Oahu residents are being asked to subsidize a Big Island biofuels project that will generate some of the most expensive electricity in Hawaii.

Hawaiian Electric Co. (HECO) and its subsidiary, Hawaiian Electric Light Co. (HELCO) are proposing to buy 16 million gallons annually of liquid biofuels from Aina Koa Pono LLC at an undisclosed price that is higher than diesel fuel.

They want the state Public Utilities Commission (PUC) to approve a surcharge on Oahu and Hawaii Island ratepayers to help generate revenues to buy the more expensive fuel. The charge would add an estimated $1 per month to a typical electric bill.

Wahiawa resident Dan Nakasone is among those opposing the project. “I feel these corporations view me and other Oahu residents not as individuals or customers, but as a pool of money to fund this project with no apparent benefit to anyone – except for AKP investors,” he wrote in testimony submitted to the PUC at a public hearing earlier this month.

Henry Curtis, director of Life of the Land, said HECO’s proposal to tap Oahu residents for a project on another island is unprecedented. “It’s a way of shifting money from ratepayers to politically connected individuals when there are far cheaper ways of doing it,” Curtis said.

The project is also meeting strong resistance from Big Island residents who are worried about fuel tanker traffic in the rural Kau District, higher electric bills and Aina Koa Pono’s plan to use an untested microwave catalytic depolymerization technology to turn organic material into liquid fuel. The company also has yet to determine what sort of fuel it plans to grow to supply the processing facility it wants to build outside Pahala, a sleepy former sugar plantation town.

The PUC previously rejected one proposal from HECO and Aina Koa because it was too expensive and not in the public’s best interest. Curtis said the most recent proposal is a little better, but would still result in “probably the second-most expensive energy in the state, in terms of price per kilowatt hour.”

“Biofuels don’t typically pencil out unless they are given huge subsidies,” Curtis said. And in this case, Oahu residents would be subsidizing the project.

Curtis commended the PUC for its pioneering decision to take a broader look at the Aina Koa proposal and review it ”from a policy perspective. That’s a good process.”