Tag Archives: Big Island

HECO Withdraws Rate Increase Request & More

January 29, 2013 Richard Ha 4 Comments

Richard Ha writes:

Governor Neil Abercrombie issued a press release yesterday, announcing that Hawaiian Electric Company is withdrawing its rate increase request for the Big Island:

State Reaches Settlement with Hawaiian Electric Company

HONOLULU –As island families and businesses continue to face high energy prices, Gov. Neil Abercrombie today announced a settlement between the State of Hawaii and the Hawaiian Electric Company, Inc. (HECO) that will result in the withdrawal of a rate increase request for Hawaii Island and a significant reduction in taxpayer dollars requested to cover project costs.

Subject to approval by the Public Utilities Commission (PUC), the formal settlement filed with the PUC on Jan. 28 outlines an agreement between the state Department of Commerce and Consumer Affairs’ Division of Consumer Advocacy (DCA) and HECO, including its subsidiaries, Maui Electric Co., Ltd. (MECO) and Hawaii Electric Light Company, Inc. (HELCO), which serve Maui County and Hawaii Island, respectively.

“With high oil prices driving up electricity and other costs throughout our economy, we have to take action to help Hawaii’s families and businesses who are struggling to make ends meet,” Gov. Neil Abercrombie said. “While this settlement will help in the short-term, we remain committed to pursuing long-term solutions toward clean energy alternatives.”

As part of the settlement, HELCO will withdraw its request for a 4.2 percent or $19.8 million rate increase in 2013.

HECO and its subsidiaries will also reduce by $40 million the amount being sought for improvements to two major projects –the 110-megawatt biofuel generating station at Campbell Industrial Park and a new customer information system.

In addition, HECO will also delay filing a 2014 rate case that was originally scheduled to be filed this year under the current regulatory framework for reviewing its rates

DCA Executive Director Jeffrey Ono said: “This settlement will benefit consumers and help reduce the ever-increasing cost of electricity.”

Around five months ago, the steering committee of the Big Island Community Coalition formed, in order to advocate for Big Island rate payers to have the lowest electricity rates in the state.

It submitted this Op Ed to Hawai‘i’s newspaper.

HELCO & YOUR BILL: WHAT’S WRONG WITH THIS PICTURE?

By Noelani Kalipi

Hawaii Electric Light Co. is applying to raise Big Island electricity rates by 4.2 percent — shortly after its parent company announced impressive profits that were 70 percent higher than last year.

What’s wrong with this picture?

…The proposed HELCO rate increase, coming at a time of record profits, does not sit right with us.

We understand the regulatory system, which is rate-based. Our concern is that we continue to see requests for rate increases at the same time that we read about record profits for the utility.

While we understand the fiduciary duty to maximize profits for the shareholders, we believe the utility’s responsibility to the rate payer is just as important. As part of good corporate business, it should benefit both by investing its profits into a sustainable grid.

The Big Island is one of the few places on the planet where we have robust, renewable energy resources that can be harnessed effectively to provide firm, reliable, low cost electricity for our residents.

One example is geothermal, which costs about half the price of oil. We also have solar, wind and hydroelectric. We have resources right here that can both lower our electricity costs and get us off of imported oils.

Lower rates would mean that when the grid needs repairs, or the cost of oil goes up again, it will not be such a punch-in-the-gut to our electric bills.

If HELCO is allowed to raise its rates by the requested 4.2 percent, plus raise rates again via the Aina Koa Pono project, and then the oil price goes up, that would be a triple whammy price hike on your electric bill….

Read the rest here

The steering committee is: Dave De Luz 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.

Prior to that article, people expected that rising electricity rates were inevitable, and that they could do nothing about it. But the steering committee encouraged people to attend PUC hearings and write letters, and it has made a huge difference.

The Consumer Advocate noticed and told the Hawaii Tribune-Herald that the PUC meetings had some of the largest turnouts that he has seen. He said that if an equivalent number of letters came from O‘ahu, it would take two days just to read them all.

