Tag Archives: Kauai Island Utility Cooperative

Hawaii Island Energy Cooperative

Letter: How “Owning the Power” Benefits Us

Here’s a Hawai‘i Tribune-Herald letter to the editor from Noelani Kalipi about how the Hawai‘i Island Energy Cooperative would benefit us here on the Big Island.

She compares it to what happens with Kaua‘i utility co-op: “On Kauai, when a resident flips the switch, their dollars flow back to the community utility — Kauai Island Utility Cooperative — which uses the money to operate the system. If KIUC has more than what it needs, those funds go back into the pockets of Kauai ratepayers.”

Noelani’s letter to the editor from Saturday’s paper:

‘Own the power’

Turning on the lights has a bigger effect beyond your home. There is a direct connection between the dollars you provide to HELCO for electricity and Wall Street. The dollars move through Hilo to Honolulu and on to shareholders — many who don’t live in Hawaii.

If the NextEra/Hawaiian Electric deal is approved by the Hawaii Public Utilities Commission, the dollars from your pocket will travel even farther offshore, diverted through NextEra’s headquarters in Florida, then to global investors.

On Kauai, when a resident flips the switch, their dollars flow back to the community utility — Kauai Island Utility Cooperative — which uses the money to operate the system. If KIUC has more than what it needs, those funds go back into the pockets of Kauai ratepayers.

The upcoming PUC public listening sessions Tuesday and Wednesday on Hawaii Island are an opportunity to let the commissioners know we support another option: Hawaii Island Energy Cooperative. It is a unique opportunity for all energy consumers to “own the power.”

Let the PUC know Hawaii Island wants to consider a different option to the conglomerate utility. The investor-owned utility model is not bad. However, let’s look at homegrown alternatives that allow us to turn to power sources that suit us best. Renewable, environmentally friendly and cost-effective sources.

If you come early to the listening sessions, which start at 6 p.m. Tuesday at Hilo High and at 6 p.m. Wednesday at Kealakehe High, supporters of HIEC will give you an Own the Power T-shirt. The PUC needs to hear from us. 

Noelani Kalipi, Hilo

Lowering Electric Rates

More on the Hawaii Island Energy Cooperative

The Hawaii Island Energy Cooperative formed after the NextEra/HEI merger was announced. Several community grassroots organizations got together and asked the Kauai Island Utility Cooperative (KIUC) folks to come to Hilo and do a briefing on how they got started.

After that meeting back in December 2014, a steering committee of Big Island community members looked into the feasibility of the Big Island forming a utility co-op. Although HELCO was not for sale, the group decided to prepare just in case an opportunity came up to purchase it.

This post talks about that KIUC briefing and how we formed the co-op steering committee.

Henry Curtis wrote about the Hawaii Island Energy Cooperative today at Ililani Media:

Big Island Energy Cooperative on the Move

The Hawaii Island Energy Cooperative (HIEC) was founded in January 2015. HIEC proceeded to file a motion to intervene in Hawaii Public Utilities Commission Docket 2015-0022 and was granted party status by the Commission.
 
That regulatory proceeding is examining the proposed sale of Hawaiian Electric Company (HECO) and its subsidiaries Maui Electric Company (MECO) and Hawaii Electric Light Company (HELCO) to NextEra Energy (NEE). 
 
Attorneys David J. Minkin, Brian T. Hirai and Peter J. Hamasaki from the law firm McCorriston Miller Mukai MacKinnon LLP, represent both HIEC and the Kauai Island Utility Cooperative (KIUC) in the merger proceedings.
HIEC was formed not only to explore the possibility of a Big Island community-based electric utility cooperative but also to examine other energy issues such as sustainable transportation policies.
 
HIEC has staked out a clear position. It is no for or against the merger and it is not promoting an alternative to HELCO or NextEra. Rather “HIEC seeks to bring to the proceedings its specific focus on the energy needs of Hawaii Island and its unique perspective on potential cooperative ownership structures.” 
 
HIEC Spokesperson Marco Mangelsdorf asserted that “being able to have more direct control over Hawaii Island’s present and future energy profile would provide us with an extraordinary opportunity to showcase what can be done on our island on many different and innovative levels.”

 

Government, Hawaii Island Energy Cooperative

An Interview & Also a Visit to a Co-op Finance Corporation

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Richard Ha writes:

Henry Curtis of Ililani Media recently interviewed me about the energy co-op. He asked me, “Why a co-op?”

