Climate Challenge Participation AccordDOE's Energy Partnerships for a Strong EconomyCLIMATE CHALLENGE PARTICIPATION ACCORD
BETWEEN HAWAIIAN ELECTRIC COMPANY, INC. AND THE U.S. DEPARTMENT OF ENERGY This Participation Accord describes the commitments that Hawaiian Electric Company, Inc. (including its subsidiaries Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited) and the U.S. Department of energy (DOE) have made to participate in the Climate Challenge Program in pursuit of the President's goals for reducing greenhouse gas emissions. The Climate Challenge Program is a joint, voluntary effort of DOE and the electric utility industry to reduce, avoid or sequester greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Memorandum of Understanding and exhibits thereto dated April 20, 1994 (The Climate Challenge Program MOU) (see Attachment A to this Participation Accord). I. Utility Commitments A. 1. Consistent with paragraph II.B.l.a. of the Climate Challenge Program MOU, Hawaiian Electric Company will participate in the Utility Forest Carbon Management Program (UFCMP), a Climate Challenge industry initiative. Hawaiian Electric Company has contributed $5,000 to aid startup of the program, and has thus far contributed an additional $ 10,000 to pay for implementation of actual forestry projects. Hawaiian Electric Company will evaluate annually whether further project contributions will be made. This commitment is further detailed in Attachment B. 2. Consistent with paragraphs II.B.1.d., II.B.1.e., and II.B.1.f of the Climate Challenge Program MOU, Hawaiian Electric Company: a. Will limit, through the year 2000, CO2 emissions per kWh from Company owned fossil fuel generating units to 1.76 lbs CO2/kWh, calculated as a weighted system average; b. Will cumulatively avoid 380,000 tons of CO2 emissions by the end of the year 2000 through demand side management (DSM) programs; c. Will annually purchase or produce at least 500,000 MWh of renewable energy, resulting in a five-year cumulative avoidance of 2,200,000 tons of CO2 through the year 2000; d. Has undertaken or will undertake the following actions to reduce, avoid or sequester greenhouse gas emissions: (i) Transmission and Distribution Projects; -- Restoration of native Hawaiian Plant Species (iv) Electric Vehicle and Transportation Programs; These commitments are further detailed in Attachment B. Accounting for commitments a, b, and c shall be calculated using the method specified in Attachment C to this accord. B. Hawaiian Electric Company will report annually on activities and achievements under the Climate Challenge Program. Results achieved during each year shall be reported in a clear and understandable manner that is consistent with the guidelines adopted pursuant to subsection 1605(b) of the Energy Policy Act and with the Climate Challenge accounting protocols in Exhibit B of the Climate Challenge MOU. The first such report may include a description of the activities and achievements of Hawaiian Electric Company prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible. C. Hawaiian Electric Company will confer with DOE on or before December 31, 1998 to evaluate jointly the progress of Hawaiian Electric Company in achieving its Climate Challenge Program goals and to discuss possible adjustments to its voluntary commitments. D. The Climate Challenge Program representative for Hawaiian Electric Company will be: Ms. Patricia Uyehara Wong, Esq. Hawaiian Electric Company agrees to notify DOE prior to or, in any event, no later than 30 days after any change in the contact. II. DOE Commitments A. DOE's commitments to Hawaiian Electric Company are those set out in section III of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference. B. DOE will consider Hawaiian Electric Company requests to intervene in regulatory proceedings of federal, state and local commissions and boards on issues pertinent to the Climate Challenge Program. Before DOE intervenes in regulatory and other proceedings pertaining to Hawaiian Electric Company for purposes of addressing Climate Challenge Program issues, it will provide notice to Hawaiian Electric Company. C. DOE will provide an annual report to Hawaiian Electric Company describing the actions that it has taken to fulfill its commitments under section III and Exhibit C of the Climate Challenge Program MOU and the results of those actions. D. The Climate Challenge Program representative for DOE, who will serve as liaison to Hawaiian Electric Company, will be: Mr. Larry Mansueti DOE agrees to notify Hawaiian Electric Company prior to or, in any event, no later than 30 days after any change in liaison responsibilities or personnel. III. General Provisions A. Use of DOE-developed materials by Hawaiian Electric Company will be governed by the provisions of section IV the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference. B. In addition to the foregoing provisions, DOE and Hawaiian Electric Company agree to act in accordance with the general principles set out in section I of the Climate Challenge Program MOU and the general provisions set out in subsections V.A-V.D, V.F and V.G of the Climate Challenge Program MOU, which are hereby incorporated by reference. C. Either party may withdraw from this Participation Accord or any of its activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity. (signed) T. Michael May (signed) Secretary of Energy (or designee) Attachments: Attachment A - Climate Challenge Program MOU and exhibits Attachment B - Hawaiian Electric Climate Challenge Program
