Mina Morita is former chair of the Hawaii State Public Utilities Commision. At her Energy Dynamics blog, she wrote the post Let the Consumer Advocate & PUC Do Their Jobs!
I generally agree with what she writes. Referring to a wave of politicians who want to explore a public utility option instead of the proposed NextEra/HEI merger, she writes:
During this time of transformation a well-functioning electric utility requires insightful leadership, nimble and flexible strategic planning and strong analytical capacity.
That is exactly why a group of community leaders and business persons formed the Hawaii Island Energy Cooperative. When the proposed NextEra/HEI merger was announced late last year, we arranged for a briefing by the KIUC folks. It looked very promising, so we formed a steering committee. At that time, though, there wasn’t a willing seller so we waited to see if there would be an opportunity down the road.
The other day I spoke as part of a League of Women Voters forum. I told the moderator, Pearl Johnson, that we decided to use the Wayne Gretsky strategy. Gretsky said to skate to where the puck is going to be, not where it is. That’s an example of insightful leadership. We decided to prepare a co-op option in case an opportunity arose. If we had waited to start when an opportunity came up, it would have been too late.
The co-op model allows for nimble and flexible strategic planning. I told Pearl Johnson that it isn’t the strongest, largest or smartest that survives, it’s the one that can adapt to change.
A board of directors directs a co-op model. In the case of Kaua‘i’s co-op, nine members sit on the board. The terms are staggered and every year three positions become vacant, which allows the co-op to quickly respond to changes. It is especially important now because declining natural resources require us to be nimble, flexible and strategic, as Mina points out.
What we should consider is which business model will give the next generations tools they need to cope in an uncertain future.
There are many qualified people the board can hire to help with technical analyses.
The HIEC is not opposing the NextEra/HEI merger. What we are doing is positioning ourselves to be a viable option.
The Big Island has a huge advantage in working to achieve 100 percent renewable energy. We already have 40 percent renewables, and HELCO itself projects 92 percent renewables by 2030. It appears that we could probably avoid LNG entirely.
When I visited Iceland several years ago, they showed us an oil-fired plant that had been on standby since the 1970s. We could do that, too. I don’t see many opportunity costs foregone. If we change nothing at all, the co-op model would still have the advantage of some tax savings.
If we are successful in acquiring HELCO, we will need legislators to work with us to make legislation that will encourage the usage of “curtailed” (thrown away) power.
As we move toward the future of 100 percent renewable energy, we must remember that this is about all of us, not just a few of us. The co-op has an incentive to lower costs.
So yes, we do agree with Mina. We’re waiting.
Richard would you explain to me where the large amount of capital is going to come from for this total or partial buy out,,, and than what the sources will be and than; what size and sources for future operating build outs…
Ken Yeo liked this on Facebook.
Chester Lowrey liked this on Facebook.
Veronica Ohara liked this on Facebook.
Peter H. M. Lee liked this on Facebook.
John Wehrheim liked this on Facebook.
Coops have access to some of the cheapest debt capital on the planet, thru usda Rus (rural utility service), and other funds specifically for them by national coop associations. Operating funds will come from the same source a for profit uses (fees for utility service) except without a profit margin.
Robin. Everyone knows that you know what you are talking about. Mahalo.
L Don, that was the first issue that we had to come to grips with. We needed to raise money to form the co op, hire lawyers to enter the docket, do out reach so we are in the game. We did that. We need to put together a credible plan that the PUC would find acceptable if it decides that we are in the game. We have made the arrangements necessary to get this done if we are determined to be in the game. There are 900 co ops in the nation. The association of co ops owns its own bank, which is itself a non profit whose sole purpose is to finance their members. They have $26 billion in loans outstanding. The USDA rural redevelopment program gives low interest loans for the portions of the Big Island that qualifies as rural–38% qualifies as rural. Co ops generally have better financing than Investor Owned Utiilities. Thats all I can share now. But, I would not be in this if I wasn’t confident that we can actually do this. I think you would be surprised who the local contributors are, its a mix of small and large contributors.
Joni Kamiya-Rose liked this on Facebook.
Greg Whiting liked this on Facebook.
Bruce Wacker liked this on Facebook.
L Don Machado, that was the first issue that we had to come to grips with. We needed to raise money to form the co op, hire lawyers to enter the docket and do out reach so we are in the game. We did that. We need to put together a credible plan that the PUC would find acceptable if it decides that we are in the game. We have made the arrangements necessary to get this done- if we are determined to be in the game. There are 900 co ops in the nation. The association of co ops owns its own bank, which is itself a non profit whose sole purpose is to finance its members. They have $26 billion in loans outstanding. The USDA rural redevelopment program gives low interest loans for the portions of the Big Island that qualifies as rural–38% qualifies as rural. Co ops generally have better financing than Investor Owned Utiilities. Thats all I can share now. But, I would not be in this if I wasn’t confident that we can actually do this. I think you would be surprised who the local contributors are, its a mix of small and large contributors.
Thanks… you have answered my questions…
Kia Almeida liked this on Facebook.
Judi Steinman liked this on Facebook.
Exciting opportunity of liberation! The best aspect is that hawaii island rate payers become the owners in a very real sense, annual coop meeting instead of a shareholder meeting somewhere on the mainland or Honolulu, with a board of directors consisting of rate payer/members that aren’t looking to increase profits, but to contain costs. Totally worth exploring!
Sandra Shimazu liked this on Facebook.
John Hardin liked this on Facebook.