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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

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