PUC Approves Hawaiian Electric's Waiau Repowering Project
Summary
The Hawaii Public Utilities Commission (PUC) has approved Hawaiian Electric's Waiau Repowering Project to replace aging oil-fired units with new combustion turbines. The approval includes strict cost controls, capping recovery at $847 million plus inflation, and mandates increasing renewable fuel usage to 100% by 2045.
What changed
The Public Utilities Commission (PUC) of Hawaii has issued a decision and order approving Hawaiian Electric Company's Waiau Repowering Project. This project aims to replace six aging oil-fired steam units with six new fuel-flexible combustion turbines totaling 253 megawatts to address critical electric reliability needs on Oʻahu. A key condition of approval is the mandate for Hawaiian Electric to operate the new units on a minimum of 51 percent renewable fuel by 2032, increasing to 100 percent by 2045, aligning with state renewable energy goals.
The commission imposed significant cost controls, rejecting Hawaiian Electric's request to recover up to $1.155 billion and instead setting a cost recovery cap at the utility's original competitive bid of $847 million, plus a limited inflation adjustment. This means Hawaiian Electric cannot recover costs exceeding this cap from customers through electricity rates. The project is estimated to increase a typical residential customer's bill by approximately $3.62 per month. Regulated entities, particularly energy providers in Hawaii, should note the stringent cost recovery limitations and the phased renewable fuel integration requirements.
What to do next
- Monitor project implementation for adherence to cost cap and renewable fuel mandates.
- Review impact of projected $3.62 monthly bill increase on customer rates.
Penalties
Hawaiian Electric may not recover costs exceeding the $847 million cap plus inflation adjustment from customers.
Source document (simplified)
Home » News Release, Public Notice » PUC Approves New Firm Generation to Address Oʻahu’s Critical Electric Reliability Needs
PUC Approves New Firm Generation to Address Oʻahu’s Critical Electric Reliability Needs
Posted on Mar 23, 2026 in News Release, Public Notice HONOLULU – The Public Utilities Commission today approved the Hawaiian Electric Company Waiau Repowering Project, to address urgent reliability needs on Oʻahu’s electric grid, while putting in place strict cost controls to limit financial impacts on customers.
The project proposes to replace six aging, inflexible oil-fired steam units with six new fuel-flexible, simple-cycle combustion turbines totaling 253 megawatts. As a condition of approval, Hawaiian Electric must operate the new units on a minimum of 51 percent renewable fuel at commissioning of the first four units or by 2032, whichever occurs first, increasing to 75 percent by 2040 and 100 percent by 2045 to ensure continued progress toward the state’s renewable energy goals.
The new units’ flexibility and fast‑start capabilities will enable more integration of renewable energy and improve reliability as older fossil-fuel burning units are retired. The new units will also help maintain sufficient firm power to support grid resiliency and reliability during the transition to a 100% renewable energy future.
The project was selected through a competitive bidding procurement process that was overseen by an independent observer and independent engineer, which sought firm renewable resources on Oʻahu to improve system reliability while helping to move the state closer to its clean energy goals.
After selection under the competitive bidding process, the commission completed a comprehensive review of the project’s anticipated benefits and costs to carefully balance system reliability, safety and affordability.
To safeguard customers, the commission did not approve Hawaiian Electric’s amended request to recover up to $1.155 billion for the project. Instead, the commission set a cost recovery cap at the utility’s original competitive bid of $847 million, plus a limited inflation adjustment. Pursuant to this cap, Hawaiian Electric may not recover more than that amount from customers through electricity rates, even if its final costs exceed it. If the final project cost is less than the bid, the company may only recover the lower, actual cost. Based on the cap, the project is estimated to increase the bill of a typical residential customer on Oʻahu by about $3.62 per month.
This action reflects the commission’s continued commitment to balancing safety, reliability, affordability, and Hawaiʻi’s long‑term clean energy goals.
The decision and order, along with a summary of it, is available here.
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