ENERGY AFFORDABILITY SIGNALLED AS STATE PRIORITY – Public Utilities Commission Heeds Calls for Rate Accountability in Waiau Repowering
HONOLULU — The First Decision and Order issued by the Public Utilities Commission (PUC), under the direction of Chair Jon Itomura, signals energy affordability as a state priority, supporting broad state initiatives on affordable housing, healthcare and a firm commitment to reduce the cost of living for Hawaiʻi residents.
In its decision, the PUC did not approve Hawaiian Electric’s request to recover up to $1.155 billion from ratepayers to upgrade the 75-year-old Waiau power plant, but instead set a cost-recovery cap at the utility’s original competitive bid of $847 million, plus a limited inflation adjustment of 10%, in a win for ratepayers.
“This administration will continue to fight for greater affordability for Hawaiʻi’s people,” said Governor Josh Green. “Hawaiʻi residents have dealt with reliability concerns and the highest electricity costs in the nation, due to polluting fuels imported from places like Libya and inefficient power generation for decades. We have a generational opportunity to make meaningful change and my administration has been united in saying we will not condemn another generation to costly utility bills that it can’t afford.”
Agencies including the PUC, the Consumer Advocate and the Hawaiʻi State Energy Office supported the imposition of strict cost controls to limit the financial impacts of the Decision on customers.
In its Order, the PUC also requires HECO to meet specific renewable-fuel milestones to ensure the Waiau project supports the state’s transition to a 100% renewable energy future, requiring the utility to operate the units with at least 51% renewable fuel by 2032, or when the first four units begin service, whichever occurs first, 75% renewable fuel by 2040 and 100% renewable fuel by 2045.
Previously, in a Statement of Position filed in the Waiau Docket, Chief Energy Officer Mark Glick requested that the PUC delay final approval of the Waiau Repower Project to more fully address the Project’s revised cost profile that exceeded limits imposed by the Competitive Bidding Framework; and to be made aware of a more comprehensive firm capacity proposal under a Strategic Partnering Agreement with JERA announced on October 7, 2025, that is estimated to reduce costs for the average Hawaiʻi household by $500 a year.
While the delay was not granted, Glick lauded the imposition of cost controls in the Decision and Order consistent with the Competitive Bidding Framework limits cited by the State Energy Office, saying: “The PUC’s action on this Docket reflects a continued commitment to balancing safety, reliability and affordability that underlies Hawaiʻi’s long‑term clean energy goals.”
The Green administration will continue to aggressively advocate for local residents and businesses alike by pushing for cost accountability at the PUC, protecting renewable development support and by spearheading new energy opportunities that lower consumer bills.
In a proposal submitted to the state on March 17, 2026, JERA, Japan’s largest power producer, identified LNG as a cost-effective component of lowering the state’s carbon emissions, accelerating renewable energy integration onto the grid and going well beyond estimated savings in the HSEO Alternative Fuels, Repowering and Energy Transition Study. JERA proposes conclusive cost savings of 20% over oil (an average of $500/year per household) and 50% savings over imported biofuels, with LNG infrastructure paid back in less than two years.
The company has indicated that a full proposal to the PUC is pending, which will provide regulators and ratepayers with additional energy pathways, all of which will have to undergo PUC and regulatory evaluation.
Continuing on a status quo path will result in rising energy prices and Hawaiʻi continuing to generate electricity by burning oil, when the price of crude oil hovers close to $100/barrel and the cost of gasoline has spiked above $5/gallon.
“We have a credible proposal on the table to make energy more affordable,” Governor Green concluded. “People want change—this administration will continue to deliver change that prioritizes the needs of the people of Hawaiʻi.”
