Tag Archives: NextEra

Where Kauai Utility and NextEra Stand

Richard Borreca wrote an editorial for the Honolulu Star-Advertiser’s “On Politics” column Sunday. It’s called “Compared to NextEra, Kauai’s Utility Looks Good.”

He notes that all the talk about Hawaiian Electric Industries (HEI) merging with NextEra Energy comes when Hawaii is, more and more, being recognized for its moves into alternative energy. “HECO,” he writes, “with its flickering support for solar programs, has caused consumers to vote with the checkbook as they scramble to go solar and leave the grid. Unfortunately, the public utility getting much of the praise is not HECO, but the tiny Kauai Island Utility Cooperative.”

Compared to NextEra, Kauai’s utility looks good

It has been a year-and-a-half since Hawaiian Electric Industries announced it was set to merge with Florida-based NextEra Energy Inc. in a deal worth $4.3 billion.

If talk were watts, the still-not-approved purchase could power the state. Everyone has an opinion on the publicly traded local company.

The talk may be up as the companies have set a June 3 time limit for consummating the deal, which also needs a decision by the state’s Public Utilities Commission to approve, reject or modify the merger…

Read the rest (behind Honolulu Star-Advertiser paywall)

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Civil Beat Article about Richard & Co-op: ‘When People Power Meets Electricity’

Did you see this Civil Beat article that ran yesterday about Richard and the Hawaii Island Energy Cooperative? It’s a good look at how the price of oil and electricity affects agriculture.

When People Power Meets Electricity On The Big Island

NextEra Energy’s proposed takeover of Hawaii’s century-old utility has sparked a renewed effort to establish an electric utility co-op on Hawaii Island.

At Hamakua Springs Country Farms on the Big Island earlier this year, rows of aging arched white awnings covered surprisingly barren soil along the dirt road that leads into the farm.

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Letter: Why Hawaii Island Energy Co-op Makes Sense

Michelle Galimba’s letter to the editor in Friday’s Hawai‘i Tribune-Herald offered a great overview of why the Hawai‘i Island Energy Cooperative makes great sense for the Big Island.

Here’s Michelle’s letter:

Support the Co-op

Hawaii Island Energy Cooperative is a group of local people who want to offer an alternative path to the NextEra-HEI deal. We want to make our Hawaii Island more resilient and equitable by keeping decision-making and accountability here on our island.

We want to offer the possibility of taking responsibility for the energy future of our island communities by means of an energy cooperative that will be owned by all energy users on Hawaii Island. This is a path that already has been taken by the citizens of Kauai, and by more than 900 other communities across the United States.

We will have the opportunity to make our voices heard on the question of the ownership of the energy utility for our island at the Public Utility Commission’s public hearings at 6 p.m. Sept. 29 in the Hilo High School cafeteria and at 6 p.m. Sept. 30 at the Kealakehe High School auditorium.

Let’s let the PUC know we support an energy cooperative for Hawaii Island!

Michelle Galimba, Naalehu

Please come out this Tuesday (at 6 p.m. in the Hilo High cafeteria) or Wednesday (at 6 p.m. in the Kealakehe High cafeteria) to let the PUC know that you support the Hawaii Island Energy Cooperative. Read more about why this is important.

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See Mina Morita’s Blog Post on NextEra Merger

Mina Morita is former chair of the Hawaii State Public Utilities Commision. At her Energy Dynamics blog, she wrote the post Let the Consumer Advocate & PUC Do Their Jobs!

I generally agree with what she writes. Referring to a wave of politicians who want to explore a public utility option instead of the proposed NextEra/HEI merger, she writes:

During this time of transformation a well-functioning electric utility requires insightful leadership, nimble and flexible strategic planning and strong analytical capacity. 

That is exactly why a group of community leaders and business persons formed the Hawaii Island Energy Cooperative. When the proposed NextEra/HEI merger was announced late last year, we arranged for a briefing by the KIUC folks. It looked very promising, so we formed a steering committee.  At that time, though, there wasn’t a willing seller so we waited to see if there would be an opportunity down the road.

