Category Archives: Lowering Electric Rates

Hawaii Island Energy Cooperative, Lowering Electric Rates

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%
Hawaii Island Energy Cooperative, Lowering Electric Rates

Cheaper Electricity: The Need Hasn’t Changed

Every so often I’m going to repost something here that I feel is still significant.

This article, which I submitted to the Big Island Chronicle and ran in April 2014, talks about some of the important principles behind why we formed the Big Island Community Coalition. It still applies.

***

A Call For Cheaper Electricity

Here is the single most important need facing Hawai‘i today. Everything else radiates from it:

We need cheaper electricity.

It can be done. Recently the Big Island Community Coalition, along with others, helped stop some fairly significant electricity rate hikes from showing up on everybody’s HELCO bills.

And we are very lucky to have resources here, such as geothermal energy, that we can use to generate much cheaper electricity.

Here’s why this is so important:

• We need enough food to eat, and we need to grow it here, instead of relying on it coming to us from somewhere else.

Food security – having enough food to eat, right here where we live – is truly the bottom line. We live in the middle of an ocean, we import more than 80 percent of what we eat, and sometimes there are natural or other disasters and shipping disruptions. This makes a lot of us a little nervous.

• To grow our food here, we need for our farmers to make a decent living: “If the farmers make money, the farmers will farm.”

The price of oil, and of petroleum byproducts like fertilizers and many other farming products, keeps going up, which raises farmers’ costs. They cannot pass on all these higher costs, and they lose money.

We use oil for 70 percent of our electricity here in Hawai‘i, whereas on the mainland they use oil for only 2 percent of theirs—so when the cost of oil increases, anything here that requires electricity to produce is less competitive. And farmers in Hawai‘i also pay four times as much for electricity as do their mainland competition, which puts them at an even bigger competitive disadvantage. Fewer young people are going into farming and this will impact our food security even further.

HELCO needs to be a major driver in reducing the cost of electricity. We believe that HELCO is fully capable of providing us with reliable and less costly electrical power, and ask that the PUC reviews its directives to and agreements with HELCO. Its directives should now be that HELCO’s primary objective should be making significant reductions in the real cost of reliable electric power to Hawai‘i Island residents.

At the same time, we ask that HELCO be given the power to break out of its current planning mode in order to find the most practicable means of achieving this end. We will support a long-range plan that realistically drives down our prices to ensure the viability of our local businesses and the survivability of our families. All considerations should be on the table, including power sources (i.e., oil, natural gas, geothermal, solar, biomass, etc.), changes in transmission policy including standby charges, and retaining currently operating power plants.

This is not “us” vs. “them.” We are all responsible for creating the political will to get it done.

Rising electricity costs act like a giant regressive tax: the people on the lowest rungs of the economic ladder get hurt first, and hardest. If our energy costs are lower – and we can absolutely make that happen – our farmers can keep their prices down, food will be cheaper, and consumers will have more money left over at the end of the month. This is good for our people, and for our economy.

We have good resources here and we need to maximize them. Geothermal and other options for cheaper for energy. We also have the University of Hawai‘i, the College of Tropical Agriculture and Human Resources, the Pacific Basin Agricultural Research Center and others that help our farmers.

To learn more about achieving cheaper electricity rates, consider joining the Big Island Community Coalition (bigislandcommunitycoalition.org; there’s no cost). We send out an occasional email with information on what we’re doing to get electricity costs down, and how people can help.

Remember the bottom line: every one of us needs to call for cheaper electricity, and this will directly and positively impact our food security.

Current Affairs, Geothermal, Hawaii Island Energy Cooperative, Lowering Electric Rates, Mauna Kea, Peak Oil, Renewable Energy Sources, Science, Sustainability

Is Our Culture Falling Backward?

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This editorial ran in the Hawaii Tribune-Herald today. In case you didn’t see it, I’ll run what we sent them here.

***

The purpose of the Big Island Community Coalition is to work towards reduced electrical energy costs on the Island of Hawaii – where we pay up to four times the national average for our power.  We are particularly sensitive to electric power rates as very high rates serve essentially as a regressive tax on our population while greatly reducing the probability of generating jobs in any sector that is dependent on electricity.

