Hawaiian Electric Co. Inc. said it is in preliminary discussions to potentially turn over its Lanai utility assets to that island's owner.

Oracle Corp. founder Larry Ellison bought Lanai, Hawaii's sixth-largest island, in 2012. Like every other island in Hawaii, Lanai has its own grid. In Lanai's case, much of its electricity comes from the 10.2-MW, oil-fired Miki Basin plant owned by Hawaiian Electric Co., or HECO, subsidiary Maui Electric Co. Ltd. But Pulama Lanai, a privately held company that manages Lanai for Ellison, wants to replace the plant with renewable energy.

To that end, Pulama Lanai approached HECO, a subsidiary of Hawaiian Electric Industries Inc., about acquiring the utility's assets on Lanai, according to a HECO news release.

"Representatives of the privately held company said it was already working to develop a plan that would increase the use of renewable energy and lower electricity bills for the island's 3,000 residents," HECO said.

Pulama Lanai approached HECO with the utility purchase offer after Maui Electric issued a request for proposals for solar-plus-storage projects on the island. Because of the ongoing discussions, HECO said it is working with the Hawaii Public Utilities Commission and other stakeholders on possible revisions to the solicitation.

Under state law, HECO must get all of its power from renewable resources by 2045. Pulama Lanai has a stated mission to build a sustainable future on the island. The company operates two resorts on the island.