Hu Honua – Hawaii’s PUC Rejects the Controversial Tree Burning Power Plant
Hu Honua – News Update
PUC Rejects Hu Honua
This news development is courtesy of Henry Curtis, Life of the Land, and Contributing Editor to BeyondKona –
The Hawaii Public Utilities Commission issued Order No. 37205 on July 9, 2020, denying Hawaii Electric Light Company`s Request for a Waiver from Competitive Bidding for the Hu Honua Biomass Project. As a result, the HELCO-Hu Honua Power Purchase Agreement is not considered and dismissed without prejudice, that is, Hu Honua may compete in the next request for proposal for renewable energy projects.
On December 31, 2018, as result of the RFP process in Docket No. 2017-0352, the Hawaiian Electric Companies submitted applications requesting Commission approval for seven PPAs for grid-scale, solar-plus-storage projects on the islands of Oahu, Maui, and Hawaii.
These same Solar plus Battery Storage clean power generation options also feature dispatchable (on-demand) power delivery to the utility, previously a utility sticking point with solar and wind generation power options.
RDG-PPA (power purchase agreements) feature contractual provisions that represent significant improvements over previous renewable energy PPAs (including lower unit costs for solar energy projects, now competitive with all other forms of energy generation in Hawaii.
The Solar + Battery power generation options offer Hawaii, HECO and ratepayers the reliability and grid stability of 24×7 on-demand power (dispatchable power), permitting complete operational flexibility that enables HECO/HELCO [the utility] access the cleanest power option available to them under Hawaii renewable portfolio standards (otherwise know as RPS 2045).
In effect, zero emissions (zero pollution) power generation and flexible power delivery options comes at a cost that is one-half less than the controversial Hu Honua power plant, and without all the environmental and pollution problems of Hu Honua — the true beneficiaries of these clean power options are Hawaii’s environment and utility ratepayers.
To date, the Commission has approved six of the RDG-PPAs, including two on Hawaii Island, both 30 MW renewable facilities paired with battery energy storage system (“BESS”) of 120 MW-hours (“MWh”), and which feature unit pricing of $0.08/kWh and $0.09/kWh, respectively.
These RDG-PPA projects have also transformed the renewable energy procurement market in Hawaii by demonstrating that competitive bidding can result in PPAs that provide firm, dispatchable renewable energy and ancillary grid services at increasingly lower prices.
- Pertinently, the approved RDG-PPA projects for Hawaii Island, AES Waikoloa Solar, LLC {Docket No. 2018-0430) and Hale Kuawehi Solar LLC (Docket No. 2018-0432) are 30 MW in size, which is slightly larger than the 21.5 MW for the Hu Honua Project, and at $0.08/kWh and $0.09/kWh, respectively, are significantly less expensive than the Hu Honua Project’s estimated pricing of $0.221/kWh
But its more than just price that makes these newer clean power options more attractive than Hu Honua. They contain the ability and commitment to the utility to provide fixed amount of dispatchable energy to the utility at the utility’s discretion (i.e., available capacity), thereby eliminating number a complicated and undesirable set of contractual provisions, such as seniority curtailment, “evergreen” renewal, and risk-adjusted pricing associated with traditional PPA’s (power purchase agreements) of the past.
HELCO, Controversial Power Plant Plans –
– Previously Published May 12th, 2020
HELCO holds as a contingency on Hawaii Island, Solar and storage projects to serve as replacements for the company’s present day dirty energy power generation infrastructure and controversial plans to re-start the PGV geothermal plant and go foward with the Hu Honua tree burning power plant.
HELCO has proposed that the Big Island Request for Proposal (RFP) for solar and storage power replacement options be conditional depending upon whether the Hu Honua (21.5 MW) and/or the Puna Geothermal Venture (44 MW) go on–line as power suppliers to the grid.
HELCO has an existing Power Purchase Agreement with Puna Geothermal Venture for 38 megawatts. HELCO filed a proposed Amended and Restated Power Purchase Agreement to increase the amount to 46 megawatts. The Board of Land and Natural Resources approved 60 megawatts. The Public Utilities Commission wants to know why HELCO settled for 46 MW instead of 60 MW.
The Commission now has a better understanding of the different proposals for the Big Island, both in size and in cost.