There are occasions when events are so alarming that groups such as ours feel compelled to move beyond our primary task.  This is such a time.

We have observed with increasing alarm as our community has taken steps that inexorably blunt the forward movement of our economy and even move us backwards.  These include:

  1. Anti-Geothermal activists encouraged County government to ban nighttime drilling, effectively stopping expansion of a major source of renewable and inexpensive electric power beyond already-existing permits.This action was taken despite the existing plant meeting all applicable noise standards.  It appears that government officials took this action without first going to the site to verify that the noise was disruptive.  Once they did go to the site, some years later, government found that the noise was less than other environmental sounds (i.e., coqui frogs) and essentially no more than typical background noise.
  2. Anti-GMO activists lobbied to stop any new GMO products from being grown on the island – despite the fact that the vast majority of scientific, peer-reviewed studies found such products to be as safe, and in some cases more nutritious, as their non-GMO counterparts.  Legislation even prohibited GMO flowers – not consumed by anyone – from being grown on the island.  Thus family farmers lost the most effective new tools needed to reduce pesticide and herbicide usage while increasing productivity needed to keep their farms competitive.
  3. Now we have anti-Thirty Meter Telescope (TMT) activists taking steps to stop construction of the most advanced telescope in the world.  If successful in stopping TMT, despite its sponsors following every legal requirement over a seven-year period, we will lose our world leading advantage in understanding the universe.

All of these actions share similar characteristics:

  • The arguments used to justify such actions are consistently anti-scientific.
  • “Anti” groups often obscure the lack of scientific evidence to support their position by using emotional pleas intended to incite fear.
  • The only “win” for many of these groups is to completely stop, thereby making them completely unwilling to consider any facts that refute their position or to make any reasonable compromise.
  • Long-term consequences are significant both culturally and economically.

Cultures that survive and thrive embrace new technologies carefully, thoughtfully and steadily.  Cultures and economies that thrive are innovative beccause they generate ideas and solutions, solve problems and take calculated but careful risks.

Cultures that fall backwards are those that fear advancement, fear change and cling to a mythicized view of yesteryear.  The net result is loss of their brightest and most hard working youth.  Those youth that remain find fewer and fewer jobs – those jobs having greatly diminished economic value and lower wages.  The downward spiral becomes inexorable.

As we look to tomorrow, we need to ask ourselves whether we wish to give our children the exciting and invigorating job market typified by Silicon Valley or a job market that is much closer to the poorer regions of third world countries.  It is up to us to point one way or another.  Driving TMT out will be one more major step to cultural and economic poverty.

Signed,

Big Island Community Coalition

Richard Ha, President,

David DeLuz Jr., Rockne Freitas, Michelle Galimba, Wallace Ishibashi, Noe Kalipi, H.R “Monty” Richards, William Walter.

Lowering Electric Rates

More on the Hawaii Island Energy Cooperative

The Hawaii Island Energy Cooperative formed after the NextEra/HEI merger was announced. Several community grassroots organizations got together and asked the Kauai Island Utility Cooperative (KIUC) folks to come to Hilo and do a briefing on how they got started.

After that meeting back in December 2014, a steering committee of Big Island community members looked into the feasibility of the Big Island forming a utility co-op. Although HELCO was not for sale, the group decided to prepare just in case an opportunity came up to purchase it.

This post talks about that KIUC briefing and how we formed the co-op steering committee.

Henry Curtis wrote about the Hawaii Island Energy Cooperative today at Ililani Media:

Big Island Energy Cooperative on the Move

The Hawaii Island Energy Cooperative (HIEC) was founded in January 2015. HIEC proceeded to file a motion to intervene in Hawaii Public Utilities Commission Docket 2015-0022 and was granted party status by the Commission.
 
That regulatory proceeding is examining the proposed sale of Hawaiian Electric Company (HECO) and its subsidiaries Maui Electric Company (MECO) and Hawaii Electric Light Company (HELCO) to NextEra Energy (NEE). 
 
