(BIVN) – The Hawaii Public Utilities Commission has given its approval for an amended power purchase agreement between Hu Honua Bioenergy LLC and the Hawaii Electric Light Company.

HELCO president Jay Ignacio talked about the PUC decision on Monday, first addressing whether or not any cost increases will have to be resolved in a rate case before the PUC.

IGNACIO: This is not going to require a proceeding like what we call a rate case. The Public Utilities Commission, in part of their order, they said that the utility could recover the cost of the contract. And we have mechanisms that we use today. It’s called energy cost adjustment and power purchase cost adjustments, that we can actually adjust the bills monthly for the energy that we pay independent power producers. So we already have those mechanism in place.

Ignacio also talked about how HELCO’s previous plans to purchase the Hamakua Energy Partners facility in Honoka’a related to the Hu Honua PPA docket.

IGNACIO: The utility had proposed a purchase of the Hamakua Energy Partners facility. About two months ago now, the Public Utilities Commission denied that request, for the utility to purchase (HEP). But part of that proceeding, what what we did was, we got signals from the Commission saying that the contract expires in year 2030. It appears that the Commission desires not to have that contract extend beyond year 2030 because it’s a fossil fuel power plant.

The commission has a desire – the whole state has a desire – to go to renewable. So when we did the analysis for the Hu Honua biomass power plant, we changed the original analysis. We took Hamakua Energy Partners out of the analysis after year 2030. So when we filed it originally with Hamakua Energy Partners in, it showed that it didn’t have a cost benefit. After we took out Hamakua Energy Partners, which is the lowest cost option, it raised everything so Hu Honua became attractive. tTere was a net benefit. So, what the analysis showed was up till year 2030, you actually have higher bills with the addition of Hu Honua – and then after 2030, you would have lower bills to the the contract. And the net result is net lower cost to customers. That’s what our analysis showed.

In its Findings and Conclusions, the PUC said it found the pricing of the HELCO-Hu Honua PPA to be reasonable. It added that its decision “to approve the A&R PPA is not based solely on pricing, but includes other factors such as the State’s need to limit its dependence on fossil fuels and mitigate against volatility in oil pricing.”

Hu Honua responded to the approval in a weekend news letter:

We are beyond excited to receive this news. Now we can move forward with construction ramp up and hire island workers to complete the partially built biomass-to-energy facility.

Mahalo to all who submitted testimony to the PUC in support of this project, which will power Hawai‘i Island homes with firm, renewable power, revitalize East Hawai‘i’s agricultural and forestry industries, create hundreds of employment opportunities, and reduce electric bills.