Hawaii Electric proposes 5.2 percent rate hike for biodiesel-powered plant

In Hawaii, the Hawaiian Electric Company (HECO) has requested  the Hawaii Public Utilities Commission to approve a 5.2 percent rate increase that would finance the construction of its proposed biodiesel plant. The rate increase would realize $97 million for plant construction.

Meanwhile, BizJournals.com is reporting that an unnamed environmental group has requested the Hawaii PUC to deny HECO’s request to approve a mainland-based biodiesel purchase contract. HECO was forced to look outside of Hawaii after Imperium Renewables pulled out of a plan to construct a biodiesel plant in Hawaii.

Hawaii background

• HR Biopetroleum announced that it will build a microalgae production facility adjacent to the Maui Electric plant in Maalaea, and will use 10 percent of the Maui Electric plant’s CO2 emissions as feedstock. The CO2 will be delivered by pipe from the Maalaea pipe, and the plant will produce up to 3 Mgy of algae oil based on a projected 750-acre algae farm producing 5,000 acres per gallon.

The company said that it expected that it would take up to three years to obtain permits for the operation, which would be profitable in the first year of production according to HR Petroleum execs. Last year, the company announced a six-acre demonstration project on the Big Island in cooperation with Shell and the Natural Energy Laboratory of Hawaii in Kona.

• Researchers at the University of Hawaii have developed a process that will produce fish or livestock feed from vinasse, a byproduct of sugarcane ethanol production. Vinasse is produced as a by product of the fermentation process, and researchers hope to shortly test the new feed. Hawaiian Commercial and Sugar awaits the results of the test to determine its entry into the sugarcane ethanol business.  The feed would compete with imported fishmeal.

• Governor Linda Lingle signed legislation that expands the definition of “renewable energy producer” to include feedstock growers.  Previously, leasing rights to public land were reserved to biofuel producers, although producers typically needed commercial and industrial sites and feedstock growers use public lands to grow biomass. The legislation will facilitate more effective use of land, where previously producers were incentivized to site their plants on agri-friendly public lands in order to secure the leases for cultivation of feedstock.

• Shell and HR Biopetroleum have been constructing an algae-oil production facility to produce feedstocks for biodiesel. The two companies created a joint venture, called Cellana, to construct a pilot plant in Hawaii, but the production capacity and location was not disclosed.

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