Hawaiian Electric Company has asked the Public Utilities Commission for permission to negotiate with five proposed projects that could quickly provide low-cost electricity for Oahu.
If the PUC approves, HECO will negotiate agreements directly with the developers of the five projects, which include a mix of solar and wind technologies across Oahu with a combined capacity of 64 megawatts.
HECO anticipates negotiating long-term, 20-year contracts with each project.
All the combined projects have committed to sell electricity to HECO at an average price of 15.9 cents per kilowatt-hour. 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.
“These projects represent an important first step as we are starting to see lower market prices for renewable energy,” HECO Vice President for Energy Resources and Operations Scott Seu said. “The strong response we received demonstrates the high level of competition in our market. That’s good news for our customers.”
Based on preliminary estimates, HECO expects the combined effect of all five of these projects could reduce generation costs by approximately $7.4 million a year, compared to today’s cost of generation. HECO’s goal is to have as many of these projects as possible in service by the end of 2015.
“Every step we take toward reducing our customers’ bills helps. We can’t control the cost of oil, but we can try to accelerate the addition of more low-cost renewable energy resources,” Seu said.
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.