When people attended PUC hearings and wrote letters protesting the rate hikes, the thinking started to change.

Someone who has been reading about our efforts commented that they made him think of these words of Gandhi’s, which are pretty profound.

When we wrote that letter, this change was just a thought. Our thoughts became our actions. And our actions became our habits. Soon, our habits will become our values and our values will become our destiny.

It’s already started.

Biofuel, Government

NY Times: Fed Court Says Biofuels Quota Based on “Wishful Thinking”

January 27, 2013 Richard Ha

Richard Ha writes:

Friday’s New York Times article Court Overturns E.P.A.’s Biofuels Mandate is very interesting.

Even more reason for the PUC to set aside the Big Island’s Aina Koa Pono biofuels project!

From the New York Times:

Published: January 25, 2013

WASHINGTON — A federal appeals court threw out a federal rule on renewable fuels on Friday, saying that a quota set by the Environmental Protection Agency for incorporating liquids made from woody crops and wastes into car and truck fuels was based on wishful thinking rather than realistic estimates of what could be achieved.

But actual production has been near zero.

While the mandate springs from a 2007 act of Congress meant to promote advanced biofuels to run cars and trucks, “we are not convinced that Congress meant for E.P.A. to let that intent color its work as a predictor, to
let the wish be father to the thought,” the court wrote….

Read the rest

Geothermal, Government, Peak Oil

My Testimony Against Resolution 42-18

January 23, 2013 Richard Ha 2 Comments

Richard Ha writes:

I testified before the County Council against Resolution 42-18. That’s the resolution that asks the Legislature to repeal Act 97, which allows geothermal resource zones in certain land classifications.

This was my testimony:

I think we can make things work to everyone’s satisfaction by amending Act 97, instead of repealing it.

I am testifying as a farmer who has attended five Association for the Study of Peak Oil (ASPO) conferences. Most of the time, I was the only person there from Hawai‘i.

The world has been using two to three times the amount of oil as it had been finding, for 30 years. Oil is a finite resource and there will be consequences. It’s not a matter of if. It is just a matter of when.

More Information can be found at the ASPO website.

A report done by an economic research team of the IMF was presented at the last ASPO conference.

They modeled five declining oil scenarios. They found that under declining oil scenarios of between one and four percent – when oil price exceeds $200 per barrel of oil – it could not be modeled. That would be uncharted waters.

The report said when two of three of the following conditions occur, then all bets are off.

If the minimum amount of oil necessary to maintain infrastructure is not met
If a minimum amount of oil necessary to maintain essential technology is not met
Or if the relationship of supply to demand exceeds 1-1, and the oil price rises faster than supply

If two or more of these issues occur simultaneously, the results could be dramatic or even downright implausible. These words in an economic report are very worrisome, especially for us living out here on an island.

We on the Big Island could be in jeopardy from outside forces. Robert Rapier, an International energy expert, lives right here on the Big Island. I highly recommend that the County Council ask him to give a presentation.

I also recommend that we start to focus on solutions. Just saying no is not enough.

Big Island, Lowering Electric Rates, Peak Oil

What I Gleaned From This Year’s Peak Oil Conference

January 1, 2013 Richard Ha 1 Comment

Richard Ha writes:

I’ve found it takes about a month for me to assess what I learn at Association for the Study of Peak Oil (ASPO) conferences. And it’s been about a month now since I returned from the most recent conference, my fifth one.

As we start a new year, I can say that I am very optimistic about our prospects on the Big Island. Our new County Council is thinking about the whole island, not just East vs. West. The Big Island Community Coalition has shown that people can indeed draw a line in the sand and make a difference on electricity price issues.

This is truly about all of us; not just a few of us. Instead of focusing on the thousand reasons why “No can,” we need to form into communities of people who agree on the one reason why CAN:

For the greater good.

