BlueEarth Biofuels LLC has filed a lawsuit against Hawaiian Electric Co. and subsidiary Maui Electric Co., claiming that the isle utilities attempted to force it out of a deal to operate a biodiesel production facility on Maui.

Aloha Petroleum Ltd. and Karl Stahlkopf, HECO's chief technology officer, were also named in the suit, filed in U.S. District Court in the Northern District of Texas last month.

BlueEarth, whose managing members live in Texas and Connecticut, said after BlueEarth introduced Aloha to MECO in March 2008 as a potential operator of a fuel terminal facility, “;HECO and MECO began separate and exclusive negotiations with Aloha for, among other things, the development, investment and ownership in the project,”; the filing states.

The $61 million BlueEarth plant is slated to produce 120 million gallons of biodiesel a year at full capacity with operations starting in 2010.

The filing claims that the utilities and Stahlkopf are now refusing to work with BlueEarth to develop investment or complete the project. The company is seeking damages from the utilities under a breach and interference of contracts as well as damages from Aloha and Stahlkopf.

“;As with any type of legal proceeding it is not appropriate to discuss details, but we hope to resolve it amicably,”; HECO spokesman Darren Pai said.

Aloha Petroleum Chief Executive Officer Richard Parry was out of the office yesterday and unavailable for comment.

The utilities began talks with BlueEarth in March 2006 to jointly develop the biodiesel facility on an exclusive basis, the suit states. The companies signed a non-disclosure agreement in September of that year, followed by an agreement in January 2007 to proceed with the development and funding of the facility on MECO's Waena site on Maui.

BlueEarth said it spent more than $1.2 million and spent “;significant time and other valuable efforts”; to obtain permitting, conduct engineering and secure project investment and analysis. The company also established BlueEarth Maui Biodiesel LLC, of which 50.1 percent is owned by BlueEarth and the remaining 49.9 percent is owned by HECO subsidiary Uluwehiokama Biofuels Corp.

BlueEarth said it also began talks with Aloha for logistical support for incoming feedstock and other raw materials, followed by two non-disclosure and confidentiality agreements in January and July 2008. The lawsuit states that Aloha in May expressed interest to BlueEarth in making a minority investment in the project. The next month, HECO said it was terminating investment talks with the project's potential investor to provide Aloha with a possibility to purchase a majority interest.