HELCO, Hu Honua Are Negotiating A New Power-Purchase Agreement
Hu Honua, the controversial power plant on the Hamakua Coast of the Big Island, is once more trying to obtain permission from the Public Utilities Commission to feed power into the HELCO grid.
On March 18, attorneys representing both the Hawaiian Electric Light Company and Hu Honua jointly submitted a letter to the PUC stating that Hu Honua was offering to sell energy to the utility as “a Qualified Facility under PURPA” (the federal Public Utilities Regulatory Policies Act).
On June 3, they provided the PUC with an update:
“The Hu Honua facility is a new 30 MW firm, renewable biomass facility … that would provide firm energy and capacity to the company,” wrote Wil K. Yamamoto, representing Hu Honua, and Joseph A. Stewart and Bruce A. Nakamura, representing HELCO. Negotiations between the parties had been ongoing since December 24, 2024, they said, and at this point, “they have made substantial progress and have reached an agreement in principle on the major terms. The parties are now working on completing all of the components to implement the agreement under which Hu Honua will sell energy and capacity to the company, including executing a proposed power purchase agreement (PPA) that will be submitted to the commission.”
Among other things, HELCO anticipates seeking a waiver from the competitive bidding framework, “considering the unique factors concerning the proposal, including that the Hu Honua facility is already constructed, essentially complete and ready for commissioning in short order,” the June 3 letter states.
In addition, Hu Honua and HELCO said they would be seeking to bifurcate the request to approve the PPA from the request to submit an Interconnection Requirements Study (IRS) for the project. “As the commission is aware,” the attorneys write, “an IRS has already been completed for this project as part of the previous PPA for the Hu Honua facility, which was completed in 2010. … The parties are in the process of conducting an update of the prior IRS to confirm its results are still applicable in light of the increased scope of the project and the changes in the company’s system during the interim period.”
In its reply of June 23, the commission did not seem inclined to grant the bifurcation request. “[A]fter acknowledging recent commission orders dismissing PPA applications that included requests to bifurcate,” the PUC wrote, “you seek guidance from the commission related to the Hu Honua project’s Interconnection Requirements Study update. … Specifically, you state that unless the commission advises otherwise, ‘in the interest of bringing the … Hu Honua facility into operation as quickly as possible, the parties intend to submit the PPA application and request for waiver, and supplement the completed IRS as needed.’ …
“As the commission stated in its recent orders dismissing … PPA applications until the final IRS Amendments can be filed, ‘significant delays between review of PPA-related and interconnection related matters that resulted from [earlier] bifurcations contributed to changes in PPA terms, including pricing and [Guaranteed Commercial Operations Dates], which were attributed not only to the later filing of the IRS but also unplanned events during the time in between commission review of the PPA and interconnection-related matters.’
“Given the current uncertainty around global supply chain- and tariff-related issues, as well as the age of the original IRS for this project, the commission advises HELCO and Hu Honua that HELCO should file the PPA and any associated waiver request with the commission when the IRS update is complete and final. … This will best position the commission to make an efficient and well-informed decision on this matter.”
Both Hu Honua and its parent company, Island Bioenergy, LLC, are registered with the state Department of Commerce and Consumer Affairs as foreign corporations, with their headquarters in Delaware. While Hu Honua is in good standing, Island Bioenergy is not, having failed to file the required annual report for 2025.
In addition, as of June 1, Island Bioenergy has no registered agent. Written notice of the registered agent’s resignation was sent to Cyrus Johnson, Island Bioenergy manager at an address in Truckee, California. According to records filed with the California Secretary of State’s office, Johnson is also manager of Silverbelt Holdings, which holds a majority share of Hu Honua.
Black Sand Beach Utility Update
The drama surrounding the rate hike request of the company that runs water and sewer services at the run-down Punaluʻu Black Sand Beach resort area continues, with the Public Utilities Commission rejecting the request of attorneys representing Punaluʻu Water and Sanitation, LLC, to withdraw as counsel for the company in pursuing its temporary rate increase (TRI) application.
