Hawaiian Electric Co. Inc. has proposed increasing rates on Oahu Island an average of 4.1%, or $77.5 million in additional revenues, to help pay for operating and capital costs, including grid upgrades to integrate more renewable energy.
The Hawaiian Electric Industries Inc. subsidiary also announced Aug. 21 that the Hawaii Public Utilities Commission approved its 25-year power purchase agreement with AES Corp. for that company's Solar West Oahu, a 12.5-MW solar project with a 50-MWh energy storage system. The project will be built on 80 acres near the University of Hawaii's West Oahu campus.
If the PUC approves the rate increase, Hawaiian Electric said the earliest it would go into effect would be mid-2020. The utility said many of its grid improvements are aimed at switching Hawaiian Electric from primarily fossil fuel generation to a portfolio of renewable energy resources with the goal of reaching 100% renewable electricity by 2045 as required by state law.
To that aim, the utility and affiliated utilities, namely Hawaii Electric Light Co. Inc., which serves the island of Hawaii, and Maui Electric Co. Ltd., serving the island of Maui, were set Aug. 22 to solicit proposals for developers to build up to 932 MW of renewable energy projects and energy storage.
Hawaiian Electric said it spent more than $1 billion over the past six years replacing and upgrading equipment on Oahu, including the replacement of 7,100 poles and 5,800 transformers, upgrading steel transmission towers across central Oahu and implementing cybersecurity measures.
The utility is required to submit full rate cases every three years for the PUC to review costs of service. Hawaiian Electric filed its last rate review application in 2016, which resulted in an overall rate decrease, largely in order to pass through to customers savings from federal tax law changes.
The Solar West Oahu project is one of eight projects selected in a 2018 procurement of renewable energy resources. In late March, the PUC approved six of those solar-plus-storage contracts totaling 247 MW of solar capacity and 988 MW of storage for Oahu, Hawaii and Maui. The approximate cost of the seventh contract is 10.6 cents per kWh, which is in line with prices for the six projects and is lower than the current 15 cents per kWh cost of fossil-fuel generation, Hawaiian Electric said.
As for the eighth project, the commission is still reviewing a utility power purchase contract for a 15-MW solar array project on Maui that will include a 60-MWh storage system.