Here’s the interview:

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….

Read the rest

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.

Lowering Electric Rates

Hawaii Island Energy Cooperative Files With PUC

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Richard Ha writes:

The Hawaii Island Energy Cooperative (HIEC) has gotten quite a bit of press coverage in the past few days. Last week, we submitted an application to the PUC to intervene in the pending sale of Hawaii Electric Industries (HEI) to NextEra Energy.

HIEC logo

Our HIEC spokesman Marco Mangelsdorf answers some questions about it just below. Following his answers, you can see excerpts from and links to newspaper articles about HIEC from the Honolulu Star-Advertiser, the Hawaii Tribune-Herald, Pacific Business News, and Honolulu Civil Beat.

FREQUENTLY ASKED QUESTIONS

Provided by Marco Mangelsdorf, director and spokesman for HIEC, President, ProVision Solar, Inc.

What’s my connection to HIEC?

I was invited by Richard Ha, business owner of Hamakua Springs and community leader, to get involved with a group of Big Island residents who were interested in exploring the possibility of emulating the Kauai Island Utility Cooperative model established on Kauai.  We are seeking to get a seat at the table in the Hawaiian Electric Industries-NextEra docket by proposing an option, depending on the course of the proceedings, that offers the possibility of democratic ownership and control of the island’s energy infrastructure, through a duly elected board, to the residents and communities of the Big Island.

Are you doing this because you see the end of the PV industry in the state?  Are you leaving your company?

I will continue to manage ProVision Solar as the solar electric industry in the state continues to adapt to the unique challenges in our Aloha State.  Solar PV will continue to be a major part of the Hawaii’s efforts to become more energy independent for years and decades to come.

Do you see any conflict between continuing to be at ProVision and working with HIEC?

I see congruence between what I’m doing in my business to empower Big Island homes and businesses as far as promoting energy independence and working toward greater local control of the island’s energy infrastructure.

Is HIEC against the proposed merger?

HIEC takes no position either for or against the proposed merger.  HIEC desires to explore through the proceedings the unique perspective, goals and objectives of the residents and communities of Hawaii Island, and depending on the outcome of the proceedings, consider whether a different ownership model for energy services on Hawaii Island may provide a positive alternative.  A sound discussion should include evaluation of the pending transaction in relation to potential future options that may be in the public interest for the unique interest of the island of Hawaii.  HIEC’s participation can assist the development of a sound record by providing a Hawaii Island focused perspective.

Is HIEC making an attempt to buy HELCO?

It’s important to note that HELCO is not for sale at this time.  So no, HIEC is not submitting an offer to purchase HELCO.  HIEC is positioning itself as a possible option worthy of consideration to take Hawaii Island in a different energy direction, depending on the course of the proceedings.

Would a coop lead to lower energy bills on the Big Island?

HIEC believes that a case can be made that there would be lower energy costs to the consumer over time through tax exempt status, lower cost of capital and no shareholder profits, greater efforts to develop less expensive island-based power sources, promotion of education, markedly improved energy efficiency, and the accelerated adoption of appropriate advanced technologies.

What’s the position of HIEC regarding geothermal energy?

The residents and communities of the Big Island, through an elected board of directors, would decide what choices and directions to take as far as energy sources and policies under the coop.

What’s the position of HIEC regarding a interisland power cable from the Big Island to the other islands?

The residents and communities of the Big Island, through an elected board of directors, would decide what choices and directions to take as far as energy sources and policies under the coop.

What’s the position of the HIEC regarding this or that particular or specific issue on the Big Island?

The residents and communities of the Big Island, through an elected board of directors, would decide what choices and directions to take as far as energy sources and policies under the coop.

What would make HIEC different from a standard electric utility coop?

The cooperative would have a more diversified focus compared to a standard electric utility by focusing on greater overall energy independence, higher renewable energy generation, and enhanced sustainability through a comprehensive and integrated approach to all energy-consuming sectors on the island.

Has HIEC been working with Kauai Island Utility Cooperative? 

HIEC has been in contact with KIUC and they have been supportive.  In the event that HIEC is successful in establishing an energy coop, it is likely that synergies would exist between the two islands that would enable both to benefit by working together in certain areas. 

From the Honolulu Star-Advertiser:

By Susan Essoyan

The Hawaii Island Energy Cooperative is seeking a seat at the table as the Public Utilities Commission considers the proposed merger of Hawaiian Electric Industries and NextEra Energy.

