Response to HuHonua's Claims

DISCUSSION POINTS

SMA Permit 221 Use Restrictions

1. Today, coal as a fuel is inconsistent with county, state, Helco plans for encouraging renewable fuels and decreasing our dependence on imported fuels.
2. Coal pollution (particulate matter, gases, including mercury) from burning coal drifts with our trade winds over Hilo, created a health issue for Hilo and the Hamakua coast residents.
3. A traffic restriction was not included in this permit, yet is a requirement in the current SMA Permit Application process.
4. Procedure to notify affected individuals and lessees is 400 feet from the boundary; a practice that assumes an innocuous use of the land. This procedure creates disharmony between the affected residents and the county.

CONCLUSION: The permit was the right decision in 1985 and 1995 when sugar was an industry, land was under cultivation and the county needed electricity, but it does not solve any of today’s problems for Helco and degrades the lifestyle for citizens living nearby.


Industrial zone issues

1. Public planning must consider the potential cumulative impact of individual developments, each of which taken in itself, might not have a substantial adverse ecological impact. Now, 25 years later, the zoning is inconsistent with the actual land uses.
2. The decision to zone this industrial did not consider longer term issues which have since occurred, e.g. elimination of sugar cane industry, division of adjacent land into smaller parcels, construction of single family residences on those lots, more electrical capacity from other power plants, job shifts to west Hawaii, etc.
3. Current zoning conflicts with the actual land use, today’s population density, and past representations made to land purchasers.
4. Continental Pacific, developer of the area surrounding the plant, petitioned the county in 2003 for a change to the industrial zoning in order “to eliminate the potential for incompatible uses.” It was denied.
5. Allowed noise levels are harmful to nearby families occupying residential zoned lots, and injurious to others living on adjacent small farms. The original applicant’s request (Continental Pacific LLC) claimed that “the proposed limited industrial zoned lot will be located a significant distance from the urban/residential area… and is adequate to mitigate any possible visual or noise impacts within the area.” In fact, residents both mauka of the highway and residents within the area were disturbed by the plant noises.
6. Air quality was significantly degraded during the plant’s operation causing soot to settle on houses both makai and mauka of the plant, unlike the representation made by the developer that “the plant is not a large source of pollutant and would not contribute to air pollution within the vicinity of the project area.”
7. During the county’s deliberation of Continental Pacific’s applications in 2003, there were “no written comments or objections from the general public or adjacent landowners”. This is not the situation today, as the issue resonates with hundreds of residents who signed our petition in 2005 and are signing one this year.
8. Suggest benign activities such as: plant nurseries, agricultural tool repair business, manufacture low-cost passive solar hot water heaters, research facility for wave energy, or tourist hotel or bed & breakfast.

CONCLUSION: The zoning made sense in 1985 when sugar was a viable industry, but it is inconsistent and inappropriate for the current land uses.



HELCO

1. Helco signed a 5-year contract for electricity, ending 12/31/2004, timed to coincide with new capacity coming online. Helco did not renew the power purchase agreement with the independent operator, and viewed the contract as an interim situation only.
2. In 1995 the Planning Commission had a different view of the need for a power plant at this location, but that is not true today.
3. The future need for electricity is in Puna and West Hawaii.
4. Locating power plants close to the source of demand is optimal because less power is lost during short transmission distances. The Pepeekeo site wastes more of its transmitted electricity because of its distance to Puna and west Hawaii, thus is not an optimal business decision.
5. Helco says that its oil powered plants use fuel oil that is leftover after refining other petroleum products such as gasoline. So generating electricity from non-oil sources will not eliminate the need to import oil to Hawaii.

CONCLUSION: Helco’s plans for our island’s growth do not include this location, its equipment or its coal or biomass fuel.


Equipment at Hilo Coast Power Plant

1. Major equipment is 35 years old (Babcock & Wilcox Boiler & 836 KW Diesel Generator – serial BW23523) .
2. The equipment limits the efficiency of the proposed operation to producing steam.
3. With a significantly higher investment in newer equipment, a gasification biomass plant could generate comparable level of electricity with 1/3 the biomass fuel, thus conserving the same resources to last 3 times longer.

CONCLUSION: The existing structure and its equipment are an artifact from our island’s history. The fact of the location’s current zoning, SMA use permit, and equipment simply make this an opportunity for a quick profit for mainland investors, and not a long-term investment in Hawaii county.


