Survey Shows Support for Aina Koa Pono

Media Release:

Aina Koa Pono (AKP) received support from Hawaii Island residents in a recent survey, but a larger number revealed that many are still unaware of the company and its Kau project.

The survey results were released today to coincide with the Hawaii Public Utilities’s Commission hearings on Hawaii Electric Light Company’s request for approval of the biofuels contract.

Aina Koa Pono is proposing a biorefinery in Kau which would produce 24 million gallons of biofuel annually—16 million gallons will be used at HELCO’s Keahole power plant and eight million gallons will be distributed by Mansfield Oil for transportation, with preference to Hawaii. When completed, AKP can supply 18 percent of the island’s power needs from renewable resources.

“Hawaii Island residents were surveyed because we wanted to get a sense of the level of acceptance and support for the Kau project,” said Chris Eldridge, partner of AKP. “What we learned was that while there’s support, we need to do more education and outreach.”

AKP engaged SMS Research and Marketing of Honolulu to conduct the survey. The survey, taken in September and October, found that 85 percent support “developing more renewable energy sources for the Island of Hawai‘i.”

The Kau project would provide “base load” electricity, which is essentially steady electricity, as opposed to other alternatives such as wind or solar, which are intermittent and depend on weather conditions.

Aina Koa Pono’s operation would initially convert invasive plant species, coconut husks and macadamia nut hulls to biofuel using Microwave Catalytic Deploymerization (Micro Dee). Microwave technology has been successfully and safely used in the herbal extraction and pharmaceutical industries for decades.

SMS Research has served organizations in Hawaii for more than 50 years.

The research also indicated that a large minority Hawaii Island residents do not know enough about Aina Koa Pono or its project.

SMS Research found that only 10 percent of those interviewed knew about the Aina Koa Pono project when asked on an unaided basis. Of the residents who knew of the project, 65 percent support the project compared to 16 percent who do not.

A description of the project was provided to all respondents and when asked whether they favor or oppose the project, 56 percent stated they were in favor of the project as compared to 11 percent opposed— a 5-to-1 ratio. 33 percent stated they did not know enough about the project.

“We have been meeting with folks in Kau and will be increasing our outreach to the community so they are aware of our project,” Eldridge said.

Excluding those who do not know enough, the support for Aina Koa Pono development is strong in the areas of safety, keeping money in the State, additional jobs, revitalization of Hawaii’s agricultural industry, reduction of electric bills for Island residents, and more.

Again, excluding those who do not know enough, some of the concerns with the project include the perception that Aina Koa Pono will be run by outsiders, may have some impact on traffic, biofuel will cost more to produce than imported oil, and the plant will be too expensive to build.

“Serious misinformation is circulating throughout the community. Aina Koa Pono is locally owned and the $450 million project is privately funded,” Eldridge said. “Eight to 12 trucks a week will deliver biofuel to Keahole. The project poses no financial risk to ratepayers, who pay nothing until the biofuel is produced and accepted by HELCO.”

The Aina Koa Pono project would increase electricity bills for HECO and HELCO customers by 84 cents to $1 a month for typical 500 to 600 kWh usage.

At the conclusion of the survey, participants were asked again the level of support or opposition to the development of the biofuel plant at Kau, a majority of 63 percent support versus 12 percent who oppose with 25 percent having no opinion.

The final report will be released by SMS Research shortly.

(Research Methodology: 303 interviews conducted between September 20 to October 3, 2012, margin of error is +/– 5.6 percentage points.)

HELCO Asks PUC to Approve New Contract for Biofuel on Hawaii Island

Hawaii Electric Light Company recently asked the Hawaii Public Utilities Commission (PUC) for approval of a new biofuel supply contract with Aina Koa Pono.

Under the agreement, Aina Koa Pono would provide 16 million gallons per year of renewable biofuel to replace fossil fuel used at the Keahole Power Plant on Hawaii Island and other plants in the future. An additional 8 million gallons will be produced for sale to Mansfield Oil Company, a privately-owned fuel distributor.

Aina Koa Pono, which is building a processing facility in Kau, will provide biofuel over 20 years at a fixed price formula, providing economic security from volatile oil prices. The new contract will save electricity customers $125 million over 20 years when compared to an earlier contract which was not approved by the PUC.

The use of renewable biofuel, along with many other renewable energy projects, will also help Hawaii meet the legal requirement that 40 percent of electricity come from renewable sources by 2030. The 16 million gallons of biofuel each year represents close to 100% of the Keahole plant’s present annual fossil fuel use.

