Category Archives: Hawaii Island Energy Cooperative

Making Life Better, Part 3: Why These Big Island Issues?

I want to talk about why I’m involved in all these different Big Island issues: Geothermal. The Thirty Meter Telescope. The Hawaii Island Energy Cooperative.

These are not random, unrelated concerns. They are all directly related to what’s happening in our world and on our island.

I am always working toward making our lives better here on the Big Island, and making this a better place for our children and grandchildren.

Everything came together for me when I started going to the Peak Oil conferences  in 2007. That’s where I learned about Charlie Hall and his theory of Energy Return on Investment (EROI).

What was interesting to me about that his is a biophysical approach. A systems approach. It doesn’t put everything into its own silo, but instead takes everything into consideration all together.

EROI boils down to one basic concept: You have to have net energy to survive. This concept is discussed as an economic concept, but really it goes all way back to biology. Think about a rainbow trout swimming in a river and catching flies. At the end of the day, it has to have caught enough flies not only to survive but also to reproduce.

It’s the same for every animal. Look at cheetahs. They’ve got to be able to run down antelopes and rabbits and whatever they eat, and still have energy left over to reproduce and raise their kids.

It takes energy to get energy. We have to be able to get at our source of energy – like oil – and still have enough left over to power our society.

This concept applies to organisms, organizations and civilizations – everything.

How These Big Island Issues Apply

I’m no scientist. I’m a farmer who’s spent a lot of time out there on the farm, dealing with the physical stuff, out in the rain and the dirt. I come at this practically, always remembering my Pop’s lesson about, Not no can, can.

I am always trying to find a solution to something or other by thinking hard and planning ahead. When I went to school I learned there’s a name for this. It’s called “contingency planning.”

And it’s what we need to be doing now. Contingency planning. We need to take sustainable actions now to prepare for a better future.

What makes a solution sustainable? It has be economically, environmentally and socially sustainable.

As for the economic part, people understand what you need to do to make that work. Environmentally, too.

What is generally missing, and what I gravitate toward, is the social part of sustainability: leaving no one behind. I always come at everything from that point of view.

When we look at the Big Island, we have the lowest median family income, a homelessness problem and many other social problems. When I look at solutions, I want to make sure they address these problems.

Solutions

From what I see, education is the game changer. There are clear correlations between education and family income. And education and family income have a strong impact on the other problems. It’s not very complex.

The TMT brings $50 million to our island,  earmarked solely for our kids’ education. And geothermal and the Hawaii Island Energy Cooperative bring smart energy solutions to our peak oil crisis.

I’ve been influenced by my Pop, who taught me to look long term. When you’re looking long term, you don’t have to make radical decisions you might regret later. When you  focus on the long term, you can make gradual changes to get to where you want to go.

We need to have a sustainable energy situation, and that will help with everything else.

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Maui Energy Conference: ‘How Did We Get Here?’

I just got back from the 2016 Maui Energy Conference, where I spoke on a panel. It was really interesting how the moderator, Bill Aila, set up our panel. He said:

“Imagine it’s now 2045 and Hawai‘i is a wonderful place because we’re using 100 percent renewable energy. How did we get here?”

I went straight to talking about the Hawai‘i Island Energy Co-op because it’s very simple – it saves money. It’s a non-profit, and all the profits that would otherwise go to shareholders go, instead, to the folks that own meters. It’s predictable. Everything else that is going to happen with energy between now and 2045 is unpredictable. But saving money because of your business model is predictable.

Another reason a co-op is a good model is because the board members have to pay attention and keep up with what the people want or they won’t be re-elected.

The moderator also wanted to emphasize to the audience outside Hawai‘i that things are different here. It’s Hawaiian-style to prepare way in advance. People can’t just come in and look at the balance sheets, say they’re going to invest here and then expect changes to happen really quickly.

Things operate differently here. Hawai‘i’s culture has evolved from a society where relationships were reciprocal, and the more you gave the more you received, to a market economy that is more along the lines of “the more you get, the more you get.” It’s quite different, and there a lingering, uncomfortable feeling that the capitalist system is suspect.

In my opinion, it’s partly why Hawaiians introduce themselves by talking about who they are, with some of their genealogy. You don’t come in here all of the sudden and try to rush things through on us. It doesn’t work that way here in Hawai‘i. We have to know who we’re talking to.

I also used the Thirty Meter Telescope (TMT) as an example. We can’t say that one size fits all, that all telescopes are bad, that a whole mountain is sacred. And the GMO subject, where the anti-GMO folks will say that all GMOs are bad. Well, not really. Some are bad and others are helpful. It depends on what you’re talking about. We can’t talk in generalities.

What are we trying to achieve? I asked. We’re trying to make sure our society benefits all of us, not just some of us. The ends don’t justify the means. That doesn’t work.