The U.S. shale, gas and oil boom will not last forever. But it does give us some time to position the Big Island to be a better place for future generations. It is about utilizing low cost options, and it is about taking care of our community. Doing these things will make all of us more prosperous.

Bananas, Big Island, Community, Government

Looking Back: RIP Senator Inouye

December 25, 2012 Richard Ha 1 Comment

Richard Ha writes:

Senator Dan Inouye had a direct influence on Hamakua Springs Country Farms, primarily through the Rural Economic Transition Assistance Hawaii (RETAH) program. That, in turn, allowed us to be part of the Big Island Community Coalition, where our mission is to achieve the lowest-cost electricity in the state.

We continue to follow Senator Inouye’s example: It is about all of us, not just a few of us.

Mahalo, Senator Inouye—Rest in Peace.

Let me tell you a story. Nearly 18 years ago, C. Brewer Executive John Cross let me use 10 acres at Pepe‘ekeo, rent free, to test grow bananas. It was not clear then whether or not bananas could be successfully farmed in the deep soil and heavy rainfall of the Hilo Coast.

Having farmed bananas in the rocks of Kapoho and Kea‘au, I had no experience pulling a plow or getting stuck in mud. Until then, the standard way of planting bananas was by the “mat” system. The idea was to plant 250 plants per acre. Then, after the first bunch was harvested, you let four plants grow up, thereby increasing the population to 1000 plants per acre.

We decided to plant 25 percent fewer plants, in straight rows, so sunlight could hit the ground. The idea was to mow the grass in the
middle aisles in order to get traction instead of getting stuck in the mud. On that 10 acres, I mowed the grass and pulled a plow during the week to mark the lines. Then every weekend for several months, Grandma (who was 71), June, Tracy, Kimo and I, plus our two grandkids, would plant the banana plants from our own tissue culture lab.

(UH Hilo Professor Mike Tanabe taught us how to do that. And, by the way, instead of having a drop in production, the bunch size became larger, which made banana farming at Pepe‘ekeo more efficient.)

Kimo would carry a bucket of lime and dropped a handful as a marker every so many steps. Tracy or June drove the truck, and Kapono, who was around 6 years old, sat in the back and dropped a plant by the lime marker. Using picks and shovels, the rest of us set the plants in the ground. Even Kimberly, who was around 3, had a pick. She dug a hole wherever she wanted. After all the plants were planted, we took buckets and fertilized them.

At the end of that year, we felt it would work. We had a small ceremony where Doc Buyers, C. Brewer’s Chairman of the Board, cut off the first bunch of bananas. Also present were Jim Andrasick, who was then President of C. Brewer, and later Chairman of the Board of Matson; Willy Tallett, Senior Vice President of Real Estate/Corporate Development, and John Cross, who later became President of Mauna Kea Agribusiness (the successor company of C. Brewer).

C. Brewer had tens of thousands of acres and we had 10 acres – but our dreams were huge! We did not feel awkward that this group of heavy-duty corporate people were in attendance. We knew where we were going and it felt very appropriate for them to be there.

Then, a few years later, Senator Inouye, the leader of the Democratic party, appointed Monty Richards, a staunch Republican, to administer the RETAH program. That helped us expand our production at a critical time. And again Senator Inouye demonstrated that it wasn’t about a few of us, but it was about all of us.

We are only one of the tens of thousands of people who were helped by Senator Inouye.

At this special time of year, we look back at times and people from long ago and we smile. We thank everyone who has helped us along the way.

If we can continue to grow food, and if we can help our workers have a better life for their children, those are our goals.

Happy Holidays, Everyone.

Community

Biomass To Electricity: A Fancy Way To Talk About Firewood

December 12, 2012 Richard Ha 1 Comment

Richard Ha writes:

At last week’s PUC meeting in Hilo regarding the Hu Honua Bioenergy project slated for Pepe‘ekeo, few members of the public objected to the project.

The hearing was required because HELCO is proposing to relocate a switching station. The proposed site is on a 13-acre parcel that June and I own; they want to buy half of the property. We notified the community associations that this was taking place several months ago, and, as a consequence, I do not plan on submitting personal testimony to the PUC.

