The state Public Utilities Commission has again rejected an amended power purchase agreement between Hawaiian Electric Co. and Honua Ola Bioenergy.
The vote was 2-1 with PUC Chairman James Griffin and Commissioner Jennifer Potter voting to reject the contract between Honua Ola and HECO. Commissioner Leodoloff Asuncion Jr. cast the dissenting vote.
The decision prevents the nearly completed almost half-billion-dollar eucalyptus wood burning power plant formerly known as Hu Honua from going online, at least for now.
The 30-megawatt facility has long been the subject of controversy, including several court battles, culminating in a contested-case evidentiary hearing before the PUC earlier this year.
In the majority decision, the commission said it “is not convinced that the project will result in long-term environmental benefits for Hawaii Island. As such, the commission is concerned that reliance on energy produced at the project could result in long-term environmental and public health costs.”
The commission also found Honua Ola’s claims of carbon neutrality unrealistic, with the decision stating the project “is likely to emit a significant amount of (greenhouse gas) emissions, and (Honua Ola) has not reasonably demonstrated that it will be able to successfully offset these emissions, creating the potential risk that the project could result in net GHG emissions.”
The PUC — which earlier overturned its approval of Honua Ola’s request for a waiver of competitive bidding against renewable sources such as wind and solar — said an independent review and analysis of costs using HECO data found the project “is estimated to be a relatively high cost resource on (HECO’s) system, with a revenue requirement equivalent to approximately 40.64 cents per (kilowatt hour) over the term of the amended PPA.”
The panel said HECO’s bill impact analysis “indicates that this would result in a typical residential customer likely experiencing a monthly bill increase of approximately $10.97, across the 30-year term of the (contract).”
Henry Curtis, executive director of the environmental group Life of the Land, which has challenged Honua Ola in the state’s high court, said his organization is “very pleased with the decision.”
“We note that the decision was confined to two issues — greenhouse gases and the cost. Life of the Land did raise other environmental issues,” Curtis said Monday.
Curtis said if Honua Ola continues in its attempt to produce electricity “we’ll raise the other issues.”
Marco Mangelsdorf, former owner of ProVision Solar on the Big Island and a lecturer at the University of California, Santa Cruz, said the PUC “absolutely made the right call when it came to protecting the needs and well-being of the public by rejecting a tree-burning power plant that is not needed at a (kilowatt hour) price which cannot be justified.”
“In the face of a yearslong, relentless and aggressive campaign waged by (Honua Ola’s) deep-pocketed mainland backers and co-opted local promoters, this commission acted with courage and persistence despite the court rulings, required hearings and a multi-pronged pressure offensive that I’ve rarely, if ever, witnessed in Hawaii,” Mangelsdorf said.
In his dissenting opinion, Asuncion noted the PUC in 2017 originally approved the power purchase agreement between Honua Ola and HECO. He added the Supreme Court’s order to hold the evidentiary hearing was limited to “explicit consideration to the reduction of greenhouse gases” associated with the project and allowing Life of the Land “its right to meaningfully address the impacts of approving the amended PPA with respect to its right to a clean and healthful environment.”
“In my opinion, the overwhelming testimony and evidence in the record clearly demonstrates that both issues have been addressed,” Asuncion said. “… The evidence clearly establishes that the applicants have met their burden in showing that the project will result in a significant reduction in GHG emissions over the course of the PPA term, and consequently, that the costs of the Amended PPA are reasonable in light of the potential for GHG emissions.”
In a statement, Warren Lee, president of Honua Ola Bioenergy, said, “We are extremely disappointed in the decision of Chair Griffin and Commissioner Potter to deny our power purchase agreement with Hawaiian Electric, as well as deny residents of Hawaii Island all the benefits Honua Ola is prepared to bring. We presented an abundance of evidence to the PUC that met the burden for approval as established by the Hawaii Supreme Court. We agree with the dissenting opinion of Commissioner Asuncion and his strong rationale for supporting the power purchase agreement.
“If the PUC’s decision is allowed to stand, it will be a huge loss for the Big Island’s future, including the more than 200 jobs Honua Ola will support islandwide with its renewable energy operations. 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 Hawaii Supreme Court.”
Email John Burnett at jburnett@hawaiitribune-herald.com.