By David Corrigan and Stephanie Salazar

PAHALA, Hawaii: In our Ka’u news update: Pacific Business News reports that the Aina Koa Pono biofuel company is planning to go ahead with its refinery and farm in the Pahala area, even thought the Public Utility Commission denied approval of a contract with Hawaiian Electric.

Aina Koa Pono would have supplied HECO with biofuel to be used in its power plants, and caused a hike in electric rates, if it were given the OK.

The PUC said the contract price for the project – which was never disclosed to the public – is “excessive, not cost-effective and, thus, is unreasonable and inconsistent with the public interest.”

Now, Aina Koa Pono is reportedly in negotiations with a publicly traded oil company to buy the entire output of its $350 million, 13,000-acre Big Island project for use in California.