Puna Geothermal Venture (PGV) and the Hawaiian Electric Light Company (HELCO) have come to an agreement for PGV to provide an additional 8 MW of power to HELCO’s grid. I hope the PUC approves this expeditiously. Read about the agreement here.

PGV has two previous contracts:

• One for 25 MW. This is an existing, “avoided cost” contract. In February, that avoided cost was approximately 16.75 cents/KW at Peak time.

• Another for between 25 and 30 MW, which was also an existing, avoided cost contract. PGV agreed to change this to a fixed cost contract at the lower rate of 11.8 cents/kWh.

Both have a 1.5 percent escalator per year.

The new 8 MW addition is at 9 cents/kWh for the first 30,000 MWH/year, then 6 cents per MWH per year for anything greater than 30,000 MW.

Although the addition is 8 MW, PGV renegotiated one of its existing avoided cost contracts to a fixed cost contract. This results in a significant lowering of the 5 MW avoided cost contract from approximately 16.75 cents avoided cost in February to 11.8 cents fixed.

This new contract is significant because it is more than just a base power contract. Sixteen (16) MW of the geothermal-generated electricity is dispatchable from HELCO’s base station in Hilo. When this has been in operation awhile and proves to be dependable, it can replace petroleum-fired units with the same characteristics.

Geothermal is the only non-liquid-fueled power generation facility that can provide dispatchable power. This means we will have the ability to get off oil and biofuels.