HECO, wind farm reach agreement on kilowatt price

Hawaiian Electric Co. will pay a developer 22.9 cents a kilowatt-hour for electricity produced by a proposed North Shore wind energy project that will be the state’s largest when completed next year.

The 69-megawatt Kawailoa Wind project is being built on former sugar cane land northeast of Haleiwa. It will generate enough energy to power 14,500 homes, according to Boston-based First Wind LLC, which is developing the facility.

Construction on the project is expected to begin this month and be completed by late 2012.

The pricing, which is an average rate over a 20-year period, is identical to what HECO is paying for electricity produced by a 30-megawatt wind project built by First Wind in nearby Kahuku that began feeding power into the HECO grid in March.

The Kawailoa pricing was set by the Public Utilities Commission as part of a power purchase agreement approved Monday between HECO and First Wind.

Both rates are well below the record-high 34.6 cents a kilowatt-hour HECO charged its residential customers on Oahu in November. The price that HECO pays for electricity produced by independent power producers like First Wind is passed straight through to consumers.

However, HECO will be paying considerably more than what utilities on the mainland pay for wind-generated power. According to the Department of Energy, the average price for utility-scale wind power ranges from 4 cents a kilowatt-hour at locations with stronger, more consistent winds, to 7 cents a kilowatt-hour where the wind resources are less ideal.

The Department of Energy calls wind energy "one of the most cost-competitive" renewable energy technologies.

The price HECO will pay for the wind power is comparable to what the utility agreed to in two recent power purchase agreements with solar developers on Oahu. HECO will pay 21.8 cents a kilowatt-hour for electricity generated at the 5-megawatt Kalaeloa Solar II project and 23.6 cents a kilowatt-hour for power from the 1-megawatt project at the Kapolei Sustainable Energy Park.

The Kawailoa wind project will be built on land owned by Kamehameha Schools that was part of the Kawailoa Plantation operated by Waialua Sugar Co. before it closed in 1996. While the plantation is spread over several thousand acres, the area "disturbed" by the project will be limited to 335 acres, according to an environmental impact statement.

"This project is significant as we continue down the path of greater energy independence and away from our reliance on expensive imported oil," said Gov. Neil Abercrombie.