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PUC won’t exempt Honua Ola from competitive bidding

  • LEE

  • MANGELSDORF

The president of Honua Ola Bioenergy said Wednesday that he was “not feeling so good” after the state Public Utilities Commission denied his company’s motion to reconsider a waiver of the competitive bidding process for the company’s nearly completed 21.5-megawatt biomass power plant.

“If we had an effective power purchase agreement, we could be operating by the end of the year. If we had an effective purchase power agreement. But there’s no place for the power to go, yeah?” said Warren Lee, president of the company formerly known as Hu Honua Bioenergy.

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The PUC announced Wednesday that it won’t reconsider its July 9 order denying a waiver of the competitive bidding process previously granted to the Pepeekeo power plant’s intended customer, Hawaiian Electric Co., formerly known as Hawaii Electric Light Co. The regulatory panel’s reasoning in denying the waiver is that Honua Ola’s projected sales price of about 22 cents per kilowatt hour to HECO for electricity generated by burning eucalyptus chips is more than double that of two recently approved large-scale solar projects.

The PUC’s July order, in effect, nullified a 2017 amended power purchase agreement between HECO and Honua Ola. The purchase agreement was sent back to the commission for reconsideration by a 5-0 decision by the state Supreme Court after an appeal by environmental group Life of the Land. The high court agreed with Life of the Land that the panel didn’t “explicitly consider” the reduction of greenhouse gases, as required by law.

The July order was without prejudice, which would allow Honua Ola to continue to seek a power purchase agreement based on competitive bidding.

In a written statement, Honua Ola blamed the PUC for “killing a badly needed firm renewable energy project on Hawaii Island,” and said the PUC’s order “disrespects the 64 workers whose jobs are threatened during this unprecedented economic crisis.”

Despite numerous legal and regulatory challenges to the project in the past decade or so, investors continued construction. Recent estimates placed the power plant at 99% complete with $474 million so far invested in the project.

The 69-page order issued Wednesday said Honua Ola “did not have a reasonable basis for proceeding with the project during (Life of the Land’s) appeal” based on the language of the 2017 power contract.

Honua Ola has put on a public relations full-court press in recent months, saying what hangs in the balance are 200 well-paying jobs in the community, plus a new forestry sector and expansion of agriculture during the next three decades.

“The commission is aware that this project has generated a significant amount of interest, with many in the community passionately advocating for or against the project,” the PUC wrote in Wednesday’s order. “… The commission is cognizant that its ruling will impact many in the local community in a personal way, and does not take such considerations lightly.

“However, in this instance, the commission affirms its belief that the public interest will be best served by requiring (HECO) to evaluate (Honua Ola’s) project through competitive bidding.”

In the docket filings, the war of words between Honua Ola and Life of the Land has taken an ugly turn.

In a Sept. 4 letter to the PUC signed by Lee last week, Honua Ola accused Life of the Land Executive Director Henry Curtis of being behind seven “spoof” or illegitimate emails filed with the PUC in favor of the project. The letter said the company traced the bogus emails — which cast a shadow over the authenticity of all public comments — to an IP address associated with Curtis’ Honolulu residence.

Curtis has denied the allegation and hired his own cyber-investigator.

“In light of the significant breach-of-privacy concerns implicated by this situation and the difficulty of ascertaining which comments may have been filed without permission, the commission has redacted from public view comments brought to the commission’s notice on September 1, 2020,” the Wednesday PUC document states. “However, these public comments remain part of this docket’s record — they, and any responses received, have merely been filed under seal to protect the privacy of those who may have had unauthorized comments filed using their email addresses.”

Honua Ola’s statement called it “reprehensible” that “the PUC made this decision without conducting an investigation of the fraudulent letters submitted to discredit the overwhelming number of comments in support of the project,” and accused it of “suppressing the voices of thousands of supporters of this project in favor of a hasty ruling.”

In a document dated Aug. 24, Honua Ola told the PUC if it didn’t issue a decision on its motion to reconsider by Sept. 30, Honua Ola “will regretfully be forced to start laying off its employees.”

“We said that if we didn’t get a (favorable) decision by the end of September, we may have to do something,” Lee said. “But that’s something that’s still on the table.”

Curtis didn’t return a call seeking comment by press time, but project opponent Marco Mangelsdorf of ProVision solar in Hilo said that despite “unprecedented pressure and personal attacks” the PUC “absolutely came to the right decision rejecting Honua Ola’s motion for reconsideration, showing that even in the face of deep-pocketed and relentless efforts from afar that it’s possible for justice and the health of the aina to prevail.”

“With the bounty of truly green renewable energy sources that bless Hawaii Island, we certainly can and must do better than chopping down living trees and combusting them for decades,” Mangelsdorf said.

The deep pockets Mangelsdorf referred to are those of Jennifer Johnson, who in 2015 became the principal investor in the project, which was mired in debt and lawsuits. Johnson is CEO of Franklin Templeton, a global financial services company headquartered in San Mateo, Calif., that claimed $717.1 billion assets under management as of 2018.

Johnson spearheads a group of investors, although it’s unknown whether any of the money is that of the multi-billion-dollar company.

In a video posted Aug. 31 to YouTube, Lee told Jay Fidell of ThinkTech Hawaii that Johnson is “committed to renewable energy, and to see this product through.”

Asked whether Honua Ola would again enter a competitive bid to HECO to sell electricity or whether it would go to court to appeal the PUC’s decision, Lee replied, “We’ll have to really assess what the order says and what our options are, and then, we’ll know which ones to execute.”

Mangelsdorf said that soon, those following the project will “likely witness the lawsuits fly.”

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“It’s inconceivable that the dedicated people behind the project, after spending all the money that they say they spent, that they would say, ‘Oh, I guess I reached the end of the road,’” Mangelsdorf said. “… But I think it’s 98.35% over for (Honua Ola).”

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

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