Aina Koa Pono has entered into an agreement with Edmund C. Olson Trust II and the Mallick Trust to farm over 12,000 acres of under-utilized private agricultural land in Pahala that was once part of Kau Sugar Company. Aina Koa Pono will initially harvest and process existing invasive plants, eucalyptus trees and local green waste such as macadamia nut husks, tree trimmings, coffee pulp and hulls.

Aina Koa Pono is working with the Hawaii Agriculture Research Center to select the most appropriate non-invasive perennial crops to farm and convert to biofuel, such as long-term tree crops, sweet sorghum varieties, non-seeding napier grass and other tested sterile grasses. Aina Koa Pono is also consulting with Hawaiian Islands Land Trust regarding appropriate biofuel crops.

“We are committed to being a good neighbor and steward, producing sorely needed renewable, clean fuel and bringing jobs and economic opportunity where they are greatly needed. We respect the community and its cultural character and believe that over time we will earn its trust,” said Chris Eldridge, Aina Koa Pono partner.

Construction is expected to require 400 workers over three years. The farm and processing plant will bring about 200 agricultural and processing jobs to Kau, create new businesses to support the industry, and generate substantial tax revenues, Eldridge said. The operation can provide other farmers a revenue stream from their agricultural waste. Farmers can also benefit from the charcoal by-product that is an environmentally sound fertilizer.

Aina Koa Pono has engaged R.M. Towill and SMS Research to conduct broad community outreach in Kau to identify issues and concerns of local residents. These voluntary efforts will include assessing how the operations and processes will affect the environment in and around Kau.

The PUC did not approve an earlier contract between Hawaii Electric Light Company and Aina Koa Pono, citing concerns about price and other considerations.  The new contract contains a reduced price and other changes to be reviewed by the PUC with input from the Consumer Advocate.

“We have renegotiated the AKP contract to meet the PUC’s concerns and believe there is significant value to Hawaii of this and future biofuel contracts,” said Jay Ignacio, Hawaii Electric Light Company president. “If Hawaii is to reach our clean energy goals and get off oil, we need to pursue all possible renewable resources, including biofuel which can be a bridge to future technologies. Locally grown and processed biofuel can be used in existing power plants at costs that can help us stabilize volatile petroleum-based electricity prices. It can keep Hawaii green and create jobs rather than sending millions of dollars out of state for energy.”

The filing asks the PUC to approve sharing the cost difference between locally grown and produced renewable biofuel and the fossil fuel it replaces among customers of Hawaii Electric Light Company and Hawaiian Electric Company. If the proposed surcharge were in place in 2015, the estimated incremental cost spread among Hawaii Island and Oahu customers based on fuel price projections could be about 2/10th of one cent or from $0.84 to $1.00 per month for a residential bill of 500 to 600 kilowatt-hours.  The surcharge would not begin until AKP begins deliveries of biofuel and will decrease over time as petroleum-diesel prices rise.

“Hawaii Island already has the highest level of renewable energy in the state, getting more than 40% of its energy from renewable sources. Renewable energy requirements are calculated on a consolidated basis for all our service territories, so Oahu has benefited from Hawaii Island’s leadership,” said Robbie Alm, Hawaiian Electric executive vice president.

“This contract provides for future delivery of AKP biofuel to other islands. It’s reasonable that the cost of advancing a local biofuel industry in Hawaii be shared among more than just Hawaii Island customers. Fossil fuel prices are expected to continue their erratic upward climb, so in time the cost of AKP biofuel is expected to be less than the cost of the oil it displaces,” Alm said.

Aina Koa Pono has partnered with Mansfield Oil Company (mansfieldoil.com) to handle its distribution and supply arrangements for the biofuels produced by the Kau plant. Mansfield will also purchase some 8 million gallons of biofuel per year for sale and distribution first in Hawaii and then on the mainland. Mansfield, which is privately owned, is one of the nation’s largest distributors of fuel and operates an integrated network of refiners, terminals, carriers and retailers throughout North America.

Aina Koa Pono will use a unique technology licensed from Sustainable Biofuels Solutions, LLC (SBS). This thermal microwave depolymerization (Micro Dee) technology is currently in use at a demonstration plant in North Carolina, which has been operational since early 2012. Micro Dee accelerates the natural decomposition and metamorphosis of biomass to crude liquid to just 50 minutes, Eldridge said.

AECOM (aecom.com), a global engineering and technical services company, is completing tests of this technology. Results have met or exceeded projections and AECOM has determined that the Micro Dee process, now a second-generation technology, is now poised for optimal renewable liquid fuel production.