Hawaii Tribune-Herald, August 8, 2008

Power facility: No coal
by Jason Armstrong
Tribune-Herald Staff Writer
Published: Friday, August 8, 2008 11:11 AM HST
Casual survey finds most support Hu Honua proposal
Plans to reopen the Pepeekeo power plant no longer include using coal as a backup fuel to wood and other biomass, Hu Honua Bioenergy LLC officials said Wednesday.

The company is responding to area residents' opposition to coal burning, said Tim Lasocki, Hu Honua executive vice president.

Other temporary substitutes for biomass will be explored, he said, adding that garbage incineration won't occur at the plant.

Hilo Coast Power Co. had been using coal before the facility closed at the end of 2004, when its contract with Hawaii Electric Light Co. expired. Before coal, bagasse from crushed sugar cane stock fueled the plant.

"We're trying to do with the plant what was historically done," Lasocki said. "That's basically our mission: Return the plant to its original use using wood chips."

Hu Honua, a partnership of MMA Renewable Ventures LLC and Ethanol Research Hawaii, bought the plant and obtained a 35-year lease-purchase option on 26 acres surrounding it, company Director Dan KenKnight said.

Company officials are in discussions with HELCO, and hope to achieve a price that's "significantly below" HELCO's cost to produce power by burning oil, said Rick McQuain, Ho Honua's vice president of power sales.

"This is our first biomass investment," said Lasocki, who serves as MMA's vice president of business development.

MMA, which would finance, operate and serve as majority owner of the power plant, was the nation's No. 1 installer of photovoltaic plants last year, he said.

The company built and runs a $100-plus million, 14-megawatt solar-photovoltaic plant that powers a U.S. Air Force base in Nevada, Lasocki said, adding that is the largest such system in North America.

In the years since the Pepeekeo plant was closed, the surrounding farm land has sprouted luxury homes. This land-use change has attracted new residents not accustomed to having a smokestack as a neighbor.

As a "good-faith gesture" to win community approval, Hu Honua is seeking to amend its operating permit to prohibit the use of coal, Lasocki said.

That change, if granted by government regulators, will make it difficult for any future operator of the Pepeekeo plant to ever burn coal again, he said.

Other efforts to win over the community include reducing plant noise and ending emissions that fouled water catchment tanks and caused other damage, KenKnight said.

"We can say unequivocally that will not happen," he said of previous emission-related damage.

He also offered to provide safe shoreline access to popular Pepeekeo fishing spots.

"We're just going to do what the community wants," KenKnight said.

Those efforts, combined with meetings the company has held with the community, have gained a measure of approval, according to results of an informal survey.

Some 387 Pepeekeo residents out of 392 approached have signed a petition in support of resurrecting the power plant, said Richard Baker, Hawaii Island director of the ILWU labor union, which conducted the unscientific survey finished Tuesday.

Baker said he and other union officials found only two individuals who said they are "not interested" in signing the petition and three others opposed to the project.

The ILWU is backing the project in hopes of creating jobs for its members, some of whom have never fully recovered from the demise of the sugar cane industry nearly 15 years ago.

According to Hu Honua officials, refurbishing the plant would generate 130 to 140 temporary engineering and construction jobs.

Another 25 people would be hired to run the facility, while 110 more jobs would be created in related industries needed to produce and deliver biomass to the plant.

The fuel source would be wood chips expected to come from the island's emerging forestry industry, along with vegetation cleared from forested lots, trees removed to thin forests, and invasive species from eradication efforts, Lasocki said.

"This is untreated wood that we're talking about," he said.

The material is not what Hawaii County uses to make mulch, KenKnight said.

"The stuff we don't want is a lot better for mulch. We want the real hard, woody stuff," he said, adding the biomass plant could "peacefully coexist" with mulch-making efforts.

The plant would require 200,000 tons of "green" biomass annually, which would be delivered on two or three trucks arriving every hour during daylight hours only, Lasocki said.

"Our plan is to run (the plant) full-time, 24-7," he said.

That level of operation, he said, is expected to net 22 megawatts of electricity that Hu Honua would sell to HELCO.

Hilo Coast was supplying that same amount of power to HELCO before it ceased operations.

According to HELCO, one megawatt of electricity is enough to power about 500 Big Island homes.

Ho Honua's operation is expected to cost between $25 million and $40 million. The money would come from long-term loans typically used to finance power plants, Lasocki said.

Its plan is to open the plant by December 2010. "That is our target," Lasocki said.

Is he confident of meeting that goal?

"We wouldn't be sitting here today if we weren't optimistic," Lasocki said Wednesday. "We feel we're offering something of benefit to Hawaii, which makes us optimistic."

E-mail Jason Armstrong at jarmstrong@hawaiitribune--herald.com.