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Hawaii proposes LNG import solution for electricity generation needs

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LNG Industry,

The Hawaiian Electric Companies have approached the Hawai’i Public Utilities Commission (PUC) to request the review and approval of a proposed contract with Fortis Hawaii Energy Inc. to import LNG for the generation of electricity on O’ahu, Hawai’i Island and Maui. In order for the contract to go ahead, the PUC must also approve the merging of Hawaiian Electric and NextEra Energy (the latter can help provide financial support and expertise). If this merger is not granted approval, then the Hawaiian Electric Companies would have to negotiate a new contract.

Under the contract, Fortis would provide LNG from the Tilbury facility, which is located near Vancouver, British Columbia (B.C.), Canada. The LNG would then be transported to Hawai’i in mid-sized LNG carriers.

The contract would help Hawai’i achieve its 100% renewable portfolio standard by 2045. If granted approval, the use of natural gas could commence in 2021, with a 20-year contract ending as Hawai’i approaches its 100% renewable energy goal.

The Hawaiian Electric Vice President for Power Supply, Ron Cox, said: “We are committed to achieving our state's 100% renewable energy goal with a diverse mix of renewable resources.

"As we make this transition, LNG is a cleaner-burning alternative that potentially can provide billions of dollars in savings and stabilise electric bills for our customers compared to continuing to rely on imported oil with its volatile prices. LNG is a superior fuel for the firm generation needed to keep electric service reliable as we increase our use of variable renewables like solar and wind."

Furthermore, Hawaiian Electric is requesting authorisation from the PUC for the construction of a combined-cycle generation system at the Kahe Power Plant, which would also help facilitate the retirement of three oil-fired generators at the plant.

Cox said: “We know Governor Ige has expressed opposition to importing LNG […] However, we have just reached contract terms with a supplier after a long negotiation and now have much more than a theoretical plan for the governor, Public Utilities Commission, energy stakeholders and the public to consider. We believe we have a responsibility to put forward an option that has significant economic and environmental benefits for the people of Hawai'i, and that addresses some of the Governor's concerns.

"This proposal, negotiated with the added expertise and experience of NextEra Energy as an advisor, will support achieving our 100% renewable energy goals. It will allow us to integrate increasing amounts of renewable energy at much lower cost while providing more reliable service for our customers. Further, our plan keeps new LNG infrastructure, both on- and off-shore, to a minimum and preserves flexibility to reduce LNG imports as renewable energy increases."

Edited from press release by David Rowlands

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