Hawaii PUC denies Hu Honua Bioenergy motions for reconsideration

By Erin Voegele | June 29, 2022

The Hawaii Public Utilities Commission on June 24 denied motions for reconsideration filed by Hawaii Electric Light Co. Inc. (HELCO) and Hu Honua Bioenergy LLC asking the agency to reconsider its May 23 rejection of an amended power purchase agreement (PPA) between the two entities.

Hu Honua Bioenergy is the developer of a nearly complete 30 megawatt (MW) biomass power plant in Hawaii. Work to develop the biomass-fired power project has been ongoing for more than a decade, with development of the project nearly complete since at least mid-2020.

The facility is located at the site of the former Hilo Coast Power Co. in Pepeekeo, Hawaii, which is located near the eastern coastline of Hawaii’s big island. A sugar mill was developed at the site in 1857. A power facility was added to the site in 1972 and was fired with sugarcane bagasse until sugar production ended in 1994. The power facility continued to operate through 2004 but was fired with coal rather than bagasse. Hu Honau began work to refurbish the plant to produce biomass-based energy more than a decade ago, with plans to fuel the facility with locally grown biomass, including eucalyptus.

The PUC approved a PPA between HELCO and Hu Honua in late 2013. The project however faced development delays and legal challenges. HELCO announced plans to terminate that PPA in 2016 as a result of those delays. Hu Honua in 2017 announced that it had reached an agreement with HELCO for an amended PPA, which was approved by the PUC later that year. The PPA was soon challenged by an environmental group. The legal challenge reached the Hawaii Supreme Court, and the court in 2019 rejected the PPA, ruling that the PUC was required to expressly consider the reduction of GHG emissions in its decision making. In June 2019, the PUC re-opened a docket related to the PPA. In mid-2022 the PUC issued an order determining that HELCO had not sufficiently supported its request for a waiver of the competitive bidding process for the Hu Honua facility. Such a waiver had previously been approved for the project, but the PUC concluded that that approval had been voided by the Supreme Court ruling. Legal and regulatory wrangling over the PPA continued through the spring of 2022, with the PUC handing down its decision to deny the amended PPA on May 23.

Hu Honua Bioenergy filed a motion for reconsideration on June 2, arguing that the rejection has a negative impact on the company’s significant property interest; that the rejection will cause the loss of hundreds of jobs and millions of dollars in tax revenue; and that the rejection will result in the continued and prolonged use of high amounts of expensive and price-volatile imported oil.

Hawai’i Electric Light Co. also filed a motion for reconsideration on June 2, calling the PUC’s rejection “unreasonable, unlawful  and erroneous on a number of points.” The company specifically claims that the denial exceeds the scope of the remand from the Hawai’i Supreme Court in HELCO I and Helco II; by essentially determining that the Hu Honua project must be carbon negative, establishes a new legal standard for GHG emission that is beyond the scope of applicable law as has been applied to other projects; includes a number of incorrect factual assertions which are inconsistent with the record; and incorrectly states that the commission lacks authority to enforce conditions against Hu Honua, which would ensure that such conditions are, in fact, binding.

The PUC on June 24 denied those motions for reconsideration and closed the docket. A full copy of the denial can be downloaded from the PUC website