Hu Honua Faces New PUC Hearing, Well Issues, DOH Fines, and a Lawsuit

Hu Honua Faces New PUC Hearing, Well Issues, DOH Fines, and a Lawsuit

posted in: Energy, June 2019, Pollution | 0

In December 2017, the Hawai‘i Supreme Court told the state Public Utilities Commission that it had to consider greenhouse gas emissions in carrying out “all of the [commission’s] duties.”

The decision wasn’t unanimous. In fact, it was as close as it could be: a three-justice majority, with a dissent written by the chief justice himself, Mark Recktenwald. Recktenwald disagreed with the majority’s finding that the petitioners in the case, members of the Sierra Club of Maui, had a property interest in a clean and healthful environment.

The case did not receive the publicity that was its due, which may have had something to do with the fact that the subject of the appeal the justices were hearing was a power purchase agreement involving a power plant in Pu‘unene that had been shut down even before the case was heard by the court.

But the case – In re Application of Maui Elec. Co., or MECO for short – set an important precedent, as noted by Earthjustice attorney Isaac Moriwake, who represented the Sierra Club. “The issue of what happens on remand” – the case was remanded to the PUC – “is less important than the precedent we now have for future cases,” he told Environment Hawai‘i at the time.

And just how important was evident last month, when all five Supreme Court justices – Recktenwald included – signed on to a ruling in a case involving the power purchase agreement (PPA) between the Hu Honua power plant, being built along the Big Island’s Hamakua Coast, and Hawaiian Electric Light Company (HELCO).

Unlike the Maui case, this one is not moot. Hu Honua Bioenergy, LLC, has had an on-again, off-again relationship with HELCO over the last several years. Since last summer, though, the switch has been “on,” after the PUC approved an amended – from 2012 – power-purchase agreement between the plant, which proposes to burn eucalyptus logs as its fuel source, and HELCO. Hu Honua reports having spent in the neighborhood of $300 million to refurbish the plant, which, like the Pu‘unene facility, originally burned bagasse from sugar mill operations.

Soon after the PPA was approved, the environmental group Life of the Land appealed. The Supreme Court heard oral arguments in October. And on May 10, it issued its 66-page ruling.

Consistent with the MECO decision, the justices found that the PUC had not given due consideration to the impact of the plant’s operation on greenhouse gas emissions and had not allowed Life of the Land a “meaningful opportunity” to be heard regarding the impact of the plant’s operation on the group’s “right to a clean and healthful environment.”

A Duty to Consider

Henry Curtis, executive director of Life of the Land, has raised the issue of the role of greenhouse gas emissions in climate change in both the original PUC docket on the Hu Honua PPA (begun in 2012) and the amended PPA (filed in 2017, after some disputes between Hu Honua and HELCO were ironed out). However, the several information requests – or IRs – that Curtis filed with Hu Honua, HELCO, and the state Consumer Advocate concerning the effect of using logs as a fuel source on greenhouse gas levels were not meaningfully answered.

“In response to at least one of the IRs that [Life of the Land] submitted to HELCO, HELCO objected and refused to respond,” the Supreme Court noted in its decision, “arguing that the information sought was ‘not relevant to and [was] outside the scope of LOL’s authorized scope of limited participation.’”

Also, “The Consumer Advocate responded to LOL that it had not completed an analysis of the impact the project would have on GHG [greenhouse gas] emissions, and that any analysis should be comprehensive, including GHGs resulting from harvesting and transporting the feedstock. The Consumer Advocate further stated that it had not evaluated the need for a consultant to review GHGs and climate change in the instant proceeding,” the ruling states.

For its part, Hu Honua stood firm in itsclaim that by burning a renewable fuel – logs– it would make a “significant contribution to the state’s” renewable portfolio standards and “avoid the emission of hundreds of thousands of tons” of carbon dioxide, a major greenhouse gas.

In its final decision and order approvingthe power-purchase agreement in 2017, the PUC, adopting HELCO’s analysis, found that the Hu Honua project “provides significant renewable energy-related benefits.” At no time, however, did the PUC hold a hearing on the 2017 PPA or receive any argument on the subject of the greenhouse gases that would be emitted in the course of the plant’s operation.

Yet, the Supreme Court found in MECOthat a 2011 law – codified as Section 269-6(b) of Hawai‘i Revised Statutes – requires the PUC to consider greenhouse gas emissions in the “fulfillment of all of the [PUC’s] duties.”

“That the facility involved in the amended PPA is a biofuel facility does not absolve the PUC of this duty,” the court went on to state.

Other Issues

While the matter of greenhouse gas emissions was front and center in the Supreme Court’s decision, Life of the Land’s appeal was challenged on other issues as well.

Hu Honua, HELCO, and the commission argued that the group was not entitled to a contested case hearing because it failed to request one. They cited administrative rules of the Department of Land and Natural Resources and the Department of Health, which require claimants to submit a petition for a contested case.

The justices, however, pointed out that the commission’s rules lack a similar requirement.

As to the group’s standing to appeal the decision to the Supreme Court, the justices were clear: Life of the Land “has demonstrated an injury to its members, including their right to a clean and healthful environment … due to the PUC’s approval of the amended PPA. LOL has therefore satisfied the first prong of the standing analysis.”

Life of the Land’s involvement in the PUC docket – submitting information requests and attempting to intervene in other ways – also bolstered the group’s standing. “Because LOL was involved in the 2017 docket as a participant, it has met the second prong of the analysis,” the justices found.

