In re application of Hawai‘i Electric Light Co.

This case concerned the Public Utilities Commission’s (the Commission) denial of a proposed Power Purchase Agreement (PPA) between an energy company, Hu Honua, and the Hawai’i Electric Light Company, Inc. The PPA proposed the development of a biomass power plant, where Hu Honua would burn biomass—mainly locally grown eucalyptus trees—to create energy, and the Hawai’i Electric Light Company would purchase that energy. Over 30 years, the power plant was estimated to emit approximately 8,000,000 metric tons of CO2. 

The Commission was responsible for determining whether to approve the PPA, guided by the criteria outlined in the state statute defining the right to a healthy environment (R2HE) and the assessment of energy projects. The Commission held hearings and issued a series of decisions starting in 2017, first deciding in favor of the PPA. However, in 2019, the Hawai’i Supreme Court overturned the Commission’s decision and ordered a new hearing. This time, the Commission was to “meaningfully address the impacts” of approving the PPA on the community’s R2HE.  

The Commission complied and engaged in a “public interest-minded balancing” test, considering factors including greenhouse gas emissions, consumer price spikes as well as hidden and long-term consequences. It ultimately rejected the PPA following a contested hearing in 2022. Hu Honua appealed the Commission’s decision to the Hawai’i Supreme Court, claiming that the Commission should not have (1) considered prices; (2) compared Hu Honua’s project to other fossil fuel projects; and (3) violated Hu Honua’s due process rights.  

In a unanimous decision, the Hawai’i Supreme Court decisively dismissed Hu Honua’s arguments and upheld the Commission’s decision. First, the Court rejected Hu Honua’s assertion that according to HRS § 269-6, the Commission’s “public interest-minded balancing” test could not consider the project’s pricing relative to its greenhouse gas emissions. The Court refuted the argument that the test was constrained to comparing Hu Honua’s renewable energy project only to fossil fuel-based alternatives. Second, the Court rejected Hu Honua’s contention that the Commission violated its due process rights. The Court determined that the Commission met its state constitutional duty to safeguard the right to a healthy environment (R2HE) by conducting fact-finding and evaluating the information presented by Hu Honua, which it was entitled to find unpersuasive. 

Moreover, the majority clarified that the Commission did not adopt a new ‘carbon neutrality’ standard, which it could have done. Because the constitutional R2HE subsumed the “right to a life-sustaining climate system,” the Court explained, the Commission was under a constitutional duty to evaluate the proposed PPA in light of the increasingly pressing risks posed by climate change. It did so properly. 

The majority clarified that the Commission did not institute a new ‘carbon neutrality’ standard, which it had the authority to do. The Court explained that since the constitutional R2HE encompasses the “right to a life-sustaining climate system,” the Commission was constitutionally obligated to assess the proposed PPA, considering the growing risk that climate change poses. The Commission fulfilled this obligation properly.

Using an established domestic body of law

Much of the plaintiff’s argument rested on its interpretation of HRS § 269-6(b), the primary statute governing the Commission’s evaluation of energy projects. The plaintiff specifically contended that the language of HRS § 269-6(b) and its 2021 revision limited the Commission’s ability to conduct a “public interest-minded balancing” test when assessing whether to approve a project. According to the plaintiff, the Commission was prohibited from considering project prices and could only compare proposed renewable energy projects, such as the one in question, against fossil fuel projects. Nor could the Commission analyze how a renewable energy project might displace other forms of renewable energy. Based on this interpretation, the plaintiff argued that the Commission acted improperly by comparing the plaintiff’s project to non-fossil fuel projects and evaluating its displacement of other energy sources.

The Court disagreed with the plaintiff’s argument. It also cited established Hawaiian environmental law and the legislature’s original intent behind HRS § 269-6(b) to assert that the plaintiff’s interpretation of the statute would lead to a “blinkered approach.” The Court also highlighted the Commission’s firmly established “duty to act in the public interest” and concluded that, during its analysis, the Commission “understood its public interest-minded mission.”

Similarly, the Court emphasized Article XI, Section 9 of the Hawai’i Constitution (1978): “Each person has the right to a clean and healthful environment.” Notably, the Court directly linked Hawai’i’s constitutional R2HE with HRS § 269-6(b), explaining that HRS § 269 delineated the necessary measures to protect R2HE. In other words, by invoking the State’s constitutional duty to protect R2HE, the Court found that HRS § 269-6(b) could not logically limit the Commission’s analysis. Accepting such an interpretation of HRS § 269 would imply that the Commission would render it impossible to “perform its statutory function in a manner that fulfills the State’s affirmative constitutional obligations.”

Expansive reading of the scope and content of R2HE

The Court’s definition of R2HE as encompassing “the right to a life-sustaining climate system” carries substantial implications. This groundbreaking recognition is the first instance in the United States where a court has acknowledged such a right, setting a precedent for future cases to utilize R2HE as a pivotal tool in combating the climate crisis.