At the PUC meeting, the Kamehameha Schools (KS) representative talked about forest products as an industry. What is more practical and proven than using firewood to boil water? This is what we need; it’s practical.

This Big Island Video News video covers the meeting, and here are some things to especially note:

At the 3:00 minute mark, the KS representative expresses how this project could be the catalyst around which a forest industry could grow. Native trees, especially, take a longer time, and so a combination of native and non-native trees could make the forest industry viable.

As a scalable feedstock, trees work on the Hamakua Coast. They’ve been growing for 20 years. KS is crucial to making this big picture work.

Of course we won’t overdo it. Everyone knows what happened to Easter Island. We are talking about balance and proportion.

Early Hawaiians understood this; it’s why they sometimes had a kapu on fishing – in order to prevent overtaxing the resource.

At 6:50, David Tarnas presents Robert Rapier’s testimony. Robert was in Austin at the time, where he was lead speaker on the second day of the Association for the Study of Peak Oil conference. Giorgio Calderone and Jason Jeremiah, both from KS, and Noe Kalipi and I also attended that conference.

Robert lives in Waimea and we would love to claim him, but he is more of a national/international representative. He participates in the HECO Integrated Resource Planning process.

His testimony was that the Big Island needs a firm power alternative to oil, and that biomass and geothermal fit that description. His testimony is that the most efficient way to turn biomass (firewood) to electricity is to burn it.

At the 8:30 mark, Elaine Munro talks about the conflict between HECO’s fiduciary duty to the shareholders and the rate payer. She talks about the cost of capital and how the present model results in unnecessary higher costs to the rate payer. We all know that the model is broken.

Lynn Nakim, at 11:00 minutes, talks about environmental effects. Lynn is a neighbor of ours at Hamakua Springs. She uses solar panels for power.

At the 16:00 minute mark, a worker expresses his opinion. The money stays in Hawai‘i and provides jobs for Big Islanders, instead of being sent to foreign countries to pay foreign workers.

Making firm power electricity is mostly about making steam to turn a turbine. Burning wood to make steam is proven technology and will be cheaper and more stable than oil price in the long run.

From Big Island Video News:

HILO, Hawaii: The public expressed widespread support
for the Hu Honua Bioenergy project at Wednesday night’s Public Utilities Commission hearing in Hilo.

Hu Honua Bioenergy LLC is converting the former Hilo Coast
Power Company plant at Pepeekeo into a modern biomass energy facility. The 24-megawatt operation is expected to meet about 10 percent of the island’s electrical needs and about enough for 14,000 homes, once in operation.

Hu Honua has negotiated a power purchase agreement with
Hawaii Electric Light Company, which is subject to approval by the PUC. However, the hearing was triggered by the need to install transmission lines for the project, as explained by this HELCO engineer.

Nevertheless, the hearing created an opportunity for the public to share its views on the entire project.

Speaking in favor of the proposal, the growing forestry industry on the Hamakua Coast, where thousands of acres on the Hamakua Coast are occupied by Eucalyptus trees, ready for harvest….

Read the rest

Peak Oil

Best Possible Odds & How To Determine Them

December 3, 2012 Richard Ha

Richard Ha writes:

I just attended my fifth Association for the Study of Peak Oil (ASPO) conference, which was at the University of Texas at Austin. I attend these conferences in order to figure out how to give our farming operation the best possible odds of succeeding in this world of finite resources.

Determining this requires understanding the main drivers in the world energy situation, how it all affects the U.S., and then how it affects Hawai‘i’s unique situation. When we understand that, we can determine how we need to move our farm to be relevant in a rapidly changing future.

Presentations at the ASPO conference are data-driven. None of them are based on any predetermined philosophy. It’s all about adapting to physical change and resisting B.S. Good data and a little bit of common sense keeps everything in its proper perspective.

