Hawaiian Electric and the U.S. Navy are in talks for plans to build what would be the first liquefied natural gas (LNG) import terminal in the state at Pearl Harbor, the Honolulu Star-Advertiser reported. The utility has been looking at an LNG option since last year at the behest of Gov. Neil Abercrombie. A near-shore floating terminal is being contemplated. Hawaii currently does not use any natural gas for power generation purposes. Meanwhile, Hawaii Gas, also known as The Gas Co. LLC, is planning to receive LNG deliveries originating from the mainland (see Daily GPI, Jan. 18, 2013). LNG imports could cut residents' and businesses' oil-based energy bills in Hawaii substantially during the next 20 years, according to a University of Hawaii study (see Daily GPI, Jan. 9, 2013).

The California Public Utilities Commission (CPUC) on Thursday approved a 25-year purchased power tolling agreement for Sempra Energy's San Diego Gas and Electric Co. (SDG&E) with the 305 MW natural gas-fired Pio Pico peaking generation plant near the U.S.-Mexico border south of San Diego. A 20-year tolling deal was rejected by the CPUC last year. The CPUC approval covers a revised agreement subject to a cost cap. It requires Pio Pico, which is located adjacent to Calpine Corp.'s 600 MW gas-fired Otay Mesa power plant (see Daily GPI, Aug. 24, 2011) be operational by Sept. 15 2015, and resource adequacy deliveries begin in 2016 for SDG&E. The combination utility will seek CPUC approval for its resource adequacy contract. Future local capacity additions have been estimated at up to 298 MW in 2018, but opponents of the contract, including the local Sierra Club chapter, argued that the added volumes could be provided through additional demand response and energy storage programs. The CPUC did not agree.