The Big Island PUC will be holding Public Listening Sessions re: the proposed NextEra/HEI merger at Hilo High School on September 29th at 6 p.m., and Kealakehe High School on September 30th at 6:00 p.m. PLEASE ATTEND to say you support the Hawaii Island Energy Cooperative. It matters!
Category Archives: Hawaii Island Energy Cooperative
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.
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.
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.”
Chris Lee also spoke about this on Hawaii Public Radio recently. Listen here (10:11):
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.
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.
Cheaper Electricity: The Need Hasn’t Changed
Every so often I’m going to repost something here that I feel is still significant.
This article, which I submitted to the Big Island Chronicle and ran in April 2014, talks about some of the important principles behind why we formed the Big Island Community Coalition. It still applies.
***
A Call For Cheaper Electricity
Here is the single most important need facing Hawai‘i today. Everything else radiates from it:
We need cheaper electricity.
It can be done. Recently the Big Island Community Coalition, along with others, helped stop some fairly significant electricity rate hikes from showing up on everybody’s HELCO bills.
And we are very lucky to have resources here, such as geothermal energy, that we can use to generate much cheaper electricity.
Here’s why this is so important:
• We need enough food to eat, and we need to grow it here, instead of relying on it coming to us from somewhere else.
Food security – having enough food to eat, right here where we live – is truly the bottom line. We live in the middle of an ocean, we import more than 80 percent of what we eat, and sometimes there are natural or other disasters and shipping disruptions. This makes a lot of us a little nervous.
• To grow our food here, we need for our farmers to make a decent living: “If the farmers make money, the farmers will farm.”
The price of oil, and of petroleum byproducts like fertilizers and many other farming products, keeps going up, which raises farmers’ costs. They cannot pass on all these higher costs, and they lose money.
We use oil for 70 percent of our electricity here in Hawai‘i, whereas on the mainland they use oil for only 2 percent of theirs—so when the cost of oil increases, anything here that requires electricity to produce is less competitive. And farmers in Hawai‘i also pay four times as much for electricity as do their mainland competition, which puts them at an even bigger competitive disadvantage. Fewer young people are going into farming and this will impact our food security even further.
HELCO needs to be a major driver in reducing the cost of electricity. We believe that HELCO is fully capable of providing us with reliable and less costly electrical power, and ask that the PUC reviews its directives to and agreements with HELCO. Its directives should now be that HELCO’s primary objective should be making significant reductions in the real cost of reliable electric power to Hawai‘i Island residents.
At the same time, we ask that HELCO be given the power to break out of its current planning mode in order to find the most practicable means of achieving this end. We will support a long-range plan that realistically drives down our prices to ensure the viability of our local businesses and the survivability of our families. All considerations should be on the table, including power sources (i.e., oil, natural gas, geothermal, solar, biomass, etc.), changes in transmission policy including standby charges, and retaining currently operating power plants.
This is not “us” vs. “them.” We are all responsible for creating the political will to get it done.
Rising electricity costs act like a giant regressive tax: the people on the lowest rungs of the economic ladder get hurt first, and hardest. If our energy costs are lower – and we can absolutely make that happen – our farmers can keep their prices down, food will be cheaper, and consumers will have more money left over at the end of the month. This is good for our people, and for our economy.
We have good resources here and we need to maximize them. Geothermal and other options for cheaper for energy. We also have the University of Hawai‘i, the College of Tropical Agriculture and Human Resources, the Pacific Basin Agricultural Research Center and others that help our farmers.
To learn more about achieving cheaper electricity rates, consider joining the Big Island Community Coalition (bigislandcommunitycoalition.org; there’s no cost). We send out an occasional email with information on what we’re doing to get electricity costs down, and how people can help.
Remember the bottom line: every one of us needs to call for cheaper electricity, and this will directly and positively impact our food security.
Is Our Culture Falling Backward?
This editorial ran in the Hawaii Tribune-Herald today. In case you didn’t see it, I’ll run what we sent them here.
***
The purpose of the Big Island Community Coalition is to work towards reduced electrical energy costs on the Island of Hawaii – where we pay up to four times the national average for our power. We are particularly sensitive to electric power rates as very high rates serve essentially as a regressive tax on our population while greatly reducing the probability of generating jobs in any sector that is dependent on electricity.
There are occasions when events are so alarming that groups such as ours feel compelled to move beyond our primary task. This is such a time.
We have observed with increasing alarm as our community has taken steps that inexorably blunt the forward movement of our economy and even move us backwards. These include:
- Anti-Geothermal activists encouraged County government to ban nighttime drilling, effectively stopping expansion of a major source of renewable and inexpensive electric power beyond already-existing permits.This action was taken despite the existing plant meeting all applicable noise standards. It appears that government officials took this action without first going to the site to verify that the noise was disruptive. Once they did go to the site, some years later, government found that the noise was less than other environmental sounds (i.e., coqui frogs) and essentially no more than typical background noise.
- Anti-GMO activists lobbied to stop any new GMO products from being grown on the island – despite the fact that the vast majority of scientific, peer-reviewed studies found such products to be as safe, and in some cases more nutritious, as their non-GMO counterparts. Legislation even prohibited GMO flowers – not consumed by anyone – from being grown on the island. Thus family farmers lost the most effective new tools needed to reduce pesticide and herbicide usage while increasing productivity needed to keep their farms competitive.
- Now we have anti-Thirty Meter Telescope (TMT) activists taking steps to stop construction of the most advanced telescope in the world. If successful in stopping TMT, despite its sponsors following every legal requirement over a seven-year period, we will lose our world leading advantage in understanding the universe.
All of these actions share similar characteristics:
- The arguments used to justify such actions are consistently anti-scientific.
- “Anti” groups often obscure the lack of scientific evidence to support their position by using emotional pleas intended to incite fear.
- The only “win” for many of these groups is to completely stop, thereby making them completely unwilling to consider any facts that refute their position or to make any reasonable compromise.
- Long-term consequences are significant both culturally and economically.
Cultures that survive and thrive embrace new technologies carefully, thoughtfully and steadily. Cultures and economies that thrive are innovative beccause they generate ideas and solutions, solve problems and take calculated but careful risks.
Cultures that fall backwards are those that fear advancement, fear change and cling to a mythicized view of yesteryear. The net result is loss of their brightest and most hard working youth. Those youth that remain find fewer and fewer jobs – those jobs having greatly diminished economic value and lower wages. The downward spiral becomes inexorable.
As we look to tomorrow, we need to ask ourselves whether we wish to give our children the exciting and invigorating job market typified by Silicon Valley or a job market that is much closer to the poorer regions of third world countries. It is up to us to point one way or another. Driving TMT out will be one more major step to cultural and economic poverty.
Signed,
Big Island Community Coalition
Richard Ha, President,
David DeLuz Jr., Rockne Freitas, Michelle Galimba, Wallace Ishibashi, Noe Kalipi, H.R “Monty” Richards, William Walter.
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?”
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….
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.