Hu Honua was aware of the timing associated with competitive bidding events unfolding and the pending Life of the Land motions to compel the release of information.
Hu Honua reacted by sending a letter to the Commission dated May 8, 2020.
“Hu Honua believes it would be helpful for the Commission to hold a scheduling conference with the Parties in this matter regarding the Evidentiary Hearing and other related procedural steps.”
“On March 10, 2020, we spoke with Commission counsel regarding the remaining procedural steps to be established and we indicated that the Parties (and their respective witnesses) to the docket were available on certain days during the first half of May 2020 for the Evidentiary Hearing. On March 17, 2020, Commission counsel indicated that an order was being prepared but, understandably, in light of the transition to teleworking due to Covid-19 social distancing directives, estimated that it may take 1-2 months for the order to issue.”
“At this time, given the need to provide the Commission with additional alternative dates and to coordinate the availability of several local, mainland and international witnesses’ schedules for the Evidentiary Hearing, we thought it would be helpful to hold a scheduling conference to discuss the Parties’ and witnesses’ available dates.”
Hu Honua is challenging the Hawai`i County Planning Director`s requirement that Hu Honua filed an Amendment to its Shoreline Management Area (SMA) permit.
The Hawai`i County Board of Appeals hearing and possible contested case proceeding has been delayed due to COVID-19, It is now scheduled for July.
Over the next month, the winning bidders will reach out to the community to discuss their proposals.
Hu Honua’s Regulatory Journey
The Public Utilities Commission held four procedural rounds with one court ruling wedged in between:
- PUC proceeding re HELCO Request for Waiver from Competitive Bidding (2008)
- PUC proceeding re HELCO-HHB Power Purchase Agreement (2012-13)
- PUC proceeding re HELCO-HHB Amended and Restated Power Purchase Agreement (2017)
- Hawai`i Supreme Court re Life of the Land`s successful appeal (2017-19)
- PUC Re-opened proceeding re HELCO-HHB Amended and Restated Power Purchase Agreement (2019-20).
Going Forward
- April 2nd, today, Life of the Land filed a Motion to Compel with the Commission, requesting that the Commission order Hu Honua to answer Information Requests regarding their corporate structure, and agricultural and environmental impacts; the motion was filed earlier on March 16.
- The County of Hawaii Director of Planning determined that Hu Honua must file for an Amendment to their SMA Permit 221 and possibly also file for a Special Permit.
- Hu Honua will go before the County of Hawaii Board of Appeals on Friday, May 8, to argue that the Director of Planning exceeded his authority.
- Hu Honua is also revising their permits with the Department of Health regarding their injection wells and other issues (the same injection wells which polluted a local coastline and marine habitat in 2018)
- The County of Hawaii Director of Planning determined that Hu Honua must file for an Amendment to their SMA Permit 221 and possibly also file for a Special Permit.
The long and jaded history of the Hu Honua plant is a twisted journey on a path littered with politics, state and County oversight and regulatory failures, unanswered environmental and social concerns, and burdened with the economics of a broken business plan intended designed to be subsidized by HELCO ratepayers and taxpayers.
The overall regulatory and legal proceedings promoting and challenging the plant’s operation is headed to the finish line, and potential approval All testimony, exhibits, and Information Requests are pau (completed).
Limited (allowed) community input has previously sought to address public concerns on the prospects of the Hu Honua plant. The public’s feedback has been mostly hostile and skeptical about the plant’s purported community benefits presented by its promoters.
Community concerns were amplified in 2018 when the Hu Honua plant operators (not yet fully operational) managed to violate state law by discharging industrial wastewater into the ocean near Pepeekeo and into the reef marine ecosystem.
In previous BeyondKona articles and coverage on Hu Honua (see below for article links below), the many valid reasons for the PUC and other state and county regulatory bodies to deny Hu Honua’s their permit to proceed can summed up as:
- Hu Honua business case assumptions, from fuel to operations are flawed – failure in these assumptions comes at little risk the plant owners and operators, with HELCO ratepayers positioned to cover the plant’s many financial failings
- Hu Honua environmental impacts: from climate impacts -to air and water pollution -to deforestation and supply-chain impacts make little sense in terms of economic and social benefits, especially with much power generation options
- The only stakeholders who need Hu Honua plant power to proceed are its financial backers — HELCO doesn’t need it as a power supplier with much better clean and homegrown renewable energy supply options available to the utility and ratepayers
- Tree (fuel) requirements and assumptions are risky at best and flawed. Cutting down mature growth Big Island trees and replanting replacements sounds noble, but is better suited to long term forestry practices than a fuel source (see previous Hu Honua articles for details).
