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HECO signs deal to buy 10 million gallons of local biofuel

By Star-Advertiser Staff

LAST UPDATED: 3:33 p.m. HST, Sep 12, 2011

Hawaiian Electric Co. said today it has reached an agreement with Hawaii BioEnergy to buy 10 million gallons of biofuel a year to be burned at the utility’s Kahe power plant in Leeward Oahu.

HECO said the 20-year contract for the alternative fuel offers “stable pricing,” although it did not disclose terms of the agreement. HECO was criticized by some of its customers for another proposed biofuel contract that would result in a surcharge to offset the higher cost of biofuel over the utility's petroleum-based fuel.

The agreement is subject to approval by the Public Utilities Commission. A 1 million gallon test batch of the fuel is expected to be delivered within 4 years of the PUC approving the agreement, HECO said in a news release. Delivery of the 10-million gallon annual supply is expected to begin a year later, according to HECO.

The biofuel will be produced on Kauai by Hawaii BioEnergy from a crop that has yet to be indentified.

Hawaii BioEnergy is a partnership between Maui Land & Pineapple Company, Grove Farm Company, and Kamehameha Schools.

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