The other day I spoke as part of a League of Women Voters forum. I told the moderator, Pearl Johnson, that we decided to use the Wayne Gretsky strategy. Gretsky said to skate to where the puck is going to be, not where it is. That’s an example of insightful leadership. We decided to prepare a co-op option in case an opportunity arose. If we had waited to start when an opportunity came up, it would have been too late.

The co-op model allows for nimble and flexible strategic planning. I told Pearl Johnson that it isn’t the strongest, largest or smartest that survives, it’s the one that can adapt to change.

A board of directors directs a co-op model. In the case of Kaua‘i’s co-op, nine members sit on the board. The terms are staggered and every year three positions become vacant, which allows the co-op to quickly respond to changes. It is especially important now because declining natural resources require us to be nimble, flexible and strategic, as Mina points out.

What we should consider is which business model will give the next generations tools they need to cope in an uncertain future.

There are many qualified people the board can hire to help with technical analyses.

The HIEC is not opposing the NextEra/HEI merger. What we are doing is positioning ourselves to be a viable option.

The Big Island has a huge advantage in working to achieve 100 percent renewable energy. We already have 40 percent renewables, and HELCO itself projects 92 percent renewables by 2030. It appears that we could probably avoid LNG entirely.

When I visited Iceland several years ago, they showed us an oil-fired plant that had been on standby since the 1970s. We could do that, too. I don’t see many opportunity costs foregone. If we change nothing at all, the co-op model would still have the advantage of some tax savings.

If we are successful in acquiring HELCO, we will need legislators to work with us to make legislation that will encourage the usage of “curtailed” (thrown away) power.

As we move toward the future of 100 percent renewable energy, we must remember that this is about all of us, not just a few of us. The co-op has an incentive to lower costs.

So yes, we do agree with Mina. We’re waiting.

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40+ Hawaii Politicians Say Let’s Explore Public Utility for Big Isle

A Civil Beat article lists more than 40 politicians interested in exploring the idea of a utility cooperative or other options, rather than the proposed for-profit NextEra/Hawaiian Electric merger.

From Civil Beat:

State, County Lawmakers Want to Explore Public Utility Option for Hawaii

A diverse group of more than 40 elected officials wants more options on the table as the merger deal between NextEra and Hawaiian Electric is being considered.

By NATHAN EAGLE 
 

More than 40 state and county lawmakers united Thursday in a commitment to explore the potential of public utilities in Hawaii.

Their announcement comes as the Public Utilities Commission considers approving the proposed $4.3 billion sale of Hawaiian Electric Industries to Florida-based NextEra Energy.

…“Public utilities don’t need higher rates to make profits for shareholders, and as a result they tend to have significantly lower rates than for-profit utilities across the country,” state Rep. Chris Lee, who heads the House Energy and Environment Committee said at a news conference in the Capitol.

He was flanked by 20 other lawmakers who support looking at fundamentally changing the monopoly for-profit utility model that has served Hawaii for the past 100 years.

Among the supporters was Honolulu City Council Chair Ernie Martin, who said the county will be the biggest consumer of electricity in the state, even surpassing the military. Council members Ikaika Anderson and Kymberly Pine joined him.

House Minority Leader Beth Fukumoto Chang, along with fellow Republican Rep. Cynthia Thielen, also said the public utility option needs to be explored.

“As Republicans and Democrats, we have differences,” Fukumoto said. “But we can all agree that the skyrocketing cost of electricity is detrimental to local familites. Until NextEra provides a framework for customer savings, it would be irresponsible not to explore options like co-ops and other alternatives.”

Read the rest

Chris Lee also spoke about this on Hawaii Public Radio recently. Listen here (10:11):

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Cost-Effective For Whom? Responding to NextEra

I cringed when I saw this morning’s Hawaii Tribune-Herald article NextEra Adviser: Co-ops Not Cost-Effective. Now NextEra, the company hoping to acquire Hawaii Electric Industries (HEI), has a Massachusetts-based spokesman speaking for it.

