Renewable Energy Procurement (RFP Docket No. 2017-0352) — Procurement Process

Procurement Process & PUC’s Role
Hawaiian Electric develops Requests for Proposals (“RFPs”) to solicit competitive bids from developers (and Hawaiian Electric and their affiliates, subject to restrictions) to meet the energy and capacity needs of Oahu, Maui, and Hawaii Island. The Commission opened Docket No. 2017-0352, also known as the RFP Docket, in 2017 to provide oversight on Hawaiian Electric’s competitive bidding process. Hawaiian Electric issued its third “stage” of procurement (“Stage 3 RFPs”) for large-scale renewable resources in December 2022 (Hawaii Island) and January 2023 (Oahu and Maui). The Stage 1 RFPs were issued in February 2018 and the Stage 2 RFPs were issued in August 2019. Each stage has a target amount of resources to procure to meet the island’s future needs.

Hawaiian Electric’s procurement process includes the following broad steps:

  1. Development of the RFP, including specific energy and capacity targets per island,
  2. Bid evaluation, project selection, and contract negotiation between Hawaiian Electric and the developer(s), with oversight provided by an Independent Observer (“IO”) appointed by the Commission, resulting in a contract between Hawaiian Electric and the developer that is submitted to the Commission,
  3. Commission review and approval of proposed contracts, called Power Purchase Agreements (“PPAs”), Energy Storage PPAs (“ESPPAs”), or Energy Storage Service Agreements (“ESSAs”), and
  4. Developers building projects and placing them in-service, after which the developer will sell energy to Hawaiian Electric per the terms of the Commission-approved contract.

 
The Commission’s Role

The RFP docket focuses on steps 1 and 2 of the procurement process, translating high-level resource needs into actionable procurements and monitoring of those procurements. Hawaiian Electric submits contracts for Commission review in new dockets, many of which are listed below. Hawaiian Electric utilizes a multi-stage approach to procuring renewable energy so that improvements to the RFP process can be made iteratively, and targets that are not met in one stage of procurement may be included in the next stage of procurement. Procurements are largely technology-neutral, meaning that any renewable source of energy can fuel the proposed power plant, provided that the facility meets the technical requirements laid out in each RFP.

An important part of the RFP Docket is establishing the criteria by which Hawaiian Electric evaluates bids, which the Commission reviews and seeks to improve with each stage. Hawaiian Electric’s Stage 3 RFPs introduced a requirement for developers to propose community benefit packages associated with new renewable energy projects. This mandate directs developers to set aside at least $3,000 per megawatt (“MW”) of the project capacity per year of the contract term (e.g., at least $750,000 for a 10 MW project with a 25-year contract term), thus working to ensure that communities receive benefits for hosting renewable energy projects.

Competitive Bidding Framework

The policies and procedures followed by each entity during the Competitive Bidding process are governed by a Framework for Competitive Bidding (“Competitive Bidding Framework” or “Framework”). This Framework may be periodically updated but will remain in effect throughout the entirety of a competitive solicitation. The Framework that is in effect for the Stage 3 RFP was approved on December 8, 2006 in Order No. 23121 in Docket No. 2003-0372 (See Appendix A). The Commission approved a Revised Framework to be used in the upcoming IGP RFPs on June 30, 2022 in Order No. 38481 in Docket No. 2018-0165 (See Appendix).

MORE INFORMATION

To see more and view all filed documents in the docket, see Docket No. 2017-0352.

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Updated 1/2024