Public Utilities Commission rejects Big Isle biomass plant again

The state Public Utilities Commission on Monday placed another roadblock in front of a $520 million biomass plant that would burn trees to generate electricity on Hawaii island.

The panel voted 2-1 against the proposal and issued a lengthy decision that offers a number of reasons why Honua Ola Bioenergy, legally known as Hu Honua Bioenergy LLC, should not be granted an amended power purchase agreement with Hawaii Electric Light Co. (now referred to as Hawaiian Electric).

The project, according to the decision, will produce “significant” greenhouse gas emissions, while Hu Honua’s plan to sequester carbon is speculative and relies on “assumptions and unsupported assertions.”

“The Commission is not convinced that the Project will reduce (greenhouse gas) emissions, and has concerns about the potentially significant long-term environmental and public health impacts of the Project,” the three-member panel wrote in its 164-page decision.

What’s more, the com­mission found that the amended power agreement is likely to result in high costs to ratepayers, both through its relatively high cost of electricity as well as through the potential displacement of other, lower-­cost, renewable resources.

While PUC Chairman James Griffin and Jennifer Potter voted to deny the power purchase agreement, Leodoloff Asuncion filed a 20-page dissent, asserting that Honua Ola had met its burden for approval based on the requirements established by the state Supreme Court.

After the ruling the company said it was weighing its options, including a motion for reconsideration with the PUC and, if necessary, the filing of an appeal with the state Supreme Court.

In a statement, Warren Lee, president of Honua Ola Bioenergy, said, “We are extremely disappointed in the decision of Chair Griffin and Commissioner Potter to deny our power purchase agreement with Hawaiian Electric, as well as deny residents of Hawaii Island all the benefits Honua Ola is prepared to bring. We presented an abundance of evidence to the PUC that met the burden for approval as established by the Hawai‘i Supreme Court.”

Honua Ola Bioenergy was formed in 2008 to transform the old Hilo Coast Processing Co. plant in Pepeekeo into a biomass plant that would burn eucalyptus trees. The plant formerly burned sugar cane waste material and coal.

The plant, now 99% complete, would generate enough energy to power 14,000 homes. All that’s needed is approval from the PUC.

Over the past five years the company has been pulled through the regulatory ringer in its attempt to become operational.

Honua Ola previously received key government approvals to develop the plant. These include approvals received twice from the PUC on waivers to competitive bidding between Honua Ola and Hawaiian Electric in 2008 and 2017.

The PUC has also twice approved power purchase agreements between Honua Ola and Hawaiian Electric — in 2013 and 2017. The 2017 approval directed Honua Ola to build the plant to completion and begin producing energy as soon as possible.

But the order was appealed to the state Supreme Court by conservation nonprofit Life of the Land, claiming the PUC failed to consider greenhouse gas emissions in its decision.

Honua Ola officials said the PUC was provided with studies showing that a net reduction in such emissions would be realized from the project’s operations, but the commission failed to include them in its decision.

In 2019 the state Supreme Court sent the matter back to the PUC, directing them to hold an evidentiary hearing on the emissions issue and to include this analysis in its decision and order.

Instead of holding an evidentiary hearing, the current PUC commissioners issued an order on July 9, 2020, that revoked the competitive bidding waiver approved twice previously and closed the docket on Honua Ola, effectively killing the project.

On Sept. 16, 2020, Honua Ola filed an appeal to the state Supreme Court requesting that the PUC’s order be vacated and that an evidentiary hearing be conducted on the emissions issue, and the high court complied.

In his statement following Monday’s PUC ruling, Lee said the decision not only prejudices Hu Honua, but also deprives the community of the benefits that could be realized from the project.

“If the PUC’s decision is allowed to stand, it will be a huge loss for the Big Island’s future, including the more than 200 jobs Honua Ola will support island wide with its renewable energy operations,” he said.

By contrast, Life of the Land applauded the decision.

“The proposed project would increase Hawaii Island electric rates, greenhouse gas emissions and other toxic emissions; and pose a threat to Hawai‘i’s fragile environment,” Henry Curtis, leader of Life of the Land, said in a statement.

”This Public Utilities Commission absolutely made the right call when it came to protecting the needs and well-being of the public,” said Marco Mangelsdorf, president of ProVision Solar, a Big Island renewable energy firm.

“In the face of a years’ long, relentless and aggressive campaign waged by Hu Honua’s deep-pocketed mainland backers and co-opted local promoters, this commission acted with courage and persistence despite the court rulings, required hearings and a multi-pronged pressure offensive that I’ve rarely, if ever, witnessed in Hawaii.

“We on the Big Island, and in the state, can and must do better than having any new power generation be combustion-based. The PUC could have caved to the onslaught and they didn’t. And that’s reason to celebrate,” Mangelsdorf said in a statement.

The five-year term of PUC Chairman James Griffin comes to an end June 30, so there is the potential of a reversal of the decision, depending on who replaces Griffin, a former faculty member at the University of Hawaii’s Hawaii Natural Energy Institute.