Tag Archives: David Bissell

An Interview & Also a Visit to a Co-op Finance Corporation

Richard Ha writes:

Henry Curtis of Ililani Media recently interviewed me about the energy co-op. He asked me, “Why a co-op?”

Here’s the interview:

Richard Ha owns Hamakua Springs Country Farms, served as Board Chairman of Ku`oko`a Inc., the entity which sought to buy the HECO Companies, a member of the business-based Big Island Community Coalition (BICC) which seeks lower electric rates, and a partner in the Hawaii Island Energy Cooperative (HIEC) which was granted party status in the Public Utilities Commission’s HECO-NextEra's Merger proceeding. HIEC is represented in the docket by three McCorriston Miller Mukai MacKinnon LLP attorneys: David Minkin, Brian Hirai and Peter Hamasaki….

Read the rest

Also, a couple weeks ago I visited the national headquarters of the National Rural Utilities Cooperative Finance Corporation (CFC) in Virginia. There is a strong national association of 900 utility co-ops that exists to help its members, and it owns that finance company, the CFC, which has assets of $26 billion and is a non-profit, so it pays no taxes.

I met with the CFC's senior staff and briefed them about our attempt to be ready should an opportunity arise that allows us to present a credible offer to purchase Hawaii Electric Light (HELCO) and convert it to an energy cooperative.

They told me their resources are at our disposal.

It was very eye-opening to see that we are not alone. It hit me that ours would not be a small, stand-alone co-op, but one of 900 utility co-ops in the nation, with all the ancillary services that comes with that. The technical expertise we would be able to call upon is huge – exponentially greater than what we would have access to as a stand-alone co-op, out here in the middle of the Pacific.

Back on Dec 21st, I wrote about when a group of Big Island community people organized a briefing by David Bissell, the CEO of Kauai Island Utility Cooperative (KIUC) and Dennis Esaki, one of the original founders of KIUC.

Subsequently, we formed a steering committee to investigate the possibility of creating an energy cooperative for the Big Island. That was three months ago. Since then, we registered the co-op, obtained the services of a law firm, and asked the PUC to let us participate in the docket involving the merger request of NextEra and HEI/HECO. Our request was approved.

We have set up a website with information about our efforts, the folks involved, a press release, news articles, and a place for folks to sign up if they want to help us in our efforts.

A co-op is about all of us, not just a few of us. It’s run by a board of directors that is elected by its members. Each member has one vote. Excess revenues are returned to the members in proportion to their usage. 

We are not alone. 

This morning I saw that State Rep. Nicole Lowen just introduced HR105 expressing support of "further discussion of the possibility of local ownership and control of electric utilities."

I will write more as we move forward.

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

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.

Kauai Island Utility Co-op Execs To Brief On How They Formed Their Co-Op

Richard Ha writes:

We have invited Dennis Esaki, a founder of Kauai Island Utility Cooperative (KIUC), and David Bissell, CEO of KIUC, to speak to us about how one forms a community-based utility. Having such a utility cooperative here on the Big Island would give us more control over our destiny.

It will be held this Friday, December 19, 11:30 a.m., at the former C. Brewer Executive Center in Wainaku. The event is sponsored by the Big Island Community Coalition, the Hilo Hamakua Coast Development Corporation, and the Hawaii Farmers and Ranchers United. The Ed Olson Trust is providing the Wainaku Executive Center facilities. Please R.S.V.P.

The Kauai Island Utility Cooperative was formed in 2002 when Citizens Communications’ Kauai Electric announced that it was selling the Kaua‘i utility. We have a similar situation right now in that Hawaiian Electric Industries (HEI) recently announced it is selling to NextEra.

NextEra plans to use utility-scale solar, backed up by liquid natural gas (LNG) as a bridge fuel. The average shale oil and gas well lasts only five years, so that model is a concern for Big Island rate payers. (This link is an even more in-depth explanation of how shale oil is massively over-hyped, and analyzes the best data available.) Fortunately, we have geothermal we can use in place of LNG on the Big Island. We have options.

This is not an endorsement of converting to a co-op so much as it is an informational briefing.

Please R.S.V.P. to richard@hamakuasprings.com.