In this case, affirming the Commission’s responsibility to safeguard a life-sustaining climate system regarding R2HE bolstered the Court’s interpretation of HRS § 269-6(b). Furthermore, the plaintiff’s suggested narrow reading of the statute, which would confine the Commission to comparing renewable energy projects solely with fossil fuel projects, would contradict the Commission’s duty to safeguard the climate system; “drawing a hard line between fossil fuel and renewable energy, […] elides a crucial fact — producing biofuel, unlike producing other kinds of renewable energy such as solar or wind, emits high quantities of [greenhouse gas (GHG)] emissions.” Therefore, the Court reasoned, “commanding a public agency charged with protecting the right to a life-sustaining climate system to disregard GHG emissions from a particular type of fuel source would undermine HRS Chapter 269.” As a result, the Commission would invariably violate its statutory and constitutional duties.

The Commission’s duty to protect a life-sustaining climate system also allowed the Court to inform the interpretation of HRS § 269-6(b) with climate-related laws that articulate the State’s commitment to ambitious and urgent climate policies. Specifically, the Court highlighted the relevance of HRS § 225P-5, which “sets a state policy of achieving carbon neutrality ‘as quickly as practicable, but no later than 2045.’” The Court asserted that the plaintiff’s limited interpretation of HRS § 269-6(b) did not align with the legislature’s urgency on climate, as evidenced in HRS § 225P-5. 

Notably, the Court did not stop there and clarified that “the right to a life-sustaining climate system is not just affirmative; it is constantly evolving.” The Court referenced the declaration of a climate emergency by the people of Hawai’i and highlighted the diminishing opportunities to mitigate the impacts of climate change. In light of the rapidly compounding climate change, the Court reasoned that for the Commission to fulfill its constitutional duties, it was obligated to adapt its analysis compared to when it initially approved Ho Honua’s project. “Yesterday’s good enough has become today’s unacceptable,” it emphasized.

Going even further, Justice Michael Wilson emphasized in the concurrence that the right to a life-sustaining climate system was also included in the due process right to “life, liberty, [and] property” enumerated in the Hawai’i Constitution, and mandated the State of Hawai’i “conserve and protect Hawai’i’s […] natural resources […] for the benefit of present and future generations.” As a life-sustaining and stable climate is “the foundation upon which society and civilization exist,” Justice Wilson held that preventing greenhouse gas emissions was fundamental to continuing the rule of law – a new concept that the Justice coined “climate rule of law.” Given the threats of climate change, the right to a stable environment was fundamental to Hawai’i’s other constitutional guarantees. On this basis, Justice Wilson held that the right to a life-sustaining climate system is “deserving of fundamental status as essential to our scheme of ordered liberty because it is preservative of all rights.”

Focusing on youth

While neither party focused on youth, the Court’s analysis of the State’s duty, vis-à-vis R2HE, to fulfill a life-sustaining climate system brought the temporal aspect of climate change to the forefront. In addition to underscoring the cumulative effects of climate change and the need for prompt climate action, as described above, the court stressed the importance of “reduc[ing] emissions now, before the damage done to the environment is irreversible — before action becomes impossible for future generations.”

Emphasizing the State’s duty to regulate or its failure to observe its due diligence obligations

Throughout the opinion, the Court underscored the Public Utilities Commission’s responsibility to fulfill its constitutional and statutory obligations by conducting its “public interest-minded balancing” test. Contrary to the plaintiff’s contention, the Court held that, in applying the test, the Commission “acted appropriately within its role as a fact-finder when it assessed Hu Honua based on its statements and promises and ultimately found them unconvincing.” The Court concluded that the Commission had not fabricated new facts or embraced a novel ‘carbon neutrality’ standard, even though it had the potential to do so. The plaintiff’s argument alleging a violation of due process rights was therefore deemed void.

Methods for ensuring baseline protections

The Court primarily evaluated the appropriateness of the Commission’s actions by verifying its thorough consideration of each factor – ranging from greenhouse gas emissions to price volatility – encompassed in the “public interest-minded balancing” test, as mandated by HRS § 269-6. The Court concluded that the Commission was able to properly fulfill its R2HE duties through the proper application of this standard. 

The Court also highlighted standards that could not serve as a means to achieve baseline environmental protection. It clarified that “good faith is not a sufficient metric” for environmental protection. Therefore, it concluded that the Commission properly rejected the plaintiff’s argument that its non-binding “good faith” lease negotiations with “reputable sources.” A crucial aspect of the project’s carbon sequestration and its classification as “renewable” relied on offsetting its emissions through tree planting.

Shifting the presumption proving adequacy of actions

While the Court did not change the presumption of evidence in its proceedings, it affirmed that the burden of proof in the Commission’s proceedings was on the plaintiff. Therefore, the plaintiff’s complaints regarding the Commission’s lack of conviction in its expert testimony and failure to present its own expert were unfounded. The Court clarified, “Hu Honua misunderstands its evidentiary burden; it had to persuade the [Commission], not the other way around.”

This case illustrates how courts can wield R2HE to support governmental entities, in this case a state agency, in their pursuit of enacting and enforcing environmentally sound laws and policies. This case exemplifies that R2HE can provide a basis for justifying such policies, even in the face of potential impacts on corporate profits. 

The case is also a rare example of a United States court taking a bold stance on a state’s constitutional obligations on climate change through R2HE. This decision is in stark contrast to decisions at the federal level in the United States, such as the Supreme Court’s decision in West Virginia v. EPA (2022).