Tag Archives: Geothermal

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.

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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.

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Is Our Culture Falling Backward?

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

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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.

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Shale Oil & Gas: The Overhype

Richard Ha writes:

Art Berman says we don’t have as much shale oil and gas as we think we do. He feels that the shale oil and gas sector is largely uneconomic.

The first time I heard Art Berman speak was on a panel discussion at a 2009 Association for the Study of Peak Oil conference. He studied four thousand Barnett shale wells in Texas and found that the average well gave up 72 percent of its production in the first year.

He definitely had a different perspective than an oil company executive panel member, who said that according to his hyperbolic curve calculations, the average well would produce for 22 years.

I knew someone was wrong. I thought that the oil company executive was just blowing smoke, to sell stocks. I imagined that by the end of the 22nd year, the amount of gas production from his gas well would fill a balloon an hour.

Many thousand of wells later, several credible studies from other sources, such as by this Post Carbon Institutes study by David Hughes, support Art Berman’s initial observations.

We need to pay attention to this because we rely on oil for seventy percent of our energy, and this makes Hawai‘i especially vulnerable. It’s much better to be safe than sorry.

The Big Island is lucky to have an alternative to oil and natural gas to make our base power electricity: Geothermal.

As time goes on, and as oil and natural gas prices rise, future generations will have a competitive advantage over the rest of the world. We will be over our geothermal “hot spot” for 500,000 to a million years.

It takes energy to do work. No energy, no work done. But it is the net energy left over from getting the energy that society uses to grow the economy. And since two-thirds of our economy is made up of consumer spending, it boils down to how much extra money the rubbah slippah folks have that will determine the health of our economy.

So Kumu Lehua was right. He asked me: “What about the rest?” 

That is the key question. What about our kupuna on fixed income? The single moms? The working homeless? If they had extra money, they could spend it and everyone would benefit. Farmers are price takers, not price makers, and they would benefit. If the farmers made money, the farmers would farm.

Asking what about the rest will help us with food security. It all boils down to cost. That is to say, what are the combination of things that gives us the best net energy profile? This is more about common sense than rocket science. If we take our time to look for two solutions for every problem and one more just in case, we will find the solutions that make us competitive with the rest of the world.

This, in the final analysis, is about survival and adaptation. And it is about all of us; not just a few of us.

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Hawaii, Shale & Geothermal

Richard Ha writes:

Because Hawai‘i relies so much on oil for its energy, the state will be a major beneficiary of the shale oil phenomenon. Conventional oil development takes a long time – five to ten years – whereas activating a shale oil well takes less than a year.

The result is that whenever the Saudis try to raise the price of oil, our U.S. shale oil drillers will react wherever they can make money.

From The Barrel Blog, the essential perspective on global energy:

Energy Economist: Shale oil’s response to prices may call for industry re-evaluation

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up. It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economists, explains in this month’s selection from the publication. Read the rest

At $70 a barrel, a lot of people make money and at $40, a lot of people lose money. This safety valve is very good for us in Hawai‘i.

This will give us time to make rational energy decisions. Oil and gas are still finite resources. Because two-thirds of our economy is based on consumer spending, we need to find solutions that take care of the rubbah slippah folks. Low prices for them strengthens the economy for all.

Each island has its own basket of energy resources. The Big Island, because of its abundant geothermal resource, has the biggest basket of lowest cost alternatives. O‘ahu has the smallest basket of resources and so it needs help from the other islands—hence, the talk about cabling resources.

The elephant in the room is cabling geothermal resources from the Big Island. That will never happen, though, unless the Big Island residents themselves receive a demonstrated benefit from geothermal.

So now we need to work on getting Big Islanders definite low cost and other benefits from geothermal—like making hydrogen for transportation and even nitrogen fertilizer.

Then we can have a group of Big Islanders, representing the people, sit across the table and negotiate the conditions under which the people would approve exporting energy off island.

I would think education for our keiki might be a good starting point.

