HECO strikes 3-year deal with lo­cal sup­plier of biodiesel

Honolulu Star-Advertiser - - FRONT PAGE - By An­drew Gomes agomes@starad­ver­tiser.com

Hawai­ian Elec­tric Co. has struck a deal to buy re­new­able fuel at a lower price from a lo­cal com­pany to pro­duce power on Oahu. The util­ity an­nounced Tues­day that it has ne­go­ti­ated terms for a three-year con­tract to buy biodiesel made by Pa­cific Biodiesel Tech­nolo­gies on Hawaii is­land that would be de­liv­ered by barge to run at least two Oahu elec­tri­cal gen­er­a­tion plants.

The new con­tract, which HECO hopes to im­ple­ment next Novem­ber, is sub­ject to ap­proval by the state Pub­lic Util­i­ties Com­mis­sion and would suc­ceed a now 2-yearold sup­ply agree­ment with Pa­cific Biodiesel that re­placed an ear­lier agree­ment with an Iowa sup­plier. Un­der the new deal, Pa­cific Biodiesel would an­nu­ally pro­vide HECO with 2 mil­lion to 4 mil­lion gal­lons of biodiesel made from re­cy­cled cook­ing oil and other sources, in­clud­ing sun­flower seeds grown on Maui. That rep­re­sents a po­ten­tial in­crease of 1 mil­lion gal­lons over the ex­ist­ing con­tract for 2 mil­lion to 3 mil­lion gal­lons a year, though Pa­cific Biodiesel has al­ready pro­duced over 4 mil­lion gal­lons for HECO in a year. “This new con­tract ac­com­plishes our goal of us­ing lo­cally pro­duced bio­fuel to the great­est ex­tent pos­si­ble,” Ron Cox, HECO’s se­nior vice pres­i­dent for op­er­a­tions, said in a state­ment. The amount of fuel in both con­tracts rep­re­sents a small por­tion of what HECO uses to run its Oahu power plants. Last year biodiesel rep­re­sented 2 per­cent of HECO’s oil and diesel con­sump­tion. The al­ter­na­tive fuel also helps the com­pany meet re­new­able-en­ergy stan­dards, and the new con­tracts are re­duc­ing costs for ratepay­ers.

HECO wouldn’t dis­close its con­tract price for biodiesel be­cause it said that keeps pric­ing com­pet­i­tive with other po­ten­tial biodiesel sup­pli­ers.

The ex­ist­ing con­tract pro­duced a 13 per­cent sav­ings on what HECO pre­vi­ously paid for biodiesel from Iowa-based Re­new­able En­ergy Group Inc. When HECO pro­posed its first deal with Pa­cific Biodiesel, the util­ity said the lower price for one year amounted to roughly $3 mil­lion saved. Spread among HECO cus­tomers, those sav­ings would be 30 cents a month, or 0.2 per­cent less, for a typ­i­cal res­i­den­tial customer us­ing 600 kilo­watt-hours of elec­tric­ity. Un­der the cur­rent biodiesel con­tract, the re­new­able fuel is used by an 8-megawatt emer­gency power plant at Daniel K. Inouye In­ter­na­tional Air­port, a 110-megawatt gen­er­a­tion sta­tion at Camp­bell In­dus­trial Park and other power plants if needed. Last year Pa­cific Biodiesel pro­vided HECO with 4.8 mil­lion gal­lons of biodiesel, well over the con­tract’s up­per range, by mu­tual agree­ment. HECO said it will use biodiesel un­der the pro­posed new con­tract to help run a 50-megawatt gen­er­a­tion sta­tion be­ing built at the Schofield Bar­racks Army base, which is de­signed to feed Oahu’s elec­tric­ity grid un­der nor­mal op­er­a­tions but can be iso­lated to ex­clu­sively sup­ply Army fa­cil­i­ties in an emer­gency. The Schofield plant is ex­pected to be fin­ished in 2018 and would run on a mix of petroleum diesel and biodiesel.

Un­der the new deal, Pa­cific Biodiesel Tech­nolo­gies would an­nu­ally pro­vide HECO with 2 mil­lion to 4 mil­lion gal­lons of biodiesel made from re­cy­cled cook­ing oil and other sources, in­clud­ing sun­flower seeds grown on Maui.

The Camp­bell plant would switch to burn­ing reg­u­lar diesel fuel af­ter the Schofield plant starts op­er­at­ing, the com­pany said. Pa­cific Biodiesel’s an­nual pro­duc­tion ca­pac­ity is

5.5 mil­lion gal­lons of bio­fuel, which can be used in diesel en­gines without mod­i­fi­ca­tions. The fa­cil­ity started op­er­at­ing in 2012. Be­sides HECO, Pa­cific Biodiesel cus­tomers in­clude ve­hi­cle fleets for the City and County of Honolulu, Maui Dis­posal Co. and DHX.

COUR­TESY PA­CIFIC BIODIESEL

Di­rec­tor of Op­er­a­tions Jenna Long re­views pro­duc­tion progress with plant en­gi­neer Scott Proskow, right, and plant man­ager Tony Pas­trama at Pa­cific Biodiesel Tech­nolo­gies’ re­fin­ery on Hawaii is­land.

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