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Hawaii Electric Light Co. said Wednesday it will buy a 60-megawatt oil-powered generating plant on the Big Island for $84.5 million.
HELCO said its purchase of the Hamakua Energy Partners generating plant from an affiliate of the Boston-based private equity firm ArcLight Capital Partners is estimated to reduce costs for customers. HELCO said the purchase would save customers a net $42 million, after the purchase price, over the remaining 15 years of the existing contract for power from the plant. The typical Hawaii island residential customer will save approximately $1.40 per month on their electric bill, HELCO said.
“We’re pleased to reach an agreement that can benefit our customers in many ways,” said Jay Ignacio, president of Hawaii Electric Light. “It’s expected to result in immediate savings to our customers compared to what they would pay under the current contract. It will also allow us to make better use of the plant’s cycling capabilities to help us continue to lead the nation in integration of renewable energy.”
The purchase needs approval from the state Public Utilities Commission.
The Hamakua plant comprises 23 percent of Hawaii island’s generating capacity and produced about 16 percent of the island’s energy in 2014. The plant includes two combustion turbines, a steam-generating unit and two heat-recovery steam generators.
The plant can provide power when solar and wind power are not producing, the utility said.
“We are committed to achieving Hawaii’s 100 percent renewable portfolio standard goal and having the flexibility to operate this plant will help,” Ignacio said.
The current contract limits how often the plant can be stopped and started. By owning the plant, Hawaii Electric Light will have greater flexibility to cycle HEP’s generating units, exercising greater operational flexibility to support renewable energy and use HEP’s efficient generating units.
HELCO said it intends to submit the purchase agreement to the PUC and the Hawaii Division of Consumer Advocacy for review before the first quarter of 2016 ends.
