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HELCO Signs Deal With Hu Honua for Electricity

May 22, 2012, 10:03 AM HST
* Updated May 22, 12:51 PM
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Hawaii Electric Light Co. has inked a deal with Hu Honua Bioenergy to provide 21.5 megawatts of electricity to the Big Island’s electrical grid.

The 20-year pact calls for Hu Honua to generate the electricity through the burning of biomass at the former Hilo Coast Processing Co. sugar mill in Pepeekeo.

According to a press release from Hu Honua, the source of the biomass will be renewable biofuel “including locally-grown biomass” such as eucalyptus. It was not immediately clear whether there are plans to import biomass to the Big Island.

Hu Honua spokeswoman Barbara Hastings said today the company could not comment on its biomass sources until negotiations with local biomass suppliers are completed.

Previously the boiler at HCPC burned bagasse, a sugar cane byproduct, to generate electricity. The company switched to coal after the plantation quit growing cane in 1994.

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Although company officials have not said how much the utility will pay for the electricity, the contract with HELCO calls for it to be de-coupled from “avoided cost” or what it would have cost to generate the power with fossil fuels.

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This will mark the second alternative energy contract signed recently by HELCO not tied to avoided cost. According to HELCO President Jay Ignacio, the other was with Puna Geothermal Venture for an additional 8 megawatts as well as 5 megawatts of the previous contracted 30 megawatts from PGV.

Hu Honua said its power will make up about 10% of the Big Island’s electrical needs.

Ignacio told Big Island Now in April that he expects Hu Honua to begin providing power in 2014. HELCO currently gets about a third of its capacity from renewable energy sources, and the addition of Hu Honua will raise that to more than 50%, Ignacio said in the Hu Honua statement.

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“Hu Honuaʼs facility will supply us firm renewable energy at prices that are stable and not tied to the unpredictable world oil market and that is good for our customers,” Ignacio said.

Hu Honua CEO John Sylvia said the company will be hiring between 80 and 100 workers to refurbish the former sugar cane factory and will need up to 39 employees to operate the facility.

Hu Honua’s power purchase agreement with HELCO is subject to approval by the state Public Utilities Commission.

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