The new nonprofit cooperative association, registered with the state Feb. 9, was formed by business and community leaders to explore the possibility of creating an energy co-op on Hawaii island.

The Hilo-based co-op filed a motion Feb. 11 to intervene in the Public Utilities Commission docket on the proposed $4.3 billion merger between NextEra and HEI. But it is not taking a position for or against the deal, according to Marco Mangelsdorf, spokes­man and a director of the co-op.

Instead, it hopes to ensure that commissioners consider the island's energy needs and the potential benefits of a cooperative model of utility ownership during their deliberations. Read the rest

From the Hawaii Tribune-Herald:

By Colin M. Stewart

What if Hawaii Island residents owned their own electric utility?

That’s the question being posed by a nonprofit group that filed on Feb. 11 a motion with the Hawaii Public Utilities Commission to intervene in the pending $4.3 billion sale of Hawaii Electric Light Co’s parent company, Hawaiian Electric Co. (HEI), to NextEra Energy.

The Hawaii Island Energy Cooperative is a group of Big Island community and business leaders exploring the idea of public ownership, according to group spokesman and director Marco Mangelsdorf.

“We seek to participate in the discussion of the unique perspective of the residents of our island, and, if appropriate, explore an option that would make for a fundamental change in the landscape of energy production and consumption on Hawaii Island,” he said via a press release. “Being able to have more direct control over Hawaii Island’s present and future energy profile would provide us with an extraordinary opportunity to showcase what can be done on our island on many different and innovative levels.” Read the rest

From the Pacific Business News:

By Duane Shimogawa

A group of community and business leaders on the Big Island have formed an organization to explore the potential benefits of a community-based cooperative ownership structure similar to the Kauai Island Utility Cooperative, and they want a closer look into NextEra Energy's $4.3 billion acquisition of Hawaiian Electric Co.

The Hawaii Island Energy Cooperative recently filed paperwork to intervene in the Hawaii Public Utilities Commission docket on the proposed acquisition, which involves HECO's Big Island subsidiary, Hawaii Electric Light Co. Read the rest

From Honolulu Civil Beat:

By Sophie Cocke

Big Island business and community leaders have formed a nonprofit coop called the Hawaii Island Energy Cooperative to explore taking over Hawaii Electric Light Co., a subsidiary of Hawaiian Electric Co.

The co-op would be owned by ratepayers, similar to the Kauai Island Utility Cooperative. However, the co-op is interested all of the island’s energy sectors not just the electric grid.

The co-op association emerged in recent weeks with the announcement that Florida-based NextEra Energy has entered into an agreement to purchase HECO — a deal that is expected to close by the end of the year. Last week, the Hawaii Island Energy submitted an application to Hawaii’s Public Utilities Commission, which must approve the sale, to intervene in the review of the merger. Read the rest

Community, Lowering Electric Rates, Peak Oil, Sustainability

Great Info Meeting on How Kaua‘i Formed its Electric Utility Co-op

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Richard Ha writes:

We had an interesting presentation Friday from two executives from Kaua‘i’s electrical utility, the Kaua‘i Island Utility Cooperative (KIUC). David Bissell is CEO, and Dennis Esaki was a founding member who only recently left the KIUC board.

Meeting

It was amazing to hear what KIUC went through to purchase Kaua‘i Electric Company and form the utility cooperative. The Kaua‘i County Council and mayor were originally against the purchase, and the PUC turned down its first purchase bid as not being in the best interest of the users. But the founding group continued to rework its plan and was ultimately successful the second time it presented a bid.

In total, it was about a two-year process and the group purchased Kaua‘i Electric Company in 2002 for $215 million. And, Esaki said, referring to the county administrators, “they’re all on board now.”

This month, Kaua‘i’s electricity rates are lower than any of the islands but O‘ahu’s (mostly because of the oil price decline). Most months, its rates are a little lower than the Big Island's and a little higher than Maui.

Since 2003, ratepayers have received $30 million in refunds and patronage capital — the amount of money left after all the bills are paid, and the co-op has met its lenders’ requirements. This is money that circulates back into the community. 

Members have $80 million in equity, which is what they own of the co-op. When the utility was purchased 12 years ago, it was 100 percent debt-financed, so the equity at that time was zero.

KIUC has gone from about five percent renewable energy in 2009 to 18 percent today. It will be at about 40 percent by the end of next year.

