Tag Archives: Electricity Rates

Lowering Electric Rates, Peak Oil, Renewable Energy Sources

Learning From Germany & Others’ Energy Plans: No Free Lunch

Richard Ha writes:

Germany attempted to transition to a green electricity generation more than ten years ago. Today, some of its electricity rates are the highest in Europe, and it is using coal for 45 percent of its electricity. The lesson here is that there really isn’t any “free lunch.”

From Bloomberg.com today:

Merkel’s Taste for Coal to Upset $130 Billion Green Drive

By Julia Mengewein – Sep 22, 2014

When Germany kicked off its journey toward a system harnessing energy from wind and sun back in 2000, the goal was to protect the environment and build out climate-friendly power generation.

More than a decade later, Europe’s biggest economy is on course to miss its 2020 climate targets and greenhouse-gas emissions from power plants are virtually unchanged. Germany used coal, the dirtiest fuel, to generate 45 percent of its power last year, its highest level since 2007, as Chancellor Angela Merkel is phasing out nuclear in the wake of the Fukushima atomic accident in Japan three years ago.

The transition, dubbed the Energiewende, has so far added more than 100 billion euros ($134 billion) to the power bills of households, shop owners and small factories as renewable energy met a record 25 percent of demand last year. RWE AG (RWE), the nation’s biggest power producer, last year reported its first loss since 1949 as utility margins are getting squeezed because laws give green power priority to the grids….  Read the rest

How is HECO going to both lower our electricity rates and increase intermittent power into the grid? Seems we are going to bet everything on natural gas. At $4/thousand cubic feet (mcf), it is very cheap. In Asia and Europe, it’s more than $11/mcf.

What happens when its price rises in 10 and 20 years? Where will we be then? Will we have a competitive advantage to the rest of the world? Or will we be struggling, like Germany is today?

Where will we be 10 and 20 years from now? We should be paying attention to what people like Marco Mangelsdorf, president of ProVision Solar, and others are saying about the PUC’s request for an energy action plan for the state of Hawai‘i.

HECO’s Response to the PUC’s Orders: Is the Media Right? With Marco Mangelsdorf

Government, Lowering Electric Rates

HECO Withdraws Rate Increase Request & More

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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.

Big Island, Lowering Electric Rates, Peak Oil

What I Gleaned From This Year’s Peak Oil Conference

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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.

Government

County Resolution Must Include Effects Upon People

Richard Ha writes:

The Hawai‘i County Council Comittee on Agriculture Water and Energy Sustainability will meet on Tuesday at 11 a.m. to discuss a resolution put forward by the committee.

Comm. 25: A RESOLUTION TO ENSURE THE ADVANCEMENT OF PRINCIPLES OF  (Res. 19-13) SUSTAINABILITY IN COUNTY GOVERNMENT DECISIONS AFFECTING  NATURAL AND CULTURAL RESOURCES 

From Council Member Margaret Wille, dated December 4, 2012, transmitting the  above resolution, which resolves that all County-level government decisions be  consistent with specific sustainability principles and policies, as listed.

This resolution does not include effects on people, and it would be stronger if it included that component.

Rising electricity rates such as we’re seeing act like a giant regressive tax on folks who are on the lowest rungs of the economic ladder. Actually, it’s worse than that, because people who can leave the grid will do so, leaving behind the folks unable to leave who will then have to pay an increasing share of the cost to maintain the grid.

Somehow, we need to incorporate people into this resolution.

Lowering Electric Rates

Pohoiki: Taking Our Community Coalition Into The Community

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Richard Ha writes: 

Ramp

Pohoiki Boat Ramp
There was a Ho‘olaule‘a yesterday, sponsored by the Kealoha Trust, at Pohoiki Beach Park.

Richard Ha, Kuulei Kealoha Cooper, Faye Hanohano, Noelani Kalipi

Richard Ha; Ku’ulei Kealoha Cooper, administrator of the Kealoha Trust which sponsored the Ho‘olaule‘a; Representative Faye Hanohano; Noelani Kalipi,  her husband Gaylen, and their two

small children, as well as Kapono Pa and me, manned a booth for the Big Island Community Coalition (BICC) and signed up new members.

Noe Kalipi, Richard Ha, Kapono Pa

Noe Kalipi is involved with BICC for the sake of her children.
Screen shot 2012-09-03 at 9.29.05 AM
Signing up Leah Gouker.

The BICC’s mission is to lower electricity rates on the Big
Island so that they are the lowest in the state.

