Hawaiian Electric Industries Inc. announced Wednesday that the owner of an oil-fired power plant on Hawaii island has agreed to sell the facility to a private subsidiary of HEI. The purchase comes after the state Public Utilities Commission stopped Hawaii Electric Light Co., an HEI subsidiary, from purchasing the power plant.
HEI said it has come to an agreement with the owner of 60-megawatt Hamakua Energy Partners to purchase the oil-fueled plant, which sells power to HEI’s Big Island utility Hawaii Electric Light Co. HEI would not disclose the price of the plant.
“The plant is vital in providing firm power to ensure continued reliability for customers while HELCO works to transition its power supply to meet the state’s
100 percent renewable energy goal,” said Greg Hazelton, HEI executive vice president, in a statement.
HEI said an affiliate of ArcLight Capital Partners, a Boston-based private equity firm, signed an agreement to sell Hamakua Energy Partners to Pacific Current — a subsidiary HEI created earlier this month.
“Knowing the importance of this facility to Hawaii Island and the ability of our company to provide a strong financial foundation for its continued operation, we made the decision to acquire the plant, with the purchase price and risks of ownership borne solely by HEI shareholders, not customers of HELCO,” Hazelton said.
Hamakua Energy Partners sells power to HELCO under a contract that expires in 2030. HEI said the existing contract will remain unchanged so that HELCO rates will not be affected by ArcLight’s sale of the facility.
The companies will not file an application with the PUC regarding Pacific Current’s purchase of Hamakua Energy Partners. The state agency does not regulate HEI, only the company’s utilities.
“Because the terms of the (contract) aren’t changing and there’s no impact on customers, once HELCO consents to the transfer of ownership, it simply notifies the commission but doesn’t need approval,” Hazelton said. “The commission has broad authority and may seek additional information about the ownership change.”
HEI said Pacific Current’s purchase of the plant will provide “stable, local ownership of this critical power supply infrastructure, which can provide 22 percent of Hawaii Island’s generating capacity.”
The PUC denied HELCO’s request to purchase
Hamakua Energy Partners in March, saying the benefits to customers were insufficient if the plant were directly owned by HELCO. In the application, HELCO sought to set aside roughly $88 million to purchase the facility.
PUC Chairman Randy Iwase said Wednesday that when the state agency
rejected HELCO’s request, the PUC made it clear “we would prefer that the regulated utility … pursue renewable projects rather than purchase an aging fossil fuel plant.”
While the PUC does not have regulatory control over HEI’s deal, Iwase said the agency remains concerned that the Big Island utility doesn’t unfairly favor its parent company’s power plant over others when purchasing power.
“This is a situation where HELCO is buying power from HEI,” he said. “We want to make sure when decisions are going to be made about where power can be obtained from … that there is going to be a fair decision-making process.”