Attorneys David J. Minkin, Brian T. Hirai and Peter J. Hamasaki from the law firm McCorriston Miller Mukai MacKinnon LLP, represent both HIEC and the Kauai Island Utility Cooperative (KIUC) in the merger proceedings.
HIEC was formed not only to explore the possibility of a Big Island community-based electric utility cooperative but also to examine other energy issues such as sustainable transportation policies.
 
HIEC has staked out a clear position. It is no for or against the merger and it is not promoting an alternative to HELCO or NextEra. Rather “HIEC seeks to bring to the proceedings its specific focus on the energy needs of Hawaii Island and its unique perspective on potential cooperative ownership structures.” 
 
HIEC Spokesperson Marco Mangelsdorf asserted that “being able to have more direct control over Hawaii Island’s present and future energy profile would provide us with an extraordinary opportunity to showcase what can be done on our island on many different and innovative levels.”

 

Lowering Electric Rates

Hawaii Island Energy Cooperative Files With PUC

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Richard Ha writes:

The Hawaii Island Energy Cooperative (HIEC) has gotten quite a bit of press coverage in the past few days. Last week, we submitted an application to the PUC to intervene in the pending sale of Hawaii Electric Industries (HEI) to NextEra Energy.

HIEC logo

Our HIEC spokesman Marco Mangelsdorf answers some questions about it just below. Following his answers, you can see excerpts from and links to newspaper articles about HIEC from the Honolulu Star-Advertiser, the Hawaii Tribune-Herald, Pacific Business News, and Honolulu Civil Beat.

FREQUENTLY ASKED QUESTIONS

Provided by Marco Mangelsdorf, director and spokesman for HIEC, President, ProVision Solar, Inc.

What’s my connection to HIEC?

I was invited by Richard Ha, business owner of Hamakua Springs and community leader, to get involved with a group of Big Island residents who were interested in exploring the possibility of emulating the Kauai Island Utility Cooperative model established on Kauai.  We are seeking to get a seat at the table in the Hawaiian Electric Industries-NextEra docket by proposing an option, depending on the course of the proceedings, that offers the possibility of democratic ownership and control of the island’s energy infrastructure, through a duly elected board, to the residents and communities of the Big Island.

Are you doing this because you see the end of the PV industry in the state?  Are you leaving your company?

I will continue to manage ProVision Solar as the solar electric industry in the state continues to adapt to the unique challenges in our Aloha State.  Solar PV will continue to be a major part of the Hawaii’s efforts to become more energy independent for years and decades to come.

Do you see any conflict between continuing to be at ProVision and working with HIEC?

I see congruence between what I’m doing in my business to empower Big Island homes and businesses as far as promoting energy independence and working toward greater local control of the island’s energy infrastructure.

Is HIEC against the proposed merger?

HIEC takes no position either for or against the proposed merger.  HIEC desires to explore through the proceedings the unique perspective, goals and objectives of the residents and communities of Hawaii Island, and depending on the outcome of the proceedings, consider whether a different ownership model for energy services on Hawaii Island may provide a positive alternative.  A sound discussion should include evaluation of the pending transaction in relation to potential future options that may be in the public interest for the unique interest of the island of Hawaii.  HIEC’s participation can assist the development of a sound record by providing a Hawaii Island focused perspective.

Is HIEC making an attempt to buy HELCO?

It’s important to note that HELCO is not for sale at this time.  So no, HIEC is not submitting an offer to purchase HELCO.  HIEC is positioning itself as a possible option worthy of consideration to take Hawaii Island in a different energy direction, depending on the course of the proceedings.

Would a coop lead to lower energy bills on the Big Island?

HIEC believes that a case can be made that there would be lower energy costs to the consumer over time through tax exempt status, lower cost of capital and no shareholder profits, greater efforts to develop less expensive island-based power sources, promotion of education, markedly improved energy efficiency, and the accelerated adoption of appropriate advanced technologies.

What’s the position of HIEC regarding geothermal energy?