ATTACHMENT A
Climate Challenge Program MOU and exhibits
ATTACHMENT B
Hawaiian Electric Company, Inc. I. Industry Greenhouse Gas Reduction Initiative Utility Forest Carbon Management Program II. Hawaiian Electric Company Greenhouse Gas Emissions Reduction Activities A. Fossil Fuel Generating Unit Efficiency Improvement B. Demand-Side Management Measures 1. Commercial and Industrial Energy Efficiency Programs C. Renewable Energy Generation D. Other Hawaiian Electric Company Greenhouse Gas Reduction Activities I. Industry Greenhouse Gas Reduction Initiative Hawaiian Electric[1] has elected to participate and will continue to participate in the Utility Forest Carbon Management Program (UFCMP). This industry initiative proposes to establish a coordinated electric utility plan to manage CO2 and other greenhouse gases through sponsorship of a variety of forestry projects. The nonprofit corporation called UtiliTree Carbon Company was established in the latter part of 1995 to sponsor projects identified by the UFCMP[2]. Thus far, Hawaiian Electric has contributed $5,000 to pay for UFCMP startup costs, and $10,000 to support UtiliTree projects through the year 2000. Based on a projection that the UtiliTree projects will sequester a total of 2.2 million tons of CO2 per year, Hawaiian Electric's $10,000 contribution will provide the equivalent of sequestering an average 12,260 tons of CO2 per year (a cumulative 61,300 tons by end of 2000). Further contributions to UtiliTree projects may be made by Hawaiian Electric; this will be evaluated on an annual basis. II. Hawaiian Electric Company Greenhouse Gas Emissions Reduction ActivitiesThe production of greenhouse gas emissions is a direct result of the use of fossil fuels. Hawaiian Electric's greenhouse gas emission control strategy focuses on three major areas:
Hawaiian Electric's efforts in each of these areas are described below. A. Fossil Fuel Generating Unit Efficiency Improvement To meet our commitment of limiting CO2 emissions per kWh from fossil fuel generating units to 1.76 lbs CO2/kWh, calculated as a weighted system average, Hawaiian Electric intends to do the following: Continued load growth will require Hawaiian Electric to add new generation capacity despite DSM measures. For its large generation facilities, Hawaiian Electric continuously seeks to phase in cleaner, more efficient generation systems such as combined cycle combustion turbines. The higher efficiency units are used for both peaking and new baseload service to meet the generation capacity needs brought on by the retirement of less efficient units or system load growth. Two combined cycle combustion turbines were placed in service on Maui in 1992 and 1993, respectively, and Hawaiian Electric is in the process of permitting additional combined cycle turbines on the Big Island. The Maui combined cycle turbines produce roughly 10 percent less CO2 per kWh than existing Maui steam boiler generators. Hawaiian Electric will continue to examine the use of alternate fuels and technologies which could provide fuel flexibility, improve efficiencies, and reduce emissions. The fuels include liquefied natural gas (LNG), micronized coal, coal gas, Orimulsion, methanol and others. The technologies include coal or high sulfur fuel oil gasification and fuel cells. For its existing fossil fuel generating units, Hawaiian Electric continuously aims to reduce fuel use (hence CO2 emissions) per unit of energy generated. To accomplish this, Hawaiian Electric has implemented and will continue to implement plant betterment projects such as control system and plant instrumentation overhauls/upgrades, and is moving towards increasingly automated monitoring of unit operating performance. Figure 1 shows Hawaiian Electric's CO2 emissions per kWh for 1990-1995, calculated on a combined system basis for HECO, HELCO, and MECO. In 1990, the Hawaiian Electric system CO2 emission rate was 1.76 lbs CO2/kWh. With the exception of 1992, Hawaiian Electric has been able to keep system wide CO2 emissions at or below the 1990 emission rate. Hawaiian Electric anticipates this to continue, and has therefore established as a Climate Challenge commitment limiting CO2 emissions per kWh to 1.76 lbs CO2/kWh, calculated on a combined system wide basis. The 1.76 lbs CO2/kWh Climate Challenge commitment is anticipated to be appropriate through the year 2000. Beyond this time frame, however, the possibility of coal fired generation being added to the Hawaiian Electric system, with higher rates of CO2 emissions on the order of 1.95 lbs CO2/kWh, must be noted due to the State of Hawaii's identification of coal as a desired means to reduce the State's dependence on oil. Although future generation in Hawaii may include use of coal, particularly on Oahu, Hawaiian Electric plans to offset to the extent practicable the increased CO2 emissions by continued installation of fuel efficient combined cycle combustion turbine plants. The 1.76 lbs CO2/kWh emission rate commitment will be reevaluated as necessary to reflect the use of coal fired generation.
