HELCO, biofuel maker propose less costly deal

Hawaiian Electric Co.’s Hawaii island subsidiary has submitted a new proposal to buy locally produced liquid biofuel for electricity generation after a previous plan was rejected by regulators as being too expensive.

HECO said the price of the biofuel in a proposed 20-year contract between Hawaii Electric Light Co. and Aina Koa Pono would be about $125 million less than what was in the previous contract, nixed by the Public Utilities Commission in September. HECO did not disclose the actual price per barrel of the biofuel.

Aina Koa Pono, which is building a $450 million processing facility in Pahala, would provide HELCO 16 million gallons of liquid biofuel a year which would initially be used to replace petroleum-based fuel burned by the utility at its 80-megawatt Keahole Power Plant. An additional 8 million gallons a year will be produced for sale to Mansfield Oil Co., a privately owned fuel distributor, according to a news release from HECO and Aina Koa Pono.

Aina Koa Pono’s plans call for using a technology called microwave catalytic depolymerization to convert organic material into a liquid fuel. The company has agreements with two land trusts to lease more than 12,000 acres in the Pahala area to farm crops that will be used to make the biofuel. The land was formerly used by the Kau Sugar company to grow sugar cane.

Officials from Aina Koa Pono said they will initially harvest and process existing invasive plants and eucalyptus trees. The facility also will have the capability to process waste products, such as macadamia nut husks, tree trimmings and coffee bean hulls.

"We are committed to being a good neighbor and steward, producing sorely needed renewable, clean fuel and bringing jobs and economic opportunity where they are generally needed," said Chris Eldridge, an Aina Koa Pono partner.