HECO plans to take over Army electrical service on Oahu

Hawaiian Electric said today it has been awarded a $638.5 million contract to own, operate and maintain the electric distribution system for the U.S. Army’s 12 installations on Oahu, including Schofield Barracks, Wheeler Army Airfield, Tripler Army Medical Center, Fort Shafter and Army housing areas.

HECO said it was one of several bidders for the 50-year contract following a competitive process that began in 2016.

“We made the case that we could deliver a cost-effective, long-term solution for the Army,” Alan Oshima, HECO’s president and CEO, said in a release. “I’m proud that a Hawaii-based company was selected to provide these vital services and we look forward to being a trusted energy partner to the Army and to thousands of military service members for decades to come.”

The effort supports the Army’s Utilities Privatization Program, an Army-wide effort to upgrade and sustain utilities going forward.

HECO currently provides electricity to the Army, which in turn distributes the electricity to its facilities and bills its users.

“The Army needs secure, reliable energy to do our mission and that’s what this effort is all about,” said Col. Tom Barrett, commander, U.S. Army Garrison Hawaii. “Privatizing the Army’s electrical system on Oahu supports energy resilience, and energy resilience is critical to Army readiness.”

As part of the contract, HECO agreed to perform Army-identified capital improvements and to replace aging distribution infrastructure. The cost of the improvements and maintenance will be paid by the Army through a special billing separate from its regular monthly power bill.

The contract requires the approval of the Public Utilities Commission. HECO plans to file an application for approval within 30 days.

HECO said if regulatory approval is received next year, the company and the Army have agreed to a one-year transition period, with the takeover of the system in late 2021.