HELCO biomass contract approved

The state Public Utilities Commission approved Hawaii Electric Light Co.’s contract with a half-built biomass facility on the Big Island on Friday.

Hu Honua Bioenergy LLC and HELCO, sister utility to Hawaiian Electric Co. on Oahu, submitted a revised contract in May with the PUC requesting approval for the utility to purchase electricity from the biomass facility over 30 years. HECO would buy the energy at 21.9 cents a kilowatt-hour, according to PUC Chairman Randy Iwase. The facility would create energy by burning eucalyptus wood.

Hu Honua will provide 21.5 megawatts of power, enough for roughly 14,000 homes. The project is expected to increase electrical customer bills in its first 11 years, according to HELCO. Over the life of the 30-year project, customers’ bills are expect to go down, according to HELCO estimates.

This is the second time Hu Honua’s project received PUC approval. The PUC originally approved the project in 2013. HELCO submitted the revised application after Hu Honua sued the utility for $555 million in damages for ending the previous contract.

HELCO allowed its contract with Hu Honua to end, saying Hu Honua failed to meet construction deadlines and provide assurances that it could be relied upon as a renewable-energy provider. The facility was half-built at the time the contract ended.

Hu Honua questioned whether NextEra Energy Inc., the Florida company that attempted and failed to buy the parent company of HELCO for $4.3 billion, had a role in the cancellation of the project. HECO ended Hu Honua’s project as well as three utility-scale solar projects on Oahu during state regulators’ review of NextEra’s bid to purchase Hawaiian Electric Industries Inc.

The revised applications for the three utility-scale projects HECO canceled were approved by the PUC on Thursday.