Hawaii Electric Light Co. will pay 25.3 cents a kilowatt hour over 20 years for electricity produced at a Hawaii island power plant that will burn locally grown eucalyptus trees, according to a regulatory filing.

The project’s developer, Hu Honua Bioenergy LLC, converted the former Pepeekeo sugar mill on the Hamakua coast to a 21.5-megawatt power plant that will feed electricity into the HELCO grid. The sugar mill, which closed in 1996, has a steam boiler, turbine and generator that previously generated electricity by burning sugar cane waste called bagasse.

The state Public Utilities Commission last week approved a power purchase agreement between HELCO and Hu Honua. The price being paid by HELCO is slightly higher than what developers of wind and solar project have charged under recent PPAs negotiated with Hawaii utilities. However, unlike the intermittent nature of wind and solar energy the renewable power produced by the Hu Honua plant will be will be firm and available on demand.

"DBEDT commends the PUC for carrying out the state’s energy policy directives in pursuit of a diversified energy portfolio,"  DBEDT Director Richard Lim said in a prepared statement.