From Henry Curtis:

Last year HECO sold 7.6 billion kilowatt-hours (kWh) of electricity. HECO has asked the Hawaii Public Utilities Commission to add a tax on each kWh sold to subsidize HELCO’s purchase of biofuels from the politically connecedt Aina Koa Pono (AKP).

AKP would sell 16 million gallons of biodiesel to HELCO to power the HELCO Keahole Generation Station.

The problem is that AKP’s biofuels are not economical. HECO’s solution: Impose a tax on all kWh sold by HECO and HELCO to pay the differential beteen the cost of diesel and biodiesel.

This tax would raise $26M/yr to subsidize 16M gallons of biodiesel. The subsidy is $1.66/gallon or $69/barrel. Price (Barrel Biodiesel) = Price (Diesel) + $69. HELCO is proposing to buy additional geothermal electricity from Puna Geothermal Ventures at below the cost for HELCO to generate electricity themselves and to buy biodiesel electricity from AKP at significantly over the cost for HELCO to generate electricity themselves. HECO would like their customers to subsidize the biofuel purchases but not share in the geothermal savings. The PUC is seeking comments on this open docket (2011-0005): hawaii.puc@hawaii.gov