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Government Says ‘Plenty, Cheap, No Worry!’ But Others Say, ‘Worry’

Richard Ha writes:

This is a really good graph that shows three projections for future gas production through the year 2040. Click on this postcarbon.org graph and you'll see the black line shows a University of Texas study, the red line shows David Hughes's projection and the blue line represents the government's EIA projection. 

The government projection shows nothing to worry about. Plenty, plenty, plenty!

But the others show an entirely different story. They suggest we better start making some other plans.

Conventional oil, which is our regular oil supply like from Russia and OPEC, hit its max in 2005. It's shale gas and oil that has increased our oil and natural gas supply in the last few years. But it appears that shale gas and oil will start to decline soon and if so, we need to start down the road to adapting to what will soon be again-rising oil prices. 

On the Big Island, geothermal can replace oil and LNG. Not many other places are as fortunate. We just need to be smart and figure out what works.

Geothermal works. We don't have to get there tomorrow, and we don't have to get there in a straight line. We just have to get there. 

We have a way to do this on the Big Island: Geothermal. It's a gift. 

This podcast with David Hughes, author of the recent report Drilling Deeper for the Post Carbon Institute, talks more about this. 

It's all common sense. It’s about data and science—water does not flow uphill, no matter how much we wish it would. Nothing about this is beyond the average person. I find that rubbah slippah folks understand all this in a few minutes.

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Why LNG is Such a Bad Risk

Richard Ha writes:

We are getting ready to make huge liquified natural gas (LNG) decisions, and LNG is a big risk. We need to understand the risk and who’s going to be left paying the price.

The first time I heard about shale oil and gas was at an Association for the Study of Peak Oil (ASPO) conference. I attended five of those conferences, the only person from Hawai‘i to do so. Hawai‘i County paid for the trip to the 2010 ASPO conference, held in Washington D.C., and is still benefitting from that small investment.

That discussion about shale oil and gas though was at the 2009 ASPO conference, in Denver, and it turned into a sharp discussion between the geologist Art Berman and a drilling company executive.

Art said he had studied data from 4,000 wells in the Barnett Shale and found that the average well gave off 72 percent of its production in the first year.

The executive countered that his figures showed a hyperbolic curve indicating that production lasts for 22 years.

Somebody was wrong. Later I learned that hyperbolic curves only mean that the following year is less than the one previous.

I didn’t know the definition then, but common sense told me that at the end of 22 years, maybe just a gallon might be coming out per hour. I felt like the executive was just trying to sell stock.

Later, a study of 19,000 wells showed that the average well gave more than ninety percent of its production in its first five years. This was not rocket science – even a banana farmer could tell that you would need to replace one-fifth of the wells each year just to stay even. More if production is higher in the first few years.

As of 2010, it was common knowledge that the average shale oil and gas well depleted in a short time, and it was a subject of intense discussion among those of us who attended the ASPO conferences.

In the meantime, some of the folks out there trying to sell stocks were using the terms “resource” and “reserves” interchangeably in describing what was available. The phrase “Saudi America” started to be thrown around.

The U.S. Energy Information Administration (EIA) finally estimated that the U.S. had an economically accessible shale oil supply of about 100 more years.

But David Hughes, a Canadian geologist, challenged the availability of the Monterey Shale oil due to its geological characteristics. Instead of being flat, the resource rock was wavy and squished. It was hard to access via horizontal drilling.

And then this March, the EIA quietly changed its estimate. In a low-key announcement, it readjusted its estimate of Monterey Shale oil availability – which was two-thirds of our national recoverable supply – downward by an amazing 96 percent.

I saw the announcement and realized its significance immediately. Readjusting the estimate of the US supply of oil downward by two-thirds was a huge, huge deal. But the news kind of just slipped by.

Shale gas has the same characteristics of shale oil – it depletes rapidly. If you ask me who I believe about shale oil and gas? Based on his track record, I believe the data and conclusions of David Hughes.

He based his studies on the same historical data and information the U.S. EIA used, but analyzed it in a more meticulous and targeted way. His data shows natural gas declining much, much faster than does the EIA. A recent University of Texas study agrees more with David Hughes than with the EIA.

