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PUC rejects HECO biofuel contract with Aina Koa Pono

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State regulators today rejected a controversial plan by Hawaiian Electric Co. to buy 16 million gallons of biofuel a year for electricity generation, saying the cost of the alternative fuel was too high for ratepayers.

The company, Aina Koa Pono, had proposed producing the biofuel at on the Big Island that would have resulted a surcharge of $1.75 per month for a typical residential on Hawaii island and a $2.10 per month surcharge for Oahu customers.

The Public Utilities Commission denied the proposed fuel supply contract that HECO said it needed to meet its goal of cutting fossil fuel use by 40 percent by 2030.

“Specifically, the Commission finds and concludes that the contract price for the AKP-produced biofuel is excessive, not cost-effective, and thus is unreasonable and inconsistent with the public interest,” the three PUC commissioners wrote in a unanimous decision.

Officials at HECO said they were studying the ruling and did not have an immediate comment.

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