The Hawaii Supreme Court on March 13 rejected an appeal filed by Hu Honua Bioenergy LLC challenging a May 2022 order issued by the Hawaii Public Utilities Commission denying the company’s power purchase agreement (PPA) with Hawaiian Electric Light Co. Inc. (HELCO).
Hu Honua Bioenergy is the developer of a nearly complete 30 megawatt (MW) biomass power plant in Hawaii. Work to develop the biomass-fired power project has been ongoing for more than a decade, with development of the project nearly complete since at least mid-2020.
The facility is located at the site of the former Hilo Coast Power Co. in Pepeekeo, Hawaii, which is located near the eastern coastline of Hawaii’s big island. A sugar mill was developed at the site in 1857. A power facility was added to the site in 1972 and was fired with sugarcane bagasse until sugar production ended in 1994. The power facility continued to operate through 2004 but was fired with coal rather than bagasse. Hu Honau began work to refurbish the plant to produce biomass-based energy more than a decade ago, with plans to fuel the facility with locally grown biomass, including eucalyptus.
The PUC approved a PPA between HELCO and Hu Honua in late 2013. The project however faced development delays and legal challenges. HELCO announced plans to terminate that PPA in 2016 as a result of those delays. Hu Honua in 2017 announced that it had reached an agreement with HELCO for an amended PPA, which was approved by the PUC later that year. The PPA was soon challenged by an environmental group. The legal challenge reached the Hawaii Supreme Court, and the court in 2019 rejected the PPA, ruling that the PUC was required to expressly consider the reduction of GHG emissions in its decision making. In June 2019, the PUC re-opened a docket related to the PPA. The PUC later issued an order determining that HELCO had not sufficiently supported its request for a waiver of the competitive bidding process for the Hu Honua facility. Such a waiver had previously been approved for the project, but the PUC concluded that that approval had been voided by the Supreme Court ruling. Legal and regulatory wrangling over the PPA continued through the spring of 2022, with the PUC handing down its decision to deny the amended PPA in May 2022. Hu Honua and HECLO filed separate motions for reconsideration with the PUC in June 2022. Later that month, the PUC denied those motions and closed the docket.
Hu Honua on June 29, 2022, filed a notice of appeal with the Hawaii Supreme Court seeking to vacate the May 2022 order issued by the PUC denying the PPA. Oral arguments were made in the court on January 31, 2023.
The Hawaii Supreme Court handed down its decision on March 13, affirming the PUC’s decision to reject the PPA between Hu Honua and HELCO. A full copy of the Hawaii Supreme Court’s opinion is available on the court’s website.