HawaiianElectric Co. Inc. has dropped a plan to import LNG from westernCanada and convert its oil-fired Kahe power plant to natural gas following the collapseof its proposed merger with NextEra Energy Inc.
The plan to convert Kahe and buy LNG from a -owned facility located on thecoast of British Columbia is too expensive to pursue without the resourcescompletion of the merger would have brought, Hawaiian Electric said in a July19 statement. Under the agreement, Fortis would have provided 800,000 metrictons of LNG over 20 years from its Tilbury LNG terminal in Delta, BritishColumbia, starting in 2021. The agreement reached in May was contingent on completion ofthe merger.
NextEra announced the termination of its $4.3 billion bid for HawaiianElectric on July 18 after the Hawaii Public Utilities Commission issued anorder that said the companies failed to show that deal was in the public interest.
"We're committed to transitioning to 100% renewableenergy in the most cost-effective way possible while ensuring reliableservice," Ron Cox, Hawaiian Electric vice president of power supply, saidin the statement. "We'll continue to evaluate all options to modernizegeneration using a cleaner fuel to bring price stability and support addingrenewable energy for our customers."
The LNG deal and plant upgrades were expected to provide acleaner, lower-cost bridge fuel toward Hawaii's goal to use 100% renewable energyby 2045 and reduce reliance on oil imports by more than 8 million barrels, or80%. The company estimated that electricity customers stood to save $850million to $3.7 billion through 2045.
As part of the deal, Hawaiian Electric proposed to build amore efficient combined-cycle generation system at the Kahe power plant andretire old oil-fired generators at the plant by the end of 2020, according to aMay 18 news release. The project had an estimated cost of $859 million.
Fortis, which owns utilities in Canada and the U.S., isheadquartered in Newfoundland and Labrador. The company was banking on the LNGagreement to underpin an expansion at the Tilbury facility.