Tag Archives: Kau

Good News: PUC Says No To AKP Biofuels

Richard Ha writes:

Happy holidays, everyone!

We received good news on Monday: The PUC rejected the ‘Aina Koa Pono biofuel project.

From Civil Beat:

The Public Utilities Commission has rejected a proposal to build a biofuels facility in Kau on the Big Island. 

The developer, Aina Koa Pono, hoped to use plant feedstocks to produce drop-in biofuel for the electric utilities on the Big Island, Maui and Oahu. But the PUC said that the fuel would be too expensive, in a decision issued on Monday.

“The contract price for the AKP-produced biofuel is excessive and not cost-effective at present and for the foreseeable future, and thus, is unreasonable and inconsistent with the public interest,” commissioners wrote…. Read the rest

It goes to show that “we, the people” can make a difference.

In this case, a grassroots group of folks came together spontaneously to advocate for low-cost electricity on behalf of the rubbah slippah folks on the Big Island. We called ourselves the Big Island Community Coalition (BICC).

We supported other community members by submitting written testimony, and helped organize public participation at two PUC hearings on the Big Island. Here’s a post about it from last year.

The people involved in the BICC were Dave DeLuz, Jr., John Dill, Rockne Freitas, Michelle Galimba, Richard Ha, Wallace Ishibashi, Kuulei Kealoha Cooper, Robert Lindsey, H.M. Monty Richards, Marcia Sakai, Kumu Lehua Veincent and William Walter.

Helping the rubbah slippah folks helps all of us.

The Lamakū Project

Richard Ha writes:

I want to tell you what’s new. The Big Island Community Coalition (BICC), in partnership with ‘Imiloa Astronomy Center, is kicking off the Lamakū Adopt-a-Visit project.

Download Adopt a Visit Program_2013_brochure

Lamakū means “torch of light.” This project will sponsor Puna and Ka‘ū students to go on a field trip to ‘Imiloa Astronomy Center in Hilo. 
Lamaku

Here’s how it works: You make a 100 percent tax-deductible donation to ‘Imiloa, specifying that it’s in support of the BICC “Adopt-a-Visit” project. (You can specify that it’s for a certain Puna or Ka‘ū school if you’d like, but that’s optional.)

Each $5 donation sponsors one student. Public, private, charter and homeschooled students are eligible.

Donations will be applied to the ‘Imiloa admission fee.  As long as funds are available, ‘Imiloa will cover the cost of bus transportation to the Center. ‘Imiloa will coordinate the school visits, and will ensure that the donor receives feedback about the trip to ‘Imiloa they helped sponsor.

Eighty-nine percent of students in the Pahoa school complex participate in the free/reduced lunch program. This is the highest percentage in the state.

This is an opportunity to make a real difference on the ground. Thanks for your help.

How to donate

Same Old Piggy With Lipstick & A Dress

Richard Ha writes:

Aina Koa Pono (AKP) just announced plans to bring a trailerable “Micro Dee” process to Ka‘u to demonstrate the pyrolysis oil process.

That liquid is not drop-in diesel.

  • It still needs to be sent through a refinery so that it can meet fuel specifications.
  • After refining, rate payers will still subsidize the fuel to the tune of $200 per barrel.

It kind of looks like the same old piggy but with lipstick and a pretty dress.

From the Aina Koa Pono press release:

….Our plan is to start with one, 33-ton-a-day unit so the community can see and understand the Micro Dee (Microwave Thermo Catalytic Depolymerization) process in place. AKP and its engineering, construction and procurement partner, AECOM Technology, are focused on final plans for this trailerable unit; we’re performing final validation on technology so investors are confident as we move ahead. We expect to locate the 33-ton unit in Hawaii within the next several months and be operational before second quarter, 2014.

AKP has 12,000 acres on which to produce the crop they need to make fuel. Palm oil is the only crop that can compete with oil in the biodiesel space. It yields approximately 500 gallons/ acre.

Assuming – and this is a huge assumption – that AKP gets the same yield as palm oil produces, they might get 6 million gallons annually from their 12,000 acres.

That will be far short of the 18 million gallons the utility is looking for.