I talked about how I came to the TMT project and the two most important things I learned from it: 1) To follow the process, which I learned from Patrick Kahawaiola‘a, and 2) “What about the rest?” which I learned from Kumu Lehua Veincent. I talked about how agriculture and energy are tied together. I even had a chance to talk about my Uncle Sonny Kamahele, who taught me the most important lessons I ever learned about farming.

It was a good discussion. We had a lot of really good feedback.

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PUC Testimony & HIEC Proposes Alternative Power Generation Plan

This is video of Marco Mangelsdorf of the Hawaii Island Energy Cooperative (HIEC) testifying at the Hawaii Public Utilities Commission on February 9, 2016.

Below the video is the HIEC’s just-released alternative power generation plan, which would move the Big Island faster and cheaper toward cost-effective clean energies and reach close to 100 percent renewable years before the state’s 2045 target date.

(HILO, HAWAII, FEBRUARY 10, 2016)—Hawaii Island Energy Cooperative (HIEC) today released its alternative power generation plan that would move the Big Island faster and cheaper toward cost-effective clean energies and reach close to 100 percent renewable years before the state’s 2045 target date.

The HIEC plan, based on a new analysis of the island’s existing resources and estimates of potential new solar, wind and energy storage resources, presents a less expensive and cleaner alternative to previous plans.

“We are very excited to be able to propose a compelling, practical and doable plan that would accelerate our island’s clean energy transformation in a way that would yield significant benefits for the more than 83,000 electric customers here,” noted HIEC director and spokesperson Marco Mangelsdorf.

According to Mangelsdorf, “By building on the successes achieved by Kauai Island Utility Cooperative to integrate high levels of cost-effective solar PV into the grid while adding just the right amount of storage to ensure system stability and reliability, HIEC would be better able to ensure a lower-cost, more balanced power supply portfolio.”

Through its analysis HIEC has developed a plan that includes:

No new fossil fuel generation

  • With the abundant availability of cost-effective renewable energy resources, there’s no need for any additional petroleum-based generation.
  • Any fossil fuel substitutions would be based on near-term cost advantages without requiring costly infrastructure improvements.

No liquefied natural gas infrastructure or long-term reliance on fossil generation

  • Alternative plan does not use LNG.
  • Opportunity fuels such as propane used for lower short-term cost savings with low conversion investments and quick paybacks.

Continued expansion of roof-top solar

  • Investment in battery and pumped storage would allow for additional roof-top solar with fewer technical concerns about system reliability.
  • Utility scale storage would avoid daytime curtailment and move excess roof-top generation to night time peaks.

Competitively priced, cost-effective utility-scale solar PV and wind

  • Utility-scale renewable generation, using Hawaii Island’s abundant solar and wind resources, would replace continued reliance on fossil generation.
  • Early retirement of fossil generation would occur as new renewables come on line.

Capital expenditures would be less compared to the current or future investor-owned utility model

  • Lower cost of capital due to non-profit status.

Lower cost solar and wind resources would replace LNG conversion costs. Greater efficiencies in overall operations

  • Coordinated quick response dispatch would back utility and roof-top solar generation with fossil units, thereby firming variable output for system stability.
  • Ability to integrate new low cost renewables as technologies and appropriate smart grid investments improve efficiencies.

Whether, where and when more geothermal energy will be brought on line to be left to the membership and democratically-elected board of the fully operational cooperative

In the Hawaiian Electric Industries-NextEra Energy merger proceedings now being held by the Hawaii Public Utilities Commission,  NextEra has asserted that the primary question the Commission should ask itself is whether Hawaiian Electric ratepayers and the State of Hawaii would be better off with or without the sale going through.

HIEC has argued that the Commission should consider the merits of the cooperative ownership model for Hawaii Island.

Noted HIEC president Richard Ha, “Credibility, purpose and a focus on how to best serve and benefit the island’s 195,000 residents is what this cooperative is all about.  HIEC’s alternative power generation plan provides an important basis to establish that a cooperative does what its members want, not what is in the best interest of shareholders.  We are committed to a path to the island’s renewable energy future that will get us faster and cheaper to where we all want to go—an economy based on more affordable electricity and an environment that’s cared for.”

About Hawaii Island Energy Cooperative

HIEC is a non-profit cooperative association that seeks to establish a member-owned electric utility and encourage non-petroleum-based transportation for Hawaii Island. HIEC presents a unique opportunity for all electricity consumers to “Own the Power.” For more information, visit www.hiec.coop. HIEC is on Facebook and Twitter @HiEnergyCoop 

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HIEC Advisory Board Welcomes 2 New Members

We’ve got two new members on our Hawaii Island Energy Cooperative Advisory Board:

• Greg Chun, a former executive with Kamehameha Schools

• Vincent Paul Ponthieux, who founded Blue Planet Energy with Henk Rogers

Our Board of Directors includes myself, Gerald DeMello, Wally Ishibashi, Marco Mangelsdorf, Michelle Galimba, and Noe Kalipi.