- One of many unanswered questions, the road impacts from a supply chain of heavy-loaded diesel trucks carry freshly cut trees and running around the clock to feed the beast.
- What happens when the plant’s dedicated mature timber supply runs out and is replaced with low BTU value (low energy producing) and immature (re-planted) trees? Time to import fuel? At one point, Hu Honua floated the idea of importing timber to burn, once the island reserves were depleted, an admission that their 30 year plan of replanting and supply replenishment will likely fail to meet plant fuel demands
- — Hu Honua is fraught with third-world power planning compared to Kauai’s utility track record of employing 21st century clean energy technology, including their highly successful, low cost, low risk solar plus battery storage on-demand power plant.
- Last, but not certainly least, the Hu Honua power plant (no matter how they juggle the numbers and lifecycle assumptions) will run at “twice” the cost of solar + storage power plant, and carry with it unnecessary costs to the public and to the island’s delicate environment.
Hu Honua can produce power, but at the expense of higher ratepayer power costs.
Dean Nishina, Executive Director of the Division of Consumer Advocacy, Department of Commerce and Consumer Affairs and party to overall plant approval process, nailed it, when he stated for the record: “I believe that the Company has not met the required burden of proof that approving the A&R PPA (Power Purchase Agreement with HELCO) is in the public interest.”
You don’t need to be an energy wonk to understand the Consumer Advocate’s conclusion in weighing the Hu Honua’s plant pollution, Hawaii Island deforestation, high operating costs and risks, as well as the loss of one of the island’s significant GHG carbon sinks, its forests.
Community objections aside, the pure economics of the plant does NOT make sense nor does it serve the public interest.
Hu Honua BioEnergy LLC (HHB) wants to clear-cut Big Island forests (trees) to generate electricity, serving as a long term power supplier to Hawaii Electric Light Company (HELCO).
Hawaii’s consumer advocate went on to say…“The Hu Honua project has not been the most expeditious means of adding renewable generation. There are other means of adding firm capacity and ancillary services, as evidenced by the recent dispatchable generation projects approved by the Commission.” Hu Honua, is “more expensive than the recently approved dispatchable generation projects.” “The current availability of lower priced alternatives supports even further questions about whether future savings from the Hu Honua project is a reasonable conclusion.”
Hu Honua was founded in April 2008, that was 4,360 days ago. Hu Honua currently states they will be operational this summer (2020), and they go onto assert, will be faster than any new utility-scale solar plus storage system could go on-line. The average solar plus battery storage power plant takes on average, from start to operation, of 6-12 months, not 12 years as has been the case with Hu Honua’s long history of missteps, misinformation, and omissions.
The Consumer advocate offered some very wise advice for Hawaii’s PUC to consider in the Hu Honua case…
“I offer that, if the Commission will be required to consider GHG (greenhouse gas) and other environmental issues as part of its decisions, it may be reasonable to adopt a policy where the Commission will wait for completed actions by other agencies, such as completion of permitting processes before the Department of Health and environmental assessments/environmental impact studies, in order to incorporate those actions in the Commission’s future decision and orders.
BeyondKona has been tracking the Hu Honua power plant proposal and at the request of our readers, we provided this update on the plant and its prospects for activation. For previous articles on Hu Honua, and its environmental, social, and economic impacts on Hawaii island (if allowed to proceed) … we invite to you visit the following BeyondKona articles:
Thank you for this great article.
Note to editor: “Community objections aside, the pure economics of the plant do NOT make sense nor do they serve the public interest.”
A side note: Now that GOD has intervened with a crisis of uncertain timing, would be interesting to revisit the energy use assumptions (big hotel slow downs not least of which) supposedly driving the expected increase in demand. Any wonks wanna take this on? 😉
“Community objections aside, the pure economics of the plant does not make sense nor does it serve the public interest.”