In an order issued June 17, responding to a May 30 request from the attorneys, the PUC found that the firm Yamamoto Hetherington, LLLC, had “not established good cause” for its withdrawal.
Recapping the history of the case, the PUC noted that the utility, which serves the Kaʻu resort, “has maintained throughout this proceeding that its strained financial situation is a continuing matter that hinders its ability to provide sustained reliable service.” The Consumer Advocate, in fact, had serious concerns that utility customers face “an ongoing threat to their health and safety because of a substantial risk of experiencing service interruptions or a complete loss of service even if the TRI is approved.” The concerns were serious enough, in fact, that the Consumer Advocate recommended the PUC appoint a receiver for the utility.
“Because of PWS’s financial condition and the ongoing uncertainty with its ability to provide adequate and reasonable service to its customers,” the PUC order states, “the commission does not find it to be reasonable or appropriate for PWS to proceed in the midst of the current TRI and/or while initiating and participating in a new rate case proceeding without representation of counsel.” In fact, it continues, the PUC’s own rules effectively require representation by an attorney in all rate case proceedings.
To further support its denial of YH’s request, the commission notes that PWS has still not responded to the commission’s May 28 request for information about its financial condition.
Finally, the order notes that the temporary rate hike already approved included $9,000 a month for legal fees. “If the commission were to grant the motion and allow PWS to continue pro se, this could necessitate an adjustment to … the rates or the imposition of further conditions restricting the collection and/or expenditure of funds.”
YH was ordered to continue representing PWS, ensuring that a response to the May 28 status update request is filed along with required monthly reports. It is also to “assist PWS in retaining new substitution counsel.”
On June 23, YH forwarded to the PUC the utility’s response to the PUC’s May 28 demand for an explanation of the utility’s financial situation, given the publicity that a foreclosure action against it had received. That action was later withdrawn.
According to the response, signed by Eva Liu, owner of the utility and also owner of the Punaluʻu Black Sand Beach resort, “the foreclosure action … has been fully resolved. A stipulation for dismissal with prejudice of all claims and all parties, along with an accompanying order by the Circuit Court of the Third Circuit … was filed on May 28, 2025. This filing officially concludes the foreclosure proceedings and precludes refiling of the same claims in the future.”
On June 27, YH asked the PUC to reconsider its request to withdraw, stating that this request was approved by Liu. Instead of legal fees running around $9,000 a month, the request stated, in both February and March, they were in excess of $40,000, and in excess of $30,000 in April.
“By taking on, pro se, the reporting conditions … this would enable PWS to minimize legal costs and lower any future adjustment to the amount of legal fee recovery sought in the general rate case proceeding and in turn lower the financial impact to ratepayers. PWS is willing and believes it is capable of handling the monthly reporting requirements without the assistance of legal counsel,” the request states.
Launiupoko Water Co. Rate Hike Agreement
The Launiupoko Water Company and the state Consumer Advocate have arrived at an agreement to settle the rate hike request that the company filed with the Public Utilities Commission about 18 months ago. On June 27, the PUC gave the agreement its final stamp of approval.
Under the agreement, LWC will be able to raise rates overall by 34.9 percent, or nearly 30 percent less than the 64.7 percent hike that the company had sought at the time it made the rate increase application.
Addressing the PUC’s order that the parties consider adopting a preferential rate for agricultural users, the agreement calls for giving agricultural users a rate of $3.20 per 1,000 gallons for monthly consumption in excess of 25,000 gallons. The rate for non-agricultural uses over 25,000 gallons per month is $3.30, increasing to $6.05 per 1,000 gallons for consumption in excess of 40,000 gpm.
The commission largely adopted the stipulated language. However, it added conditions related to pending issues before the state Commission on Water Resource Management. The company is instructed to “continue to promote water conservation, including submitting a water conservation policy within 60 days” of acceptance by the company of the PUC order.
— Patricia Tummons
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