HILO, Hawaii – The Hawaii Public Utilities Commission (PUC) has approved an amendment to the power purchase agreement between Hawaiian Electric and Wailuku River Hydroelectric, a move expected to benefit customers on Hawaii Island. The amended contract, announced today, establishes a fixed energy cost of $0.07 per kilowatt-hour (kWh) for power generated by the Hilo-based hydroelectric plant.
“A fixed rate of $0.07 per kilowatt-hour will save customers about $2 million per year compared with the current avoided cost payment rate of $0.20 per kilowatt-hour,” Hawaiian Electric said in a media release.
Wailuku River Hydroelectric has been providing up to 12.1 megawatts (MW) of run-of-river energy to the island’s power grid since 1993. The original contract, approved in 1991 and expired in May 2023, was extended under regulatory authorization while the amendment was under review. The new agreement extends the contract until May 2028, providing time for both parties to negotiate a future long-term agreement.
This is one of four long-term “avoided cost” contracts negotiated when laws required utilities to buy energy from renewable energy producers at adjustable rates linked to volatile oil prices. The law changed in 2009, and new renewable energy contracts are not linked to the cost of oil. Contracts with Puna Geothermal Venture and Hawi Renewable Development also were amended to include fixed pricing. The contract with Pakini Nui Wind Farm expires in 2027.
According to Hawaiian Electric, nearly 59% of Hawaii Island’s electricity in 2024 was generated from renewable sources, including solar, wind, hydroelectric, geothermal, and biofuel. The company has stated its commitment to renewable energy development to align with the state’s renewable energy goals.
Hawaiian Electric is also pursuing other renewable energy projects. In February, the company signed a contract with AES Hawaii for the Keamuku Solar + Storage project in Waikoloa, an 86 MW solar and 344 megawatt-hour (MWh) battery storage facility expected to be operational in 2030. This contract is currently awaiting PUC review and approval. In March, Innergex Renewable Energy, Inc.’s Hale Kuawehi Solar and Battery Storage Project in Waimea began commercial operations, producing up to 30 MW of solar energy supported by a 120 MWh battery energy storage system.