Right now the land is mostly in cattle, but it’s clear that AKP will need every inch of land.

I wonder when they are planning to break the news to the cattle ranchers – that the cattle ranchers will need to leave?

Is HECO Seriously Damaging Its Credibility?

A proposed biofuels project that Hawaiian Electric Company (HECO) supports is going through PUC approval process right now.

HECO’s public relations people say that as a result of this new project going through, the average Hawai‘i rate payer’s electricity bill would increase by only about $1 per month.

But let’s look at that in a little more depth. HECO is seeking approval to pay Aina Koa Pono (AKP) $200/barrel for the biofuel it produces on the Big Island at Ka‘ū, and would pass on any extra cost (beyond what oil actually costs at the time) to its rate payers, both on the Big Island and on O‘ahu.

HECO has kept that $200/barrel price secret – they are still keeping it secret – but the Big Island Community Coalition folks figured out the price, and how the “$1/month rate increase” was determined.

Using the Energy Information Agency’s (EIA) Annual Energy Outlook (AEO-2012), one can see that HECO is using the highest price scenario, which projects an oil price close to $180/barrel in 2015. In the AKP discussion, it was said that the price of oil would exceed the actual price projected at the end of the period.

We can see that the line hits $200/barrel in 2035. Since they assume that oil will be $180 in 2015, they can therefore say that the difference (between the actual and projected price) would be very small: Hence, an increase of only perhaps $1/month for the average rate payer.

However, it follows that if the actual price of oil is much lower than $180/barrel, rate payers will be paying the difference between that amount and $200. What if the actual cost of oil in 2015 is $120/barrel? That would cause rates to go up much more than $1/month – especially for high-power users.

I cannot help but think that HECO is damaging its credibility immensely by pushing this project. HECO is spending hundreds of
thousands of dollars on public relations to convince us that it is trying to lower people’s rates – when, in secret, it appears to be doing exactly the opposite.

By the way, HECO says the hundreds of thousands of dollars it spends on PR comes from its shareholders. How can rate payers tell when HECO is speaking on behalf of its shareholders, and when it’s speaking on behalf of its customers?

This Aina Koa Pono project needs to be rejected because it will make our electricity rates rise. Rising electricity rates act like a giant regressive tax, because as folks who are able to leave get off the grid, those who cannot afford to are left to pay for the grid.

This results in farmers and other business folks having higher operating costs. For everyone else, it takes away discretionary income. And we know that two-thirds of our economy is made up of consumer spending.

There are also problems with the project itself. Fuel has never actually been produced using the process and feedstock that Aina Koa Pono proposes. AKP does not know what it is going to grow. So far, the feedstock it is testing experimentally is white pine. The Micro Dee technology that AKP wants to use is still experimental.

There is also a risk that this process might use more energy than it generates. Generating electricity is generally about boiling water and making steam that turns a turbine. It is cheapest to burn the stuff, boil water and make steam.

But Aina Koa Pono’s proposed process is extremely energy-intensive and expensive: It would make electricity to make microwaves to vaporize the cellulose to get the liquid and then take the pyrolysis oil, refine it to make it burnable, and then haul it down to Keahole in tanker trucks to make steam. Why should the rate payer pay for all that?

Cellulosic biofuels are not yet a cost-effective technology. On the mainland, in the middle of last year, the Environmental Protection Agency drastically decreased its 2011 estimate for cellulosic biofuel from 250 million gallons to a paltry 6 million gallons.

In 2010, cellulosic biofuel companies on the mainland needed to buy their feedstock for $45/ton. But because farmers were earning $100/ton for hay, the biofuel firms received a $45/ton subsidy.

I asked how much AKP expected to pay for feedstock, and the AECOM Technology Corporation consultant said between $55 and $65/ton. The problem there is that Hawai‘i farmers have been earning $200/ton for hay for 10 years now.

There is an agricultural production risk, as well. Palm oil is the only industrial-scale biofuel that can compete with petroleum oil. AKP has 12,000 acres and it says it will produce 18 million gallons of biofuel annually, and another 6 million gallons of drop-in diesel. So it will produce 24 million gallons using 12,000 acres. That is 2,000 gallons per acre, and that is four times the production of palm oil. More likely they would need at least four times as much land, or 48,000 acres. But where?

