The president of Honua Ola Bioenergy — an almost completely built 21.5-megawatt biomass power plant — said he’ll likely ask the state Public Utilities Commission to reconsider a July 10 order that nixed a waiver of the competitive bidding process for a power purchase agreement between the project and Hawaiian Electric Co.
Meanwhile, project opponents hailed the PUC decision, with one calling it “the final nail in the coffin for this facility.”
Warren Lee, Honua Ola president, said $350 million was spent to retrofit the former Hilo Coast Processing Co. facility to burn eucalyptus chips to produce electricity, and called the project “too big to let it go.”
“We’re studying the order line by line, word by word. It’s highly likely we’ll file a motion for reconsideration. That’s the next step,” Lee said last week. “It’s renewable energy. It’s jobs on the Big Island, economic diversification. There’s a lot of spinoff that … would likely result from going forward. So, it’s too big to do nothing.”
The PUC had the long-stalled project, formerly known as Hu Honua, back on its docket after the state Supreme Court in May 2019 voted 5-0 to overturn the 2017 amended power purchase agreement between Hu Honua and Hawaiian Electric, formerly known as Hawaii Electric Light Co. The high court decision came after the environmental group Life of the Land appealed the power contract.
Chief Justice Mark Reckenwald wrote “the PUC erred by failing to explicitly consider the reduction of (greenhouse gas emissions) in approving the amended power purchase agreement, as required by statute … .”
The PUC, however, nullified the competitive bidding waiver, saying the waiver wasn’t in the public’s economic interest. The decision pointed to two recently approved Big Island solar-plus-storage projects that could produce 30 megawatts of power with battery storage capability of 120 megawatts at 8 to 9 cents per kilowatt hour, as opposed to Honua Ola’s projected average 22 cents per kilowatt hour over a 30-year period.
Henry Curtis, Life of the Land’s vice president and executive director, said it’s unlikely Honua Ola will “ever be anything close to price-competitive.”
“Solar plus storage is now 9 cents a kilowatt hour, and they’re proposing 22 cents,” Curtis said. “So I don’t figure how they could argue they should have any vested right to rip off ratepayers.”
Marco Mangelsdorf, owner of ProVision Solar and spokesman for Hawaii Island Energy Cooperative, called the decision the “final nail in the coffin.”
Mangelsdorf credited Curtis with “showing that the power of one can at least sometimes overcome the power, schmoozing and hundreds of millions spent by faraway developers and their hired guns and influencers.”
Lee maintains Honua Ola is a more dependable source of energy than solar.
“What you’re paying for is a firm energy producer that can produce power 24 hours a day, seven days a week,” he said. “Solar is with a four-hour battery backup. … So make it on an equivalent basis, make it a 24-hour battery. How much does a 24-hour battery cost?”
Curtis pointed to a decision issued July 10 — the same day as the PUC decision and order — by the U.S. Court of Appeals for the District of Columbia Circuit. The federal appeals court upheld a 2018 Federal Energy Regulatory Commission order that removed barriers to participation by electric storage resources in the U.S. Continental Regional Transmission Organization and Independent System Operator markets.
Curtis said the decision “point(ed) out that solar plus storage can now match all of the requirements of base-load energy.”
“The whole concept of base-load energy, of 24/7 power, is something that might have been true a few years ago, but is no longer valid,” he said. “Intermittent (production) combined with storage can now meet all of the needs of their grid.”
In a statement, Honua Ola said it appeared the PUC “opted to contravene the Supreme Court’s instructions to hold a hearing and to consider Honua Ola’s evidence on the reduction of (greenhouse gas emissions).”
“They gave us a procedural schedule, all the way up to the evidentiary hearing,” Lee said. “All of the parties complied with the procedural schedule, and we’re asking, ‘Well, where’s the rest of the schedule, you know, the evidentiary hearing and the decision making?’ And that’s when they came up with this letter saying they rescind, basically, the waiver.
“Talk about getting the plug pulled.”
Lee said studies show the project is “carbon neutral,” and added the power plant hasn’t yet ordered layoffs, pending the outcome of the motion for consideration. He added construction on the project, which the company said is 95% complete, is now on an expedited schedule.
“This is about more than producing electricity. … We’ve got a lot of things hinging on this,” he said. “A lot of this comes together with the anchor being Honua Ola, the foundation for making the forestry industry go and diversifying the economy, and bringing jobs and creating more taxes. Everybody benefits.”
Curtis thinks the PUC’s decision will likely withstand a motion to reconsider to the PUC or an appellate court challenge.
“The bulk of the decision is that they are grossly overpriced, and they are not entitled to a waiver from competitive bidding. I think that would be a very tough nut to challenge,” he said. “(Honua Ola) may claim they put $350 million toward the project, but that is like saying that if I build something and then ask for a permit because it’s already built, then I should automatically get my permit. And that is lunacy.
“Until you get your final permit, anything you put into it you don’t have any vested right to.”
Email John Burnett at jburnett@hawaiitribune-herald.com