Sunday, June 23, 2024
Hawai'i Free Press

Current Articles | Archives

Tuesday, May 23, 2023
'Renewable' Gravy Train End of Line: After Decades, HECO Dumps 'Avoided Cost' Contracts
By News Release @ 12:19 PM :: 2286 Views :: Hawaii County , Energy, Cost of Living

Three Hawaii Island renewable energy contracts amended, will result in long-term savings for customers

No longer linked to cost of oil, fixed prices will stabilize bills

News Release from HECO, 5/22/2023

HILO, May 22, 2023 – Hawaiian Electric has renegotiated three of four renewable energy contracts at fixed rates that can help reduce and stabilize bills, resulting in long-term savings for customers on Hawaii Island.

The current contracts with Puna Geothermal Venture (PGV), Hawi Renewable Development (HRD), and Wailuku River Hydroelectric (WRH) are long-term “avoided cost” contracts with adjustable rates that are tied to oil prices and that fluctuate monthly. Amended contracts were recently filed with the Public Utilities Commission (PUC) for approval.

Based on today’s rates, a typical residential customer using 500 kilowatts could see savings ranging from $9 to $13 per month. The amount of savings and the timing depends on when PGV and HRD expand their output, which is expected in 2026; the majority of savings will come from the amended PGV contract.

($13 x 12 = $156/yr x 30 years = $4,680 you paid for this scam)

If the PGV expansion is approved, at least 65% of the island’s energy would be generated by renewable resources by 2026.

“We’ve been working hard with our independent power producers to amend these contracts to provide substantial benefits to our customers on Hawaii Island,” said Rebecca Dayhuff Matsushima, Hawaiian Electric’s vice president of resource procurement. “Benefits include bill savings, stabilized energy rates, more renewable energy and reliability, and decreased fossil fuel consumption and greenhouse gas emissions.

“This is significant because more than half the island’s energy is generated by independent power producers and more than half the electric rate covers fuel and purchased power. These amended contracts have lower cost, fixed pricing delinked from volatile oil prices.”

The four original contracts were negotiated in the 1990s and 2000s when laws required utilities to buy energy from renewable energy producers at “avoided cost” – avoiding the use of oil but paying the same rate.

Avoided cost was seen as an incentive to developers to build renewable energy projects. Today, the market for renewable energy is highly competitive and the law no longer requires avoided cost contracts.

In March 2022, the PUC conditionally approved the Puna Geothermal Venture contract, which would increase the output of the plant and reduce the amount Hawaiian Electric pays for the electricity it produces. The contract is subject to an environmental review and PGV recently submitted a draft Environmental Impact Statement to the County of Hawaii.

A first amendment to the 25-year contract was filed in April 2023 and includes an updated in-service date of September 2026. The facility would be repowered with modern, more efficient generating equipment and provide up to 46 megawatts to the grid.

An amended contract with Hawi Renewable Development, which produces electricity from wind, was filed in December 2021. A first amendment to the 20-year contract was filed in January 2023 and includes modifications to upgrade and repower the facility to provide up to 34 megawatts. It currently provides up to 11 megawatts to the grid.

Regulators are reviewing a second amendment to the existing Wailuku River Hydroelectric contract, which was extended while the amended contract is being reviewed. Until the amendment is approved, the 12-megawatt run-of-river facility is allowed to continue operations under the existing contract.

Customers could see bill savings from the hydroelectric contract as early as this summer. Savings also will depend on the island’s generation mix at the time and future oil prices. Projected savings are based on a comparison to current oil prices, which may increase or decrease in the future.

The remaining long-term avoided cost contract, Pakini Nui Wind Farm, expires in 2027.

---30---

HTH: Energy contracts renegotiated; Move will reduce customers’ power bills, Hawaiian Electric says

SA: Hawaiian Electric renegotiates renewable energy contracts

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii