Tag Archives: Kumu Lehua Veincent

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.

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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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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.

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Amending HB 106: ‘Let’s Fix It”

Richard Ha writes:

I sent in testimony, on behalf of the Big Island Community Coalition, regarding HB 106, draft 1. This bill contemplates repealing Act 97 (geothermal subzones, etc.).

We should keep the good parts of this bill and add parts that make it better. We need balance as we take care of everyone’s needs. This is about all of us, not just a few of us.

Here’s my testimony:

To the Water & Land committee

Aloha Chair Evans and Vice Chair Lowen,

The BICC is very strongly in favor of amending this bill.

There are good things in this bill; let’s leverage that. We are strongly against repealing it in its entirety.

No question: home rule should be addressed. This was an unfortunate oversight the last time around. Let’s fix it.

The heart of the bill that must be kept is the part that allows geothermal exploration and development in various land use designations.  The geothermal resource exists where it exists, not where we want it to exist. So we need a larger area to explore, not less. By having more choices we can get further away from populated areas. And we can increase our chances of success. The permitting process gives the necessary checks and balances to protect the people.

The essential problem we must solve is how to protect the people from rising oil prices. Repealing Act 97 in its entirety will raise our electricity prices.

The petroleum era is less than 150 years old. Oil is a finite resource and we are observing increasing oil prices. Oil price has quadrupled in the last 10 years. In contrast, the Big Island will be over the “hot spot” for 500,000 to a million years.

Geothermal-generated electricity is less than half the cost of oil-generated electricity. And it will be stable for 500,000 years.

The Big Island’s electricity costs have been 25 percent higher than O‘ahu’s for as long as anyone can remember. The Big Island Community Coalition is a grass roots organization that was formed to drive the cost of electricity on the Big Island down.

One of the BICC members did a cost analysis of a local school district’s 12 month electricity bills – generally 2012. Their costs (total of all schools involved) averaged $115,900/month.

At O‘ahu’s rates, those costs would be $115,900/1.25 = $92,700. That’s a savings of $23,200/month or $278,400/year.

If we figure $70,000/year pay for a teacher, the difference is four teachers for the district.

Because of these kinds of things, the BICC said enough was enough.  People turned out at the PUC hearings, and consequently the governor issued a press release saying that HECO/HELCO had withdrawn its proposed 4.2 percent rate hike.

No one has ever told us: “We disagree with you; we want higher electricity rates.”

The members of the BICC are Dave DeLuz, Jr., John E.K. Dill, Rockne Freitas, Michelle Galimba, Richard Ha, Wallace Ishibashi, Ku‘ulei Kealoha Cooper, D. Noelani Kalipi, Ka‘iu Kimura, Robert Lindsey, H.M. “Monty” Richards, Marcia Sakai, Kumu Lehua Veincent and William Walter.

Rising electricity rates act like a regressive tax, but worse. As electricity prices rise, folks who can afford to get off the grid will do so. Those who cannot leave, the rubbah slippah folks, will be left to pay for the grid.

If we can achieve low-cost, stable electricity, trickle-up economics can result. If the rubbah slippah folks have money to spend, they will spend. Then businesses will be able to hire, and then we won’t have to send our children away to find jobs.

There is a lot at stake here.

Good luck.

Aloha,

Richard Ha
Cell 960-1057

I’ve been to five Association for the Study of Peak Oil conferences. I was co-chair of the Geothermal Working Group authorized by SCR99, and sit on the Hawaii Clean Energy Initiative (HCEI) steering committee and the State Board of Agriculture. I’ve been to Iceland to see geothermal in operation, and I was part of the Big Island delegation that toured geothermal resources in the Philippines.

At Hamakua Springs we farm 600 fee simple acres of diversified crops. I do an Ag and energy blog at hahaha.hamakuasprings.com.

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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.

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