FIGURE 1 Hawaiian Electric System CO2 Emissions per KWH, 1990-1995 B. Demand-Side Management Measures (DSM) Hawaiian Electric began the following DSM programs in 1996 and will continue these programs, as allowed by the Hawaii Public Utilities Commission, to meet our Climate Challenge commitment to avoid 380,000 tons of CO2 by the end of the year 2000:
2. Commercial and Industrial Custom Rebate Program: Provide a cost-sharing mechanism to develop other demand-side energy efficiency opportunities.
3. Commercial and Industrial New Construction Program: Provide design and technical assistance in the areas of air conditioning, lighting, motors and other end uses in the commercial and industrial new construction market. 4. Residential Efficient Water Heating Program (Existing Customers): Promote the use of high efficiency water heating technologies such as solar water heating, heat pump water heaters, efficient resistance water heaters and low flow shower heads. 5. Residential Efficient Water Heating (New Construction): Promote solar water heating, heat pump water heaters and high efficiency resistance water heating to developers of new housing projects. With 1996 as the beginning year of implementation, Table 1 shows forecasted DSM energy and CO2 savings[3] through the year 2000. On a cumulative basis through the year 2000, the DSM programs will have saved an estimated 431,961 MWh energy, avoiding generation of approximately 380,000 tons of CO2. TABLE 1 Expected DSM Energy and CO2 Savings
C. Renewable Energy Generation The use of renewable energy provides environmental benefits. However, cost, reliability, compatibility with existing electrical units, social and environmental impacts must also be taken into account. Despite the challenges of using certain renewable energy technologies, Hawaiian Electric has a long-standing commitment to renewable energy -- by using it as a current energy source when appropriate, and by supporting research, development and demonstration to make it technologically viable for the future. Hawaiian Electric intends to meet its Climate Challenge commitment to purchase or produce at least 500,000 MWh of renewable energy per year via the following:
The record of alternate energy purchased by HECO, MECO and HELCO since 1990 is shown in Table 2 and illustrated in Figure 2. It is expected that through the year 2000, with current trends continuing for all alternate energies except biomass[6], at least 500,000 MWh of renewable energy will be purchased or produced by HECO, MECO, and HELCO (combined) each year. This serves to avoid emissions of 440,000 tons of CO2 annually and 2,200,000 tons of CO2 cumulatively through the year 2000 (5 year period), based on the fossil fuel generating unit target emission rate of 1.76 lbs CO2/kWh. TABLE 2 Total Renewable Energy Purchased and Produced by Hawaiian Electric Company, 1990-1995
FIGURE 2 Total Renewable Energy Purchased and Produced by Hawaiian Electric Company[7], 1990-1995
D. Other Hawaiian Electric Company Greenhouse Gas Reduction Activities Hawaiian Electric commits to the following projects that will control emissions of greenhouse gases:
1. Transmission and Distribution Efficiency Improvements Improving efficiency in the transmission and distribution of electric energy reduces the amount of power that must be generated, hence decreasing total CO2 emissions. Measures being taken or evaluated by Hawaiian Electric to minimize transmission and distribution losses are listed below: 2. Renewable Energy Studies and Promotions Hawaiian Electric has participated and will continue to actively participate in and/or fund[9] renewable energy research, development and demonstration including: Hawaiian Electric also will continue programs to promote the use of renewable energy systems. Programs previously started and currently in place include: Additionally, the following programs were recently started in 1996: These activities are all part of a renewable energy action plan to help in its development. The action plan elements are: 3. Local Forestry Management Programs In addition to participating in the UFCMP forestry initiative, Hawaiian Electric has and will continue to support forestry programs within the State of Hawaii. Recent or ongoing forestry management programs include the following: 5. Education and Information Programs Hawaiian Electric currently conducts and will continue to conduct the following programs to improve awareness of the importance of energy conservation and safety, and to promote energy-saving technologies[13]: The number of people reached by such programs averages approximately 63,000 annually. In 1995, presentations were given to approximately 1,400 individuals from local service, professional, student and seniors groups. Hawaiian Electric is a member of the Electric Power Research Institute (EPRI). Through EPRI, Hawaiian Electric funds research in areas including those with particular emphasis on greenhouse gases. In 1996, $10,474 was devoted to research on "Utility Greenhouse Gas Risk Management." In 1996, Hawaiian Electric budgeted an additional amount of $575,000 in the following areas of research: Research and development expenditures may vary greatly between years pending PUC approval of projects, hence no estimate can be made for forthcoming expenditures in this area.
