News backgrounder: Questions and answers on state’s no-bid plan for Oahu power plant, LNG

News backgrounder: Questions and answers on state's no-bid plan for Oahu power plant, LNG

Release Date: 8/11/2026

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What's the situation with Hawaiian Electric and JERA?

• JERA Americas (JERA) is a subsidiary of a Japanese energy conglomerate.
• Earlier this year, JERA announced plans to build a 500-MW plant at Campbell Industrial Park and to build infrastructure to run the plant on liquefied natural gas.
• Governor Green urged JERA and Hawaiian Electric to work together on this project.
• Hawaiian Electric engaged with JERA over several months regarding a potential joint venture.
• As announced on July 17, JERA is moving on with its own plans.
• There is a non-disclosure agreement in place that prevents us from discussing the details of discussions with JERA.

What's Hawaiian Electric's position?

• JERA is seeking a no-bid, sole-source, noncompetitive approval to build the largest power plant in the state and run it on imported LNG. JERA also wants to establish a separate utility regulated by the PUC to own and operate and eventually buy other generating plants on Oahu.
• We're not against JERA. But we need to ensure that whoever builds generation has the best project at the best price. A competitive process will show what that is. So, we want JERA to follow the same competitive procurement rules that Hawaiian Electric and third-party energy producers are required to follow to ensure the best value for customers.
• Because it has a "strategic partnership agreement" with the state administration, JERA apparently believes it's entitled to cut in line and doesn't need to compete.
• By moving ahead with the arrangement that has been structured by JERA, Hawaii locks itself into a multibillion-dollar, single-source contract that we will be committing this and future generations to pay without knowing if this was the best option for Hawaii.
• We think a project of this size and cost, dependent on an imported fossil fuel only a few years before the 2045 deadline requiring 100% renewable energy for power generation, should be evaluated through the PUC's competitive bidding process.

What's happening now?

• The PUC has directed Hawaiian Electric to continue its long-range planning to determine, among other things, how much more firm generation is actually needed - regardless of who builds it - to serve Oahu's future energy needs. This determination of need would clearly apply to JERA's proposal, too.
• "Without thorough analyses and consideration of collaborative stakeholder engagement, it would be imprudent for the Commission to consider instigating a significant procurement request" for 500 MW of firm generation, the PUC said in an Aug. 5 letter.
• The analysis is underway and should be completed in the next several months.

What's Hawaiian Electric's position on LNG?

• It was our idea to use it more than 15 years ago as a bridge fuel to 2045.
• A lot has changed since then and we're 19 years away from the 2045 mandate to use 100% renewable energy.
• If it takes 10 years to build a power plant, which it probably will, that means we'll only be using LNG for 9 years, unless the law is changed.
• We all want to make electricity affordable for everyone. If LNG can be shown to be cost effective, we welcome having more options to achieve our state's policy goals - affordability, resilience, 100% RPS and decarbonization.
• We support the use of LNG if a rigorous, objective study overseen by the PUC can confirm there are customer benefits to help offset the infrastructure costs. And the right to supply LNG should also be subject to competitive bid.

When would all of this happen?

• Nothing is happening yet. JERA sent a letter to the PUC saying it plans to apply for approval of its plans in the first quarter of 2027. It will take time for the PUC to consider and take action on the request.
• The PUC would have to approve plans for the power plant and separate utility structure.
• The Federal Energy Regulatory Commission (FERC) would have to approve JERA's plans for an offshore floating storage regasification unit (FSRU), pipelines and other infrastructure to bring in LNG.
• The process for approvals, along with obtaining permits and conducting environmental assessments, will likely take many years.
• So even if any cost savings are real, it will be years before they show up.

Are you against JERA's plan because they're a competitor?

• We're not against JERA. We just want them to follow the same competitive procurement rules that Hawaiian Electric and third-party energy producers have followed for 20 years. Customer benefit increases and costs are reduced when developers know they're competing.
• Some have misunderstood what JERA is proposing to mean that JERA would be a direct competitor to Hawaiian Electric and that customers could choose who they buy their electricity from. That isn't what's happening.
• If approved by the PUC, JERA's power plant would sell electricity to Hawaiian Electric; JERA has no plans to build an electric grid so it wouldn't have any direct interaction with utility customers.
• Even if the JERA plan is approved, we'll still operate our own power plants and we'll still operate the grid and deliver electricity to homes and businesses - the poles and wires business and all of the relationships with customers.
• Hawaiian Electric has the franchise to serve Oahu, Maui County and Hawaii Island and we have the obligation to ensure safe, reliable and reasonably priced service to all customers.
• Creating a new regulated utility in an existing utility's service territory, especially a small one like ours, would be unprecedented, and we aren't aware of anywhere in the country where this has occurred. We think it would be inefficient and potentially raise costs to customers.
• JERA has never operated as a regulated utility in the U.S. - and it's never built a power plant in the U.S., much less Hawaii with its own unique complexities and challenges of a small island grid.
• Hawaiian Electric has served Hawaii for 135 years and we're not going anywhere. Hawaii has made clear it doesn't want to give up control of its local utilities, but that's what JERA envisions, setting up and running a new utility from Japan that will impact every customer on Oahu.

Why has it taken so long to replace or retire older power plants?

• There's no argument that we have aging power plants. That's exactly why we've been trying to retire and modernize our plants over the last 15 years.
• Shifting politics, policies and regulation have prevented us from doing so in a meaningful way, so we've had to keep machines running longer than planned.
• The PUC approved the repowering of the Waiau facility earlier this year; it took 11 years for previous groups of regulators to approve our requests to go out to bid for firm generation, the kind that's available 24/7.
• Modern, efficient, flexible and fuel flexible power plants that have already been approved for Oahu and are expected to be put into service from 2029 to 2032.
• Don't confuse generation and fuel choice with transmission and distribution operations - outages during a storm are NOT a power generation or fuel issue.

Bills are high, couldn't LNG lower electric rates?

• We're all concerned about costs. That's why we think shortcutting the established competitive bidding framework for the JERA project could actually raise costs.
• This path locks in a single-source contract without seeing what else is out there. Why would we do that for such a huge, multibillion-dollar infrastructure project that our children and grandchildren will be paying for?
• Whether this project and LNG can lower rates is unknown. That's part of what we have to find out. JERA says there will be savings but others have run the numbers and have found only minimal savings, if any. It could even raise costs.
• We support modernizing firm/thermal generation and we know that by itself can unlock efficiencies for customers - we proposed this over a decade ago - but that doesn't mean that JERA's project in particular would lower rates.
• Building a power plant can easily take 10 years. Even if there are bill savings with LNG, they won't show up for another decade.
• In a lot less time, Hawaiian Electric will add a dozen renewable energy and battery projects to its grids, reducing generation costs, strengthening reliability and cutting our use of imported oil by tens of millions of gallons a year.

JERA says it's going to invest $2 billion in Hawaii

• We know the governor talks about JERA "investing" $2 billion "of their own money" into Hawaii as if it is a gift that will lower utility bills. It is not.
• The power plant and LNG infrastructure are a long-term capital investment by a for-profit corporation.
• They expect to receive regulated cost recovery and return on that investment, paid by utility customers, in order to justify the long-term investment.
• This is the same investment approach that all regulated utilities take.