Consider too that Ka‘ū Sugar relied on natural rainfall, and it was one of the least productive of the sugar companies. There is a drought right now. And at 22 degrees N latitude, the area has less sun energy than the palm oil producers located on the equator.

According to Energy Expert Robert Hirsch, in his book The Impending World Energy Mess, the best model for biofuel production is a circular one, where processing is done in the
center of a field (which does not exceed a radius of 50 miles) consisting of flat land and deep fertile soil with irrigation and lots of sun energy. This situation exists in Central Maui, where Hawaiian Commercial & Sugar Company (HC&S) is located. It explains exactly why HC&S is the sole surviving Hawai‘i sugar plantation.

To compete heads up in the world market would require the best possible combination of production factors. These are not them.

It’s also important to consider that locking ourselves into a 20-year contract now would preclude lower cost alternatives. Geothermal, for example, is the equivalent of oil at $57/barrel. Ocean thermal has the possibility of being significantly lower in price than $200/barrel oil.  LNG is on the radar and so is biomass gasification. Who knows what else would come up in 20 years?

Paul Brewbaker and Carl Bonham, both highly respected Council of Revenue members, have said, very emphatically and for a while now, that low energy cost is critical. We should listen to them.

The International Monetary Fund team modeled different oil supply scenarios and did a presentation at the Association for the Study of Peak Oil (ASPO) conference a month and a half ago. They could not model a constant $200/barrel oil. Those would be uncharted waters; and ones, by the way, that would devastate Hawai‘i’s tourist industry. Why should we start paying $200/barrel for oil in 2015 if we don’t have to?

Five people from Hawai‘i attended this year’s ASPO conference. Notably, Kamehameha Schools sent two high-level people. Next year, Hawai‘i should send 20 people to learn what’s happening with oil prices and energy.

In the meantime, the amount of risk involved in the AKP biofuels proposal is just far too great. In the investment world, reward is generally commensurate with risk. Except for protection from $200/barrel oil in later years, the AKP project would provide little reward for all the risk we rate payers would assume.

This is a very, very bad deal for consumers.

Big Island electricity rates have been 25 percent higher than O‘ahu’s for as long as anyone can remember. This probably adds to the reason why the Big Island has the lowest median family income in the state, as well as the social ills that go with it. We need lower rates, not higher rates!

Although this is not an official Big Island Community Coalition (BICC) communication, I would like to point out that the BICC has been very instrumental in getting lots of people to stand up and say, “Enough is enough.”

The BICC is a bare-bones, grass roots citizen group with some of the most recognizable names on the Big Island on its steering committee: Dave DeLuz Jr., John E K Dill, Rockne Freitas, Michelle Galimba, Richard Ha, Wallace Ishibashi Sr., Ku‘ulei Kealoha Cooper, D. Noelani Kalipi, Ka‘iu Kimura, Robert Lindsey, H M Monty Richards, Marcia Sakai, Kumu Lehua Veincent and William Walter.

Hilo’s PUC Meeting Successful: ‘Enough is Enough’

Richard Ha writes:

Monday night’s PUC hearing in Hilo went very well. The overwhelming sentiment was that enough is enough. People will not take any more electricity rate hikes.

Big Island Video News has posted a video about the PUC meeting.

VIDEO: Aina Koa Pono, HELCO rate hikes blasted at PUC hearing

October 30, 2012

Video by David Corrigan, Voice of Stephanie Salazar

HILO, Hawaii: Residents of East Hawaii packed the Hilo High School cafeteria, to tell the Public Utilities Commission what they think about a proposed electricity rate hike and and biofuel surcharge…. Watch the Big Island Video News video here.

It’s hard to remember that until the BICC dared say it, no one could imagine we could actually get lower rates. We have made good progress. People are now saying they want lower rates, and expecting it.

In its “Off the News” section this morning, the Star-Advertiser wrote:

Electricity bill too high? Wear slippers

“Not to make light of a serious situation such as rising electricity bills, or a consumer group’s desire to show solidarity.  In an era when pennies – and dollars – must be pinched to get by, solidarity over cost-of living issues is a good thing.