Sign

I got involved with the BICC for the same reason I got involved in Ku‘oko‘a: We need to align the needs of the people with the needs
of the utility. The world is changing and we must adapt.

Sign1

This is the same reason I got involved with the Thirty Meter Telescope; it helps our community transition. And it’s also why I now support the Hawaii Island Beacon Community, which is involved in making the health care system more efficient, and therefore more affordable.

Did you see the front page headline in yesterday’s Hawaii Tribune-Herald?

Poor Hit Hardest by Rate Hikes

Should a proposed electricity rate increase of 4.2 percent in 2013 be approved by the state’s Public Utilities Commission, Big Island low-income families will be among those hardest hit by higher power bills. 

Last year, almost a third of all Hawaii families that sought federal assistance with paying their electricity bills were located on Hawaii Island. 

“For many of our families, the money covers one or two bill payments, and that’s it. Then they’re in trouble,” said [Kayla Rosenfeld, spokeswoman for the Department of Human Services]….. “I get concerned every time I see that HELCO is getting a rate increase because it has a tremendous impact on these families. Their bills are already high now…. And for the elderly, some have to make a choice each month, between buying food or paying for medicine or paying their electric bill.”  Read the rest

The bottom line re: all my involvement is that agriculture
is a hard business. I am unable to raise my workers’ pay, and they are coming under increasing pressure from the economy.

Everything I do starts with the objective of helping my farm workers. And helping our workers helps everyone in the community, as well.

Community, Geothermal

Join the Big Island Community Coalition for Lowest Electricity Rates

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Richard Ha writes:

The Big Island Community Coalition is determined to make Big Island electricity rates the lowest in the state.

Big Island Community Coalition

After all, we have the best combination of renewable resources here on the Big Island. It will proactively weigh in wherever electricity rates are involved.

The fundamental problem with the Hawaii Clean Energy Initiative is that it does not require that the electric utility choose lower cost solutions. It does not take into consideration the rubbah slippah folks.

Two-thirds of our economy is made up of consumer spending. If in place of expensive electricity we had affordable electricity, businesses would grow, farmers would farm and we would not be sending our children to the mainland to look for jobs.

Visit the Big Island Community Coalition website to join the mailing list and support the Big Island Community Coalition’s Priority #1: “Make Big Island electricity rates the lowest in the state by emphasizing the use of local resources.”

Geothermal, Peak Oil

Can We Have the Same Electricity Rates Statewide?

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Levelized electricity rates across the whole state?

Yes, but it needs to be done in a deliberate, thoughtful manner.

Geothermal is gaining momentum, but we need to make sure we don’t get ahead of ourselves. This must be a bottom-up process, and it must be a Big Island-driven process.

  • We must assure public safety and demonstrate appropriate deference to cultural concerns.
  • That accomplished, there must be a clear pathway to lower electric rates for Big Islanders.
  • And, as the geothermal working group suggests, there needs to be transparency in the distribution of royalties.

So, as geothermal electricity is expanded, Big Island people need to see a plan that shows that rates will stabilize at a reasonable level in a reasonable amount of time. The people have an abundance of common sense.

If geothermal results in lower and stable electricity rates for the Big Island, and if transparent royalty distribution shows that the more geothermal production the more benefit now and for future generations, then Big Islanders will ask themselves, “How can we share?”

There is a big difference between volunteering to share and being forced to share. Local people hate it when the opportunity for sharing is taken away. This is the heart of the matter.

Peak Oil

Oahu’s Electricity Rates Surpass Other Islands

It used to be that the avoided cost (the part of your electricity bill that is due to oil) was higher on the other islands than on O‘ahu. This Hawaiian Electric (HECO) chart shows the rate on different islands back to 2008.

This past October, though, the avoided cost on O‘ahu, Maui and Hawai‘i Island was roughly the same, at approximately 15 cents per kwhr.

Now, O‘ahu’s avoided cost has about doubled. It’s 29 cents per kwhr now, and actually higher than on the other islands.

This is more proof of what has been clear to me since 2007, when I attended my first Peak Oil conference – that oil prices were going to just keep rising.

