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City and Hawaiian Electric reach new H-POWER purchase agreement

(Tues., June 26, 2012)---Hawaiian Electric Company and the City & County of Honolulu have reached a revised and expanded power purchase agreement for the utility to buy electricity generated by the H-POWER plant in Campbell Industrial Park.  The contract is now before the Hawaii Public Utilities Commission for review, with input from the Division of Consumer Advocacy.

The original power purchase agreement was signed in 1986 and the 46-megawatt H-POWER plant has been generating electricity since 1990 with a two boiler, solid waste-to-energy plant. Starting construction in 2009, H-POWER has added a third boiler, combustion train and associated air pollution control equipment, turbine generator, cooling equipment and electrical interconnection equipment that will increase total capacity to 73 megawatts.

H-POWER provides firm renewable power, aiding Hawaii’s drive to reduce dependence on imported oil for energy. The expansion allows the City’s Department of Environmental Services to divert more trash from Oahu’s landfill. It will help Hawaiian Electric meet its renewable energy goals. The new contract modifies and extends terms of the original contract and includes the expanded capacity for the next 20 years.   

“I am pleased with the results of the recently completed power purchase agreement with Hawaiian Electric Company,” Mayor Peter Carlisle said. “The renewable energy produced is a huge step towards being one of the better sustainable cities in America.”

“On an island with limited possibilities for disposal of waste and a necessity to get off imported oil for generation, waste-to-energy is an ideal solution,” said Scott Seu, Hawaiian Electric vice president for energy resources. “We have worked well with the City & County and Covanta, the company that operates the H-POWER plant for more than 20 years and we are pleased we will continue to do so.”

Hawaiian Electric will pay H-POWER six cents to 16 cents per kilowatt-hour, depending on time of day and total power provided, plus 5 cents per kWh capacity payment for electricity during peak hours from 7 a.m. to 9 p.m.  The price is linked to an external price index. H-POWER is paid the non-escalating capacity fee because it provides firm power when it is needed.     

The contract price is lower than Hawaiian Electric’s current avoided cost for power. Hawaiian Electric takes no mark up or profit on energy purchased from vendors like H-POWER.

Covanta Honolulu operates the Honolulu Program of Waste Energy Recovery (H-POWER) plant for the City.  H-POWER combusts garbage at 1,800 degrees Fahrenheit and turns it into inert ash. The boiler produces steam that drives a turbine generator. The facility has been able to process up to 2,160 tons of MSW per day, and the expansion will add 900 tons per day with a total of more than 800,000 tons of MSW per year.   

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