The Public Utilities Commission (PUC) recently approved an amended power purchase contract between Hawaiian Electric and Wailuku River Hydroelectric.
The Hilo plant has supplied the island's grid with up to 12.1 megawatts (MW) of run-of-river energy since 1993. Under the amended contract, Wailuku River Hydroelectric will sell energy to Hawaiian Electric at a fixed cost of $0.07 per kilowatt-hour - one of the lowest costs for renewable energy in the state.
The contract was approved in October 1991 and expired in May 2023. Regulators allowed Wailuku River Hydroelectric to operate under this contract while the amended contract was being reviewed. The second amendment was approved in April 2025, and the contract was extended to May 2028 to allow the parties to negotiate a new contract.
This is one of four long-term "avoided cost" contracts negotiated when laws required utilities to buy energy from renewable energy producers at adjustable rates linked to volatile oil prices. The law changed in 2009, and new renewable energy contracts are not linked to the cost of oil. Contracts with Puna Geothermal Venture and Hawi Renewable Development also were amended to include fixed pricing. The contract with Pakini Nui Wind Farm expires in 2027.
A fixed rate of $0.07 per kilowatt-hour will save customers about $2 million per year compared with the current avoided cost payment rate of $0.20 per kilowatt-hour.
In 2024, nearly 59% of the island's electricity was generated by solar, wind, hydroelectric, geothermal, and biofuel. Hawaiian Electric is committed to procuring new projects to achieve the state of Hawaii's renewable energy goals.
This February, the company signed a contract with AES Hawaii to purchase power from its Keamuku Solar + Storage project in Waikoloa. The 86 MW solar and 344 megawatt-hour (MWh) battery storage project is expected to be in service in 2030. The contract must be reviewed and approved by regulators.
In March, Innergex Renewable Energy, Inc.'s Hale Kuawehi Solar and Battery Storage Project in Waimea began commercial operations and produces up to 30 MW supported by a 120 MWh battery energy storage system.
