Hawaiian utility gains PUC approval for biofuel contract

By Erin Voegele | October 16, 2013

The State Energy Office of Hawaii recently announced that the Hawaiian Public Utilities Commission has approved a new fuel contract between Hawaiian Electric Co. Inc. and Hawaii BioEnergy LLC. Under the agreement, Hawaiian Electric will purchase approximately 10 million gallons of biofuel from HBE on an annual basis over a 20-year period. The biofuel will be used to fuel UBE’s Kahe Power plant, which is located in Kapolei on the island of Oahu.

According to PUC documentation , Hawaiian Electric first filed its application with the PUC in late 2011. Approval of the contract was handed down Oct. 11.

As part of the approval, the PUC also granted Hawaiian Electric’s request to include the costs of the biofuels supply contract, including the cost of biofuel and associated terminaling  and handlings fees, throughput feeds, storage, transportation and related taxes in its energy cost adjustment clause, to the extent those costs are not recovered through Hawaiian Electric’s base rates.

According to information published by the PUC, the Kahe Power Plant currently utilizes more than 215 million gallons of low sulfur fuel oil per year. Replacing 10 million gallons of that fuel oil per year with biofuel would reduce the plant’s consumption of fossil fuels by nearly 5 percent. 

The PUC approval also specifies that HBE is proposing to develop a 22 MMgy biofuel plant on the island of Kauai. The proposed facility would utilize pyrolysis technology developed by Ensyn Corp., and manufactured by Envergent Technologies, a joint venture of Ensyn and UOP, a Honeywell Co.

Earlier this year, HBE announced it had signed a contract with Alaska Airlines to supply sustainable aviation fuel. At that time, HBE indicated it intends to ramp up production of sustainable biofuels within five years.