HELCO, Hu Honua settle federal lawsuit

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Hu Honua Bioenergy reached a settlement in its federal antitrust lawsuit against Hawaiian Electric Light Co. and its parent companies, Hawaiian Electric Co. and Hawaiian Electric Industries, over a terminated power purchase agreement.

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Hu Honua Bioenergy reached a settlement in its federal antitrust lawsuit against Hawaiian Electric Light Co. and its parent companies, Hawaiian Electric Co. and Hawaiian Electric Industries, over a terminated power purchase agreement.

Terms of the settlement were filed Tuesday in U.S. District Court in Honolulu.

“We have come to terms with Hawaii Electric Light Co. and now have a clear path, pending (Public Utiliies Commission) approval, to get the plant built and operational in time to meet the federal tax credit deadline of Dec. 31, 2018,” Harold Robinson, president of Island BioEnergy, parent company of Hu Honua, said Wednesday in a written statement.

HELCO President Jay Ignacio confirmed that agreement was reached between the parties.

“The contents of the settlement agreement are confidential. I can’t speak to it,” Ignacio said.

The settlement between Hu Honua and HELCO didn’t include the two other defendants in the bioenergy company’s lawsuit — NextEra Energy, whose proposed $4.3 billion merger with HEI was rejected in June 2016 by the PUC, or Hamakua Energy Partners, whose proposed $84.5 million sale of its fossil-fuel power plant to HELCO was nixed by the PUC on May 4.

HELCO and Hu Honua came to a tentative agreement on a new power purchase contract earlier this month, with exception to price. Ignacio said at the time HELCO was using a computer simulation model to determine if Hu Honua’s price proposal was acceptable.

Ignacio said HELCO would file its pricing analysis with the PUC by the close of business Wednesday, in compliance with a commission order.

“That will have all the figures from Hawaii Electric Light’s perspective,” Ignacio said. “… I’m not going to say what’s in there prior to its being filed.”

Hu Honua is seeking PUC approval for preferential price rates provided by law for renewable energy produced in conjunction with agricultural activities which, in this case, are the forestry, logging and hauling necessary to provide eucalyptus wood for the half-completed, long-stalled 21.5 megawatt bioenergy plant in Pepeekeo.

“A request for such preferential rates filed pursuant to (Hawaii Revised Statutes Section) 269-27.3 has never been granted by the commission, and merits a further review,” commissioners wrote in a document filed May 17.

The parties originally entered into a 20-year deal in 2013 that called for HELCO to pay $1 million a year plus electrical costs of 21.5 cents per kilowatt for the first 10 megawatts, with a declining price scale for energy purchased above that amount.

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The revised power purchase agreement, in which energy price fluctuations would be linked to the U.S. gross domestic product, is a 30-year deal.

Email John Burnett at jburnett@hawaiitribune-herald.com.

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