Landowner sues Hu Honua

  • HOLLYN JOHNSON/Tribune-Herald file photo
    A tour is lead through Hu Honua Bioenergy plant in 2017 in Pepeekeo.

Hu Honua Bioenergy faces more litigation, while construction of its biomass power plant near Pepeekeo falls further behind schedule.

The 21.5-megawatt facility, under construction at the site of a former sugar mill power plant, was intended to be finished by the end of 2018 in order for the company to qualify for federal renewable energy tax credits estimated to be worth $100 million.

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Warren Lee, Hu Honua president, said that while the deadline was missed, the company can still seek the tax break, but it’s not guaranteed. He said the project is moving forward either way, though it won’t be complete in March, the most recent estimated completion date.

“There’s a lot of money invested in this renewable energy project,” Lee said. “I don’t think anyone is going to say stop now when you’re almost there.”

He couldn’t say how much longer the project would take to complete.

Hu Honua has missed deadlines before, prompting Hawaii Electric Light Co. to cancel the power purchase agreement in 2016. Hu Honua sued, and the companies reached a settlement agreement to continue the project.

HELCO isn’t planning to terminate the agreement again because of delays, Jay Ignacio, former HELCO president, said last month.

The fate of the power plant could ultimately be determined by the state Supreme Court.

Environmental group Life of the Land filed an appeal of the power purchase agreement, arguing the PUC didn’t consider greenhouse gas emissions when approving the project as it says is required by law.

Oral arguments were made last October.

Henry Curtis, the group’s executive director, said it’s unclear when a decision will be made.

In the meantime, Hu Honua is being sued by its landlord, Mauka Ola LLC, which alleges missed payments.

The agreement states, according to the plaintiff, that Hu Honua will pay the owner 1 percent of construction costs that exceed $70 million, in addition to rent.

The lawsuit filed Jan. 22 in Hilo Circuit Court says construction costs now near $300 million, and that Hu Honua hasn’t made all of the payments the lease requires.

It claims it is owed at least $500,000.

Separately, Hu Honua is requesting a contested case with the state Department of Health for a $25,000 fine it received for the unauthorized discharge of industrial waste that occurred in November.

Janice Okubo, DOH spokeswoman, said the company will be able to present its case for reconsideration of the notice of violation.

“Hu Honua may be challenging the health department’s decision based on facts or they may request leniency,” she said in an email. “Once the case is heard, the hearings officer may decide to uphold the order by DOH, modify the order, or dismiss the order.”

Lee said the contested case is being requested to find out more about how DOH came to its decision.

The discharge involved water used in a boiler flush.

In a written response to questions from DOH, the company says that an “independent contractor” acted on their own by releasing the fluid, which “he mistakenly believed … to be sufficiently clean and his intention was to allow the ground to absorb the discharge.”

The dark-colored water reached the ocean through an outfall. Based on its most recent estimates, Hu Honua believes 7,380 gallons was discharged, according to its written response to questions from DOH.

The regulatory agency says the wastewater was filtered and neutralized, but still contained descaling residue and an acidic metal cleaning solution.

The company says 30 percent, or 2,200 gallons, could have been absorbed by the ground, and that 1,800 gallons was recovered with a pump truck.

That would leave up to 3,380 gallons that could have directly reached the ocean, according to Hu Honua’s calculations.

But it still has 49,584 gallons of wastewater in three storage tanks, and is seeking a method of disposal.

Options being considered are disposal at the Hilo wastewater treatment plant, if the wastewater can be accepted, or disposal at the West Hawaii landfill’s solidification pit, Hu Honua told DOH.

“Lastly, Hu Honua is considering purchasing evaporation equipment to evaporate water on site,” the company said. “Solids generated from evaporation would be disposed off-site at a permitted landfill.”

Lee said disposal methods may depend on how well metals in the water become settled or can be segregated.

“What we’d like to do is dispose it at the county wastewater system if they will accept it,” he said.

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If local options aren’t available, Lee said the wastewater could be shipped off island.

Email Tom Callis at tcallis@hawaiitribune-herald.com.

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