The residents and communities of the Big Island, through an elected board of directors, would decide what choices and directions to take as far as energy sources and policies under the coop.

What’s the position of HIEC regarding a interisland power cable from the Big Island to the other islands?

The residents and communities of the Big Island, through an elected board of directors, would decide what choices and directions to take as far as energy sources and policies under the coop.

What’s the position of the HIEC regarding this or that particular or specific issue on the Big Island?

The residents and communities of the Big Island, through an elected board of directors, would decide what choices and directions to take as far as energy sources and policies under the coop.

What would make HIEC different from a standard electric utility coop?

The cooperative would have a more diversified focus compared to a standard electric utility by focusing on greater overall energy independence, higher renewable energy generation, and enhanced sustainability through a comprehensive and integrated approach to all energy-consuming sectors on the island.

Has HIEC been working with Kauai Island Utility Cooperative? 

HIEC has been in contact with KIUC and they have been supportive.  In the event that HIEC is successful in establishing an energy coop, it is likely that synergies would exist between the two islands that would enable both to benefit by working together in certain areas. 

From the Honolulu Star-Advertiser:

By Susan Essoyan

The Hawaii Island Energy Cooperative is seeking a seat at the table as the Public Utilities Commission considers the proposed merger of Hawaiian Electric Industries and NextEra Energy.

The new nonprofit cooperative association, registered with the state Feb. 9, was formed by business and community leaders to explore the possibility of creating an energy co-op on Hawaii island.

The Hilo-based co-op filed a motion Feb. 11 to intervene in the Public Utilities Commission docket on the proposed $4.3 billion merger between NextEra and HEI. But it is not taking a position for or against the deal, according to Marco Mangelsdorf, spokes­man and a director of the co-op.

Instead, it hopes to ensure that commissioners consider the island's energy needs and the potential benefits of a cooperative model of utility ownership during their deliberations. Read the rest

From the Hawaii Tribune-Herald:

By Colin M. Stewart

What if Hawaii Island residents owned their own electric utility?

That’s the question being posed by a nonprofit group that filed on Feb. 11 a motion with the Hawaii Public Utilities Commission to intervene in the pending $4.3 billion sale of Hawaii Electric Light Co’s parent company, Hawaiian Electric Co. (HEI), to NextEra Energy.

The Hawaii Island Energy Cooperative is a group of Big Island community and business leaders exploring the idea of public ownership, according to group spokesman and director Marco Mangelsdorf.

“We seek to participate in the discussion of the unique perspective of the residents of our island, and, if appropriate, explore an option that would make for a fundamental change in the landscape of energy production and consumption on Hawaii Island,” he said via a press release. “Being able to have more direct control over Hawaii Island’s present and future energy profile would provide us with an extraordinary opportunity to showcase what can be done on our island on many different and innovative levels.” Read the rest

From the Pacific Business News:

By Duane Shimogawa

A group of community and business leaders on the Big Island have formed an organization to explore the potential benefits of a community-based cooperative ownership structure similar to the Kauai Island Utility Cooperative, and they want a closer look into NextEra Energy's $4.3 billion acquisition of Hawaiian Electric Co.

The Hawaii Island Energy Cooperative recently filed paperwork to intervene in the Hawaii Public Utilities Commission docket on the proposed acquisition, which involves HECO's Big Island subsidiary, Hawaii Electric Light Co. Read the rest

From Honolulu Civil Beat:

By Sophie Cocke

Big Island business and community leaders have formed a nonprofit coop called the Hawaii Island Energy Cooperative to explore taking over Hawaii Electric Light Co., a subsidiary of Hawaiian Electric Co.

The co-op would be owned by ratepayers, similar to the Kauai Island Utility Cooperative. However, the co-op is interested all of the island’s energy sectors not just the electric grid.

The co-op association emerged in recent weeks with the announcement that Florida-based NextEra Energy has entered into an agreement to purchase HECO — a deal that is expected to close by the end of the year. Last week, the Hawaii Island Energy submitted an application to Hawaii’s Public Utilities Commission, which must approve the sale, to intervene in the review of the merger. Read the rest

Lowering Electric Rates

Climbing the Bamboo Pole: Why We Formed a Co-Op Steering Committee

You know the Wayne Gretzky quote about skating to where the puck is going to be, not where it is? It refers, of course, to planning ahead.