In one sense, this is like a chess game. There will be winners and losers. The rules of physical science determine how things operate. Warren Buffett once observed that nine women cannot each have a baby in one month.

But unlike in chess, not everything is clear. As Robert Hirsch said about Saudi Arabian oil reserves on Friday, some of the information is unknowable, and in those situations we must operate on best available information.

This is when we must use common sense. Even small kids know that when you’re in a pasture picking guavas and you hear hoofbeats, you don’t gather and have a meeting. You run!

Stay tuned and I will be writing about what makes sense for us, living out in the middle of the Pacific, and on the Big Island in particular.

Big Island, Biofuel, Community, Lowering Electric Rates, Renewable Energy Sources

A Modern Day ‘Avoided Cost’ Contract. What?!

November 30, 2012 Richard Ha

Richard Ha writes:

Dr. Jim Kennedy, a friend of mine, is a respected member of the astronomy community and a tireless supoorter of the community at large. Below is the testimony he sent to the PUC.

Today is the last day the PUC is accepting testimony re: the proposed Aina Koa Pono biofuels project and HELCO 4. percent rate increase. Email your thoughts today to hawaii.puc@hawaii.gov.

Click to read Jim Kennedy’s letter.

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Big Island, Biofuel, Community, Lowering Electric Rates, Renewable Energy Sources

Graphic Opposition to Aina Koa Pono & 4.2% HELCO Rate Increase

November 29, 2012 Richard Ha

Richard Ha writes:

More PUC testimony from a Big Island resident opposing the Aina Koa Pono biofuels project and the proposed 4.2 percent HECO rate increase.

See below where he charted the price of crude oil over the past two years, as well as how much his HELCO bill increased over the same period of time, and didn’t find much correlation.

Dear Chair Morita & Commissioners:

I want to express my most sincere opposition both to the Aina Koa Pono Biofuel project and the Helco 4.2% rate hike.

In today’s day and age it is inconceivable that while we are living in one of the most privileged locations on the planet with regards to renewable energy resources availability we still depend on a single utility company that holds a true monopoly on the power generation and that continues to ignore what would be the most efficient path towards energy independence.

South Puna seats on a rich geothermal zone that could provide enough power for the entire Big Island. South Kona & Kohala areas have enough sun radiation to produce a significant supplement to the grid, and South Point and Saddle Road areas provide some of the most reliable wind patterns for wind generation. Yet, here we are debating on whether we should lock in a $200/barrel deal with a biofuel company. Who in its right mind would opt for this option!?

As for the rate hike, the following graph shows my cost per kWh at my home for the past two year (since Jan 2010)

As you can see from the graph, my price has increased from $0.36/kWh to $0.42/kWh, that is a 16.7% increase in just two years. Now they want an additional 4% increase? under what justification? meanwhile, HELCO continues to report record profits year after year.

And do you know what the real kicker is? look at the following graph, that shows the price per barrel of crude oil (WTI) between January 2010 and November 2012 (source: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=D).

Notice any discrepancy between the two graphs? In Jan 2010 the price per barrel of crude oil was $82.00, in November 2012 the price is $87.50 an increase of 6.7%. Helco has increased their rates 2.5 times the net increase of the price of oil, and now they want another increase.

Sincerely,

Rodrigo F.V. Romo, Ch.E., MBA, LEED AP

VP Engineering

Zeta Corporation

Big Island, Biofuel, Community, Lowering Electric Rates, Renewable Energy Sources

How Much HECO Is Spending On Those Ads, & More PUC Testimony

November 29, 2012 Richard Ha

Richard Ha writes:

You’ve probably seen the slick newspaper and TV ads. Hawaii Electric Company (HECO) has spent more than half a million dollars recently to convince us they are trying their hardest to do the right thing. The company is very good at public relations.

For example, the ads say HECO has increased geothermal energy on the Big Island by 25 percent. That sounds wonderful – but that is from a base of only 30 MW. It also says that Aina Koa Pono will only result in $1 per month difference to a typical rate payer.

