Competitive Bidding for New MECO Generation
On December 8, 2006, the Hawaii Public Utilities Commission (PUC) adopted a framework for competitive bidding as a mechanism for acquiring or building new energy generation in Hawaii. This framework applies to electric utilities regulated by and subject to the Commission's jurisdiction pursuant to Chapter 269, Hawaii Revised Statutes. Under the process, the Commission will make a determination in the utility's Integrated Resource Planning proceeding as to whether a competitive bidding process shall be used to acquire a future generation resource or block of generation resources. HECO has established a new Competitive Bidding Division within their Resource Acquisition Department to administer this competitive bidding procurement process. Information and related documents pertaining to MECO's Requests for Proposals are available here. MECO Firm Capacity Request for Proposals (RFP) November 25, 2009 Update The Commission has provided their approval for the closing of this docket and the termination of the Independent Observer contract. MECO will request that a new proceeding for competitive bidding be opened at the appropriate time in order that firm capacity can be installed in a timely manner on the island of Maui. November 5, 2009 Update Accion has submitted a report concurring with MECO's request to close this docket and the termination of their contract. October 15, 2009 Update Based on the need date for firm capacity being extended to the 2021 timeframe, MECO has filed a request to the Commission to close the RFP docket and to terminate the contract of the Independent Observer. September 28, 2009 Update MECO has filed an update to the need date for firm capacity. Based on a reduction in the forecast for peak demand, the need date for firm capacity has been revised from 2015 to 2021. February 27, 2009 Update - Need Date for Firm Generation Capacity on Maui changed from 2014 to 2015. The following are excerpts from Sections 1.7.1. and 1.7.2 of MECO's Adequacy of Supply filed on January 30, 2009: “MECO and HC&S agreed on July 2, 2007 not to issue a notice of termination of the PPA resulting in termination of the PPA prior to the end of the day on December 31, 2014. With both the extension of the non-termination contract agreement with HC&S and the assessment of reduced Maui system peaks, MECO’s analyses indicate that the need for additional firm generation on Maui will be in 2015. However, if MECO’s PPA with HC&S continues beyond year-end 2014 by mutual agreement of the parties, it is possible that the need for a firm capacity may be deferred to 2016 or beyond. MECO will continue to assess this need in future Adequacy of Supply analyses.” “With a 2015 unit addition need date, MECO is reassessing the scope and schedule of the planned competitive bidding process that was previously contemplated in its November 2, 2007 request.” A copy of MECO’s Adequacy of Supply filed on January 30, 2009 can be viewed by clicking here. Next update will be posted in April 2009. August 1, 2008 Update - Need Date for Firm Generation Capacity on Maui changed from 2011 to 2014. The following are excerpts from the update to MECO's Adequacy of Supply: “This is to inform the Commission that the need date for the next increment of additional firm generating capacity on the island of Maui has changed from 2011 to 2014. The primary reason for the deferral is a reduction in the forecast of peak demand. The new forecast of peak demand and the consequences of the deferral in the need for capacity are discussed herein.” “With the need date for the next increment of firm generating capacity deferred to 2014, MECO is reassessing the scope of the planned competitive bidding process previously contemplated in its November 2, 2007 request. This reassessment of the scope of the competitive bidding effort will be conducted in the process of preparing the upcoming MECO IRP Evaluation Report, which is scheduled to be filed no later than December 31, 2008. Depending on the results of this reassessment process, it is anticipated that a Draft RFP could be issued in early 2009 to support the firm generating capacity need date of 2014.” The update to MECO’s Adequacy of Supply was filed with the Public Utilities Commission on July 31, 2008. PAST POSTING Maui Electric Company, Limited. (MECO) plans to proceed with a competitive bidding process in accordance with the PUC Competitive Bidding Framework to acquire approximately 20 to 25 MW of firm generating capacity on the island of Maui in each of the 2011 and 2015 timeframes. The preferred units shall be primarily fueled by renewable resources. The preferred units should be capable of peaking or cycling duty where the unit can be started quickly and can cycle off-line. When on-line, the preferred units should be fully dispatchable from minimum to full load by MECO and should be capable of load-following, providing frequency control and voltage support according to standards to be determined by MECO. Additional information will be available in the Draft RFP. The Draft RFP is currently targeted for release in the 2nd quarter of 2008. Information and updates on the Draft RFP will be made available on MECO’s Generation Bidding website. The web site address is: generationbidding.mauielectric.com. If you are interested in receiving notification of the release of the Draft RFP, please submit the attached Notice of Interest to: genbid@mauielectric.com. Notice of Interest PUC Docket No. 2007-0403
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