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New Agreement Could Reduce Electric Bills For Hawai?i Island Residents

U.S. Department of Energy
Puna Geothermal Venture

A revised contract between Hawaiian Electric and Puna Geothermal Venture could lower power bills for Big Island residents.

Under the new agreement, the rate paid by the utility to PGV for the geothermal energy power it produces would be fixed. The rate was previously linked to the price of oil, and the cost passed to customers.

The contract changes have been submitted to the state Public Utilities Commission for review and approval.

"Part of the contract calls for an expansion of the capacity of the PGV plant," said Hawaiian Electric's Jim Kelly. "Once that's completed, it will result in around a $7.50 a month bill reduction starting in 2022. And it's going to be close to $13 a month in 2023 based on current prices."

PGV is in the process of upgrading its 38 megawatt facility to produce an additional eight megawatts of energy. That is expected to not only lower consumer costs, but reduce the use of fossil fuels to generate electricity. The utility says it will displace roughly 160 million gallons of oil over the life of the new agreement.

PGV, which began operation in 1992, has been shut down since last year's K?lauea eruption. Hawaiian Electric said it has relied on oil-fueled generators to make up for the loss of the facility, and that has increased monthly electric bills by about $2.

Meanwhile, the utility is awaiting approval from the PUC for a project to rebuild two transmission lines to the PGV facility. The lines would reconnect the facility to the electricity grid.

If its plans are approved, Hawaiian Electric expects 70% of Hawai?i Island's electricity to come from renewable sources once the upgrades are completed. The utility said all repairs and upgrades will be carried out at no cost to customers.

The existing contract between Hawaiian Electric and PGV expires in 2027, and remains in place until PGV facility upgrades are completed in 2022. Once that occurs, the new amended agreement will take effect, and expire in 2052.

Casey Harlow is an HPR reporter and occasionally fills in as local host of Morning Edition and All Things Considered. Contact him at or on Twitter (@CaseyHarlow).
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