You have to give the Board of Water Supply, under the leadership of Milton Pavao, credit. While everyone else is talking about alternate energy, the Board of Water Supply is quietly doing something about it. They finished the first hydroelectric unit on Hina Lani Street this past September.

The tall unit on the left is a turbine that generates electricity. It is at the third water tank at the intersection of Hina Lani Street and Queen Kapiolani Highway in Kona.

And now they are working on another at the Kahalu‘u Shaft just above Keauhou.

The hydroelectric generator located just outside the Kahalu‘u Shaft. This generator provides electricity to the three pumps down in the shaft. Additional power is provided by HELCO.

There are three big water pumps in this shaft located above the Keauhou shopping center, just off the main highway. The Board of Water Supply generates electricity from a higher elevation source. The electricity generated will help to lower the cost of running the three pumps. Savings may be in excess of $150,000 per year. This will benefit all Board of Water Supply customers on the Big Island.

At approximately 40KW, these units are tiny compared to the big generating plants, which can be up to 700 times larger. But they can save the Board of Water Supply system more than $100,000 each. And they have plans to install these kinds of units all over the island. This will stabilize water rates and avoid our having to pay for oil from foreign governments who may not even like us.

I am interested in all this because we plan to install a similar type unit soon at our farm. But I am very concerned, because there seems to be a problem getting permitted under Schedule Q.

Schedule Q applies to small projects that are less than 100 KW in size. By contrast, geothermal is 750 times larger than that. HELCO enables the larger projects by competitive bidding. This insures lowest rates to rate payers.

Schedule Q has different goals and results. It contemplates encouraging alternate small energy production, and it encourages food security as well as economic security through enabling small producers of energy.

The first unit on Hina Lani Street, completed in September, still has not received its permit from the PUC. That is nearly six months. For half a year we haven’t avoided oil usage and Water Supply customers have not received the benefit of its use. I worry that the PUC is contemplating some other payment schedule, rather than the “avoided cost” of using oil, as was the procedure all along under Schedule Q.

Because of the uncertainty, it was suggested that we consider a different rate schedule—something called Net Metering. This means that usage would be accumulated for the month, and if we used more than we generated we would pay the net difference. But if we generated more than we used, we would just give it free to HELCO.

For us, this would make it more difficult to justify starting the project in the first place. Our project is estimated to cost more than a million dollars. And nearly 25% of the unit’s output would not contribute to the loan repayment.

But this is about more than just us. In a world where oil supplies are decreasing and where we, sitting in the middle of the Pacific, are especially vulnerable, we need to encourage more people to provide renewable energy so we can free ourselves from foreign oil. We should encourage our small businesses to produce energy, not discourage them.

Earlier in the session, we submitted a separate bill that attempts to empower farmers by enabling them to finance alternate energy projects under favorable terms. It expected that Schedule Q would continue in effect.

The benefits of this bill are:

1. Food security. If farmers make money, they will farm.

2. Energy security. The less we depend on foreign oil, the more secure we will become.

3. Economic security. If we pay our own businesses for energy instead of paying foreign government for oil, the money will circulate and multiply in our own economy.

The PUC needs to streamline the whole process and it needs to pay “avoided costs” of oil under Schedule Q.

Here is the resolution that we drew up to bring clarity to the PUC regarding the legislative intention of Schedule Q.