March 2017 Project Update
A Settlement Conference among Hawai‘i Electric Light Co. (HELCO), other defendants, and Hū Honua has been scheduled for May by Magistrate Judge Kenneth Mansfield of the US District Court. A Status Conference will follow.
Hū Honua is hopeful that differences between HELCO and Hū Honua can be resolved in May and lead to a PUC-approved Power Purchase Agreement (PPA) by the end of June that will enable Hū Honua to complete the construction of its half-built biomass power plant and generate electricity by the end of 2018. Upon completion, the plant will provide both enormous economic benefits and energy stability for residents and businesses of Hawai‘i Island.
“The Settlement Conference will, we hope, put us back on track and enable us to fulfill our mission of delivering firm, renewable, clean energy to HELCO’s customers, without the risk of rising oil prices over the next 20 years and the risk inherent in the importation of foreign oil,” said Harold Robinson, president of Island BioEnergy, the owner of Hū Honua.
Beginning more than two years ago, following construction delays that often were beyond HHB’s control, the Hū Honua team asked the utility to extend the contract milestone dates so construction could resume. HHB offered significant price concessions that the utility rejected.
Instead, HELCO, which was then working through a merger agreement with NextEra, terminated Hū Honua’s 20-year PPA. Had it granted the extensions, the Hū Honua facility would have been completed and be providing power today to the Island 24/7.
Hū Honua’s Pepe‘ekeo power plant is 50 percent completed, with over $120 million already invested in the property, labor and equipment. In addition to the loss of its entire investment as a result of the defendants’ actions, the termination of the PPA has caused Hū Honua huge losses in revenues.
“If we can work out our differences with the utility,” Robinson said, “it is a big win for the people of Hawai‘i Island, in terms of energy costs and power grid stability.”
The plant will produce 30-megawatts of power and can deliver about 15 percent of the island’s electric needs. It is baseload, or firm power, capable of 24-hour-a day, seven days a week production.
Hu Honua expects to resume onsite operations with a full team of employees and contractors before year-end. The accelerated activity comes after Hu Honua and Honolulu-based Hawaiian Dredging Construction Company reached a settlement related to a contractual dispute between the parties.
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Hu Honua has recently received two shipments of specialized equipment in Hilo: our re-injection system as well as biomass fuel yard equipment and air quality control operating system. Learn more here…
Bioenergy in Hawaii
At a forestry workshop in Hawaii earlier this summer, Dr. John R. Shelly of the University of California, Berkeley summarized the benefits of woody biomass-produced electricity derived from biomass power plants similar to Hu Honua Bioenergy as offsetting high costs for thinning forests, reducing fire hazards and wildfire potential, and contributing to landfill disposal diversion.
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New steam turbine generator
We have invested in a new steam turbine generator to match the +30 year expected life span of the power plant. The new 30-megawatt (net) steam turbine generator is being manufactured by Shin Nippon Machinery Co, Ltd.
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Revised construction schedule, new contractor at HHB
Hu Honua has engaged Performance Mechanical, Inc. (PMI) as its new general contractor for work remaining on-site. PMI has extensive boiler and power plant experience with utility-grade facilities, including several installations in Hawaii. Once the contractor is on board, construction is expected to return to full staffing levels by mid-summer.
EPA Clears Air Permit Application
Hu Honua Bioenergy’s air permit application has cleared the U.S. Environmental Protection Agency (EPA), which issued a “no objection” determination to the proposed permit.
Hu Honua is working with the Hawaii Department of Health, Clean Air Branch (DOH) to finalize language of the air permit to address comments and recommendations from EPA to DOH regarding procedures and processes associated with emissions monitoring. Hu Honua will be the first of its kind of facility to be located in Hawaii and the standards governing this type of operation have been recently updated.
Hu Honua has affirmed it will meet all of these updated standards, including the latest and most stringent applicable emissions regulations that have recently been implemented—maximum achievable control technology (MACT.) Furthermore, Hu Honua’s engineering and construction contractor has provided a guaranty that the facility will meet the limits contained in its air permit application.
John Sylvia, CEO of Hu Honua, was clear that the facility is being designed to meet all the requirements. “The last thing we want is a facility which doesn’t meet its permit requirements,” he said.
Air permit timeline
Hu Honua first applied for an air permit two years ago. Following extensive air emissions modeling and engineering analysis conducted by outside experts retained by Hu Honua, during which period numerous DoH questions and information requests were addressed, a year later the DOH issued a draft permit and opened a public comment period that exceeded a month. DOH held a public hearing in September 2010 and extended the public comment period to nearly two months.
Based on the feedback from the public hearing and the public comments, Hu Honua revised and resubmitted its application in December 2010. DOH opened a second public comment period, which lasted about a month.
After further public comments, DOH and Hu Honua implemented additional modifications to the draft air permit in response to public comments. DOH sent the proposed air permit to EPA for review in May 2011.
EPA responded at the end of June, saying it had no objection to the proposed air permit being issued.
As the state faces rising oil costs and a mandate to meet the Hawaii Clean Energy Initiative goals for renewables, Hu Honua’s biomass facility will be a significant contributor—24 megawatts of electricity for the Big Island grid, about 10 percent of the island’s demand. This will allow the utility to reduce the amount of power it produces from fossil fuels.
Hu Honua will also be a stable power source, not intermittent like wind. That means the utility can rely on its steady output and plan accordingly.
The facility will also bring jobs to an area that sorely needs them. During the rebuilding phase of the facility, approximately 100 construction jobs are anticipated. Once it is operating, approximately 30 fulltime, good paying jobs will be created at the facility. Another 120 indirect jobs are estimated in the timber and related industries as well.