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HU HONUA SUES HAWAIIAN ELECTRIC INDUSTRIES OVER CONTINUED MONOPOLY BEHAVIOR

Hawaiian Electric’s Chronic Monopoly Behavior Has Contributed to Wildfire Risks,
Nation-High Electricity Rates, an Unreliable Electric Grid, and Prevention of
Firm Renewable Energy for Hawaii’s Ratepayers.

Read Full Press Release

Hu Honua Bioenergy, LLC (“Hu Honua”) on November 16, 2023 filed a motion seeking
leave to update its antitrust charges in its litigation against Hawaiian
Electric Industries, Inc., and related companies (collectively referred to as
“HECO” within the updated complaint) in federal court.   

Hu Honua’s updated complaint, which streamlines Hu Honua’s allegations and
accounts for new facts uncovered since the litigation was filed, asserts that
HECO has a near-total monopoly over the wholesale firm power generation market
on Hawaii Island and has abused that monopoly by excluding independent power
operators like Hu Honua, which are designed to promote competition by
diversifying the island’s energy mix.

According to Hu Honua’s updated complaint, HECO’s anticompetitive conduct has
caused direct harm not only to Hu Honua, but also to Hawaii Island residents:

 * HECO’s status as a monopolist and monopsonist has enabled it to avoid
   adequate investment in its outdated fossil fuel plants, leading to an
   unreliable grid, including power interruptions and blackouts, as well as
   highest-in-the-nation energy prices for Hawaii Island residents—nearly three
   times the national average.
 * Further, HECO’s anticompetitive behavior has prolonged Hawaii’s continued and
   overwhelming reliance on imported crude oil, putting the State’s statutory
   commitment to 100% renewable energy by 2045 in jeopardy.
 * Finally, HECO’s status as monopolist and monopsonist has enabled it to
   underinvest in proper safety and wildfire prevention efforts, as well as
   block competition from those who aim to address these risks. The feedstock
   for Hu Honua’s biomass power plant was to include, among other things, woody
   invasive plant species on Hawaii Island, which would have mitigated
   well-documented wildfire risks presented by such overgrowth.

Hu Honua asks the U.S. District Court sitting in Honolulu to allow the case to
move ahead based on the updated complaint.  Hu Honua seeks an end to all
monopolistic conduct and also requests that the Court award it over $1 billion
in antitrust damages and order HECO to transfer its Hamakua power plant to an
independent owner to restore competition for the benefit of the public.


TO DATE IN THE LITIGATION:

 * In May 2017, Hu Honua conditionally settled its claims against HECO and
   entered into an amended and restated power purchase agreement (“amended PPA”)
   with HECO.
 * This conditional settlement was entered into on the heels of the Hawaii
   Public Utilities Commission (“PUC”) denying HECO’s application to acquire the
   Hamakua plant, HECO’s largest rival. 
 * Unbeknownst to Hu Honua, however, HECO intended to acquire the Hamakua plant
   despite the PUC’s rejection.
 * The parties conditioned the settlement on approval by the PUC of the amended
   PPA.  The lawsuit was paused by the Court while the parties sought approval
   from the PUC. 
 * The PUC initially approved the amended PPA in July 2017.
 * In November 2017, HECO bypassed the PUC and purchased the Hamakua plant
   through newly-formed subsidiaries.
 * In May 2019, at the behest of a third-party challenger, the Hawaii Supreme
   Court ordered the PUC to reconsider its approval of the amended PPA.
 * On remand, the PUC rejected the amended PPA, and the Hawaii Supreme Court
   affirmed.  Hu Honua’s updated complaint alleges that HECO took steps to
   frustrate approval of the amended PPA before the PUC and Supreme Court.
 * On November 16, 2023, Hu Honua filed a motion seeking leave to file an
   amended and supplemental complaint, which streamlines and updates the prior
   complaint, and adds the three subsidiaries of HECO involved in the purchase
   of the Hamakua plant: Pacific Current, LLC; Hamakua Holdings, LLC; and
   Hamakua Energy, LLC. 
 * In December 2023, HECO awarded a new firm power purchasing contract to the
   Hamakua plant, and rejected Hu Honua and all other firm power bidders.  




HAWAIIAN ELECTRIC WATCH

HECO’s anticompetitive conduct has not only harmed Hawaii Island residents, but
has also caused Hu Honua severe financial harm.  Among other relief, Hu Honua’s
updated complaint seeks at least 30 years of lost profits—over $1 billion in
antitrust damages after trebling.

Read Full Press Release




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