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PUC Approves HELCO-HU HONUA Amended, Restated PPA

Plant Will Be Completed in 2018 and Provide Dependable Renewable Energy

Yesterday, the state Public Utilities Commission (PUC) informed Hu Honua Bioenergy, LLC it had approved its amended and restated power purchase agreement with Hawaii Electric Light Company (HELCO).

Hu Honua site courtesy Hu Honua

Hu Honua will be a state-of-the-art bioenergy facility, providing firm, renewable, dispatchable energy. The Pepeekeo-based power plant will be completed in December 2018 and support the state’s clean energy goals, revitalize East Hawaii’s agricultural sector, and bring hundreds of new jobs to Hawaii Island.

The Commission conducted a detailed review of the Hu Honua project’s benefits and approved Hu Honua’s original Power Purchase Agreement with the HELCO in 2013. The amended, restated PPA provides HELCO customers with the same advantages as the original PPA but at a lower cost.

“We couldn’t be more pleased with the PUC’s decision,” said Harold Robinson, president of Island Bioenergy, parent company of Hu Honua. “Now we can begin employing hundreds of additional workers from the building trades to accelerate construction and complete the plant by the end of 2018. We will also make arrangements to start forestry operations, including logging and transporting eucalyptus trees that will fuel our facility.”

The amended, restated PPA extends two contract milestones to allow Hu Honua to finish its half-completed biomass facility, and reduces and restructures the contract’s pricing and term.

Because the original PPA was already approved, the Commission limited its review of the amended, restated PPA to whether HELCO met its burden of proof for the following three issues:

  1. Request to waive Hu Honua’s project from the PUC’s framework for competitive bidding
  2. Whether the power costs to be paid by HELCO reflect the cost of biomass fuel supply and whether HELCO’s purchase power arrangements under the PPA are in the public interest
  3. Request for preferential rates for the purchase of renewable energy produced in conjunction with agricultural activities pursuant to Hawaii Revised Statutes § 269-27.3.

According to HELCO’s own analysis, Hu Honua will reduce its customers’ monthly bill by $1.21 per month over the term of the PPA, relative to HELCO’s current long-term projections. A separate independent analysis by PA Consulting showed Hu Honua will save ratepayers as much as $4.24 per month over the term of the PPA. PA Consulting’s analysis also shows Hu Honua would save ratepayers more than $1.3 billion over the course of the 30-year PPA relative to HELCO’s existing portfolio of fossil fuel plants, which is the benchmark the Commission used to determine the original PPA was in the public interest.

Hu Honua will provide foundational 30-year demand for the forestry sector that Hawaii policymakers and community leaders have long sought. Hu Honua will create more than 200 jobs in construction, 30 in plant management and operations, 90 in forestry and trucking, and an additional estimated 100 indirect jobs on Hawaii Island and statewide. Hu Honua is working with community partners on workforce development educational and internship opportunities.

A June 2017 independent scientific survey conducted by Anthology Research Group found that 75 percent of East Hawaii residents feel “very or somewhat favorable” about the completion of the Hu Honua Facility, and only 10 percent feel unfavorably about its completion. The margin of error for the survey is 5.06 percent.

About Hu Honua
Hu Honua Bioenergy, LLC is located in Pepeekeo on the Hamakua Coast of the island of Hawaii. When completed, the Hu Honua facility will be able to produce up to 30-megawatts (MW) of firm, baseload renewable power, which means the plant can deliver reliable power that can be dispatched 24 hours a day, seven days a week. When operating at capacity, Hu Honua will be able to produce approximately 15 percent of Hawaii Island’s electricity needs and displace approximately 280,000 barrels of imported oil per year.
For more information, www.huhonua.com

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