The big picture is that HECO has resisted closing down its oil-fired plants for years. But now, people are saying enough is enough.

Here is another concerned community member’s testimony against Aina Koa Pono and the proposed 4.2 percent rate increase. Send yours to hawaii.puc@hawaii.gov by tomorrow.

To: ‘Hawaii.PUC@hawaii.gov’
Subject: Dockets Docket # 2012-0185 & 2012-0099

Aloha Chair Morita and commissioners:

I am strongly against the AKP biofuel supply contract and the increase in the Helco electricity rates.

I have lived here on the Big Island in Puna, close to Pahoa for the last 14 years and am the owner of a bed & breakfast operation in Leilani Estates. I have a family with two children and two acres of property. If any of the two dockets go through it will increase the cost of doing business for me and infringe on the viability of my operation. The nature of my business requires for electricity to be available to our guests and there are many times, when I cannot control the use of it, because guests staying at my B&B may not be as conscientious in preserving energy as I am: fans, lights, radios or TVs are left on even though the visitors are not in their rooms. In order to cover additional operational cost my only option would be to increase our B&B rates, however, with the current economy this will result in a decrease of bookings, as people traveling always look for bargains and are not willing to pay higher accommodation rates, if they can get a “beat-the-price” online offer for some of the hotels as package deal with much better conditions.

On the Big Island, electricity rates have been 25 percent higher than Oahu’s rate for as long as people can remember. It has contributed to the Big Island having one of the lowest median family incomes in the state and the attendant social problems that come with a struggling economy. As a family this affects our children and the way we are able to give back into the economy and our communities.

Rising electricity rates act like a regressive tax – people at the bottom of the economic ladder suffer the most. But it is worse; as electricity prices rise, folks that can afford to leave the grid will do so, leaving the folks unable to leave to assume more of the grid infrastructure cost. It is a catch 22. For me with my business depending on consistent electricity supply, it would be impossible to leave the grid and I would be directly impacted by the increased rates and future consumer decisions.

1. Aina Koa Pono Biofuel Project – Docket 2012-0185: Rate payers will subsidize the difference between the actual oil price and the $200 that AKP will be guaranteed for 20 years. It is more than possible that actual oil prices would be substantially below $200 for the whole contract period. That will result in a heavy subsidy that rate payers must bear. The $200 per barrel rate is much too high. And the cost differential that is anticipated to be passed through to the rate payer is unconscionable. The PUC should not approve as just and reasonable that the utility should be allowed to establish a Biofuel Surcharge provision that will allow the pass through of the cost differential to the consumer as well as the actual cost pass through itself.

2. HELCO Rate Increase – Docket 2012-0099: HELCO states in its full page newspaper advertisement that only 3% of its revenue goes to profits. In 2011 HELCO reported $138.2 million in net earnings. Most small businesses in Hawaii do not have a 3% profit margin, most net earnings are much lower and that includes my Bed & Breakfast business. Increased electricity rates would narrow this margin even more. I am entirely opposed to an increase in electricity rates. As a business owner it is HELCO’s responsibility to keep the grid in operating condition. This is not the responsibility of the end users nor should we be charged for it. It is a crucial part of the operating expenses and investments in the future, that a business has to strategically make. It is the same for my business, if I let my rooms fall into disrepair or do not invest in new mattresses every few years, people will stop coming. It is in my best interest to make these investments as I am wanting to stay in business. It is the same for a utility company. Not all investments can be directly compensated by increased rates. The market and consumers will only bare so much – and as consumers, we are saying – no more! Profits will go up and down, depending on what investments have to be made – and that is true for all businesses. But as a business owner we all know that these investments are long term and also mean decreases in the company’s corporate taxes. Also, how much do you think the HELCO advertising campaign costs? Without knowing exact figures I am sure it is in the millions. As end consumers, we are paying for that, too! What a waste of good money…

Petra Wiesenbauer