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Hu Honua Reaches Agreement with HELCO on Biomass Plant

Hu Honua Bioenergy announced today it has reached a settlement with Hawaii Electric Light Company (HELCO) that will help put Hawaii Island closer to energy self-sufficiency.

The agreement puts its lawsuit on hold as it works with the utility to secure approval of an amended power purchase agreement (PPA) from the state Public Utilities Commission (PUC).

HELCO and Hu Honua have also agreed to an expedited procedural schedule that would make it possible to complete the plant by the end of 2018.

“We have come to terms with Hawaii Electric Light Company and now have a clear path, pending PUC approval, to get the plant built and operational in time to meet the federal tax credit deadline of December 31, 2018,” said Harold Robinson, president of Island BioEnergy, parent company of Hu Honua.

These developments come on the heels of a May 17 decision by the PUC to transfer review of the amended PPA to a new docket. The PUC cited several reasons for the docket transfer, including the request to consider a preferential rate in evaluating pricing, an element not considered in the 2012 docket.

In its amended PPA, HELCO requested approval of Hu Honua’s pricing based on HRS Section 269-27.3. The statute was enacted to increase energy self-sufficiency and enhance agricultural sustainability; it allows the PUC to approve preferential rates for renewable energy produced in conjunction with agricultural activities. In Hu Honua’s case, agricultural crops will be used to generate renewable biomass electricity.

“The Hu Honua project is the perfect candidate for utilizing the law,” Robinson said. “Through the cultivation and harvesting local eucalyptus trees, the project will bring a combination of agricultural benefits and renewable energy to Hawaii Island.”

If the amended PPA is approved, Hu Honua will have the capacity to provide up to 30-megawatts of firm renewable energy to HELCO’s power grid. The project will be a boost to the agricultural industry on Hawaii Island, triggering approximately 150 jobs in forestry, including logging and hauling eucalyptus trees, the primary feedstock for the biomass-to-energy facility. Ancillary jobs related to forestry and wood products are also anticipated, along with 200 construction jobs needed to complete work on the plant.

About Hu Honua

Hu Honua Bioenergy, LLC is located in Pepeekeo on the Hamakua Coast of Hawaii Island. When completed, the Hu Honua facility will be able to produce up to 30-megawatts (MW) of clean renewable baseload 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 14 percent of the island’s electricity needs and displace approximately 250,000 barrels of oil per year.

For more information visit www.huhonua.com

Hu Honua Reaches Agreement with HELCO on Biomass Plant

Hu Honua announced today that it has reached an agreement with Hawaii Electric Light Company (HELCO) on an amended power purchase agreement (PPA).

HELCO agreed to revised terms for electricity to be produced by the biomass project and is submitting the amended contract to the Public Utilities Commission for approval of Hu Honua’s proposed pricing.

Hu Honua can resume construction on its half-completed facility and begin delivering clean, firm renewable energy by the end of 2018, if the PUC approves the amended PPA. The project would deliver firm, renewable power around the clock, making it a natural complement to HELCO’s existing portfolio of solar and wind power, which are intermittent sources.

Harold “Rob” Robinson, president of Island BioEnergy, Hu Honua’s parent company noted, “It’s a big win for Hu Honua, Hawaii Electric Light and the people of Hawaii Island to have an amended agreement. We are hopeful the PUC will recognize the project’s value in terms of economic benefits and energy stability.”

The amended PPA submission to the PUC includes information on pricing, which is lower than the original PPA; how the project will be less expensive compared to existing fossil fuel plants; and how the project will provide firm renewable energy that can replace existing fossil fuel plants.

Approximately 200 construction jobs will be needed to complete plant reconstruction, which is expected to take 14-18 months. Nearly 30 permanent operations and maintenance jobs will be available, once the plant is operational.

Hu Honua will become the foundation for a sustainable agriculture industry, creating approximately 200 jobs in forestry, harvesting, hauling, and in the production of wood products.

The project is expected to put $20 million into the local economy each year that would otherwise leave the state to purchase foreign oil, while helping the state secure its energy future and meet its clean energy goal of 100 percent renewable by 2045.

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 clean renewable baseload 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 14 percent of Hawaii Island’s electricity needs and displace approximately 250,000 barrels of oil per year.

For more information, www.huhonua.com

Legislators, Unions Gather in Support of Hu Honua

More than 30 Hawaii Island officials in government and labor gathered this morning at Hu Honua Bioenergy (HHB) in Pepeekeo for a briefing on the biomass project’s status.
Hu Honua 1
Hu Honua spokesperson Harold “Rob” Robinson said yesterday’s filing with the Hawaii Public Utilities Commission (PUC) requests that the regulatory body conduct a technical review of the actions surrounding Hawaii Electric Light Company’s (HELCO) termination of the power purchase agreement (PPA).
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Robinson, a member of Hu Honua’s board of managers, and president of Island Bioenergy, the parent of HHB, said for more than a year, HELCO delayed meaningful response to Hu Honua’s repeated requests for milestone extensions and reduced pricing proposals.
Hu Honua 3
“We have provided the utility with a pricing proposal that significantly reduces HELCO’s costs,” said Robinson. “More importantly, we believe Hu Honua will provide a hedge against rising oil prices, which have historically whipsawed Hawaii Island consumers.”

