HILO — A Hu Honua Bioenergy official says construction of its biomass power plant near Pepeekeo is moving “full speed ahead” and is on track to be complete in December 2018.
The project was recently brought from the brink after the state Public Utilities Commission approved an amended power purchase agreement with Hawaii Electric Light Co. on July 28.
The utility previously canceled its contract with Hu Honua, which initially planned to be complete in January 2016, due to missed deadlines. The amended PPA is the result of a settlement agreement between the parties.
Harold Robinson, president of Island Energy, Hu Honua’s parent company, said construction resumed July 3 ahead of the ruling and the company is ramping up those efforts.
“We’ve been planning this for a long time,” he said Monday. “Right now, we’re still on schedule.”
Under the amended PPA, Hu Honua would be contracted to produce up to 21.5 megawatts, but is capable of 30 megawatts. HELCO would buy at least 10 megawatts. The plant is being built at a former Hilo Coast Processing Co. sugar mill.
The “all-in cost,” which includes both fixed and variable payments, is 22.1 cents per kilowatt-hour, according to Hu Honua.
HELCO estimates the project will provide a net savings for customers of $1.21 per month over the 30-year agreement, with savings kicking in after 2030.
The plant will be fueled by burning eucalyptus trees harvested on the Hamakua Coast and Pahala. Robinson said Hu Honua has agreements to supply what it needs for fuel.
He said there are about 33,770 acres of available commercial forest lands on Hawaii Island. Hu Honua will harvest about 2,000 acres each year, and replant about 2,300 acres. About 283,000 tons of biomass will be consumed a year.
About 190 jobs are estimated to be generated. Robinson said Hu Honua also is interested in starting forestry internships for island students.
While Hu Honua reached a settlement with HELCO, its federal anti-trust lawsuit is still pending with two other defendants: NextEra Energy and Hamakua Energy Partners.
Hu Honua alleged HELCO canceled its PPA to push out independent power producers and that NextEra, which sought to purchase Hawaiian Electric and its subsidiaries, also played a role. At the time, HELCO also was seeking to purchase the HEP.
Robinson declined to comment on whether lawsuit will be terminated.
“I’m not really at liberty to talk about that part of the lawsuit,” he said. “Our focus is on the piece that dealt with the utility, which is gone.”
The state’s consumer advocate has said he was concerned it lacked enough time to judge the new agreement, which Hu Honua said lowered costs.
Robinson said Hu Honua provided a full response to their questions.
“We were responding to all of the different parties in a really compressed time frame,” he said.
“As far as we know, the PUC was very happy with our disclosure.”
HELCO President Jay Ignacio said the construction of Hu Honua won’t affect plans for adopting other forms of renewable energy, such as wind or solar. The project could allow it to curtail fossil-fuel burning power plants.
He said the utility plans to issue a request for proposals for additional renewable energy that could include wind, photovoltaic or geothermal sources. Ignacio said HELCO is awaiting PUC approval to issue it.
Construction costs of Hu Honua could reach $250 million, project officials have estimated.
The project is financially feasible because of tax credits, which would be available assuming the plant is complete by 2019, officials said.
