Hawaiian Electric Contracts with Imperium for Biodiesel for Power Generation

18 October 2007

Hawaiian Electric Company has filed an application with the Hawaii Public Utilities Commission for approval of a biodiesel supply contract for its new 110 megawatt (MW) Campbell Industrial Park generating station. The biodiesel will be supplied on an exclusive basis by Imperium Services, LLC, an affiliated company of Imperium Renewables Hawaii.

The contract will continue through the end of 2011 and provides that Imperium will supply Hawaiian Electric’s total fuel requirements for the Campbell generating station, anticipated to be between 5 million and 12 million gallons of biodiesel per year. As with all Hawaiian Electric fuel contracts, financial terms are proprietary.

In an agreement with the State Department of Consumer Advocacy, Hawaiian Electric pledged to fuel the new Campbell Industrial Park unit entirely with biofuels. Honolulu Mayor Mufi Hannemann also strongly encouraged the use of biofuels for the generating unit.

Imperium will work with Hawaiian Electric and others to promote the development of a local agricultural energy industry to supply Hawaii-grown feedstock. Until then, the contract with Imperium provides that it import only feedstock that meets the new standard that Hawaiian Electric and the Natural Resources Defense Council (NRDC) developed with community input.

Among these requirements, Imperium has agreed to preferentially purchase sustainably-grown Hawaii feedstocks where available and to cooperate and comply with the “Environmental Policy for the Hawaiian Electric Company’s Procurement of Biodiesel from Palm Oil and Locally-Grown Feedstocks, prepared by HECO and NRDC” (available online at www.hawaiisenergyfuture.com or www.nrdc.org/energy).

According to a report from the Hawaii Agricultural Research Center, if recommendations are followed and expected yields are attained, Hawaii could produce more than 150 million gallons of biodiesel per year from local feedstock. That is more than 55% of the total petroleum diesel use of roughly 260 million gallons locally in 2004.

Imperium’s planned 100-million gallon per year biodiesel plant will be on land leased from the state Department of Transportation at Kalaeloa Harbor. Imperium Hawaii has completed its environmental assessment with a finding of no significant impact and is pursuing permits.

On 15 August 2007, Imperium Renewables officially opened its Grays Harbor biodiesel production facility in Washington State. With an annual nameplate capacity of 100 million gallons per year, it is presently the largest biodiesel production facility in the United States. Both the Grays Harbor and the future Hawaii production facility will create biodiesel from numerous different feedstocks using proprietary technology and processes.