Biomass firm calls for PUC to investigate HELCO actions

Hu Honua Bioenergy, the biomass facility that had a contract terminated by Hawaii Electric Light Co., filed a pleading Thursday with the state Public Utilities Commission asking the agency to investigate Hawaiian Electric Co. and its Big Island subsidiary.

Hu Honua asked the PUC to investigate HELCO’s refusal over the past 14 months to provide the Big Island facility with “reasonable” milestone extensions to construct its plant and HELCO’s “improper” termination of the contract on March 1.

“You’ve got a plant that its halfway built. We’re lowering our price. Why would you not do it?” said Hu Honua Principal Investor Jenny Johnson in a telephone interview.

The project is approximately 50 percent complete, with the company spending $137 million to date. Hu Honua said it has $125 million of capital committed to the completion of the facility, and can be ready to begin operations within 14 months.

Jay Ignacio, HELCO president, said the utility has major concerns about the project because the developer missed multiple deadlines, was locked out of its project site for more than a year, leading to the loss of its financing, and the cost more than doubled to over $200 million.

Ignacio said Hu Honua and HELCO explored options in 2015 because Hu Honua requested changes to the terms of the contract so the developer could obtain the financing it had lost.

“All of the proposals offered by Hu Honua would have led to price increases to Hawaii Electric Light customers,” he said.

In the filing, Hu Honua said that HELCO provided the wrong pricing proposal to the PUC to show that the facility didn’t benefit ratepayers.

Hu Honua said its pricing is 14 cents per kilowatt-hour at production levels above 10 megawatts. Hu Honua said the price reduction would result in additional customer savings of approximately $60 million over the 20-year life of the contract, compared with the pricing in the original application.

“Yesterday we submitted our latest pricing proposal to HELCO and are proud that the energy price we presented, if approved, would be the lowest of any renewable facility in the state,” Johnson said. ”We are hopeful that the PUC will support us.”

Ignacio said HELCO is evaluating that offer.

“We are still willing to meet to discuss these issues with Hu Honua despite their disturbing public comments,” he said.

The facility is in Pepeekeo on the Hamakua Coast. Hu Honua said its facility will be able to produce up to 30 megawatts of clean renewable power. The company also said it is capable of producing approximately 14 percent of Hawaii island’s electricity needs.