Despite opposition from the Department of Hawaiian Home Lands, Hawaiian Electric has an opportunity to extend its rights to keep generating power on Wailuku River.
The Board of Land and Natural Resources on Friday discussed a request by Hawaiian Electric for a long-term water license to use the river to generate hydroelectric power.
Hawaiian Electric currently operates a pair of hydroelectric facilities on the river, the Waiau and Puueo hydroelectric plants. Together, the two plants generate about 4.5 megawatts of power, said Hawaiian Electric spokeswoman Kristin Okinaka via email.
Okinaka said Hawaiian Electric has water usage rights for the two plants through a revocable permit with the state. However, in order to make necessary improvements to the century-old facilities — as well as repair damage to the Waiau plant caused by Hurricane Lane in 2018 — the utility has requested a 30-year license for the water in order to make the cost of those improvements justifiable.
That request, initially made in 2016, prompted concerns from DHHL representatives during Friday’s meeting.
DHHL Acting Planning Program Manager Andrew Choy requested a contested case hearing about the proposed action because of how the DLNR plans to determine rent payments for the long-term license. Choy said DHHL is entitled to 30% of revenue from water licenses, as dictated by the Hawaiian Homes Commission Act and the state Constitution.
However, the DLNR previously proposed a sizable discount for the annual cost of the water rights. Because the water would be used for renewable power generation, the DLNR calculated that the two power plants save about 11,702 tons of carbon dioxide from being produced annually, which the department determined entitles the bearer to a discount of more than $100,000 per year.
With the discount applied, the DLNR proposed that the water rights holder would have to contribute $31,080 per year to management costs for the Wailuku watershed, to which Choy objected.
“We fully understand that healthy watersheds are a critical component of well-being,” Choy said. “However, it should not come at the expense of our Native Hawaiian beneficiaries. Healthy watersheds and healthy homesteads are equally important.”
After a lengthy consultation with legal counsel, the board ultimately denied DHHL’s request for a contested case, with Chair Suzanne Case noting that DHHL will still get its 30% share as required by law.
“That is not changing, but what they are objecting to is their view of the base price … because they want it to be higher,” Case said.
The board then approved the sale of the long-term license at public auction.
Ian Hirokawa, special projects coordinator for the DLNR’s Land Division, said that although Hawaiian Electric currently holds a revocable permit for the Wailuku water rights, the company still will have to submit a bid application and be qualified just like any other prospective bidder.
Okinaka said that auction is likely to be held December or January.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.