Construction at the troubled Hu Honua Bioenergy plant in Pepeekeo again has met with delays after the company announced Monday the need to lay off employees.
Construction at the troubled Hu Honua Bioenergy plant in Pepeekeo again has met with delays after the company announced Monday the need to lay off employees.
It was not clear how many employees were laid off or whether any work at the site was continuing.
Hu Honua CEO John Sylvia issued a brief, two-sentence statement via email Monday afternoon in response to questions regarding reports of layoffs at the site of the planned 30-megawatt power station that would convert locally grown biomass into electricity.
“As a result of market developments that impact HHB’s various settlement agreements in connection with the facility’s construction, and to reflect the evolving electricity market in Hawaii, HHB must adjust its construction schedule and operational plans, including temporary labor force reductions,” Sylvia said. “HHB remains committed to create arrangements that lead to the successful completion and long-term operation of its biomass electricity production facility.”
Sylvia was traveling in Europe and was unavailable to comment further, according to Hu Honua spokeswoman Ashley Kierkiewicz.
It also was unclear how the delay might affect the company’s power-purchase agreement with Hawaii Electric Light Co.
A HELCO company spokeswoman said Monday she was unaware of any work stoppage or layoffs at Hu Honua.
“We expect Hu Honua to be in … operation in early 2016,” said Rhea Lee-Moku. “It would be premature to comment on any plans we have in the event that Hu Honua goes out of business. We have a contract to purchase power from them in place.
“However, in the event Hu Honua is unable to meet their contractual obligations to us, we have sufficient generation available already to cover the energy needs of Hawaii Island.”
Work to convert the former sugar mill power plant in Pepeekeo resumed in January after a delay of several months as the result of a dispute with construction contractor Hawaiian Dredging Construction Co., which claimed Hu Honua had not paid $35 million for its services.
The Hawaii Public Utilities Commission approved in December 2013 a 20-year power-purchase agreement between HELCO and Hu Honua to provide up to 10 percent of the Big Island’s energy needs through the plant, which would generate electricity by using eucalyptus trees as fuel for its generator.
In mid-January, Sylvia sounded upbeat about the plant’s progress, saying all equipment and materials were expected to be delivered to the site by April 5, and he anticipated construction would take 12 months after that.
“In deals like this, no matter what they say on the front end, that’s not how it works out,” he said three months ago.
“There’s things that come up. … Unexpected elements arise and have to be dealt with. … I believe that the plant is still very consistent with the themes of developing renewable energy and creating local, economic stimulus, and to support technical support to the grid.”
Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.