To speed up the development of renewable energy projects, Hawaiian Electric Co. (HECO), unit of Hawaiian Electric Industries Inc., asked the Public Utilities Commission for permission to negotiate with five proposed projects.
With PUC approval, Hawaiian Electric would negotiate power purchase agreements directly with the developers of the five projects, which include a mix of solar and wind energy technologies across Oahu with a combined capacity of 64 MW. Hawaiian Electric anticipates negotiating long term, 20-year contracts with each project.
Combined, the projects have committed to sell electricity to Hawaiian Electric at an average price of 15.9 cents per kWh. This is about one-third less than prices paid to existing solar and wind energy projects on Oahu and the current cost of generating electricity from oil, according to HECO.
Based on preliminary estimates, Hawaiian Electric expects the combined effect of all five of these projects could reduce generation costs by about $7.4 million a year, compared to today’s cost of generation. Hawaiian Electric’s goal is to have as many of these projects as possible in service by the end of 2015.
In addition, 20 projects that originally provided proposals but were not selected will be given the opportunity to update and resubmit their pricing proposals. If those projects meet lower pricing and other criteria such as site control, they could be considered in a supplemental request to negotiate power purchase agreements.