The Hawaii Public Utilities Commission has given the thumbs down to a tree-burning power plant on the Big Island.

In its 164-page decision with one dissent, the three-member panel listed a variety of reasons why Honua Ola Bioenergy, formerly known as Hu Honua, should not be granted an amended power purchase agreement with Hawaiian Electric Light Company. The top reasons: the project will result in significant greenhouse gas emissions, which contribute to climate change, and Hu Honua’s carbon sequestration plan is speculative and based on “unsupported assertions.”

Hu Honua President Warren Lee said he’s extremely disappointed by the decision and is considering next steps.

“We are carefully reviewing the PUC’s decision and determining our legal options for moving forward, including a motion for reconsideration with the PUC and, if necessary, the filing of an appeal with the Hawai‘i Supreme Court,” Lee said in a news release.

The commission said it has concerns about the potentially significant long-term environmental and public health impacts of the project if the power agreement with HELCO is approved.

In addition, the commission found that the power purchase agreement is likely to result in high costs to ratepayers, both through its relatively expensive electricity and the potential displacement of other lower cost, renewable resources.

The biomass plant, located 10 miles north of Hilo, is not expected to deliver unique benefits to HELCO’s grid nor is it urgently required at this time, the commission ruled. Therefore, it would not be prudent or in the public interest to approve the power purchase agreement, according to the ruling.

The two commissioners who signed off on the denial were outgoing chair James Griffin and Jennifer Potter.

Commissioner Leodoloff Asuncion Jr. wrote in his dissent that when the commission reopened the Hu Honua docket on June 30 upon remand from the state Supreme Court, it was supposed to consider “narrow issues” related to the greenhouse gas emissions.

The evidence clearly establishes that the burden of proof has been met and that the biomass plant will result in a significant reduction in greenhouse gas emissions over the course of its 30-year life, he said.

He added that the higher costs that would be passed on to ratepayers are reasonable in light of the potential for reductions in greenhouse gas emissions.

The Hu Honua project has been in the making for many years, bogged down in litigation and regulatory proceedings. The commission initially granted a power purchase agreement to the company in 2013, and again in 2017. But environmental group Life of the Land successfully sued, arguing that the plant’s potential to cause air pollution was not adequately taken into account. The Supreme Court agreed, vacated the agreement and remanded the matter back to the commission.

In June 2019, the commission reopened its docket for further proceedings. Many twists and turns have occurred since then, including several days of evidentiary hearings in March. During those hearings, HELCO representatives testified in support of the power purchase agreement, saying Hu Honua would boost renewable energy available on the grid.

The biomass plant proposes to burn eucalyptus trees and convert the steam into 21.5 megawatts of energy, supplying about 14% of Hawaii island’s power needs or about 14,000 households. That would result in 8 million metric tons of carbon dioxide produced over the life of the plant.

The company says the operation will be carbon neutral because carbon dioxide released by the plant would be offset through reforestation, the purchase of carbon offsets, and by displacing existing generators that run on fossil fuels.

Griffin and Potter did not find those claims credible “due to Hu Honua’s reliance on a number of speculative assumptions.” The margin of error in Hu Honua’s carbon sequestration analysis is so small that even a tiny change in the operation could result in the power plant becoming a significant source of air pollution, according to the decision. It’s also unclear whether and how the commission would be able to enforce Hu Honua’s carbon commitments over the course of three decades.

Marco Mangelsdorf, a solar power entrepreneur on Hawaii island, applauded Monday’s decision.

“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,” said Mangelsdorf, responsible managing employee of Hilo-based ProVision Solar.

The Hu Honua plant is 99% complete as far as construction and would be ready to start operating by later this year, according to the company.

Read the full ruling below.