Avoided costs for January 2012: 

HECO (O‘ahu)

On Peak 29.167 cents per kwhr

Off Peak 19.060 cents per kwhr

HELCO (Big Island)

On Peak 21.656 cents per kwhr

Off Peak 17.656 cents per kwhr

MECO (Maui)

On Peak 20.240 cents per kwhr

Off Peak 19.194 cents per kwhr

MECO (Lana‘i)

On Peak 34.621 cents per kwhr

Off Peak 29.057 cents per kwhr

MECO (Moloka‘i)

On Peak 29.428 cents per kwhr

Off Peak 26.580 cents per kwhr

Peak Oil, Renewable Energy Sources

HECO Starts TV Ads Explaining Increasing Electricity Rates

In an article in yesterday’s Honolulu Star-Advertiser, Hawaiian Electric Company (HECO) Vice President Robbie Alms talks about how current increases in electricity rates are due to forces beyond our control, and says that customers should “brace for an extended period of high electricity prices.”

The article mentions that HECO is starting to run educational spots on TV to explain what is going on.

HECO sees electric prices staying high

The utility will begin airing TV ads tonight explaining reasons behind the rate hikes

By Alan Yonan Jr.

POSTED: 01:30 a.m. HST, Dec 23, 2011

Hawaiian Electric Co. is launching its first-ever public awareness campaign telling customers to brace for an extended period of high electricity prices.

Electric rates on Oahu have hit record levels in four out of the past five months largely due to an unprecedented hike in the cost of petroleum-based fuel, which the utility burns for more than 75 percent of its electricity production. Read the rest

I’ve been to four Peak Oil conferences now. During the first, in 2007, I learned that the world had been using twice as much oil as it had been finding for the past 20 years (and that trend continues). Ever since, I have been trying to educate folks so we can transition to more sustainable energy sources in an orderly manner.

At the time, one could not tell if the leveling off of oil production since 2005 was the beginning of a trend or not.

By 2009 though, at the time of the Peak Oil conference in Denver, we could see that the leveling off of oil production continued. At that time, I started paying attention to an idea that Professor Charles A.S. Hall called Energy Return on Energy Invested (EROI).

The idea: It is the net energy, resulting from the effort to get that energy, that is what society can use. The more difficult it is to get oil in its final usable form, the less net energy that’s available for society to use.

By 2010, Lloyds of London had issued a white paper alerting its business clients to be prepared for $200/barrel oil by 2013. By then, it was generally agreed that oil fields begin, peak and decline in a bell-shaped curve. And the decline rate of all the world’s oil fields could be estimated to within reasonable limits, say between 3 and 6 percent.

So the natural decline rate would be between 2.5 and 5 million barrels/day each year. Since Saudi Arabia produces 10 million barrels per day, we would need to find the equivalent of a Saudi Arabia every four years. Or, in the worse case scenario, every two years.

Renewables would have to fill that amount just for us to stay even.

Somewhere along the way, I picked up that our world economy is about manufacturing – building or making things – and that takes energy. But if the primary source of energy is not increasing, could it mean that the world economy cannot grow? It sounds plausible.

By this most recent Peak Oil conference, in October – and as recent events are starting to show – it looks like there is a fundamental change occurring in the oil market. Normally, one would expect to see the price of oil declining in a recession. But something different is happening: Oil costs close to $100 per barrel.

In China, the per capita usage of oil is around 2, while in the U.S. the per capita usage is around 26. At $100/barrel oil, China’s economy is still growing. The upside of this is that we have a cushion.

If oil supply is not able to keep up with demand, it seems reasonable that the price of oil will be rising. If this results in higher gas and electricity costs, it will put a drag on consumer spending, two-thirds of which affects economic growth.

The EPA is requiring upgrades to oil-fired plants, which will cost ratepayers even more.

It feels like we will be starting down the backside of the oil supply curve soon. And as it becomes more difficult to get oil, the net oil available to society will be less and less.

We in Hawai‘i are so lucky to have geothermal as an option for base power electricity, which is 80 percent of our electricity use. Geothermal is proven technology, environmentally benign and it’s affordable: Geothermal-generated electricity costs less than half that of oil at today’s price, and the cost will stay stable for 500,000 to a million years.

As the price of oil rises, and if we rely on affordable geothermal for a large portion of our electricity base power, our economy will become more competitive compared to the rest of the world, and our standard of living will rise. Our farmers and food manufacturers will become more competitive and Hawai‘i will become more food secure. Our young people will be able to find jobs at home.

I saw the first of the new HECO television spots a short time ago. Congratulations to HECO for starting them. There is a huge amount of catching up to do. It will be a challenge.

If we move urgently toward affordable energy, we will strengthen our Aloha way of life – where people aloha and take care of each other. Together we can make a better tomorrow for all.

Happy Holidays!