In re: Hawai'i Electric Light Company, Inc.

CourtHawaii Supreme Court
DecidedMarch 13, 2023
DocketSCOT-22-0000418
StatusPublished

This text of In re: Hawai'i Electric Light Company, Inc. (In re: Hawai'i Electric Light Company, Inc.) is published on Counsel Stack Legal Research, covering Hawaii Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re: Hawai'i Electric Light Company, Inc., (haw 2023).

Opinion

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Electronically Filed Supreme Court SCOT-XX-XXXXXXX 13-MAR-2023 08:51 AM Dkt. 343 OP

IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

---o0o---

In the Matter of the Application of

HAWAIʻI ELECTRIC LIGHT COMPANY, INC.

For Approval of a Power Purchase Agreement for Renewable Dispatchable Firm Energy and Capacity.

SCOT-XX-XXXXXXX

APPEAL FROM THE PUBLIC UTILITIES COMMISSION (Docket No. 2017-0122)

MARCH 13, 2023

RECKTENWALD, C.J., NAKAYAMA, McKENNA, WILSON, AND EDDINS, JJ.; WITH WILSON, J., ALSO CONCURRING SEPARATELY

OPINION OF THE COURT BY EDDINS, J.

Over ten years ago, energy company Hu Honua had a

brainwave: it could produce renewable energy by burning trees.

The company sought regulatory approval to supply energy to

Hawaiʻi Island using a biomass power plant. Last summer,

approval for that energy deal was denied. Hu Honua appeals the *** FOR PUBLICATION IN WEST’S HAWAI‘I REPORTS AND PACIFIC REPORTER ***

denial, arguing that the Public Utilities Commission (PUC)

misunderstood its mandate and held Hu Honua to an unfair

standard.

We disagree. The PUC understood its public interest-minded

mission. It faithfully followed our remand instructions to

consider the reasonableness of the proposed project’s costs in

light of its greenhouse gas emissions and the project’s impact

on intervenor Life of the Land’s members’ right to a clean and

healthful environment. It stayed true to the language of its

governing statute HRS § 269-6(b) (Supp. 2021) by measuring the

project’s cost and system impact. And it acted properly within

its role as fact-finder when it evaluated Hu Honua by its own

statements and promises and, ultimately, found them

unconvincing.

Finding no error, we affirm the PUC’s decision rejecting

the power purchase agreement between Hu Honua and the Hawaiʻi

Electric Light Company, Inc.

I.

In 2012, Hawaiʻi Electric Light Company, Inc. (HELCO)

approached its regulator, the Public Utilities Commission, about

entering into a power purchase agreement (PPA) with private

company Hu Honua Bioenergy, LLC (Hu Honua). Under the

agreement, Hu Honua would convert an abandoned power plant in

Pepeʻekeo, Hawaiʻi. The plant would produce energy by burning

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woody biomass — mainly locally-grown eucalyptus trees. HELCO

would purchase this energy to service Hawaiʻi Island’s power

grid.

In 2017, the PUC granted HELCO a waiver from the

competitive bidding process and held a contested case hearing

over the PPA. Life of the Land (LOL), a Hawaiʻi-based community

action group dedicated to protecting and preserving the ʻāina,

sought to intervene in the hearing. They were given limited,

rather than full participant, status. The PUC ultimately

approved an Amended PPA between Hu Honua and HELCO for a thirty-

year term. LOL appealed the decision.

In Matter of Hawaiʻi Elec. Light Co., Inc., 145 Hawaiʻi 1,

445 P.3d 673 (2019) (HELCO I), this court vacated the PUC’s

decision. We told the commission to hold a new hearing. Our

remand instructed the PUC to give “LOL an opportunity to

meaningfully address the impacts of approving the Amended PPA on

LOL’s members’ right to a clean and healthful environment, as

defined by HRS Chapter 269.” Id. at 26, 445 P.3d at 698. We

also told the PUC to give “express consideration of GHG

emissions that would result from approving the Amended PPA,

whether the cost of energy under the Amended PPA is reasonable

in light of the potential for GHG emissions, and whether the

terms of the Amended PPA are prudent and in the public interest,

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in light of its potential hidden and long-term consequences.”

Id.

On remand, the PUC devoted its attention to a threshold

issue - whether it should “reissue” to HELCO a waiver from the

competitive bidding process. Matter of Hawaiʻi Elec. Light Co.,

Inc., 149 Hawaiʻi 239, 240, 487 P.3d 708, 709 (2021) (HELCO II).

It decided to deny the waiver. Id. Since HELCO now had no

waiver, the PUC declined to consider the merits of the Amended

PPA. Id.

This time, Hu Honua appealed. Because the competitive

waiver issue was outside the scope of HELCO I’s remand, we

returned the case. We repeated our remand order from HELCO I.

Id. at 242, 487 P.3d at 711.

The PUC held a new contested case hearing on the Amended

PPA in early March 2022. Before the evidentiary hearings began,

Hu Honua brought several motions centered on Act 82, which had

amended HRS § 269-6(b) in 2021. HRS § 269-6(b) is the primary

statute governing the PUC’s evaluation of energy projects like

the Amended PPA. It requires the PUC to engage in “public

interest-minded balancing.” Matter of Maui Elec. Co., Ltd., 150

Hawaiʻi 528, 532, 506 P.3d 192, 196 (2022) (Paeahu).

Hu Honua argued that Act 82 changed things. It said the

PUC could now only consider GHG emissions from fossil fuels.

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Emissions from other sources, such as biomass burned to produce

renewable energy, had to be kept out of the equation.

The commission rejected this approach. It concluded that

Act 82 did not materially alter its statutory obligations under

HRS § 269-6(b).

At the hearings, Hu Honua and HELCO maintained that the

Amended PPA served the public interest. Yet they admitted that

by their own numbers, the proposed project would produce massive

carbon emissions - 8,035,804 metric tons over its 30-year term.

The vast majority of these emissions would come from the plant’s

routine operations. Trucking trees to the plant would emit

carbon. And when the trees burned, “stack emissions” would rise

into the atmosphere.

But Hu Honua made a promise: the project would ultimately

be carbon neutral. Hu Honua intended to offset its emissions by

planting trees. These trees would sequester, by Hu Honua’s

count, 8,066,309 metric tons of carbon. That would zero out the

project’s projected eight million metric ton carbon price tag.

If everything went right, it would even make the project carbon

negative.

Hu Honua hoped to source all of its “feedstock,” that is,

the organic matter it hoped to burn for fuel, from locally-grown

eucalyptus. Its tree supplier, a sister company to Hu Honua,

would initially source eucalyptus from Pāhala, Pāʻauhau, and

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Hāmākua plantations on Hawaiʻi Island. According to Hu Honua,

those lands have enough trees to fuel the project for nine

years.

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Related

In re Application of Hawai'i Electric Light Company, Inc.
445 P.3d 673 (Hawaii Supreme Court, 2019)
In re: Hawai'i Electric Light Company, Inc.
487 P.3d 708 (Hawaii Supreme Court, 2021)

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In re: Hawai'i Electric Light Company, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-hawaii-electric-light-company-inc-haw-2023.