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Oahu households can expect to see their monthly electricity bills increase by about 7% when Hawaiian Electric Co. shuts down the state’s last remaining coal-fired power plant on Sept. 1 and replaces it with another fossil fuel source: oil.

The local utility released that official estimate Sunday. It represents an additional $15 for what Hawaiian Electric considers its “typical” user – a customer or family that consumes 500 kilowatt-hours of electricity a month.

Some level of increase in electricity costs on Oahu has been expected. It’s been clear for at least the past year and a half that the utility would not launch the added renewable energy projects it needs in time to replace the AES coal-fired plant.

That 180-megawatt facility has operated for the past 30 years in West Oahu, and it currently generates about 10% of the island’s electricity.

It also pumps some 1.5 million metric tons of carbon dioxide into the air each year, according to Hawaiian Electric, easily making it one of the islands’ largest sources of greenhouse gas emissions.

A prevented the plant from renewing its power purchase agreement once it expired this year and banned all future use of coal across the state as Hawaii looks to transition to clean energy.

But with few new renewables ready to go, Hawaiian Electric will have to resort to more imported oil for the time being to help power Hawaii’s most populous island. It’s poor timing, however, as oil prices have surged this year amid the Russian invasion of Ukraine, which has disrupted international energy markets.

“We know that paying more for an essential service like electricity will impact many households and businesses particularly at a time when other costs are rising,” Hawaiian Electric President and CEO Shelee Kimura said in a statement. “We wanted to let customers know the situation in advance so they can plan and we can help them with options.”

Kimura added that company officials are seeing “encouraging signs” that oil prices are dropping, and they hope to lower rates sometime “in the coming months.”

Both the utility and local clean-energy advocates agree that renewable energy would offer Oahu households much more long-term price stability compared to oil.

“The challenge is (that) our energy prices are at the mercy of those volatile international markets with imported oil. Local renewable energy projects will lead to self-sufficiency, and less volatility,” said Melissa Miyashiro, executive director of the Honolulu-based clean energy nonprofit .

“We’re still stuck on relying on oil — for now,” Miyashiro said.

Currently, oil costs about 30 cents per kilowatt hour compared to 6 cents for coal and 9 to 13 cents for solar, according to Hawaiian Electric.

The Push For More Clean Energy

Hawaiian Electric is poised to launch next week a new 49-megawatt solar energy project in Mililani developed by Clearwater Energy Group.

In addition to that project, dubbed “Mililani I Solar,” the utility’s shows eight other renewable energy projects in the works, all slated to be completed by 2024.

It’s not clear that all of those upcoming renewable projects combined would compensate for the full 180 megawatts of power that was being generated with coal — or the oil that will be used to replace the coal.

Hawaiian Electric has not released an estimated date or year for when it expects renewable energy sources to completely offset what was being generated at AES.

In March 2021, Jay Griffin, then-chairman of the state Public Utilities Commission, for not having sufficient renewable energy projects ready to replace the AES plant and for going “back in the hands of the oil markets.”

“Those projects were going to smooth the transition,” Griffin said during a public PUC meeting. “We’ve lost a year and they’re now pushed out. So who’s going to bear that cost? Is Hawaiian Electric going to bear that cost? Why does the public have to bear it?”

Colton Ching, Hawaiian Electric’s senior vice president for planning and technology, told the commissioners that the utility company had to ensure the renewable projects would work properly. “We have one shot” to get it right, Ching said.

The company on Sunday pointed to supply chain factors “and other issues” delaying a number of its renewable energy projects in the works.

The company to have as much as 700 megawatts of firm renewable capacity — meaning the power can be used regardless of weather or time of day — by 2033 on Oahu.

The entire state, meanwhile, aims to be powered by renewable energy and off of fossil fuels by 2045.