The Kaua'i Island Utility Co-op has signed a 20-year agreement with Green Energy Hawai'i to buy power from a proposed 6.4-megawatt plant that will use as fuel waste wood from Hawaiian Mahogany's lumbering operations.

"KIUC anticipates the cost of power from biomass will escalate less rapidly than the cost of fuel oil, reducing our members' risk to oil cost volatility," said KIUC chief financial officer David Bissel.

Green Energy plans to use a gasification/thermal oxidation technology to convert wood chips from Hawaiian Mahogany's plantations, which lie between Lihu'e and Koloa.