Hawai'i's waves soon could be powering Maui homes.

Australia-based Oceanlinx Ltd. plans to generate 2.7 megawatts of power using offshore hydrokinetic technology. State lawmakers are considering allowing the company to sell up to $20 million in tax-free bonds. The company also is in negotiations with Maui Electric Co., which would purchase the wave-generated energy.

If successful, Oceanlinx would be Hawai'i's first commercial provider of electricity from ocean waves. Hawaiian Electric Co., which owns the Maui utility, said it's still working out the final details of a memorandum of understanding with Oceanlinx.

"This would be a significant step forward in ocean energy and we're really very optimistic about it," said Hawaiian Electric spokesman Peter Rosegg. "We just need to finalize the documents."

Ordinarily, 2.7 megawatts of power is enough to fulfill the energy needs of about 2,700 households. However, the Oceanlinx project likely would produce somewhat less energy because wave power is less reliable than conventionally produced electricity. Still, wave power coupled with other renewable sources such as wind and photovoltaic combined could help significantly reduce Maui's reliance on crude oil.

Oceanlinx technology relies on rising and falling waves to compress and displace air in a chamber. That air is used to drive a turbine that converts the motion to electricity. That work is done within a floating device that's roughly the size of a large truck, said Oceanlinx spokesman Peter Kingsbury.

The device can be tethered more than a mile offshore, he said. A cable is used to transfer electricity to an onshore power substation.

"They're pretty big," Kingsbury said. But, "most people can't see these things."

The company has similar projects planned in Australia, Oregon and Rhode Island.

Oceanlinx and Hawaiian Electric did not disclose the potential site or timeframe for the project, which also could be eligible for Hawai'i's 100 percent tax credit for technology investments.

According to a 1992 state study wave energy resources from Hawai'i's northern shores far exceed the electricity demand of all islands except O'ahu.

The most promising coasts for wave energy development were those facing northeast that were partly sheltered from north Pacific swells by nearby coastal features or neighboring islands.

Oceanlinx would not be the first company seeking to generate electricity from Hawai'i's waves. Pennington, N.J.-based Ocean Power Technologies Inc. has worked with the Navy for several years with buoys deployed off Marine Corps Base Hawaii at Kane'ohe Bay.

Ocean Power Technologies plans to test a 150 kilowatt, or .15 megawatt, buoy in Hawai'i this year, according to a filing with the Securities & Exchange Commission.

According to the Federal Energy Regulatory Commission, there are 49 permitted hydrokinetic projects in the United States.

Reach Sean Hao at shao@honoluluadvertiser.com.