Read more about HIEC.

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Civil Beat Article about Richard & Co-op: ‘When People Power Meets Electricity’

Did you see this Civil Beat article that ran yesterday about Richard and the Hawaii Island Energy Cooperative? It’s a good look at how the price of oil and electricity affects agriculture.

When People Power Meets Electricity On The Big Island

NextEra Energy’s proposed takeover of Hawaii’s century-old utility has sparked a renewed effort to establish an electric utility co-op on Hawaii Island.

At Hamakua Springs Country Farms on the Big Island earlier this year, rows of aging arched white awnings covered surprisingly barren soil along the dirt road that leads into the farm.

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Hawaii Island Energy Co-op ‘Better, Faster & Cheaper’

Big Island electric customers are estimated to save much more money with the Hawaii Island Energy Cooperative (HIEC) than they are promised with the proposed sale of the Hawaiian Electric companies to NextEra Energy.

Read more below, as well as in the Hawaii Tribune-Herald, Pacific Business News, and in the Hawaii Star-Advertiser (behind their paywall).

The difference in the business model of a co-op model, such as HIEC, is that it’s non-profit. At a for-profit utility, such as NextEra, revenue goes to shareholders. That’s not the case with a non-profit co-op, and that’s one reason for the significant savings.

Also, co-ops, by definition, cooperate. HIEC can call up the electrical co-op on Kaua‘i, and they will share information. Hawai‘i Island’s co-op can call up the national headquarters and they will share information. Avoiding mistakes saves money.

It’s all very practical. The co-op model is a better model to help ratepayers prepare for the future.

Hawaii Island Energy Cooperative’s Press Release:

Hawaii Island Energy Cooperative would deliver transformation better, faster and cheaper

(HILO, HAWAII, DECEMBER 9, 2015)—Conversion of the electric utility on Hawaii Island to a nonprofit cooperative is expected to deliver greater savings than those promised with the proposed sale of the Hawaiian Electric companies to NextEra Energy of Juno Beach, Florida.

Hawaii Island Energy Cooperative (HIEC) analyzed financial information filed by the Hawaiian Electric companies (HE) and NextEra Energy (NEE) with the Hawaii Public Utilities Commission (HPUC).

By lowering the cost of capital, eliminating federal income taxes and the profit margin built into Hawaii Electric Light Company’s rates, the financial analysis found that Big Island customers could save as much as $113 million on the existing HELCO rate base and up to $234 million including investments to modernize the grid over a four-year period. This compares to $60 million in savings estimated by NEE for customers on all five islands served by HE over a four-year period.

In proceedings now being held on the proposed sale by the HPUC, NEE has asserted that the primary question the Commission should ask itself is whether the customers of HE and the State of Hawaii are better off with or without the sale going through.

HIEC has argued that the Commission should also consider the merits of the cooperative ownership model for Hawaii Island.

In addition, HIEC makes the case that a cooperative has the ability to accelerate the island’s clean energy transformation faster and with more focus than a mainland-based investor-owned utility.

“For Hawaii Island, the reality is that the 190,000+ residents of the island would be better served by a cooperative. Beyond the lower cost of capital and the lower electric bills that follow, the benefits of a coop include local, democratic ownership and control of one of the most important infrastructures on the island,” said Marco Mangelsdorf, HIEC director and spokesperson.

Other advantages of the cooperative business model

■ HIEC would be able to access low-cost debt capital.

• Traditional cooperative lenders include the U.S. Department of Agriculture, Rural Utilities Service, National Rural Utilities Cooperative Finance Corporation (CFC), and Co Bank.

• The combined borrowings of electric cooperatives from these sources is over $85 billion.

■ The cooperative network of 900 utilities has equivalent, and perhaps better, buying power and economies of scale for technology, administration, pensions and insurance. Many companies that support the cooperative program, including CFC and CoBank, are owned by their electric cooperative customers.

• National Rural Electric Cooperative Association provides a multi-employer pension plan on behalf of electric cooperative employees that is fully funded.

• Through national programs the electric cooperative network has led the utility industry in the deployment of smart grid technologies.

■ Cooperatives can be more nimble and quick in integrating more and cost-effective renewable energies. Emulating the example of Kauai Island Utility Cooperative (KIUC), HIEC should be able to move faster to provide the advantages of renewable energies to Hawaii Island consumers.

• KIUC has gone from approximately 10 percent renewable in 2011 to almost 90 percent during prime sun hours today through a portfolio of utility-scale solar, biomass generation, distributed solar and legacy hydropower.

