Rejection of Big Island biomass plant could cost 209 jobs

Hu Honua Bioenergy said the state Public Utility Commission’s decision Thursday to reject an amended power purchase agreement for a biomass project on the Big Island will result in imminent layoffs of 64 current Hu Honua employees and contractors and the loss of an additional 145 positions to be filled.

Those ancillary jobs consist of positions in trucking, forestry and support serv­ices on the Big Island, the company said.

Hawaii Electric Light Co., the Big Island power company, had sought 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. 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.

“Because the Commission’s decision has just been issued, we are studying it to determine how we will proceed,” Honua said in a statement released to the Honolulu Star-Advertiser on Friday. “Understandably, we are disappointed by the PUC’s decision, especially considering that more than $350 million has been spent on a state-of-the-art renewable energy facility that was anticipated to be completed and ready to commence operations in 2020 and the more than 200 well-paying jobs that would have existed for the next 30 years.”

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

The agreement between HELCO and Hu Honua 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 Supreme Court ruling instructed the PUC to hold an evidentiary hearing. Hu Honua said it had been waiting for more than a year to demonstrate at the hearing that its plant operations will result in a significant reduction of greenhouse gases and bring numerous other benefits to Hawaii island.

“Instead, it appears that the PUC has opted to contravene the Supreme Court’s instructions to hold a hearing and to consider Hu Honua’s evidence on the reduction of GHG,” Hu Honua said. “The PUC’s action essentially reverses its two prior approvals of the PPA and waivers that allowed the project to proceed and which Hu Honua relied on in spending hundreds of millions of dollars.”

Hu Honua said the PUC’s action not only forecloses the opportunity for the company to have its GHG reduction considered at an evidentiary hearing, “but also precludes all the benefits of Hu Honua’s locally produced renewable energy, resulting in the prolonged use of imported fossil fuel on Hawai‘i Island that Hu Honua’s firm renewable energy was designed to replace.”

Hawaiian Electric spokesman Jim Kelly said a lot has changed since this project was first proposed 12 years ago and that the renewable energy landscape and economics are dramatically different. 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.