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Hawaii Supreme Court: Regulators must weigh biomass greenhouse gas emissions

The Hawaii Supreme Court ruled that state utility regulators failed to thoroughly examine greenhouse gas emissions of a proposed biomass facility and therefore must reconsider their approval of a related power purchase agreement between Hawaii Electric Light Co. Inc. and independent power producer Hu Honua Bioenergy.

Environmental group Life of the Land appealed the Public Utilities Commission's 2017 decision approving the Hawaiian Electric Industries Inc. subsidiary's 30-year contract for up to 30 MW of capacity from the proposed Hu Honua (Bioenergy) Pepeekeo Energy Facility on the island of Hawaii.

According to the group, the PUC did not properly account for the greenhouse gas emissions the biomass facility would produce. In particular, Life of the Land took issue with the energy producer's claim that plant operations would be carbon neutral.

Hu Honua Bioenergy, which now does business as Honua Ola Bioenergy, said it plans to rely on a rotational system of growing new trees and subsequently harvesting them. But the environmental group said the energy producer did not account for fossil fuels that would be used in growing, chopping and chipping the biomass or in transporting it to the plant. The company committed $250 million to convert for biomass burning a now-closed Pepeekeo Power Plant, which previously burned sugar cane waste and coal, according to the Hawaii State Energy Office.

In a 2017 position statement, Life of the Land also questioned the power producer's plans to supplement its harvested tree fuel with other, not clearly identified, biomass supplies. Further, the group complained about the price of the 30-year contract with Hawaii Electric Light. Payments would rise from 20 cents/kWh to 32 cents/kWh over the life of the agreement, while the PUC had recently approved a separate, unrelated contract for solar-based electricity at a price of 11 cents/kWh, the group noted.

Siding with Life of the Land, the court on May 10 vacated the PUC's decision, ordering the agency to reopen the case and give due consideration to the impact of greenhouse gases.

"The significance of the case is that the PUC has been mandated to look at greenhouse gas emissions since 2011 and has NEVER done so," said Life of the Land Executive Director Henry Curtis.

In its opinion, the Hawaii Supreme Court pointed to a 2011 amendment to state law, HRS Chapter 269-6(b), which requires the commission to explicitly consider the levels and effect of greenhouse gas emissions.

"This court determined that primary purpose of the [2011 amendment] was to require the commission to consider the hidden and long-term costs of reliance on fossil fuels, which subjects the state and its residents to increased air pollution and potentially harmful climate change due to the release of harmful [greenhouse gases]," the court said in its opinion.

The opinion referenced the court's Dec. 14, 2017, ruling that a lower court erred in dismissing the Sierra Club's motion to intervene in a proceeding related to a separate power purchase agreement between Hawaiian Electric Industries subsidiary Maui Electric Co. Ltd. and Hawaiian Commercial & Sugar Co. concerning the Pu'unene bagasse-fired power plant. In addition to bagasse — the residue left after juice is extracted from sugarcane — the Pu'unene plant also burned a number of other fuels, including coal and petroleum.