East Hawaii News

Hu Honua Responds to Hawai’i Electric Light’s Status Report

February 24, 2016, 5:34 PM HST
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Hu Honua photo.

Hu Honua photo.

Hu Honua Bioenergy has filed a response with the Hawai’i Public Utilities commission, addressing Hawai’i Electric Light’s Status Report, in which HHB claims the electric company provided incomplete and misleading information.

PUC required the report after milestone schedule dates in the HHB power purchase agreement, approved in December 2013, were missed.

Hu Honua expressed disappointment with Hawai’i Electric Light in its response. The disappointment came from not processing its milestone date extension request that was submitted over 12 months ago.

The extension was requested by Hu Honua after a dispute with its former contractor that disrupted the project’s construction schedule and to provide the replacement contractor sufficient time to complete the biomass-fueled, renewable energy facility in Pepeekeo.

HHB submitted a proposal to reduce energy prices in its PAA to 14 cents for energy purchased above a 10-megawatt minimum level for economic dispatch. The submission was reportedly at the urge of Hawai’i Electric Light, however, Hu Honua’s milestone date extension requests were not processed.

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According to HHB, the company invested $100 million in the biomass-to-energy project, which is about 50 percent complete. In addition, HHB has arranged full financing from its investor base and the plant can be operational in about 12 to 16 months.

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Once completed, the plant will supply residents with firm, baseload, dispatchable renewable power that would complement intermittent resources such as wind and solar, and help the state meet mandated clean energy goals.

In its filing, HHB asserts the value of the plant today to the Big Island’s electricity system is as great or greater than December 2013, when the PUC approved the PPA.

According to HHB, Hawai’i Electric Light’s threat to terminate it as a result of missed milestones was announced just days before parts of the Big Island experienced blackouts due to insufficient firm generating capacity.

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The company says it is “looking forward to working with HELCO and the PUC to resolve its milestone date extension request, along with HHB’s proposal to reduce the energy price in its PPA to 14 cents for amounts purchased above the 10-MW minimum threshold for economic dispatch.”

In addition, the HHB says the completed plan would provide between 100 and 150 jobs within the local community.

HHB sent a release Wednesday with the following items reportedly filed to the PUC by Hawai’i Electric Light addressing “incomplete and misleading statements:”

“Hu Honua does not have the ability to achieve commercial operation in the near future.”

Hu Honua has fully committed financing up to $125 million to complete the project, with $20 million having been invested since November 2015.

“Hu Honua failed to meet PPA obligations.”

Hawai’i Electric Light’s statement appears to refer to the boiler hydro test date. Unlike solar and wind projects, Hawai’i law requires high pressure/high temperature steam boiler projects to follow rigorous inspection, approval and documentation protocol throughout construction before successive work can begin. As a result of disputes with its former contractor, HHB did not have ready access to prior documentation needed to perform successive work, which resulted in disruption and delays to schedule.

“Hu Honua failed to justify a milestones extension.”

As early as October 2014, HHB alerted Hawai’i Electric Light that its milestone dates could be delayed because of certain factors beyond its control, including the circumstances underlying the dispute with its former contractor.

In January 2015, well in advance of project milestone dates, HHB approached Hawai’i Electric Light to proactively discuss revised milestones dates in light of circumstances. Throughout discussions over revised milestones, Hawai’i Electric Light reported a need for pricing reductions as an exchange for milestone date relief. HHB revised pricing arrangements on three separate occasions—February, April, and May 2015.

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