Hawaiian Electric Co. has signed a contract with a subsidiary of the Renewable Energy Group of Iowa to supply clean-burning biodiesel for testing at its new plant.

REG, which was chosen from among eight bidders, is expected to supply 400,000 gallons of biodiesel for HECO to conduct operational testing and collect emissions data at its 110-megawatt plant at Campbell Industrial Park.

The biodiesel will be processed from used cooking oil and waste animal fat. REG operates a national network of biodiesel production, and has the capacity to produce more than 300 million gallons per year.

The contract is still subject to review by the state Public Utilities Commission and the Hawaii Division of Consumer Advocacy before it can be included in HECO's fuel costs.

HECO in August resumed its search for a biodiesel supplier after the PUC rejected a previous contract with Imperium Services LLC of Seattle, saying higher costs would have been passed on to the consumer.

A second request for proposals, which closed on Sept. 30, sought a supplier of 3 million to 7 million gallons per year for two years.

HECO hopes a contract will be in place from that request for PUC consideration by the end of November.

“;Being able to use liquid renewable fuels in our generating units is one of many steps—including more electricity from other renewable sources such as solar, wind, biomass and the ocean—to meet our goal of providing reliable electric service while reducing Hawaii's dependence on fossil fuels,”; said Robbie Alm, HECO vice president.