My Pop’s story about climbing the bamboo pole taught me a lesson about planning ahead, too. He told me about fishing for aholehole with some friends at Maku‘u. They stuck a bamboo pole into the rock and hung a kerosene pole on it when, suddenly, they saw white water coming straight for them. It was going to cover the rocky point where they were fishing.

“What you going do?” my Pop asked me when he told me this story. I had no idea. He told me he climbed up the bamboo pole, hand over hand, lifted up his legs, and let the water go under him. Then he dropped back down and used the pole to fish his friends out of the water.

Before the white water arrived, he already knew what he would do. He had a plan.

NextEra is proposing to purchase the Hawaii Electric Company (HECO) grid, and this is a good time to compare alternatives. HECO has been having a tough time making necessary changes. NextEra looks like they can make the changes, but they’re not from here.

We have seen how the Kaua‘i Island Utility Cooperative (KIUC) has done over the last 12 years. Each meter has one vote. KIUC has nearly $100 million in retained earnings that would have gone off island, but has stayed in the state instead. And they are flexible and can make changes in a timely manner.

The Big Island Energy Utility Cooperative steering committee we’ve created – to look into forming a Big Island Energy Co-op here on the Big Island – is our way of skating to where the puck is going to be, or climbing the bamboo pole. We are planning ahead.

We are doing all the legwork and research and information gathering now so that if there is an opportunity, we will be in position. If we don’t do this, we won’t be in the game.

The goals and benefits of a Big Island Energy Cooperative are:

  • Local, democratic control over one of the most important infrastructures and public goods on the island. This would provide more benefits to island residents, with any profits staying at home.
  • Community over off-island, corporate shareholder priorities, as the cooperative would work for sustainable development of the island’s communities through policies approved and accepted by its members.
  • Lower electric costs through greater efforts to develop island-based energy sources, improve energy efficiency and an accelerated adoption of smart grid technologies.
  • Greater overall energy independence and sustainability through a comprehensive and integrated approach to all energy-consuming sectors on the island.
  • Development of island-produced fuels to provide an energy source for both electricity generation and transportation.

If not here, where? If not now, when? If not all of us, who?

Community, Lowering Electric Rates, Peak Oil, Sustainability

Great Info Meeting on How Kaua‘i Formed its Electric Utility Co-op

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Richard Ha writes:

We had an interesting presentation Friday from two executives from Kaua‘i’s electrical utility, the Kaua‘i Island Utility Cooperative (KIUC). David Bissell is CEO, and Dennis Esaki was a founding member who only recently left the KIUC board.

Meeting

It was amazing to hear what KIUC went through to purchase Kaua‘i Electric Company and form the utility cooperative. The Kaua‘i County Council and mayor were originally against the purchase, and the PUC turned down its first purchase bid as not being in the best interest of the users. But the founding group continued to rework its plan and was ultimately successful the second time it presented a bid.

In total, it was about a two-year process and the group purchased Kaua‘i Electric Company in 2002 for $215 million. And, Esaki said, referring to the county administrators, “they’re all on board now.”

This month, Kaua‘i’s electricity rates are lower than any of the islands but O‘ahu’s (mostly because of the oil price decline). Most months, its rates are a little lower than the Big Island's and a little higher than Maui.

Since 2003, ratepayers have received $30 million in refunds and patronage capital — the amount of money left after all the bills are paid, and the co-op has met its lenders’ requirements. This is money that circulates back into the community. 

Members have $80 million in equity, which is what they own of the co-op. When the utility was purchased 12 years ago, it was 100 percent debt-financed, so the equity at that time was zero.

KIUC has gone from about five percent renewable energy in 2009 to 18 percent today. It will be at about 40 percent by the end of next year.

