you can also thank the Public Utility Commission for the increase of costs:
What: Sept 30, the PUC turned down HECO's proposed contract to buy locally grown biodiesel from Aina Koa Pono
Why: The PUC was concerned about the potential high cost to customers.
What’s next: It 's too soon to know what AKP will do. However, using biofuel in HECO power plants absolutely still makes sense.
We’ve signed several other biofuel contracts, each with its own pricing formula, and they’ll be filed with the PUC this year for their consideration.
Read on for more details............
As you may have heard, yesterday the Public Utilities Commission issued a decision turning down our proposed contract to buy biodiesel from Aina Koa Pono, citing concerns about the potential high cost. AKP is a local start-up that wants to grow crops in Ka'u on Hawaii Island to make biodiesel for Keahole Power Plant and possibly later for our other power plants. It's the first of four local biofuel contracts we've signed to date.
The decision is very disappointing. But our basic strategy to switch to using renewable biofuels in our fossil-fueled units still makes sense. In its decision, the PUC did restate its support for locally grown and processed biofuels to use in existing fossil-fired generating units.
You may be asked why we are continuing to pursue using biofuels. Here’s why:
· It can help stabilize customer bills: Using biofuels at prices based on long-term contracts and more stable rates can be a good hedge against volatile oil prices. The current unpredictability of electricity prices based on oil costs is a huge source of frustration for our customers and damaging to our economy.
· It’s a way to get “green†existing firm generation. As we add more solar, wind and other variable renewable energy sources, we also need firm power available on demand. Biofuels are also a bridge to a future with other firm renewables like geothermal or OTEC.
· It can help nurture local agriculture. That takes big investments by landowners and biofuel developers. Creating a market for locally grown energy will help them get financing to make those investments. We’ll avoid sending millions of dollars that currently flow out of our state to buy oil. Instead that money can stay here benefiting Hawaii’s economy.
· It’s good for energy security and the environment. Our supply of local energy can not be cut off like the oil that arrives by tanker every week. Our environment benefits too. Biofuels result in significantly lower sulfur dioxide and other air emissions.
Bottom line, using biofuels – along with many other renewable energy sources – can provide local, more stably priced energy that's good for Hawaii today and the Hawaii of our kids tomorrow.