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Another Cheaper Power Source Possible, HELCO Says

October 17, 2012, 6:37 PM HST (Updated October 17, 2012, 6:41 PM)
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A Hawaii Electric Light Co. official today told the County Council that a second independent power producer may be willing to reduce what it charges the utility for electricity.

Curtis Beck, HELCO’s manager of electrical service, declined to name the company that has approached the utility about changing the terms of its contract.

The council last month approved a resolution urging the utility to renegotiate its contracts with power providers to “de-link” them from what is known as avoided cost, or what it would have cost to generate the electricity with fossil fuels.

Beck said he did not know whether the resolution was a factor in the producer’s decision to approach HELCO.

Hilo Councilman J Yoshimoto had introduced the resolution in an attempt to reduce HELCO’s electrical rates, which are among the highest in the nation.

The resolution also requested that HELCO appear before the council today to provide an update on its progress.

During discussions last month, HELCO President Jay Ignacio said that HELCO was in agreement with the resolution but is tied to existing contracts, some of which will last for decades.

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However, Ignacio said that HELCO had already been approached by Puna Geothermal Venture about renegotiating its existing contracts.

HELCO had previously reached an agreement to purchase at a reduced cost 8 additional megawatts of power from Puna Geothermal Venture, and 5 megawatts from an older 30-megawatt PGV contract.

HELCO also has a de-linked contract with Hu Honua to purchase biomass-generated electricity when the plant north of Hilo begins operations in several years.

It is not clear how much savings HELCO’s customers would see from the reduced contracts. Ignacio said in April that the 13 megawatts from the new PGV contracts would have only a negligible impact on electrical bills.

Ignacio told council members last month that his company does not make any profit on power bought from independent producers. He said its profits come from its investments which include power generators and other utility infrastructure.

Any changes to power contracts must be approved by the state Public Utilities Commission.

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