This Peak Prosperity podcast features an interview with David Hughes talking about shale production and how he did his analysis. It’s a good interview (47:24). Alternately, you can read the transcript here.

On p. 300 of his report, in figure 3-116, Hughes shows an interesting graph of the EIA’s forecast for shale gas projections and how, in the long term, they are greatly overestimated.

At the end of Hughes’ study on natural gas, he cautions (click to enlarge) :

David Hughes report

Here on the Big Island, based on the precautionary principle, I would rely on geothermal rather than liquid natural gas for our electricity generation. A faster decline probably means a faster rise in natural gas price. If we rely on LNG, the rate payer will assume that risk.

And in Hawai‘i we do not have methane underground. So the bad effects of fracking does not apply to us at all. We have drilled 85,000 wells by now. It’s a mature industry that deals with H2S routinely.

In the future, geothermal could also help us solve our transportation problem by providing hydrogen for fuel-celled vehicles. The cost of hydrogen comes from either natural gas or from passing electricity through water. Eventually, the cost of making hydrogen from natural gas will pass the cost of making hydrogen from electricity from geothermal. Then we will have a permanent advantage over the rest of the world. That’s what we want!

Geothermal is climate change-friendly and as infinite as we can get—we will sit for 500,000 to a million years over the “hot spot.” And we are one of the few places in the world with these circumstances and this opportunity.

We have truly come to a crossroads in our history. We must put our personal agendas behind us and do the right thing for ourselves and future generations.

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Aren’t the Falling Oil Prices Great?

Richard Ha writes:

Isn’t it great that the price of oil has dropped so low all of the sudden?!

Wait – is it??

In the short term, for maybe five years, we’re going to be pretty happy here in Hawai‘i. More tourists will travel here, food and electricity costs will drop, and we will have more consumer confidence. We’ll feel like everything’s fine.

But everything is interconnected in our big world now, and could there be any problems with such a sudden and steep drop in oil prices?

Gail Tverberg, the former insurance actuary I sometimes refer to here who is very knowledgeable about such things on a macro level – and who writes the blog Our Finite World – just wrote about this.

In her post Ten Reasons Why a Severe Drop in Oil Prices is a Problem, she writes about the big picture.

From Our Finite World:

Let me explain some of the issues:

Issue 1. If the price of oil is too low, it will simply be left in the ground.

The world badly needs oil for many purposes: to power its cars, to plant it[s] fields, to operate its oil-powered irrigation pumps, and to act as a raw material for making many kinds of products, including medicines and fabrics….

Issue 2. The drop in oil prices is already having an impact on shale extraction and offshore drilling.

While many claims have been made that US shale drilling can be profitable at low prices, actions speak louder than words. (The problem may be a cash flow problem rather than profitability, but either problem cuts off drilling.) Reuters indicates that new oil and gas well permits tumbled by 40% in November… 

Issue 4. Low oil prices tend to cause debt defaults that have wide ranging consequences. If defaults become widespread, they could affect bank deposits and international trade. 

With low oil prices, it becomes much more difficult for shale drillers to pay back the loans they have taken out. Cash flow is much lower, and interest rates on new loans are likely much higher. The huge amount of debt that shale drillers have taken on suddenly becomes at-risk. Energy debt currently accounts for 16% of the US junk bond market, so the amount at risk is substantial.

Dropping oil prices affect international debt as well. The value of Venezuelan bonds recently fell to 51 cents on the dollar, because of the high default risk with low oil prices.  Russia’s Rosneft is also reported to be having difficulty with its loans….

Tverberg writes about some pretty extreme consequences of nearing the limits of our finite resources. I’ve said many times that I cannot disagree with her. My approach, though, is to look for workarounds for us here in Hawai‘i.

I’ve also said plenty of times that we are so lucky to have geothermal. It’s not quite “infinite,” but the Big Island will be over the geothermal “hot spot” for 500,000 to a million years, and that’s close enough.

We’ll see where all this takes us. It’s uncharted waters. On the state level, it will be good for us in the short term, but on a higher level – where Gail Tverberg operates and what she writes about – we need to pay serious attention to what’s going on. Have a look at her post. It’s important and enlightening. 

