Hawaiian Electric to Keep Importing Biofuel
Hawaiian Electric Co. will continue to import biodiesel from a mainland company to supply its Campbell Industrial Park Generating Station on Oahu for the next three years.
The contract, announced Monday, which must be approved by state regulators, is in response to a request for proposals issued in February. The state鈥檚 major electric utility company, which serves Oahu, the Big Island and Maui County, had said that it would give precedence to local companies in awarding the contract.
But Hawaiian Electric instead gave the contract to Iowa-based Renewable Energy Group, extending the company’s two-year contract which expires next year. Renewable Energy Group will supply Hawaii鈥檚 customers with 3 million to 7 million gallons a year of biodiesel made from used cooking oil and waste from animal fats.
While, importing the biodiesel is not ideal, Hawaiian Electric spokesman, Peter Rosegg, noted that the utility was required to use biofuel in the generating plant. He said that the company had been 鈥渁 very good partner and very good as far as delivery and client relationships.鈥
Renewable Energy Group, which is exploring going public, sold about 68 million gallons of biofuel in 2010.
The contract award follows the Hawaii Public Utilities Commission‘s recent rejection of a 20-year contract with local biofuel start-up Aina Koa Pono, that planned to build a biofuel plant on the Big Island. The commissioners ruled that the cost of the fuel 鈥 which was not publicly disclosed 鈥 was excessive and not in the best interest of ratepayers.
Aina Koa Pono criticized the decision by the PUC, saying it flaunted energy mandates and was short-sighted. Hawaiian Electric Co. expressed its disappointment in the ruling. However, the utility will not contest the ruling, as had been considered, according to a document filed with the commission on Monday.
Three other local biofuel contracts are awaiting PUC approval, and Hawaiian Electric is still in contract negotiations with half a dozen local biofuel companies.
Hawaiian Electric declined to disclose the price of the fuel from Renewable Energy Group, though a representative of REG said that its biodiesel was priced competitively with petroleum-based diesel.
Imported biofuel is part of Hawaiian Electric’s effort to meet state clean energy mandates, which include 40 percent renewable energy by 2030. But however critics say it’s still subject to the same disruptions in fuel supply as is petroleum and can be subject to price volatility.