NextEra says it’s sensitive to Hawai‘i, but this spokesman is from Massachusetts. It’s exactly what many of us are wary of – mainland advisors with no idea of the complexity of the issues. The NextEra spokesman didn’t even seem to know that the Big Island has an abundance of natural resources quite different from what’s available on the mainland.

NextEra says if it purchases HEI in its proposed $4.3 billion deal, it would let us have an advisory board – but that doesn’t really mean anything. An advisory board wouldn’t have any power. It would be the same thing as a representative to Congress back in the Territorial days.

NextEra would be investor-owned, which means its goal would be to make money for it investors and shareholders. That would be the priority. If it benefits the Hawai‘i ratepayer at all, that would be incidental.

Contrast that with the co-op, which is non-profit and it is not taxed (that savings is returned to the ratepayers). Right there, even without making any other changes, a co-op already saves money compared to an investor-owned utility because it pays no taxes.

The co-op is not going to tell you exactly what it is going to do. We are going to set the framework so we and future generations will always be equipped to make decisions and do what is best as conditions change. There’s no way we can know now what the future holds.

Co-ops have a nine-member board of directors, with each member having a staggered term. Every year, three positions come up for election. This keeps it sensitive to what’s going on in the community. The co-op’s board structure is a self-correcting mechanism that is responsive to what the people are thinking as attitudes change over time. You don’t see that in a powerful company that’s located far away.

A company like NextEra tells you what it’s going to do and then locks it in – because that’s how it makes money for its investors. Not because it works for the local community, or saves money for ratepayers.

Keep in mind, it’s not the biggest or the strongest that survive; it’s the ones that can adapt to change. NextEra is by far the biggest (but so were the dinosaurs, and they’re not around anymore).

Hawaii Island Energy Cooperative is big enough (it will be part of a 900-member cooperative association with its own, healthy, financial institution) and it’s about adapting. It’s about doing what we have the opportunity to do for the Big Island right now – changing our energy utility to a cooperative model –  so we, and future generations, can adapt to changing conditions as needed, and survive and thrive.

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Community Listening Sessions: The PUC Wants To Hear

This is probably the last chance in this generation to have a say in how our electric utility is run.

The PUC is going to travel around the state in September holding “community listening sessions.” They want to know what we think about the HEI/NextEra merger application.

Here on the Big Island, we want to ask the PUC to consider a co-op model, similar to the Kauai Island Energy Cooperative.

The reason I say it’s probably our only opportunity is because you have to have a willing seller to put such a plan into place, and in the absense of something earth-shattering, this probably won’t come up again in our lifetime. It’s speak up now, or miss our chance.

It’s definitely in our best interest to show up at these PUC meetings and ask them to consider our co-op model: the Hawaii Island Energy Cooperative. Otherwise we miss our chance to make a change for the better.

If you are not clear on what a co-op model would look like, it’s really very simple: We’re only suggesting a change in the business model of how the electric utility operates, and that means three essential differences from how things operate now.

Some people will say we don’t have enough qualified people. Well, let’s say we didn’t change any of the employees running Hawaiian Electric, but only changed the business model. There goes that argument. There is no argument.

Essentially, there would just be three differences.

1)    The co-op would be an investor-owned, non-profit utility that does not pay taxes, and the money we save would go straight back to the people.

2)    The co-op would be a non-profit model that existed to do what the people want. People would elect the board of directors, and if people were not happy with the board of directors, they could fire them by not electing them again.

3)    People always wonder if the co-op would have enough money. The National Rural Electric Cooperative Association, or NRECA, which is made up of 900 co-ops in the United States, owns its own finance company; its own bank. Its whole objective is to manage co-ops. That’s why they are called co-ops—they cooperate with each other. They have plenty of money.

It’s not any more complicated than that. The big question here is which business model will work best for the people in terms of managing our utility. This is not rocket science.

It’s important that we show up and speak up when the PUC asks us to. Attend the meetings next month — I’ll post when and where they are — and ask the PUC to consider the co-op. Ask them to consider what’s really best for the people of the Big Island.

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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.”

 

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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.

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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 prioritiesas 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?

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