ATTACHMENT C
Method of Accounting for Carbon Dioxide (CO2) Emissions per kWh Energy Generated Annual CO2 emissions are calculated using the methodology given in State Workbook: Methodologies for Estimating Greenhouse Gas Emissions, U.S. Environmental Protection Agency, 2d Edition, 1995. For each fossil fuel-fired generating unit, the annual amount of CO2 emissions is calculated using the following equation: Tons CO2 = (annual heat input) * (carbon emission factor) * (oxidation factor) * (molecular ratio of CO2 to C) Annual heat input is calculated in 106 Btu/yr from the annual HECO/MECO/HELCO fuel use reports submitted to the Hawaii State Department of health, assuming 150,000 Btu/gal for No. 6 fuel oil and 139,000 Btu/gal for No.2 diesel. The carbon emission factor, expressed in pounds of carbon per 106 Btu, is given in the U.S. EPA document cited above as 47.4 lbs/106 Btu for No. 6 fuel oil and 44.0 lbs/106 Btu for No. 2 diesel. The oxidation factor is also provided in the document as 0.99, and the molecular ratio of CO2 to C is 44/12. Annual tons of CO2 is summed for all units in the HECO/MECO/HELCO system, and divided by the total gross kWh produced by the units to obtain lbs CO2/kWh. Annual CO2 Avoided by Demand Side Management (DSM) Programs The amount of annual kWh energy saved by DSM programs is reported by the HECO Energy Services Department. DSM savings are the calculated reduction in energy sales for the year based on the actual installation of energy efficient measures. Annual kWh energy savings are multiplied by the system wide average lbs CO2/kWh emission rate to obtain the annual CO2 avoided by DSM programs. This calculation will utilize the actual computed lbs CO2/kWh for that year, rather than the Climate Challenge commitment 1.76 lbs CO2/kWh emission rate. Annual CO2 Avoided by Use of Renewable Energy The amount of annual kWh renewable energy purchased or generated by HECO/HELCO/MECO is multiplied by the system wide average lbs CO2/kWh emission rate. This calculation will utilize the actual computed lbs CO2/kWh for that year, rather than the Climate Challenge commitment 1.76 lbs CO2/kWh emission rate. [1] As used in this document, "Hawaiian Electric" includes Hawaiian Electric Company, Inc. (HECO) and its subsidiaries Maui Electric Company, Ltd. (MECO), and Hawaii Electric Light Company, Inc. (HELCO). [Back] [2] Five projects in the areas of rural tree planting, forest preservation, forest management and research located in Louisiana, California, Oregon, Belize and Malaysia are currently being funded by UtiliTree. [Back] [3] reductions are with respect to a base (energy sales and demand peak) forecast for each given year [Back] [4] Future uncertain since New World Power Corp. has left the site. [Back] [5] HELCO recently received ownership of Lalamilo Wind Farm. [Back] [6] Biomass energy production is highly dependent on the local sugar industry. As of 1996, all Big Island and Oahu sugar refineries were shut down, and the availability of long term biomass energy from Maui refineries cannot be guaranteed. [Back] [7] HECO, MECO, and HELCO combined [Back] [8] These transformers, identified at the 1992 "Earth Summit" as one of the key emerging technologies for energy efficiency improvement and consequent reduction of carbon emissions, can reduce "no load" energy losses by roughly 66 percent compared to ordinary transformers. While AMTs currently cost 15 to 35 percent more than conventional transformers, this premium is expected to decrease significantly as manufacturing capacity expands and further technological improvements are made. Hence, Hawaiian Electric will continue to consider the use of AMTs and other types of low loss transformers. [Back] [9] 1991-1995 Hawaiian Electric research and development expenditures in the area of renewable energy totaled $810,000. [Back] [10] Done in conjunction with State DLNR, Div. of Forestry & Wildlife, U.S. Soil Conservation Service, The Outdoor Circle, and the Sierra Club. [Back] [11] A State regulatory council that selects projects to be awarded federal grants for planting and studying the urban forest. Hawaiian Electric Company is a member and active participant. [Back] [12] EPAct of 1992 mandates that 30% of new vehicle purchases in 1996 be alternate fueled, 50% in 1997, 70% in 1998, and 90% in 1999 and thereafter. [Back] [13] Included are the thermal electric grill, cordless mulching mower, cordless weed trimmer, rechargeable halogen lantern, renewable power station, energy saving fax machine, portable power source, countertop water distiller, noise quieting system, cordless vacuum cleaner, a pressure washer (water blaster), and an electric fireplace. [Back] [14] Hawaiian Electric Company and EPRI are cost-sharing projects in photovoltaic and transmission/distribution research. [Back]
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