Nonetheless, the court left it to the commission to determine the extent to which Life of the Land may participate in the remanded proceeding, provided that the agency gives the group a meaningful opportunity to be heard and complies with its obligations to “consider the reduction of GHG emissions.”

Attorney Lance Collins represented Life of the Land, going up against two former attorneys general: Margery Bronster (for Hawaiian Electric and HELCO) and David Louie (for Hu Honua Bioenergy, LLC).

Collins told Environment Hawai‘i that the decision’s most important features arethat it solidifies the holding that peoplehave a constitutional right to a clean and healthful environment, “rejects the PUC’s disregard of its statutory mandate to con- sider the effects of its proposed decisions on greenhouse gas emissions,” and “clarifies that the limitations on contested casesthat appear in the BLNR rules are not based upon statute and, therefore, do not apply to other agencies.”

Curtis, of Life of the Land, said his organization is thrilled with the court’s decision, and looks forward to participating in a process “where there can be a thorough analysis of the greenhouse gas implications for biomass generation facilities.”

Status

On February 12, HELCO informed the PUC that “Hu Honua anticipates being ready for interconnection acceptance testing on or about March/April 2019.” However, wrote Brendan Bailey, the utility’s legal division director, the amended PPA “is not effective unless the PUC’s approval [of it] is final and non-appealable (Final Approval Requirement).”

Still, he continued, Hu Honua wanted to know whether HELCO might waive the Final Approval Requirement “so that the project may be placed into service so that Hawai‘i Electric Light can begin making payments to Hu Honua.”

HELCO, Bailey said, “is not amenable to Hu Honua’s proposal,” given the possibility “that the matter could be remanded back to the commission.”

Well Concerns

Recently, the Hawai‘i County Department of Water Supply weighed in on Hu Honua’s proposal to pump 21.6 million gallons a day of freshwater and reinject the water, along with certain chemicals, back into the ground after it had been used in the power plant.

Keith Okamoto, chief engineer for the DWS, informed the state Department of Health’s Safe Drinking Water Branch on March 12 March that his agency had concerns about the permits that would allow the company to proceed with its plan, given the wells’ proximity to the county’s potable groundwater wells.

DWS asked that the DOH require Hu Honua to develop groundwater modeling that would show potential impacts to the county wells; make a determination that Hu Honua’s pumping and injection processes would have no adverse impacts on those wells; and that it require the company to develop a monitoring plan for “tracking water level and detecting select contaminants at DWS’ nearby sources.”

According to the DWS’s Lawrence Beck, as of mid-May, the Department of Health had not responded.

However, about a month after the DWS letter went out, Hu Honua requested that the Department of Health allow the company to increase the depth of the three injection wells it will need to dispose of the process water, going from the currently permitted 400-foot depth to 800 feet.

The request followed testing of the first well drilled to a depth of 400 feet, which showed a capacity of just 2,950 gallons per minute (gpm). “The [Hu Honua plant] requires the combined capacity of its three disposal well be 15,000 gpm. … Clearly, far greater capacity than can be provided at 400-foot well depths and gravity delivery is required.”

A source at the Department of Health said that Hu Honua was to publish a legal notice of the request to deepen the wells in the Hilo newspaper, the Hawai‘i Tribune- Herald, on May 13. As of press time, notice had still not been published.

As to the sources of that process water, Hu Honua is using three wells drilled in the early 1970s by Pepe‘ekeo Sugar and has applied for a fourth well. It also is seeking to deepen the existing wells to about 1,000 feet below sea level, to reach cooler salt water. Total combined capacity of the four wells comes to around 32 million gallons a day, according to staff with the state Commission on Water Resource Management.

Clean Water Act Violations

In November, the Department of Health sent investigators to the plant site to check out reports that the plant had discharged industrial wastewater to the ocean on the morning of November 9.

On November 30, the DOH issued a press release stating that it was pursuing “an enforcement action” against Hu Honua as a result.

The press release quoted DOH director Bruce Anderson as saying, “The discharge was a blatant disrespect of the environmental laws that govern this highly regulated industry. The history of concern over the operations of this facility emphasize the need for the Department of Health to take swift action on this violation.”

On December 19, the DOH announced its investigation had determined that the plant had discharged between 3,500 and 32,500 gallons of treated industrial wastewater. The discharge included acidic metal cleaning solution and residue from descaling of the boiler. “While the dark green colored wastewater had been filtered and neutralized prior to discharge,” the DOH press release stated, “it contained high levels of iron and is a regulated waste.”

The notice of violation and order that was issued to Hu Honua required the plant to implement environmental compliance training for its employees within 30 days, develop standard operating procedures to prevent similar dis- charges, and pay a $25,000 penalty to the DOH. Also, the department issued a request for information to the company, requiring it to provide timely responses to the department’s questions.

According to DOH spokesperson Janice Okubo, Hu Honua requested a contested case hearing and the department is in the process of scheduling it. She added that because the case is pending, Hu Honua has not paid the ordered penalty.

Meanwhile, in Circuit Court

A complaint that Hilo resident Claudia Rohr filed last fall against Hu Honua as well as state and county agencies is set for a hearing in 3rd Circuit Court in early June.

Rohr maintains that the County of Hawai‘i Planning Department and the Windward Planning Commission should have required Hu Honua to comply with the state’s environmental disclosure law, Chapter 343, before granting permits allowing work on the plant.

Attorneys for both the county and the state have filed motions to dismiss the lawsuit. Hu Honua has joined in those motions. 

— Patricia Tummons

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