Once the upgrade is completed, residential bills would reduce to approximately $7.50 per month in 2022, and around $13 per month in 2023
Hawaiian Electric and Puna Geothermal Venture (PGV), a subsidiary of Ormat Technologies, have signed an agreement on an amended and restated power purchase agreement (PPA) for the upgrade of the 38MW Puna geothermal plant, located on the Big Island of Hawaii.
The amended contract is expected to reduce the electric bills, greenhouse gas emissions and expand the renewable portfolio standard on Hawaii Island by 70%.
Under the amended agreement, which is filed with Public Utilities Commission (PUC), the Puna geothermal facility will be upgraded to produce an additional 8MW low-cost renewable energy, to further reduce the electricity bills and the use of fossil fuels for electricity generation.
The company said that once the upgrade is completed, usual residential bills would reduce to approximately $7.50 per month in 2022, and around $13 per month in 2023.
Hawaiian Electric Maui County and Hawaii Island utilities president Sharon Suzuki said: “We thank our regulators for the opportunity to revisit the agreement and find solutions that will reduce customer bills. The pricing of renewables has dropped significantly in recent years.
“The owners of PGV recognize that and we appreciate their willingness to sit down and work with us on an amended contract that benefits customers and accelerates our transition to 100 percent renewable energy.”
The existing agreement between Hawaiian Electric and PGV is valid until 2027 and remains intact until the amended contract is effective, when the upgrade is completed in 2022. The amended contract is valid until 2052.
Puna geothermal plant facing shut down since May 2018
Following the eruption of the Kilauea Volcano in May 2018, the Puna geothermal plant, which commenced operations in 1992, was shut down. Electricity generation from oil-fired generators has been increased to cover the loss of the PGV facility.
The plant’s additional production will also displace about 160 million gallons of oil over the life of the contract, significantly reducing greenhouse gas emissions.
Ormat Technologies (owner of PGV) chief executive Isaac Angel said: “We have enjoyed a long and successful relationship with Hawaiian Electric and Hawaii Electric Light and are grateful for its support of geothermal power. We are proud to partner with Hawaiian Electric and enable Hawaii’s commitment to clean energy and reducing greenhouse gas emissions.
“As Hawaii continues to pursue the goal of achieving 100 percent of its electricity generation from renewable sources, PGV is an increasingly critical source of renewable energy and capacity, unaffected by volatile fossil fuel pricing, in this region.”