HILO — A Hawaii County Council committee is urging Hawaii Electric Light Co. to do something company representatives say they really want to do anyway — bring down the price the utility pays for alternative energy from independent suppliers.
The council Committee on Agriculture, Water and Energy Sustainability on Wednesday advanced Resolution 297, sponsored by Hilo Councilman J Yoshimoto, asking HELCO to renegotiate power purchase agreements to delink them from the cost of fossil fuel.
The committee also passed an amendment by Council Chairman Dominic Yagong asking HELCO representatives to appear at the council’s Oct. 17 meeting at the West Hawaii Civic Center to report on its efforts renegotiating its contracts, especially with Puna Geothermal Venture.
It remains to be seen whether the council’s action will have any affect on HELCO’s contracts, or ultimately, the price island residents pay for electricity.
“If we can get that cost lowered, we can pass that savings on to customers,” HELCO President Jay Ignacio told the council.
The nonbinding resolution doesn’t carry the weight of law, but Yoshimoto said he hopes public support will motivate the electric company and the various power producers to consider the public’s benefit and help bring electric rates down.
“Just because they can (charge fossil-fuel rates), doesn’t mean that it’s right,” Yoshimoto said.
Ignacio said the utility has already started renegotiating with Puna Geothermal Venture, which has a contract that doesn’t expire until 2027.
But Pahoa resident Toby Hazel was dubious. She said the language should be more forceful.
“You don’t urge a mugger,” Hazel said. “You call the police.”
South Kona Council-woman Brenda Ford asked Ignacio whether a negotiated cost will just mean more profits for shareholders rather than savings for customers.
“I don’t see that negotiating a penny or two off the production cost is going to make a big difference on any of our bills,” Ford said.
Bob Ernst, a frequent testifier on energy issues, laid the blame at the feet of the Public Utilities Commission.
“The only reason we have these high rates is the PUC approves them,” Ernst said. “They don’t look at the big picture.”
HELCO has power purchase agreements with four independent providers, according to information provided by HELCO. The agreements are tied to the cost of oil, known as “avoided costs,” because HELCO avoids paying that amount for oil.
Such agreements were common when alternative energy producers needed a little boost to get their systems built. But they’re no longer needed in today’s economy, said proponents of the resolution.
Agreements with Puna Geothermal Venture and Wailuku River Hydro were struck when oil was just $21 a barrel. The agreements with the wind-energy producers Hawi Renewable Development and Tawhiri Power were inked when oil was $70 a barrel. Oil is now averaging $126 a barrel, resulting in a windfall for the power providers.
Big Island residents paid a starting rate of 40.1 cents per kilowatt hour, compared to the Hawaii average of 36.25 cents and the national average of 11.43 cents in January, according to the U.S. Energy Information Administration. That’s by far the highest in the nation, with no other state reaching even half that. A typical residential customer’s monthly electric bill, using the average 500 to 600 kilowatts, runs $204 to $250.
Mililani Trask, principal with Indigenous Consultants LLC of Hilo, pushed the council to focus the resolution solely on Puna Geothermal Venture, which she said accounted for 20 percent of the power produced on the island.
“The reference to the other avoided cost contracts should be deleted as these contracts were not cited by the PUC, do not include public trust assets, and in fact result in very little costs added to our rates,” Trask said.