Honua Ola Status Update As We Await A Decision From The Public Utilities Commission

On June 30, 2021, the Hawaii Public Utilities Commission (PUC) issued an order reopening the Hu Honua Bioenergy, LLC (Honua Ola) proceeding to review the application and schedule an evidentiary hearing for the approval of an amended power purchase agreement (PPA) between Honua Ola and Hawaiian Electric.

The Hawaii Supreme Court directed the PUC, for the second time on remand, to hold a hearing and consider greenhouse gas (GHG) emissions.

During the proceeding, which culminated in a 5-day hearing that took place between March 1 – 7, 2022, Honua Ola and Hawaiian Electric were the only parties that prepared expert GHG emissions analysis and such analysis showed that the Honua Ola project will significantly reduce GHG emissions.

Moreover, in an effort to remove any doubt that GHG emissions will be reduced, Honua Ola committed as a condition of approval that the project would be carbon negative (i.e., remove more GHG emissions from the atmosphere than produced). Importantly, because the PUC and other parties questioned the assumptions and methodologies of Honua Ola’s analysis, as well as the ability to hold Honua Ola accountable and enforce such carbon negative commitments, Honua Ola made it very clear, that:

(1) Honua Ola is willing to use any reasonable assumptions and methodologies that the PUC prefers (i.e., if the PUC is not satisfied with Honua Ola’s assumptions and methodologies used in its GHG emissions projections, Honua Ola agrees to use the PUC’s preferences, recalculate, and would still honor its carbon negative commitments). In this way, the PUC cannot claim that any shortcomings in the assumptions and methodologies are a basis for determining that Honua Ola will not reduce GHG emissions.

(2) Honua Ola agrees in advance to adopt any reasonable additional conditions of approval by the PUC that will enable the PUC to hold Honua Ola accountable and enforce its carbon negative commitments. In this way, the PUC cannot claim that it is unable to hold Honua Ola accountable or enforce its carbon negative commitments.

The decision and order from the PUC regarding whether to approve Honua Ola’s PPA is anticipated in May or June 2022.

COMMITMENT TO CARBON NEGATIVE OPERATIONS

Honua Ola has committed to not only reduce GHG emissions, but to be the first utility-scale energy project in the State to be carbon negative. Our commitment will directly contribute to climate change mitigation efforts and move the state away from relying on harmful and volatile fossil fuels.

By planting and growing more eucalyptus and other trees than harvested, Honua Ola will sequester more carbon emissions than it emits. Honua Ola will plant and grow more trees to replace the trees that it harvests, as well as plant trees through partnerships, such as the Friends of Hawaii Volcanoes National Park, One Tree Planted, and the National Forest Foundation.

To ensure Honua Ola’s carbon negative commitments are realized, it has agreed to an annual inventory emissions and sequestration, as well as independent verification by a PUC-selected auditor every five years.

AFFORDABLE FIRM, RENEWABLE ENERGY

Honua Ola will support the State’s 100% renewable energy RPS mandate by 2045. Upon approval, the facility can begin to provide firm renewable energy, 24 hours a day, seven days a week, year-round by the end of 2022. This will enable Hawaiian Electric to retire firm fossil fuel plants, leading to significant reductions in GHG emissions and lowering of costs to ratepayers given the high cost of fossil fuel oil.

The facility’s always-on renewable power will increase grid stability, as well as complement and allow for more intermittent solar and wind energy to be added to the grid. Hawaii Island needs always-on renewable energy plants capable of providing power whenever it’s needed to avoid power outages.

Intermittent wind and solar-plus-battery projects, which are limited by weather and time of day, cannot replace fossil fuel plants that deliver reliable power 24/7, while Honua Ola is able to for a reasonable $0.22 cents per kilowatt hour (kWh). As a comparison, the cost of fossil fuel oil energy from Hamakua Energy is $0.34 cents/kWh as of April 1, 2022.

Also, by way of comparison, a solar project, with enough solar panels and battery capacity to be always-on (most of the day) and replace a firm fossil fuel plant will cost over $0.40 cents/kWh.

Even then, it will be unable to do so reliably because of rainy, cloudy days. In order to produce and store enough energy for a two-day rainstorm, more battery storage and solar panels would be needed, pushing up the cost to more than $0.50 cents/kWh.

WHAT’S AT STAKE

• Innovative Energy Facility Ready to Produce Renewable Energy:
  Honua Ola has converted a defunct sugar mill bagasse and coal plant into a biomass power facility in Pepe‘ekeo on the Hāmākua Coast of the Big Island. The plant is the realization of a vision by the Kohala Task Force to retain agriculture as a viable industry on the neighbor islands following the closure of sugar plantations. Honua Ola will soon be ready producing enough renewable energy to power 14,000 homes and businesses on the Big Island. All that’s needed is the go-ahead from the PUC.
• Renewable Energy vs. Costly Fossil Fuels:
  If Honua Ola is shut down again by the PUC, the Big Island will continue to be overly dependent on expensive and volatile fossil fuel oil which currently makes up over 60% of the electricity generated on the Big Island. Also, Honua Ola’s forestry program, which will sequester more GHG emissions and help to curb climate change, will not happen.
• Economic Benefits:
  Honua Ola will help stabilize the cost of electric bills and generate more tax revenue for the County of Hawai‘i to use for upkeep of parks, infrastructure, etc.
• Long-Term Careers for Kama‘āina on the Big Island:
  More than 220 Big Island jobs will be supported by Honua Ola’s operation, both at the plant and in several industries, including forestry, construction and transportation. These jobs will be lost if the facility is not allowed to operate.
• State’s Reputation to Attract Future Investment:
  Honua Ola has invested over $500 million in reliance on prior government approvals and the project is 99% completed. Abruptly killing a project previously approved several times by the state sends a terrible message to potential investors and paints Hawaii as a bad place to do business