That said, it was interesting to see that the Big Island Community Coalition opposed to a surcharge to finance the use of biofuels to produce power, urged its members to wear rubber slippers to last night’s public hearing as a show of uniform solidarity. This being Hawaii, what other footwear would folks don for a pau hana (after work) forum?

Of course this may have been a smart strategic move. This way the PUC might have scanned the room and figured that every last person was opposed.  It also ruled out slippers as a footwear choice for commission members, too….”

It was a civilized hearing and most of the many testimonies were on point.

About 150 people were in attendance and it was a diverse audience, including: Faye Hanohano, Fred Blas, Jeff Melrose, Richard Onishi, Russell Ruderman, PGV people from Nevada, Jim Albertini, Deborah Ward, Patrick Kahawaiola‘a, Mililani Trask, John Cross, Ka‘u people, ILWU, IBEW, Carpenters, Laborers, HELCO group, the Aina Koa Pono (AKP) core group, Sierra Club and other community members.

Other than HELCO, AKP and those who needed to be cautious, most of the rest were allies of low-cost electricity.

In today’s Hawaii Tribune-Herald, Mayor Billy Kenoi made it very clear that he is against the AKP project for several reasons.

Kenoi criticizes biodiesel proposal

By ERIN MILLER Stephens Media

Aina Koa Pono’s biodiesel proposal isn’t a good deal for Hawaii County residents, Mayor Billy Kenoi said Monday, hours before the Public Utilities Commission was set to begin its first Big Island hearing on the subject.

“This to me looks like one of those deals, after 10, 20 years, we ask how did we let that happen?” Kenoi said. “Ultimately, there is no benefit to the people of the Island of Hawaii….” 

Read the rest

The Hawaii Tribune-Herald also wrote about the PUC meeting itself.

Online Extra: HELCO rate hikes blasted

By COLIN M. STEWART
Tribune-Herald Staff Writer

No more increases.

That seemed to be the main message relayed to members of the state Public Utilities Commission on Monday night by more than 100 Big Isle residents who showed up at a public hearing at the Hilo High cafeteria to weigh in on two separate electricity rate hikes proposed by Hawaii Electric Light Co. Inc….

Read the rest here

Tonight is the West Hawai‘i PUC meeting (Tuesday, October 30, 2012) at 6 p.m. in the Kealakehe High School cafeteria.

And the third and final meeting will be held this Thursday, November 1, 2012 at 6 p.m. at Farrington High School.

Wear your rubbah slippahs!

Aina Koa Pono: Farmers Want To Know About Pay

Richard Ha writes:

Farmers want to know: What can Aina Koa Pono pay farmers to raise the crops they need to make pyrolysis oil?

On the mainland, large cellulosic biofuel projects wanted to pay $45/ton for feedstock. But farmers were getting much more than that – $100/ton – to grow hay. So the biofuel projects got a $45/ton subsidy, and could then offer $90/ton for the farmers' feedstock.

Last year, in a presentation, I heard Chris Eldredge of Aina Koa Pono say that they would pay $75/ton for feedstock. But farmers here in Hawai‘i make $300/ton for their hay!

I just shook my head.

From Big Island Now:

HELCO Proposes New, Cheaper Aina Koa Pono Deal

Posted on August 3rd, 2012 

by Dave Smith

Hawaii Electric Light Co. is asking state regulators to approve a new contract with Aina Koa Pono which the utility says will be cheaper for its customers than the proposal shot down last year.

Like the proposal rejected last year by the Public Utilities Commission, HELCO would buy 16 million gallons of biodiesel produced by Aina Koa Pono on former sugar cane lands in Ka`u.

However, under the latest proposal, Aina Koa Pono would also produce an additional eight million gallons of biofuel for Mansfield Oil Company for sale in Hawai`i and eventually the mainland, the company said in a statement Thursday. Read the rest

Michelle Galimba & Kuahiwi Ranch

Richard told me he is very impressed with what Michelle Galimba and her family are doing in Ka‘u, and so I thought I’d give her a call and learn a little more.