• KIUC’s smart grid initiative, which enables customer choice and is a key to the efficient integration of renewable energy, was completed nearly two years ago.

•Over the past two years, KIUC has built the two largest solar arrays in Hawaii, generating electricity cheaper than similar arrays proposed on Oahu. As well, KIUC is in the approval process for the nation’s first utility-scale solar array with dispatchable energy storage, moving solar energy to the nighttime hours and displacing millions of gallons of oil.

Noted HIEC president Richard Ha, “HIEC is able to focus on only our Hawaii Island and its unique needs, desires and resources. The single island focus and urgency created by a customer-elected board of directors to set the strategy is KIUC’s greatest strength and the reason they have been so successful in the transformation of their island’s utility system.”

About Hawaii Island Energy Cooperative:

HIEC is a non-profit cooperative association that seeks to establish a member-owned electric utility and encourage non-petroleum-based transportation for Hawaii Island. HIEC presents a unique opportunity for all electricity consumers to “Own the Power.” For more information, visit www.hiec.coop. HIEC is on Facebook and Twitter @HiEnergyCoop

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Whiteboard Animation: The Electric Cooperative Story

This short whiteboard animation explains really well just what an electric cooperative is and how it works. The 3-and-a-half-minute video is well-worth watching.

You’ll see how electric co-ops started in this country, back during the Roosevelt era when farmers and ranchers put in $5 each for membership and equity in a cooperative to bring electricity to their rural areas.

And you’ll see how the not-for-profit electric co-ops operate in ways that really align with how we think and live here in Hawai‘i. Members elect local directors to represent them. Co-ops work with other co-ops (they cooperate) for financing and research, to help after storms, and other times when needed. Profits are returned to members.

A co-op model is also better positioned to accomodate zero or negative economic growth than an investor-owned model.

Forty-two million people in the U.S. currently get their electricity through an electric co-op.

With a co-op model as our electric utility, we would not be all by ourselves. There’s no need to worry that it would just be us out here against the world.  Watch this short video and you’ll see there is a robust association of more than 900 co-ops in the U. S., all helping each other. No one is left behind.

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Comparing Electricity Rates for HECO & Kauai’s KIUC Customers

It’s interesting to look at this chart and compare what electric rates have looked like for Hawaii Electric Company (HECO) customers compared with prices for Kauai Island Utility Cooperative (KIUC) customers over the same period.

KIUC’s electric rates have been all but flat from 2008 to 2014, while rates for the HECO companies have gone up from 4.4 percent to a whopping 28.3 percent.

ELECTRIC RATES 2008-2014 Jun-08 Jun-14 % Chg
   KIUC  $                       439.39  $                          440.00 0.1%
   HECO-Oahu  $                       280.53  $                          359.90 28.3%
   HELCO-Hawaii  $                       395.09  $                          425.80 7.8%
   MECO-Maui  $                       374.35  $                          391.00 4.4%
   MECO-Lanai  $                       426.87  $                          470.00 10.1%
   MECO-Molokai  $                       416.32  $                          480.00 15.3%
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Diagnosing Our Electricity Situation

This blog post by Gail Tverberg, Our Electricity Problem: Getting the Diagnosis Right, clearly explains what is going on in the world today and makes it easy to understand some things that seem counterintuitive at first glance.

She write about the oil price drop, and, recently, the economic slowdown. That’s the counterintuitive bit – you’d think with the drop in the price of oil, the economy would be picking up.

I have followed Gail’s analyses for a long time now. What she explains in this blog post is something she’s been predicting, and talking about, for quite awhile.

And here’s the thing – she’s been right on the mark for as long as I’ve known her. She is more doom and gloom about it than I am, but then I have never been able to prove her wrong. So it’s best to be prudent and try to protect ourselves as much as we can.

It’s why I’m pushing the utility co-op. An investor-owned electricity utility would just take us farther down the same old path in the wrong direction.

With a co-op, we are in control of our direction and our destiny. We would manage it ourselves; it would not be managed by people whose end goal was trying to make a dollar for investors. This is what I see as the basic difference between the NextEra plan and ours, and it’s a huge one.

We need to control our direction in order to take care of ourselves, and even more importantly so our kids and grandkids and their grandkids will be able to adapt to changing conditions and take care of themselves. The future is not going to look like, or work like, the past.

Go read Gail’s blog post, where she makes that easy to see. Things are already different, on many levels, and we need to be doing our long-term planning now. It’s like my Pop taught me – we plan for the future by taking small steps now so that later we don’t have to take drastic, catastrophic steps just to survive.

We have to take care of all of us, not just a few of us.

Those survival lessons I learned from my Pop were simple, and it’s time to put them into play.

If Gail’s wrong about how bad it will get, that’s okay. No harm, no foul. But if she’s right, we’ll have done the right thing. Either way, we will have protected ourselves.

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