Shares of Kapolei-based technology company Hoku Scientific Inc. surged yesterday after the company announced a potential contract with Hawaiian Electric Co. and progress on its Idaho polysilicon plant.

Hoku shares jumped 59 cents, or 13.8 percent, to $4.86 on the Nasdaq Stock Market. The stock has traded between $2.12 and $7.54 during the past 52 weeks.

Hoku said that HECO is beginning formal purchase negotiations with a subsidiary, Hoku Solar Inc., for a photovoltaic power, or solar power, system. The 167-kilowatt system would be the second largest sun-to-energy unit on O'ahu, Hoku said.

Hoku Solar will own and operate the system and charge Hawaiian Electric for the power generated at a fixed rate over 20 years.

The utility will be given an option to purchase the system after five years.

The system is expected to be in service early in 2008, pending approval by the Public Utilities Commission.

Hoku also reaffirmed that its subsidiary, Hoku Materials Inc., is on track to complete a planned polysilicon plant and begin product deliveries in January 2009. Polysilicon is used in the production of solar modules.

Hoku Materials has drawn on its $13 million credit facility with Bank of Hawaii to pay the 15 percent initial deposit for reactors capable of producing 2,000 metric tons of polysilicon per year.

In addition, several financing deadlines have been extended. Hoku Scientific Chief Executive Dustin Shindo said the extensions reduce the company's "immediate pressure to finance the project."

Shindo also reported that the company received pre-permit construction approval from the Department of Environmental Quality in Idaho to begin site preparation and construction.