From the KIUC 2013 Annual Report (click to enlarge):

Annual report

  Annual Report p. 9

The organization of the co-op also reflects what the people of Kaua‘i want, because its board is selected by the people. Esaki and Bissel said that at first there was almost total, and repeated, board turnover as ratepayers regularly voted out board members who weren’t doing what they wanted. Eventually, they said, the board has stabilized.

Projects are financed through national co-op financing, which results in much lower financing costs.

You can watch a video of the meeting below. Thanks to Chester Lowrey for videotaping!

There was a lot of community interest in the KIUC presentation, with a good turnout from various community groups. The presentation was sponsored by three organizations:

The Big Island Community Coalition, the steering committee of which is made up of David DeLuz, Jr., Rockne Freitas, Michelle Galimba, myself, Wallace Ishibashi, Kuulei Kealoha Cooper, Ka‘iu Kimura, D. Noelani Kalipi, Robert Lindsey, H. M. Monty Richards, Marcia Sakai, Ku‘u Lehua Veincent, and William Walter.

The board of the Hilo-Hamakua Community Development Corporation, which is President Donna Johnson, Judi Steinman, Glenn Carvalho, Eric Weinert, Jason Moniz, Gerald DeMello, Colleen Aina, and Richard Ha.

And Hawai‘i Farmers and Ranchers United, which represents more than 90 percent of the farming goods produced on the Big Island.

Ed Olson donated the use of his Wainaku Executive Center for the meeting.

We have formed a steering committee to discuss this further. The committee consists of Gerald DeMello, Michelle Galimba, Wally Ishibashi, Donna Johnson, Eric Weinert, Vincent Paul Pontieux, Marco Mangelsdorf, Russell Ruderman, and myself. I’ll keep you posted on further developments.

Edited 12/21/14 at 10:45 pm; 1/5/15; 1/30/15.

Current Affairs, Geothermal, Lowering Electric Rates, Peak Oil, Renewable Energy Sources, Sustainability

Thoughts on the NextEra Purchase of HEI

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Richard Ha writes:

NextEra Energy’s purchase of Hawaiian Electric Industries (HEI), just announced yesterday, will be very good for Hawai‘i.

Here’s what we know about NextEra: It’s a publicly traded company headquartered in Florida. Its principal subsidiaries include Florida Power & Light Company, which was recognized by Market Strategies International earlier this year as the nation’s most trusted electric utility, and NextEra Energy Resources, which together with its affiliated entities (NextEra Energy Resources), is North America’s largest producer of renewable energy from the wind and sun.

NextEra says it will spin off HEI’s American Savings Bank, which makes a lot of sense. NexEra.jpg

NextEra has the balance sheet and other resources to support significant investment in Hawai‘i’s transmission and distribution system to enable much higher levels of renewable energy sources.

Most of all, this change in ownership of our electrical utility will finally make much needed new and different approaches possible. What we all want is a lower cost of electricity.

And each island needs to take advantage of its own resources. One size does not fit all.

For example, the Big Island and Maui each have the options of using wind, solar, and possibly geothermal and some biofuel.

O‘ahu has wind, solar and biofuel but no proven geothermal and so limited opportunities to lower rates. Solar is a possibility. Coal is cheap, but unacceptable. LNG is possible as a bridge fuel.

Maui has its own issues, which are different from both O‘ahu and Maui.

We are unique on the Big Island. Beside solar, wind and biofuels, we have proven geothermal. Once it’s developed, geothermal wants to run 100 percent of the time, and the more it runs, the cheaper it is to the rate payers.

What if we guaranteed the geothermal developer, say, 25MW, and put no restriction on generating electricity for hydrogen manufacturing over and above the 25MW. If, for instance, the geothermal company installed a 30MW generator, they could sell 25MW to the utility and sell the excess 5MW cheap to make hydrogen. That would solve our liquid transportation problem, via hydrogen fuel cells, and we could make nitrogen fertilizer so as not to be dependent on petroleum byproducts. That’s only one example of what we could do with new thinking.

I would resist the temptation to advocate for a cable going from the Big Island. We need to see demonstrated results first.

This sales is an unexpected but very interesting turn of events. We welcome NextEra.

