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Oral arguments this week in Honua Ola case

  • KELSEY WALLING/Tribune-Herald file photo Part of the Honua Ola Bioenergy plant in Pepeekeo.

The state Supreme Court is set to hear arguments Thursday in Honua Ola Bioenergy’s appeal requesting the high court order the Public Utilities Commission to vacate its July 9, 2020, decision that nullified an amended power-purchase agreement the Pepeekeo power plant had with Hawaiian Electric Co.

The PUC order, which nixed a 2017 waiver from the competitive bidding process granted to Hawaiian Electric Co. for Honua Ola — formerly known as Hu Honua Bioenergy — has kept the almost-completed biomass facility from going online.

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The decision forced HECO to consider two 30-megawatt solar-plus-storage projects that offered a price of 8-9 cents per kilowatt hour for electricity, as opposed to Honua Ola’s stated price of 22.1 cents per kilowatt hour for electricity generated by burning eucalyptus wood chips.

Attorneys for Honua Ola and Life of the Land, an environmental group that appealed the PUC’s 2017 decision granting HECO a waiver from the competitive bidding process, will be given 40 minutes each to make their arguments Thursday.

The Supreme Court on Feb. 16 denied Honua Ola’s request for a writ of mandamus — also known as an extraordinary writ — to order the PUC to reconsider its denial of the competitive bidding process for the sale of electricity by the facility.

Honua Ola filed a motion three days later requesting the Supreme Court expedite the appeals process in its case.

In its motion, it said the power plant is “99% complete and will provide the state … with numerous immediate and long-term benefits.”

The document describes the PUC decision to revoke the project’s waiver from the competitive bidding process as “erroneous and disastrous” and notes almost $500 million has been invested in the project.

The motion also said the PUC ignored the high court’s order to have an evidentiary hearing on greenhouse gas emissions, accusing the regulatory panel of denying Honua Ola’s “constitutional rights to due process.”

Honua Ola claims its eucalyptus reforestation plan makes the project “carbon neutral” and that the power plant “would have an impact on the state’s goal of reducing greenhouse gas emissions.”

Submitting statements in support of the motion include: Warren Lee, Honua Ola’s president, who said the company had been continuing to pay employees and contractors through February, but couldn’t continue to do so indefinitely; Miles Yoshioka, executive officer of the Hawaii Island Chamber of Commerce, who said the economy has “been greatly impacted by the COVID-19 pandemic” and that an operational Honua Ola “is expected to create hundreds of additional jobs”; Peter Simmons, secretary of the Hawaii Forest Industry Association, who said the project could create “over 60 jobs in the forestry sector”; and labor leaders Randy Perreira, executive director of Hawaii Government Employees Association, and Donna Domingo, president of the International Longshore and Warehouse Union, Local 142.

In its answering brief, Life of the Land argued that the PUC’s decision does not prevent Honua Ola “from participating in (a) competitive bidding process to obtain a new power purchase agreement with (HECO).”

The environmental group’s brief also argued that Honua Ola “harbors its own uncertainties,” noting the failure of the project’s 400-foot-deep injection wells and “a Department of Health inspection which concluded that (Honua Ola) had violated state water pollution laws by discharging industrial wastewater into the project’s injection wells.”

In addition, Life of the Land argued that Honua Ola wrongfully “push(ed) forward to construct a project without necessary approvals” and then pronounced it “essentially complete” as an argument “to claim entitlement to those discretionary approvals.”

Also submitting an answering brief on behalf of the PUC were Kimberly Guidry and Kaliko‘onalani Fernandes, the state solicitor general and deputy solicitor general, respectively, requesting the PUC’s order denying the waiver and its order denying reconsideration of the waiver be affirmed.

The PUC brief opines Honua Ola unreasonably relied on the 2017 waiver of competitive bidding “to charge ahead with the development and construction of this project” — spending almost $314.5 million since 2017.

“This is especially true given that the commission’s 2017 (decision and order) was on appeal from August 2017 until the May 2019 decision vacating the 2017 (decision and order),” the brief states. “(Honua Ola) assumed the risk inherent in constructing and expending large sums of money while its case was on appeal and while it was without final approval” of a power purchase agreement.

The court won’t issue its ruling on Honua Ola’s appeal Thursday, but Lee said he’s hoping for a quick and favorable decision that the “PUC follow the remand that the state Supreme Court ordered awhile ago, which was to do the greenhouse gas analysis, which we did and HECO/HELCO did, let the parties have evidentiary hearings, and then move on.”

“This is a 24/7 renewable energy project, and the longer this plant is not operating, the more fossil fuels will be consumed to make electricity,” Lee said, adding that 33 employees remain on Honua Ola’s payroll for the time being.

Henry Curtis, executive director of Life of the Land, said his lawyers will argue that “the PUC made the right decision and that (Honua Ola) is not entitled to a waiver from competitive bidding.”

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“Hopefully, this will be the final nail that will put this project to rest,” Curtis said.

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

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