Electricity customers will have to cough up 1 percent more to pay for a new plant that is designed to help lessen Hawaii's dependency on imported fuel.

The state Public Utilities Commission approved the increase Saturday, and it became effective that day, Hawaiian Electric Co. said.

With the increase, a typical customer using 600 kilowatt-hours a month will see a $1.34 increase on a total bill of $149.57.

The increase will go toward paying for a recently completed $142.3 million, 110-megawatt biodiesel-fueled generating plant at Campbell Industrial Park.

“;We know that the price of fossil fuels only go in one direction, and that's up,”; said Darren Pai, HECO spokesman. “;There's also the real potential that there may be some type of carbon taxes or additional costs incurred for using fossil fuels as energy.”;

The commission authorized the utility to start collecting a 4.7 percent rate increase that had been in place since August on an interim basis. But the increase did not include the cost of the new plant. Saturday's approval brings the rate increase to 5.7 percent, or $73.8 million in annual revenue.

The final amount HECO is seeking totals 6.2 percent, or $80.2 million in revenue. Pai said the commission has yet made a decision on that. HECO's original 2008 request was at 7.5 percent, or $97 million in revenue.

Meanwhile, delivery of biodiesel is on hold since the PUC has yet to approve HECO's contract with Renewable Energy Group in Iowa. The PUC and the state Consumer Advocate must give approval before the deal is factored into HECO fuel costs.

In August the commission denied HECO's original biodiesel contract with Seattle-based Imperium Services LLC because of too many risks, and costs that would have been passed on to consumers.

Pai said the biodiesel unit will be used to power the island during daily peak usage periods, from 5 to 9 p.m. The unit also has black start capability to restore operation without outside energy sources, which gives the utility another option to restart the system.

The PUC also approved the utility's new method for setting electric rates. Electric revenues will now be unlinked, or decoupled, from the amount of electricity sold.

Under the decoupled system, the commission would approve a revenue level based on services it authorizes the company to do for customers. Rates are then adjusted based on varying sales levels, allowing the utility to continue to recover costs of providing the services, but not earn additional profit from higher sales.

HECO has a month to detail how the system will work. The company said the system would help comply with the state's clean energy initiative that aims to increase the proportion of renewable energy use in Hawaii to 25 percent in 2020, and 40 percent by 2030.