Bananas, Big Island, Hydroelectric, Lowering Electric Rates, Peak Oil, Renewable Energy Sources, Sustainability, Tomatoes

Yes, We’ll Have No Tomatoes

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Richard Ha writes:

I haven’t mentioned this yet, but we have been phasing out production of our tomatoes.

This came about because of what I’ve been saying here for years: The price of oil has raised farming costs substantially. The pluses of growing our hydroponic tomatoes were no longer exceeding the minuses.

When we started growing tomatoes back in 2002, we had been banana growers. Oil prices were low and banana prices were also low; it was hard to make a living that way. We needed to diversify, which is one of the reasons we went into tomatoes. It was a good decision.

But costs have been increasing drastically, and our tomato growing infrastructure is getting old and will start falling apart soon, so we had to make a decision. Do we take it apart and rebuild the tomato houses? Or do we replace them? Replacing them would cost an eye-opening three times what it cost 12 years ago when we put them up.

It’s a real-life consequence of what I keep saying here: The price of oil is four times higher than it was 10 years ago and there are significant consequences. Everything costs so much more now. We are in the middle of major changes and most people don’t even realize it.

We took into account that our customers are under increasing economic pressure, as well—meaning they have less disposable income—and that our tomatoes are a high-end product. We also knew, as we made this decision, that oil and other costs are expected to keep rising.

Our plan had always been to take our tomato farming to the next step, which would have been to leverage our excess hydroelectricity in a controlled environment that allowed us to exclude insects and optimize light and temperature. Unfortunately, it just took too long to get our hydro plant operating.

It’s been a very difficult decision, and one that we’ve been carefully considering and making for quite some time, taking not only all these conditions into account but also our next generation. As hard as it’s been to make this decision, we all agreed it was the right thing to do. It allows us to continue farming. 

We’re definitely not closing up shop; just refocusing our farming efforts based on economic factors.

We will stay in bananas. They do well in our rain and deep soil and other conditions. The banana infrastructure we have in place, such as the coolers and concrete, is good for another 20 years. The pluses exceed the minuses.

I continue to be very interested in producing a cost-effective protein source here on the farm, such as tilapia and other fish. We are currently working on the problems of protein feed and oxygenation of water, which we can do with gravity and electricity. We’re always thinking about where we need to be in 10 or 20 years.

And I’ll let you know what other interesting projects crop up along the way. 

In the meantime, you’ll see our Hamakua Springs Country Farms tomatoes until the end of November; that’s when the last of them will come off the vines, go through our packing houses, and hit the supermarkets.

We thank you for supporting, and enjoying, our tomatoes all these years.

Hamakua Springs tomatoes

Geothermal, Lowering Electric Rates

Canada, LNG & What Our Electricity Will Cost in Hawaii

Richard Ha writes:

Hawai‘i’s utilities depend on liquefied natural gas (LNG) as a “bridge fuel,” which will allow it to lower rate payers’ costs. The cost to rate payers, though, depends on the long-term contract HECO can secure.

Canada is probably the best place for Hawaii to acquire LNG. But Canada has some important decisions ahead. Should they build LNG plants, which will require huge upfront investments in the multiple billions? They will have to make some decisions soon.

Click to read a special report on the subject from TD Bank Group (PFD):

Higher prices abroad and an increasingly promising global demand outlook for natural gas have garnered a considerable amount of attention from North American resource producers, who are interested in tapping into foreign markets, via liquefied natural gas (LNG) exports…. 

Japan is the highest priced market for LNG, but Japan has not yet made its final decision about whether it will restart its nuclear plants. And the Russia/China natural gas pipeline could take 10 percent of Asia’s demand off line.

What will Canada do? They are wrestling with this decision right now.

Hawaii rate payers will be interested to see what price contract HECO is able to secure. Whatever it is will determine the electricity rates we pay for the following twenty years.

And we don't want to see what happened in the Aina Koa Pono docket – where the price was kept secret.

The Big Island has geothermal as a low-cost base power. What we don’t want here is for expensive LNG to prohibit the development of our low-cost geothermal.