I testified in person last week at the Hawai‘i State Legislature in favor of Senate Bill 2467 and House Bill 2261. This bill, which I helped draft, helps address important issues of food security, high oil prices and economic development.
Hawai‘i has two very serious issues right now. The first is food security—we are very vulnerable out here in the middle of the ocean and must ensure we can produce enough food for our residents.
The second is our need to get off oil, which we depend upon both for transportation and for generating electricity. Prior to the Association for the Study of Peak Oil (ASPO) conference in Houston four months ago, little was reported in the press about the consequences of what are tightening oil supplies. (I was the only Hawai‘i resident to attend that conference; the next one is in Sacramento in September). Since the conference, we are increasingly hearing in the media about oil demand exceeding supply.
The answer to this problem is to generate as much electricity as possible from natural sources here in Hawai‘i, and use as much electricity as possible (vs. oil) for transportation.
Here is my testimony in support of SB2467 and HB2261:
Aloha Chairpersons and fellow representatives:
I am in favor of HB 2261—the Hawai‘i Farm Renewable Sustainable Energy Loan Program. This is a bill that accomplishes three things:
1) It addresses our food security issue by encouraging farmers to farm. If farmers make money, they will farm. This bill will help farmers save money by using alternate energy sources as oil costs rise. If the utilities will buy power from farmers in the future, farmers will make money. Further, farmers can qualify for one hundred percent state income tax credits for alternate energy projects.
2) It helps to wean us from dependence on foreign oil. When farmers produce power, that will help us get off foreign oil.
3) It addresses an economic issue of balance of payments. A dollar saved from having to buy foreign oil is a dollar that can revolve in our local economy.
This bill is necessary because energy projects cost money and in many cases, the savings is in the future. In order for farmers starting energy projects to obtain a positive cash flow sooner rather than later, they must have a lower loan payback for doing energy products as compared to present electricity/power costs. A low down payment and long payback period helps to accomplish this.
Alternate energy projects qualify for one hundred percent state income tax benefits though Act 122. While it is true that investors in these projects can qualify for favorable tax treatment, investors require a return on their investment. If investors finance farmers’ alternate energy projects, the project’s value goes to the investors, not the farmers. If that’s the case, farmers will not waste their time starting alternate energy projects in the first place. That is the main reason this bill is so effective.
Aloha,
Richard Ha
President,
Hamakua Springs Country Farms
The reason this bill is so significant is because it positions farmers to sell electricity to the grid. Instead of sending all our money to foreign countries, why not have our own people generating electricity? It keeps our money circulating in our own economy. And it also aids in our efforts to make ourselves food secure—because if farmers can make money, by selling electricity along with their food products, farmers will farm.
I believe this bill will pass “as is,” along with an amendment that expands its scope and does not detract from the original intent. Because it will be incorporated into an existing Department of Agriculture loan program, there will no need to go through the Attorney General’s office for scrutiny. And since there is no request for funding at the present time, it also will not need to go through the House Finance committee or the Senate Ways and Means committee.
On another, related, topic, we are also working with the U.S. Department of Energy to develop alternate energy projects here on the Big Island.
Things are starting to move! I’ll write about those efforts in another post.
What I can tell you now is that it is all very encouraging.