Biomass as Fuel

1. We understand that 15,000 acres are already under contract for a modern 30MW plant in Honokaa.
2. We believe that there is no other source of biomass on the island that would power a 24 MW plant in Pepeekeo at the rate of 225,000 tons of biomass per year.
3. It takes 8 years to grow a eucalyptus tree to harvest stage, and we believe there are insufficient acres under production to sustain a second biomass plant, especially one as inefficient as a steam boiler type.
4. Should our farm land be turned into biomass production, this will impact our island’s food supply and create a vulnerability/security issue.
5. Other states have had operational problems with biomass plants. Lack of fuel supplies, citizen opposition, missed deadlines, higher costs, etc.

CONCLUSION: Biomass is not an immediately renewable fuel on our island, especially when considering tree waste.



Traffic

1. Although traffic considerations were not a significant issue in the original permit, we believe this will be a major issue; given the representation made about the number of trucks per day, see below.
2. Private roads connect the plant to the highway and to the public shoreline trails and the cost of road maintenance is shared among 3 subdivisions (105 lot owners). They believe the cost to maintain the roads should be shared by the county due to the volume of public traffic accessing the trails.


Permit Holder, Ethanol Research Hawaii, LLC

1. Not Local Investors: also known as Hu Honua LLC (Dan KenKnight, Manager), MMA Renewable Ventures of Oahu a subsidiary of MuniMae (Municipal Mortgage & Equity LLC), publicly traded mainland firm focused on trading in energy tax credits. As a publicly traded firm financing this venture, profits will go to the parent company located on the mainland and not reinvested here on our island.
2. Lawsuits filed in Jan 2008 against parent company MuniMae threaten its planned investment in HuHonua: Stock price has dropped from $9.19 to $2.05 per share in the past 9 months and dividends have been suspended.
3. Track Record on Oahu: Oahu Ethanol planned in 2004 to begin ethanol production in the second quarter of 2006, but that was delayed until the first quarter of 2007. As of mid-2008 there is no operating plant.
4. Mr. KenKnight promised the public in 2004 that he would build an ethanol plant in 4 years ago, revised the completion date to 2007, yet is not completed in mid-2008. We believe he will not build a plant because it is less expensive to import ethanol from South America.
5. Economic Viability: their business model invests as little as possible on our island, refurbishes the existing old equipment, passing tax credits to mainland investors, and promises jobs and community facilities to Pepeekeo residents.
6. Unrealistic Goal: MECO buys 12 MW electricity (saving 44,700 barrels oil/year) from HC&S PUUNENE SUGAR MILL in Maui. The Pepeekeo plant can generate 24 MW of electricity and HuHonua says they will save 225,000 bbl oil per year. They have not explained how it is possible that a plant which is two times the size of Maui plant, can save nearly 5 times the number of barrels per year.
7. Impossible Goal: By converting Btu’s produced by a 24 MW plant, only 124,000 bbl per year can be saved.
8. Insignificant Impact: Assuming that 124,000 bbl could be saved, the impact only represents 0.16% of our state’s oil consumption (56 million bbl per year statewide).


Site Assessment
EIS

1. The prior operator submitted plans to cease operations and was obligated to make certain modifications to the land.
2. Has an inspection been done to certify the condition of the area since the closure of the plant in 2004? Has a full EIS ever been done on this property?
3. Who is responsible?
4. Has any documentation been drafted concerning the current condition of the area?


Air Permit, Solid Waste Permit

1. The community organized an effort in 2005 -2006 to defeat the re-opening of the plant, meeting with Mayor Harry Kim, Warren Lee, President of Helco, and petitioning the DOH.
2. The State Department of Health denied a permit to Pacific Rim Energy Partners in 2006.
3. We are pursuing a similar organized effort against the current group seeking any permits or permit modifications to use this location.


Unintended Consequences

1. What are the implications of the water and fertilizer needed to grow biomass instead of food and forage crops?
2. What will be the impact on agriculture should invasive plant and insect species spread from the trucking activity?

Recommendations

1. Repeal SMA permit #221.
2. Re-zone the area.
3. Restrict noise levels to residential for daytime and nights.
4. County take ownership of the roads to the plant and to the shoreline access points.
5. Enhance the shoreline trails with picnic tables, public restrooms, trash cans, and safety barriers. This is a beautiful area which more people should enjoy and the county has a responsibility to make the access
safe and without placing an unnecessary burden on the property owners to maintain.