Hu Honua seeks ‘new beginning’

HILO — Hu Honua Bioenergy LLC representatives say they have not given up on plans to build a biomass power plant in Pepeekeo despite the loss of their power purchase agreement earlier this year.

Company officials and investors invited media to the project site Friday at the former Hilo Coast Processing Co. sugar mill to say they are ready to proceed, assuming a new agreement is reached with Hawaii Electric Light Co.

“We are now today in a state of full readiness to complete this plant,” said Hu Honua board member Harold “Rob” Robinson while standing in front of the partially built facility.

Joining him were state lawmakers, Hawaii County officials, and members of the International Longshore and Warehouse Union and other unions representing laborers and carpenters.

Robinson, while speaking behind an ILWU podium, said the company has the additional $125 million it needs to finish the 21.5-megawatt plant, powered by harvested eucalyptus and other trees on the Big Island.

HELCO President Jay Ignacio said the utility is reviewing an offer Hu Honua made this week to sell power at a lower rate. But concerns still exist.

“They’ve always been confident, but they ran into problems,” he said.

Robinson said their latest offer is to sell electricity below 14 cents per kilowatt hour, the amount previously on the table. He declined to state the offer, but noted it amounts to $60 million in concessions over 20 years.

Ignacio said fixed pricing components could add to the cost.

He said one of the reasons for canceling the deal in March was that HELCO’s commitment to Hu Honua would prevent it from pursuing other options. That followed Hu Honua missing a deadline to begin operations in January.

“If we make the commitment we want to make sure they can execute,” Ignacio said.

Hu Honua also is requesting the state Public Utilities Commission review the cancellation of their agreement.

The road for Hu Honua has been rocky up to this point.

In addition to missed deadlines, the project faced a dispute with contractor Hawaiian Dredging Construction over $25 million in missed payments for completed work.

In an emailed statement, Ignacio said Hu Honua previously lost financing after being locked out of its project site for more than a year. “Hu Honua now estimates the project cost has more than doubled to over $200 million,” he said.

Robinson said the project has been buoyed by additional investment and would not face any more delays. He said they are ready for a “new beginning.”

“We’ll have no slow downs from procuring equipment,” Robinson said, noting the project is 50 percent complete. “All the engineering work is done.”

Steve Lyons, executive project manager, said 2,000 acres of trees would be harvested per year to support the plant. Ash created as a result of burning the trees would be used for fertilizer.

He said there are 40,000 acres of trees available for harvest, enough to sustain operations, mainly in the Hamakua and Pahala areas. Trees would be replanted and cut after five to six years of growth.

Robinson said the power plant would employ about 30 people and support up to 180 jobs, with forestry included.

Hamakua Councilwoman Valerie Poindexter, while speaking to the audience, said she saw the project as offering hope for communities hit hard by the closure of sugar plantations up and down the coast. She also reminisced of the plantation days and the role of the ILWU in helping displaced workers.

The eucalyptus trees Hu Honua wants to harvest were planted on what used to be sugar cane fields.

“I see the opportunity here,” Poindexter said, while noting that some of her constituents have to travel to Kona or Kohala for work.

“I look forward to what you will bring to this community.”

State Sen. Kai Kahele said the project would bring the spirit of those days back to the location.

Also present were Hilo Councilman Dennis “Fresh” Onishi and county Environmental Management Director Bobby Jean Leithead-Todd, in addition to others.

Email Tom Callis at tcallis@hawaiitribune-herald.com.