Michelle galimbaMichelle (left) and her family

I learned that Michelle grew up on dairy farms in Ka‘u and then lived in Haleiwa on O‘ahu, where her dad worked for Meadow Gold Dairies. These days, she and her family own and run a cattle ranch in Na‘alehu.“There’s a little bit of irony in the name,” she told me about their Kuahiwi Ranch. “Kuahiwi means ‘mountain,’ but the other meaning is ‘back country,’ like ‘the sticks.’”

To some people, Ka‘u has that sort of back country reputation. Michelle says she thinks people in Ka‘u are starting to rethink values, though, such as of its traditional culture, and that the lifestyle of Ka‘u is becoming more and more relevant.

“If we can find success stories for people in Ka‘u,” she says, “I think that goes a long way in changing other people’s perceptions and also our own, for ourselves.”

She mentions the coffee industry that’s recently sprung up in Ka‘u. “My friend Chris [Manfredi] started talking with the coffee farmers and thought their coffee was really good. He entered it into this international competition and it did really, really well. People were just so thrilled.”

She is one of the organizers of this year’s Ka‘u Coffee Festival, which will be May 1st and 2nd.

“There’s starting to be a stable of agriculture products in Ka‘u that are premium and interesting and something people can be proud of,” she says. “It’s what I’m hoping for with our beef. That we can get other ranchers involved with it and build up this market for it.”

Kuahiwi Ranch started in 1993, about the time the sugar plantations were going out and sugar cane lands were becoming available. It’s operated by Michelle’s parents, her youngest brother and herself, with age-appropriate help from her daughter and her brother’s three children (who range in age from 8 to 13).

They raise cattle for beef on 10,000 acres between Wood Valley and Waiohinu. Their cattle are free range and grass fed, and the cattles’ diet is also supplemented with grain.

“It’s a little different from grass-fed beef,” she explains. “If you just feed the cattle grass, the tenderness varies. Our beef is a little bit more expensive, but it’s more consistently tender.”

From the Kuahiwi Ranch website:

With the growing public interest in eating local and sustainable food systems, Kuahiwi Ranch decided to offer the public the best beef we know how to produce — beef that is tender, mild-flavored, and of consistent quality, but also raised naturally and humanely.

Our cattle always have plenty of room to roam and green grass to eat, but they are also given access to a grain ration for approximately 90 days.  This grain ration consists of three natural ingredients — corn, barley, molasses, that’s it.  It’s kind of like granola.

Since the late ‘70s, most Hawai‘i ranchers ship their cattle to mainland feed lots, which has been the most economically efficient model. In the last three or four years, says Michelle, as corn and transportation prices have risen, things have changed and it’s become more viable to keep cattle here.

There is little infrastructure here, though, to process the beef, and until recently there wasn’t a market locally for grass-fed beef.

She says you cannot get local beef at any supermarket on O‘ahu, and that this is a focus for Kuahiwi Ranch right now. “But everything is set up to come over in a container from the mainland,” she says. “It’s what everybody’s used to working with.”

“It’s an ongoing struggle on all kinds of fronts, and in the industry as a whole, to get it to work,” she says. “On the other hand, there’s a lot of enthusiasm – from chefs and people at the farmers’ markets. That’s kind of what keeps us going.”

Here on the Big Island you can buy their beef at KTA, where it’s sold under the “Kulana Natural” and “Mountain Apple” labels. She also sells their product, under the Kuahiwi Ranch name, at the Na‘alehu Farmers’ Market on Wednesdays and at the Volcano Farmers Market on Sundays.

Somewhere in the midst of all that dairy farm living and cattle raising, Michelle went to UC Berkeley and got a PhD in comparative literature. It’s a little jarring in its dissonance from what she does now – the ranch’s marketing as well as its accounting, though she says her favorite thing is to get on her horse and drive the cattle – until she is asked about her thesis, which was about an 11th century Chinese poet named Su Shi.

“He was this academic superstar,” she says, “and in China if you were really good in literature you rose through politics really quickly. He became the premier, running the whole country, but then he was exiled to, like, Ka‘u.” She laughs.

“He wrote a lot of poems about having to grow his own food and how rewarding that was,” she says.

I get the impression that Michele and Su Shi would have gotten along.