Hu Honua bioenergy project fails to get PUC approval

The state Public Utilities Commission has rejected a request from Hawaii Electric Light Co., the Big Island power company, to waive competitive bidding on the long-stalled and nearly completed $350 million Hu Honua Biomass Project.

Hu Honua, which now does business as Honua Ola Bioenergy, says the plant would produce 21.5 megawatts of power. Hu Honua was formed in 2008 to convert the old Hilo Coast Processing Co. plant in Pepeekeo into a biomass plant that would burn trees to generate electricity. The plant formerly burned sugar cane waste material and coal.

The PUC on Thursday denied the Big Island utility’s request for a waiver from the “competitive bidding framework” in disallowing approval of an amended power purchase agreement. The PUC said in its order that “competitive bidding for new generation resource is desirable and waivers should be treated as an exception.”

The commission dismissed without prejudice the amended power purchase agreement, meaning Hu Honua may compete in the next request for proposals for renewable energy projects.

“While the Hu Honua Project may result in community benefits such as economic stimulation and employment creation, the Commission is not convinced that these are unique to the Hu Honua Project, as any approved project developer would be required to build, maintain, and operate a renewable facility on Hawaii Island and would also convey economic benefits to the community,” the PUC wrote. “Thus, a waiver is not necessary, as community benefits could be provided by a successful competitive bidder, whether it be Hu Honua or another renewable energy project, and the unique community benefits proposed by the Hu Honua Project are better evaluated in the context of the Competitive Bidding Framework.”

Hawaiian Electric spokesman Jim Kelly said the company continues to advocate for a diverse-portfolio approach to ensure reliability and affordability as it transitions off fossil fuels.

“While we believed Hu Honua could be an important element in the mix of resources on Hawaii Island, we understand and respect the commission’s decision,” he said. “Even without Hu Honua, proposed and existing renewable energy projects — wind, geothermal, grid-scale and rooftop solar, hydroelectricity, energy storage — will enable Hawaii Island to use renewable resources to generate nearly all of its electricity by the end of this decade.”

Hu Honua could not be reached for comment late Thursday.

One Hu Honua opponent praised the PUC decision.

“Today the Hawaii Public Utilities Commission put a much welcomed end to the proposed biomass power plant on the Big Island’s Hamakua coast,” said Marco Mangelsdorf, president of ProVision Solar, a Big Island renewable energy firm, and a director of Hawaii Island Energy Cooperative, in an email. “This decision is fantastic news for our island and the state. As we accelerate the transition to clean green energies, we can and must do better than bringing on new combustion power generation, regardless of the fuel source.”

The agreement between HELCO, now known as Hawaiian Electric, and Hu Honua called for the utility to buy power that would be produced by burning eucalyptus trees growing along the Hamakua Coast as well as other timber.

That deal was challenged by the nonprofit environmental organization Life of the Land, which argued the PUC violated state law when it approved the power purchase agreement in 2017. In May 2019 the state Supreme Court agreed and rejected the deal between HELCO and Hu Honua, writing in its order that when the PUC approved the power purchase agreement, it failed to “explicitly consider” the state’s goal of reducing greenhouse gases, which is required under state law.

The PUC said in its ruling that it “does not make any express findings or conclusions regarding … the estimated impacts of GHG (greenhouse gas) emissions associated with the Hu Honua Project.”

Mangelsdorf said Life of the Land Executive Director Henry Curtis’ actions stopped Hu Honua.

“The final nail in the coffin for this facility is really due to the perseverance of one man, Henry Curtis, showing that the power of one can at least sometimes overcome the power, schmoozing and hundreds of millions spent by faraway developers and their hired guns and influencers.”