Hawaiian Electric Industries 8-K

Summary

A renewable-generation power purchase agreement. Hawaiian Electric and Kalaeloa Partners signed a 30-year agreement for 208 MW of firm capacity, intended to take effect after the existing agreement is expected to end in early 2033. Kalaeloa plans to repower its LSFO-fired combined-cycle cogeneration facility for fuel flexibility and the ability to produce electricity qualifying as renewable energy in Hawaii. The new agreement requires approval by Hawaii’s Public Utilities Commission.

Key Figures

• Capacity charge: $93/kW per year for all 208 MW, down from $100/kW per year under the existing agreement.
• Operations and maintenance charges, in 2023 dollars and escalating with the GDP implicit price deflator: variable charge of $0.004/kWh; fixed charge of $96/kW per year for 208 MW; and an overhaul charge of $300/hour for each turbine’s operating hours plus 20 hours for each start during the calendar month.
• Reliability performance standards, operating-period security, community engagement and outreach, and cybersecurity requirements are included in the agreement.

Investor Takeaways

• Watch for Public Utilities Commission approval: the agreement’s effectiveness depends on an approval acceptable to Hawaiian Electric. If approval is not received within specified time limits, or is denied, either party may declare the agreement null and void.
• The project’s execution will show whether Kalaeloa can repower the facility to provide fuel flexibility and electricity qualifying as renewable under Hawaii’s standards.