An ambitious plan to develop a renewable energy project on Kauai that would have been the biggest hydroelectric power plant in Hawaii has been scaled back and may not go forward at all.

Kauai’s nonprofit electric utility recently announced that part of its West Kauai Energy Project with developer and operator AES Corp. has been canceled, and that it is uncertain whether the remainder of the overall $250 million project remains financially feasible.

Issues with the project, where planning stretches back more than a decade, are rooted in longstanding contentions over using mountain stream water leading to the Waimea River and other parts of West Kauai.

Kaua‘i Island Utility Cooperative proposed to restore parts of the century-old Kokee agricultural irrigation ditch system, which includes high-elevation reservoirs, to channel water through turbines producing electricity and also distribute some water to agricultural land owned by the state.

KIUC’s plan included a higher elevation turbine to produce 4 megawatts of electricity, and a base-level operation featuring a hydroelectric turbine producing 20 megawatts of power as well as a 35-megawatt solar farm that would partly be used to feed the grid and to pump water back up to a midlevel reservoir where water would be released to produce electricity when no solar energy is being generated.

The project, designed to operate for 50 to 80 years, was estimated to provide Kauai with 25% of its energy, increase the amount of renewable energy generation on the island to more than 80% from about 60%, displace more than 8 million gallons of fossil fuel annually and cut costs for customers somewhere between $157 million and $172 million over an initial 25 years.

Two Kauai community groups concerned with water use filed a lawsuit in February against the state Department of Land and Natural Resources contending that the agency’s director should not have accepted the project’s environmental assessment report, which the groups also contend is inadequate.

The lawsuit, filed by the Earthjustice law firm on behalf of Po‘ai Wai Ola and Na Kia‘i Kai, asserted that a more comprehensive environmental impact statement should have been done, and that the existing report didn’t assess consequences of discharging much of the channeled water onto the Mana Plain where agricultural use was envisioned but not specified or certain.

According to the environmental report, KIUC and AES expected to divert an average of 11 million gallons a day — or 4 billion gallons a year — from reaching the Waimea River for 65 years. The lawsuit contends that discharge of this water after being used to produce electricity would collect sediment, pesticides and other pollution on its way out into the ocean.

Po‘ai Wai Ola previously had been involved in a regulatory battle over Waimea River flow levels being negatively affected by upstream diversions into the Kokee and Kekaha irrigation ditch systems being wasted after closure of the Kekaha Sugar Co. plantation in 2000.

That regulatory battle resulted in a 2017 mediated agreement that included 11 million gallons of daily water use for the contemplated West Kauai Energy Project.

The still-pending lawsuit contends that KIUC and AES expect to dump all that water into the Mana Plain drainage system after electricity production, which Po‘ai Wai Ola called a waste.

“We’re not against renewable energy,” John A‘ana, Po‘ai Wai Ola vice president and a longtime kalo farmer, said last year. “But we are against diverting and dumping river water for energy.”

KIUC said it scaled back the West Kauai Energy plan because of litigation-caused delays, project uncertainty and cost increases.

The scaled-back version comprises only the solar farm and pumping water from a base-level reservoir up to a midlevel reservoir for release back down to the base-level reservoir and hydroelectric power generation. Dropping the other part, hydroelectric power generated from water flowing through an improved ditch system from the mountaintop to the base facility, will reduce electricity production by about 25%, according to KIUC.

KIUC said it hasn’t yet been determined whether the scaled-back version is financially viable.

“While it’s unfortunate that the full potential of the environmental, social and economic benefits of WKEP will not be realized, we retain hope WKEP will still be an important piece of KIUC’s renewable portfolio,” David Bissell, KIUC president and CEO, said in a statement.

At one time, the utility company anticipated that it could have the full West Kauai Energy Project operating by 2024. That was pushed back to 2026 and most recently to at least 2028 before the latest change.

KIUC said it will still make an initial phase of Kokee ditch improvements called for in the mediated agreement regardless of whether it proceeds with the scaled-back project.

Other improvements, the company said, won’t be done, including rehabilitating the upper-level Puu Lua Reservoir that would have allowed for more recreational use, fixing other parts of the ditch system and delivering water to other users. These other users include the state Department of Hawaiian Homelands, DLNR and the state Agribusiness Development Corp.

Plaintiffs in the lawsuit challenging the hydroelectric project endorsed the scaled-back plan.

A‘ana called it the right next step. “The community supported the pump- storage proposal from the beginning,” he said in a statement from Earthjustice. “The problems started when KIUC added the flow-thru system to the project.”

Galen Ka‘ohi, president of Po‘ai Wai Ola, said in the statement that he is relieved that KIUC is no longer pursuing the flow-thru hydro system. “It does not make sense to take 4 billion gallons of water a year for the next 65 years from a river that is already suffering from reduced flows because of climate change,” he said. “We need to protect the water, safeguard the streams, and figure out ways to produce energy that does not harm this essential resource.”