Hawaiian Electric on Monday announced it had renegotiated three of four existing renewable energy contracts at fixed rates on Hawaii island.

The current contracts with Puna Geothermal Venture, Hawi Renewable Development and Wailuku River Hydroelectric have been amended, the company said, and were recently filed with the state Public Utilities Commission for approval.

These amended contracts, according to Hawaiian Electric, will result in long-term savings for customers because they will no longer be tied to fluctuating oil prices, but instead be at fixed rates.

Hawaiian Electric said based on today’s rates, a typical residential customer using 500 kilowatt-hours could see savings of $9 to $13 per month.

But the amount of savings and when they ultimately happen will depend on the island’s generation mix, and when Puna Geothermal Venture and Hawi Renewable Development expand their output, which is expected in 2026.

The Hawi Renewable Development, which produces electricity from wind, seeks upgrades to its facility so it can provide up to 34 megawatts, up from 11 megawatts currently, to the grid.

The Puna Geothermal Plant — which was shut down during the 2018 Kilauea Volcano eruption — has sought to expand its capacity from 38 to 46 megawatts with more modern and efficient generating equipment.

But the expansion is opposed by environmental groups and Hawaii island residents, who have expressed concerns about air and noise pollution and what could happen if there was another eruption.

In March 2022, the PUC conditionally approved the Puna Geothermal Venture contract, which is subject to an environmental review. PGV recently submitted a draft Environmental Impact Statement to the County of Hawaii.

Of the two, the majority of savings will come from the amended PGV contract, Hawaiian Electric said. If the PGV expansion is approved, Hawaiian Electric said at least 65% of the island’s energy would be generated by renewable resources by 2026.

“We’ve been working hard with our independent power producers to amend these contracts to provide substantial benefits to our customers on Hawaii Island,” said Rebecca Dayhuff Matsushima, Hawaiian Electric’s vice president of resource procurement, in a news release. “Benefits include bill savings, stabilized energy rates, more renewable energy and reliability, and decreased fossil fuel consumption and greenhouse gas emissions.”

“This is significant because more than half the island’s energy is generated by independent power producers and more than half the electric rate covers fuel and purchased power,” she said. “These amended contracts have lower cost, fixed pricing delinked from volatile oil prices.”

The remaining renewable energy contract to be negotiated is for Pakini Nui Wind Farm, which expires in 2027.

The four original contracts were negotiated in the 1990s and 2000s, according to Hawaiian Electric, when laws required utilities to buy energy from renewable energy producers at “avoided cost” — which meant paying the same rate as for electricity derived from oil.

At the time, Hawaiian Electric said this was an incentive for developers to build renewable energy projects, but the market for renewable energy today is highly competitive. Today, there is no longer a law requiring “avoided cost” contracts.