognize that, while the electricity will be transmitted to Oahu, the impact of construction and operation of the wind farm will be felt on Lanai, including on cultural and recreational resources, plants and wildlife, and the people of the small island community,” the announcement said. “Therefore, a community benefits package for Lanai is appropriate.”

State Sen. J. Kalani English, whose 6th Senate District includes Lanai, Molokai, East Maui and Upcountry, said the proposal by the companies is “a good starting point.”

“I’m glad they’re putting something together,” he said.

English said he was particularly pleased to see that Lanai residents, who pay among the state’s highest electric bills, would pay the same rates as Oahu residents.

The agreement “incorporates a lot of things that make good sense for Lanai,” he said.

John Ornellas, a board member with Lanaians for Sensible Growth, expressed skepticism about the benefits package for Lanai residents and the chances that Castle & Cooke would follow through with its promises.

Ornellas said he was familiar with what’s being offered to Lanai residents, and “it’s not enough.”

“There’s a lot of ifs,” but not much concrete, he said late Friday afternoon.

Ornellas said the agreement contains promises about steady employment for Lanai residents, but Castle & Cooke laid off three longtime employees Friday.

“What does that tell you?” he asked, rhetorically. “And what about the 200 (people) laid off in the past couple of years?”

Ornellas said Lanai residents have a problem with Castle & Cooke “making commitments and not following through.”

Robin Kaye, spokesman for the community group Friends of Lana’i, said the companies’ agreement is “almost insulting” to the people of Lanai.

He said Castle & Cooke stands to make $180 million a year in power generation, and offering only $1 million to residents would be unfair when a quarter of the island would be “permanently disfigured” by 170 turbines.

“It’s not a fair trade,” he said. Having a quarter of Lanai provide 10 percent of Oahu’s electricity “makes us an industrial park for Oahu.”

Kaye said the power prices estimated by Hawaiian Electric are too low because they are based on today’s prices and not those three years from now when the project would get under way.

The low prices are “just something floating out there,” he said.

But Castle & Cooke Resorts President Harry Saunders said the benefits “reflect what we have heard from many people.”

“They represent a cross section of concerns about the wind farm and ideas about what is best for Lanai’s future.

“These proposals can improve the economic future of Lanai while making a contribution to the state as a whole by helping reduce our dependence on imported oil,” he said. “It will keep more of our energy dollars at home and protect the environment.”

The Lanai benefits proposal was the result of three years of informational and other meetings, at which company officials listened to residents’ concerns, the announcement said. Those providing input included the Carpenters Union, the International Longshore and Warehouse Union, Lanaians for Sensible Growth, Friends of Lana’i and small-business owners.

“We will continue the dialogue with the Lanai community as we proceed with the environmental impact and permitting review processes,” Saunders said.

Implementation of benefits would be tied to the construction of the wind farm, and in most cases begin when electricity from Lanai is supplied to Oahu, the announcement said.

The prices for Oahu residents would be lower than those for most other renewable energy available, the announcement said.

Lanai wind power would be priced at 13 cents per kilowatt hour for a 200-megawatt wind farm and 11 cents per kilowatt hour for a 400-megawatt farm, plus transmission costs.

“This would be among the most reasonably priced renewable energy available on Oahu, and the terms would be fixed for 20 years with only minor escalations,” the joint announcement said.

Robbie Alm, executive vice president with Hawaiian Electric, added that “these low prices will help protect Hawaii from the expected rise in the price of oil, and reduce the risk to our economy and way of life from possible disruptions in oil supplies.”

He also said the “benefits package (for Lanai residents) and preliminary pricing are the first step toward negotiation of a complete purchase power agreement for the Lanai project. . . . There will also be a formal environmental impact study for this and other parts of the Interisland Wind project, with plenty of opportunity for public comment. It would be unreasonable to ask the people of Lanai to consider hosting a project of this size without knowing the community benefits that would be offered.”

Public Utilities Commission approval is needed for the agreements to pave way for the wind farms that officials estimate would displace about 15 percent of Oahu’s oil use.

* Brian Perry can be reached at



According to Hawaiian Electric Co. and Castle & Cooke Resorts, the community benefits offered as part of a proposed Lanai wind farm, which would need Public Utilities Commission approval, include:

* Electric rates for Lanai residents that would match those on Oahu. (This could mean Lanai residential electric rates would be about 40 percent lower than those paid now.)

* Lanai would be 100 percent renewable by 2030, using a combination of solar, wind, biomass and biofuel resources.

* Grid improvements, allowing roof-top photovoltaic arrays; and more solar water heating.

Benefits not needing PUC approval and being offered by Hawaiian Electric include:

* A $50,000 per year contribution – during the life of the purchase power agreement – to the Lanai Community Fund.

* A $30,000 contribution for at least two years from Hawaiian Electric and Maui Electric for a community-based campaign for energy efficiency and conservation on Lanai.

And, benefits offered by Castle & Cooke, subject to PUC approval, would include:

* Employment on Lanai being maintained at no less than it is today.

* The establishment of a Lanai Community Benefits Fund with proceeds of 1 percent of the wind farm’s gross revenues. (Funds would be used for economic diversification and job creation; medical and social/health services; education, training and recreation; and cultural and natural resource preservation, with at least $100,000 per year going to the Lanai Cultural and Heritage Foundation.)

* Continued access to hunting areas and to coastal fishing at Ka’a.

* The ability of residential, agricultural and commercial lessees to buy their properties or land at fair market prices.

* Priority for qualified Lanai residents in construction jobs, and a requirement that contractors ensure that all workers respect Lanai community standards.

* All contractors required to protect Lanai archaeological and cultural sites, monitored by Lanai residents when possible.

* A reserve of 5,000 acres for a biofuel crop on Lanai.

* A sum of $250,000 a year for the term of the power purchase agreement for preservation of the Lanai Hale watershed.

* At least $500,000 a year for the term of the agreement for capital improvements to the Lanai water system and 250,000 gallons a day above the current allocation to encourage diversified agriculture.

Lanai wind farm term agreement negotiated – | News, Sports, Jobs, Visitor’s Information – The Maui News

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