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The Honolulu Advertiser
Posted on: Thursday, July 3, 2008

LANAI WINDFARM
Billionaire wind-farm developer urges Hawaii to declare energy emergency

By Andrew Gomes
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

David Murdock.

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The billionaire developer of a planned Lana'i wind farm that would supply power to O'ahu is urging Gov. Linda Lingle to declare a state of emergency to combat soaring energy prices by fast-tracking big clean-energy projects.

David Murdock, who owns 98 percent of Lana'i and is chairman and CEO of Castle & Cooke Inc., said his wind farm project that would supply up to 20 percent of O'ahu's electricity needs will take five to seven years to gain regulatory approvals too long in a state where overdependency on $144-a-barrel oil is hurting the economy.

"We are in a desperate emergency in the state of Hawai'i," he said. "You're paying now over $100 to fill your car up it goes to $200, $300, when's it going to stop? Never. I'd like the governor to declare a state of emergency."

Murdock made his comments on Tuesday at a Lingle news conference about renewable energy production and expanded on them in an interview with The Advertiser yesterday.

At her news conference, Lingle didn't respond directly to Murdock's suggestion that she invoke her emergency proclamation powers.

Yesterday, Lingle spokesman Russell Pang said the governor shares Murdock's sense of urgency in wanting to reduce Hawai'i's overdependence on foreign oil and appreciates his passion for wanting to create price stability to help residents and businesses. But Pang wouldn't discuss the merits of using emergency powers to provide renewable energy.

Emergency powers give the governor broad discretion to waive laws that typically might interfere with immediately responding to natural disasters, such as hurricanes or earthquakes, or man-made catastrophes, such as massive oil spills or terrorism.

Proclaiming an energy cost emergency could be controversial. Earlier this year, lawmakers passed a bill to limit the governor's emergency powers. Lawmakers were unhappy with the governor's use of the emergency powers to build a homeless shelter. Lingle vetoed the bill. The Senate overrode the veto, but the House didn't, and the bill failed.

A key lawmaker said yesterday the energy emergency idea is worth exploring.

"Murdock's proposal is something that should be seriously looked at," said House Majority Leader Kirk Caldwell, who with other Legislative leaders met with Murdock in a private briefing on Tuesday.

Caldwell, D-24th (Manoa), said specifics on what kind of red tape would be cut if Lingle granted Murdock's wish is key to whether such action has merit. Caldwell added there would be strong support if the plan moves the state closer toward energy independence without significantly harming consumers or the environment.

Timothy Hill, a Castle & Cooke vice president on Lana'i, said the company isn't seeking to skip the environmental impact statement process or eliminate public input, but wants to remove uncertainty on how long state and county agencies may take for ruling on regulatory issues.

3-YEAR BID PROCESS

Another big impediment is the process that Hawaiian Electric Co., as a regulated utility, must go through to determine whether it will buy power from an alternative energy producer.

According to Castle & Cooke, it could take three years for Hawaiian Electric to arrange a power purchase agreement through a competitive bid process. The state Public Utilities Commission also plays a role in approving wind power sales.

Hill said a maximum two-year permitting timetable is Castle & Cooke's goal, which would reduce costs for developing the wind farm and provide energy cost relief and energy security sooner.

Castle & Cooke's project on 10,000 to 12,000 acres of a remote part of 88,000-acre Lana'i would go a long way toward meeting the state's ambitious goal of producing 70 percent of Hawai'i power from clean energy by 2030.

Murdock said that with the price of oil soaring 40 percent over the past three months, Hawai'i can't wait to 2030.

Lingle at her news conference noted that imported oil is a huge drain on the local economy, which sends $7 billion a year to out-of-state oil suppliers, up from $5 billion a year ago.

"Our future is very insecure if we don't make this transition (from an overreliance of imported foreign oil)," she said.

Lingle signed two bills passed by the Legislature that will encourage development of large renewable energy production.

One bill, House Bill 2505, establishes a full-time renewable energy facilitator at the state whose duties include proposing changes to the permit process and helping facilitate permits for energy project developers.

The other bill, House Bill 2863, would have the director of the state Department of Business, Economic Development and Tourism develop a permit plan application process that would encourage state and county agencies to make permit decisions within 18 months for energy projects of at least 200 megawatts. However, the bill also allows agencies to take more time if they claim they are proceeding as fast as they can.

Murdock, at the bill signing, said the bills removed some "roadblocks" but fell short of real expedition. "This bill opens up the right to do a lot of things," he said. "It doesn't say one word about hurrying."

ADMIRES ENTHUSIASM

After Murdock spoke, Lingle, a longtime friend of the businessman who has run Castle & Cooke and Dole Food Co. since 1985, acknowledged that the bills weren't perfect and thanked Murdock for his comments.

"I admire his enthusiasm and his lack of patience with everything," she said. "This happens to be one of the situations where a lack of patience will come in real handy because we just don't have the time that you do under normal circumstances to discuss things for long, long periods of time. We do need to have some action."

Murdock announced his estimated $750 million plan for a 300- to 400-megawatt wind farm a year ago, and said the area on Lana'i for the farm is 15 miles from the nearest home and receives the strongest and most consistent wind anywhere over land in the state.

The project would be the largest wind farm in Hawai'i, providing 10 times more energy than the largest existing local wind farm, and could provide power to O'ahu via undersea cable.

Castle & Cooke has erected six towers to further study the area's wind levels, and has signed a memorandum of understanding with the federal Department of Energy and Hawaiian Electric to help produce 70 percent to 100 percent of Lana'i's electricity through wind power.

Lana'i residents pay some of the highest rates for electricity in the state 44 cents per kilowatt hour, up from 33 cents a year earlier and 24 cents in 2002. At present prices, the monthly household bill for a family using 1,000 kilowatt hours a month is $440.

Castle & Cooke also pays a lot for power as the consumer of 75 percent of fuel on Lana'i, including electricity to run the two resorts on the island and shuttles to take tourists between the two hotels that are nine miles apart.

Murdock said he will benefit from his planned wind farm, but he also wants to provide consumers on Lana'i and O'ahu with energy cost relief. "If you have wind power, you freeze the price (of electricity)," he said. "The whole state has an emergency. I'm fighting for all the people of Hawai'i."

Reach Andrew Gomes at agomes@honoluluadvertiser.com.

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