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Parties pleased with ruling: State Supreme Court remands Honua Ola case to PUC

Honua Ola Bioenergy President Warren Lee on Monday hailed the unanimous decision by the state Supreme Court in favor of its appeal of a Public Utilities Commission decision that rescinded a previously granted waiver of competitive bidding on a power purchase agreement for the almost completed power plant.

“I think we’re moving in the right path. We’re not treading water,” Lee said Monday. “It’s a decision to move forward so we can have green, dispatchable, renewable energy on the island.”

The 5-0 vote by the high court ordered the PUC to reconsider a waiver of competitive bidding for Hawaiian Electric for the biomass power plant in Pepeekeo. The high court’s opinion, written by Associate Justice Todd Eddins, specifically orders the PUC to consider the issue of greenhouse gas emissions in its deliberations.

The environmental group Life of the Land appealed the PUC’s decision granting the amended power purchase agreement between HECO and Honua Ola, arguing that the regulatory panel failed to consider greenhouse gas emissions, as required by state environmental law. The group also argued it was denied due process by the PUC to protect its constitutional right to a clean and healthy environment.

The Supreme Court in July 2020 vacated the PUC decision and remanded the case, ordering the regulatory panel to hold an evidentiary hearing and specifically consider the issue of greenhouse gas emissions.

Instead of having a hearing, the PUC then issued an order denying HECO’s waiver request, stating the high court’s decision nullified the amended power purchase agreement and rendered the waiver moot.

PUC’s decision stated the projected cost of electricity from Honua Ola, about 22 cents per kilowatt hour throughout a 30-year period, wasn’t competitive with two recently approved Big Island solar-plus-storage projects that could produce 30 megawatts of power with battery storage capability of 120 megawatts at 8-9 cents per kilowatt hour. The PUC stated it was “not convinced that granting a waiver for the (Honua Ola) project is justified or in the public interest.”

That decision put the future of the controversial, 30-kilowatt eucalyptus wood-burning power plant in doubt.

Honua Ola filed an appeal to the high court, arguing the Supreme Court’s remand explicitly instructed the PUC to conduct an evidentiary hearing to consider the issue of greenhouse gas emissions from the $474 million power plant.

Eddins wrote that the PUC’s order rescinding the competitive bidding waiver “flow(ed) from a faulty premise” that the high court’s 2020 decision “nullified the 2017 waiver when, in fact, the … opinion presumed the existence of that very same waiver.”

Lee said the remand to the PUC allows all parties to “just go forward from there and do what the order says — look at the greenhouse gas analysis (and) let Life of the Land and others participate fully.”

“We are also thankful for the court’s clarification that the 2017 waiver from competitive bidding remains valid and in force,” Lee said, and added that 30-some Honua Ola employees are still on the active payroll.

“We’re moving along the path of getting the plant operational,” he said. “We’re still 99% complete. We’ve got to do some construction work, then the commissioning work. I think it’s going to be great economically for Hawaii Island when this plant goes into operation, because it’s not only jobs at the plant, but contracting jobs — and the high potential for spinoff industries like woodworking, sawmills, ranching, farming.”

Henry Curtis, executive director of Life of the Land, said his group also is “pleased with the ruling by the Hawaii Supreme Court” regarding Honua Ola.

“The Hawaii Supreme Court in essence asserted that the Hawaii Public Utilities Commission cited the wrong legal provision in denying the waiver. Now the PUC can go back and reissue their decision citing the correct standard,” Curtis said.

Associate Justice Michael Wilson wrote a concurring opinion stating his purpose in doing so is “to clarify that the majority’s decision gives discretion to the PUC to determine again whether a waiver of competitive bidding should be granted to (HECO).”

According to Wilson, the 2020 opinion by the high court “does not preclude the PUC from exercising its duty to determine under … the PUC’s competitive bidding framework whether a waiver should be granted to (HECO).”

Email John Burnett at jburnett@hawaiitribune-herald.com.
Source: Hawaii Tribune Herald

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