From Pacific West Energy website on 16 October 2009 - http://pacificwestenergy.com/KauaiProject.aspx
Pacific West Energy, through its subsidiary Gay & Robinson Ag-Energy LLC ("Ag-Energy"), is currently developing the first sugarcane-based integrated power and ethanol plant in the United States modeled on similar successful operations in Brazil and Central and South America. Ag-Energy will convert the Gay & Robinson sugar factory on the island of Kaua'i into an energy facility by constructing a new powerplant (approximately 25-megawatts), a 12-million gallon per year ethanol plant, and additional electrical generation facilities based on a variety of sources and technologies, including solar, hydroelectric, biodiesel and municipal solid waste. Hawaiian electricity and ethanol prices are consistently among the highest in the United States. The new power plant will include significantly increased boiler and electricity generator capacity. Near-term profitability is expected to be increased by augmenting the pressure capability of the existing boiler, allowing it to burn fuel more efficiently. Ag-Energy is also considering an additional boiler for which it already holds a permit to generate additional electricity sales during the period before a significantly larger facility comes online. The ethanol plant will be the first to be developed in Hawaii. Ag-Energy intends to serve the in-state market for motor fuel ethanol by constructing multiple plants, utilizing the Hawai'i Ethanol Facility Tax Credit, a strong incentive put in place by the Hawaii State Government to promote the production and use of ethanol. Unlike mainland corn-based ethanol producers, Ag-Energy intends to control a large percentage of its own feedstock for the ethanol plant and a similar large percentage of the fuel for its power plant through the lease of existing sugar cane lands and the expansion into former cane lands on Kaua'i. Cane juice processed from the island’s sugarcane will provide feedstock for the ethanol plant while bagasse, the sugarcane fiber remaining after water and sugar is eliminated in the mill, will provide fuel for the powerplant. Ag-Energy intends to sell the electricity generated under a Power Purchase Agreement (PPA) being negotiated with the Kaua'i Island Utility Cooperative (KIUC). Two State of Hawai'i mandates serve to enhance the market opportunity for Ag-Energy: (1) a mandate for a 10% blend of ethanol into gasoline that has created a local market of approximately 45 million gallons of ethanol per year and (2) the new Hawai'i Renewable Portfolio Standard that requires all utilities to generate at least 20% of their electricity sales from renewable sources by 2020. Production of raw sugar will continue on at least an interim basis. The Company has been funding its development of the Kauai project from existing investors in the Company. The Company is currently in the process of seeking significant third-party investment to fund the next stages of the Kaua'i project, including construction. Commercial Partners
Ag-Energy will lease and acquire the sugar mill and related assets from Gay & Robinson, Inc. ("G&R"). G&R has operated its sugar plantation on Kaua'i for over 100 years. The sugar mill will be leased to Ag-Energy for an initial term expected to be 40 years, with an expected 20-year extension option. The Company's management and directors have extensive experience in developing, owning and operating sugar plantations and ethanol production facilities. ED&F, the world’s largest trader of sugar and molasses and one of the largest traders of ethanol, is also a strategic partner of Pacific West Energy and the Kaua'i project. The Company has also developed a number of additional strategic partnerships to enhance the Kaua'i project.