It’s been a very interesting week in terms of energy and other issues affecting the Big Island and all the rest of it. Stay tuned. I have more to say! 

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Thoughts on the NextEra Purchase of HEI

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.

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Leadership, DHHL & Geothermal

Richard Ha writes:

There have been some very interesting developments regarding geothermal possibilities on this island – ones that could possibly see the Department of Hawaiian Home Lands, and therefore the Hawaiian people themselves, as beneficiaries receiving monthly checks. But only if their leadership steps up soon.

In 2012, when Mayor Kenoi led a delegation to see a geothermal plant in the Philippines located on a volcano that last erupted 100,000 years ago, the question immediately came up: How about on the flanks of Maunakea?

If the Philippines is getting geothermal energy from a volcano that last erupted 100,000 years ago, how about one that last erupted 4,000 years ago, like Maunakea?

While doing some exploratory drilling for water at Pohakuloa not long ago, they hit boiling water at the 6,000 foot level. Boiling water. And, interestingly, that heat was not associated with a rift zone.

While doing surface exploration, they found hot rocks on Hawaiian Home Lands around Humuula. That resource could be bigger than the entire East Rift zone.

Since the Department of Hawaiian Home Lands (DHHL) owns the geothermal resource, they don’t pay any other agency royalties for geothermal developed under their lands. What this probably means is that the beneficiaries could get a monthly cash payment for a portion of the development. That’s entirely up to the DHHL and the beneficiaries.

But they will need to act quickly or it will be developed somewhere else entirely, and Hawaiians will not benefit from it.

Now the maka‘ainana will see who the real leaders are.

Remember what the Law of the Splintered Paddle basically comes down to: You cannot be ali’i if you cannot feed the people.

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Testimony To PUC Supporting 50MW of Geothermal for Big Island

Richard Ha writes:

This is testimony that the Big Island Community Coalition (BICC) steering committee sent to the Hawaii PUC earlier this month. It is in support of the implementation of 50MW of geothermal energy for Hawai‘i island.

The BICC steering committee is made up of the following, all acting on their own behalf: David DeLuz, Jr., Rockne Freitas, Michelle Galimba, Richard Ha, Wallace Ishibashi, Kuulei Kealoha Cooper, Kai’u Kimura, D. Noelani Kalipi, Robert Lindsey, HM Monty Richards, Marcia Sakai, Kumu Lehua Veincent, and William Walter.

Our testimony:

To: Chair Hermina Morita

Commissioner Michael Champley

Commissioner Lorraine Akiba

Hawaii Public Utilities Commission

Email: Hawaii.puc@hawaii.gov

Re: Comments to PUC Docket: 2014-0183 (HECO/HELCO/MECO – PSIP: HELCO Power Supply Improvement Plan and PUC Docket: 2012-0092 (Geothermal 50 MW RFP for Hawaii Island)

Aloha PUC Commissioners,

The Big Island Community Coalition supports implementing 50MW of geothermal as soon as practicable. The high oil price case projected by the EIA 2014, predicts $150 per barrel oil by 2020. There is a direct correlation between oil usage and world GDP. A high oil price of $150 per barrel will adversely impact our tourism industry causing a severe recession.

Geothermal is one of the few ways available to mitigate high oil price. And, we need to move sooner rather than later.

Oil prices quadrupled in the last ten years and the folks who could pass on the costs did pass on the costs. Those who could not were the working homeless, kupuna on fixed income, single moms as well as others such as farmers who are price takers and not price makers. 

The Big Island has the lowest median income of the counties. Our electricity rates have been 25% higher than Oahu’s for as long as we can remember. That high electricity rate acts like a giant regressive tax. We are able to turn that around by enabling more geothermal.

The 23% curtailed electricity from geothermal can support making hydrogen at an affordable cost. This will help solve the green ground transportation problem. And, curtailed electricity can be the basis for making nitrogen fertilizer, without which we cannot feed all the people.

Mahalo, Commissioners.

Richard Ha

President, Big Island Community Coalition

Chart

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