Hu Honua has invested $137 million to date in the biomass-to-energy facility and has secured an additional $125 million to complete the project. All that’s needed is an extension of the PPA, which Robinson said, we are trying to negotiate with HELCO but are concerned they are stalling a decision.

Hu Honua 4
“The public should know that despite what HELCO claims, Hu Honua’s proposals will deliver value to ratepayers,” said Robinson. “Our project will have more than 200 workers on site during construction. After completion, the community will benefit from more than 180 new jobs and the formation of an invigorated forestry industry. There will also be environmental benefits when old HELCO power plants are deactivated and replaced with renewable energy from Hu Honua in 2017.”

During the conference, various government officials expressed support for the project and welcomed the creation of additional jobs and industry for Hawaii Island. Many were hopeful that the utility would work with Hu Honua to amend its PPA.

Valerie Poindexter, Hawaii County councilmember for the district, talked about growing up in a sugar plantation camp and the demise of the island’s sugar industry. “Hu Honua would revitalize the culture and lifestyle of the sugar days, and create jobs so people don’t have to travel so far to work.”

State Senator Kaialii Kahele touched on the importance of energy security. “If a catastrophic event happens on the West Coast, we’re stuck because we are out here in the middle Pacific, heavily reliant on fossil fuels and food imports. We must come up with creative solutions to address those issues,” said Kahele. He stressed that while he welcomed mainland investment, any and all development must be done the pono way, and commended Hu Honua’s new collaborative, collective style of leadership.
hu honua 5
Hawaii County Councilmember Dennis Onishi said Hu Honua would help reduce energy costs and put more renewable energy on the grid. Onishi suggested starting a dialogue between the County and Hu Honua to explore the possibility of processing green waste streams to divert what’s going to landfills.

Robinson explained that significant investment made in emissions control equipment, including a new turbine generator, will result in increased efficiencies, generating capacity and cleaner emissions.

Following the event, Robinson addressed a statement issued by Hawaii Electric Light Company that criticized Hu Honua. “The utility’s reference to the cost of the project is a smokescreen. When a utility builds a power plant, that cost is passed to ratepayers. This is not the case for us. We decided to invest in increasing generation capacity from 21 to 36 megawatts, but that has no impact on the price to consumers or the ratepayer. The financial risk of the project cost is ours,” he said.

Click to view Affidavit

Click to view Affidavit

Hu Honua Moves Forward on Site Construction, Reaches Settlement with Hawaiian Dredging

Hu Honua Bioenergy (HHB) expects to resume onsite operations with a full team of employees and contractors before year-end, including final site preparation, delivery of specialized equipment and construction mobilization.

Hu Honua Bioenergy is refurbishing the former sugar mill power plant at Pepeekeo into a modern biomass electricity generation facility with advanced emission control equipment. HHB will sell electricity to Hawaiian Electric Light Company under a twenty-year power sales contract. The HHB facility will generate about 100 construction jobs during the refurbishment process and 30 permanent operational and maintenance positions once the project is online. Additionally, more than 130 indirect jobs in forestry, harvesting, hauling, and local service shops are expected to be generated in the local economy.

Hu Honua Bioenergy is refurbishing the former sugar mill power plant at Pepeekeo into a modern biomass electricity generation facility with advanced emission control equipment. HHB will sell electricity to Hawaiian Electric Light Company under a twenty-year power sales contract. The HHB facility will generate about 100 construction jobs during the refurbishment process and 30 permanent operational and maintenance positions once the project is online. Additionally, more than 130 indirect jobs in forestry, harvesting, hauling, and local service shops are expected to be generated in the local economy.

The accelerated activity comes after HHB and Honolulu-based Hawaiian Dredging Construction Company (HDCC) reached a settlement to resolve a contractual dispute between the parties related to the refurbishment of HHB’s renewable energy facility in Pepeekeo.

Specific terms of the settlement are covered by a confidentiality agreement.

“We are pleased to be back on course, moving forward with construction and to resume full site activity,” said John G. Sylvia, Chief Executive Officer for Hu Honua. “As we have stated previously, there were a number of complicated issues across multiple parties that required time to resolve for the settlement; we appreciate HDCC’s patience and efforts in working through the challenges.”

Refurbishment activity, including survey and permitting work, has been underway for the final phase of construction, which is expected to be complete within 12 months, following full mobilization.

In late October, HHB received two shipments of specialized equipment in Hilo—a custom re-injection system and air quality emission control operating system. HHB designed a re-injection system for the brackish water to return to its original source after it has passed through the system’s condenser and cooled the turbine’s exhaust steam. The air quality system will maximize overall system efficiency and lower emissions beyond what is required by regulators.

Additional specialized equipment including fuel handling and the remaining emissions control equipment has been fabricated and is in route to Hilo from the mainland.