From the KIUC 2013 Annual Report (click to enlarge):

Annual report

  Annual Report p. 9

The organization of the co-op also reflects what the people of Kaua‘i want, because its board is selected by the people. Esaki and Bissel said that at first there was almost total, and repeated, board turnover as ratepayers regularly voted out board members who weren’t doing what they wanted. Eventually, they said, the board has stabilized.

Projects are financed through national co-op financing, which results in much lower financing costs.

You can watch a video of the meeting below. Thanks to Chester Lowrey for videotaping!

There was a lot of community interest in the KIUC presentation, with a good turnout from various community groups. The presentation was sponsored by three organizations:

The Big Island Community Coalition, the steering committee of which is made up of David DeLuz, Jr., Rockne Freitas, Michelle Galimba, myself, Wallace Ishibashi, Kuulei Kealoha Cooper, Ka‘iu Kimura, D. Noelani Kalipi, Robert Lindsey, H. M. Monty Richards, Marcia Sakai, Ku‘u Lehua Veincent, and William Walter.

The board of the Hilo-Hamakua Community Development Corporation, which is President Donna Johnson, Judi Steinman, Glenn Carvalho, Eric Weinert, Jason Moniz, Gerald DeMello, Colleen Aina, and Richard Ha.

And Hawai‘i Farmers and Ranchers United, which represents more than 90 percent of the farming goods produced on the Big Island.

Ed Olson donated the use of his Wainaku Executive Center for the meeting.

We have formed a steering committee to discuss this further. The committee consists of Gerald DeMello, Michelle Galimba, Wally Ishibashi, Donna Johnson, Eric Weinert, Vincent Paul Pontieux, Marco Mangelsdorf, Russell Ruderman, and myself. I’ll keep you posted on further developments.

Edited 12/21/14 at 10:45 pm; 1/5/15; 1/30/15.

Big Island, Community, Philippines, Renewable Energy Sources, Sustainability

Kauai Island Utility Co-op Execs To Brief On How They Formed Their Co-Op

Richard Ha writes:

We have invited Dennis Esaki, a founder of Kauai Island Utility Cooperative (KIUC), and David Bissell, CEO of KIUC, to speak to us about how one forms a community-based utility. Having such a utility cooperative here on the Big Island would give us more control over our destiny.

It will be held this Friday, December 19, 11:30 a.m., at the former C. Brewer Executive Center in Wainaku. The event is sponsored by the Big Island Community Coalition, the Hilo Hamakua Coast Development Corporation, and the Hawaii Farmers and Ranchers United. The Ed Olson Trust is providing the Wainaku Executive Center facilities. Please R.S.V.P.

The Kauai Island Utility Cooperative was formed in 2002 when Citizens Communications’ Kauai Electric announced that it was selling the Kaua‘i utility. We have a similar situation right now in that Hawaiian Electric Industries (HEI) recently announced it is selling to NextEra.

NextEra plans to use utility-scale solar, backed up by liquid natural gas (LNG) as a bridge fuel. The average shale oil and gas well lasts only five years, so that model is a concern for Big Island rate payers. (This link is an even more in-depth explanation of how shale oil is massively over-hyped, and analyzes the best data available.) Fortunately, we have geothermal we can use in place of LNG on the Big Island. We have options.

This is not an endorsement of converting to a co-op so much as it is an informational briefing.

Please R.S.V.P. to richard@hamakuasprings.com.

Renewable Energy Sources

A Visit to Kauai Island Utility Cooperative

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I was invited to visit the Kauai Island Utility Cooperative (KIUC) by its Board Chairman Phil Tacbian. He and Dennis Esaki, who is Vice President of the founding Board, gave me an orientation.

Kauai Island Utility Cooperative (KIUC) is a not-for-profit generation, transmission and distribution cooperative owned and controlled by the members it serves. Headquartered in Lihue, Kauai, Hawaii, the cooperative currently serves more than 32,000 electric accounts throughout Kauai. Committed to reinventing how Kauai is powered, KIUC is aggressively pursuing diversification of its energy portfolio to include a growing percentage of hydropower, photovoltaic, bio-fuel, and biomass.

It was my first visit and I had a very favorable impression of their corporate culture. This is a model that aligns the interest of the people with the interest of the utility. It’s evident that the employees are proud of their organization. They are coming up on their 10th anniversary celebration.

I toured the Kapaia Power Station. It includes a General Electric LM2500PH steam-injected combustion turbine. The unit can burn either naphtha or No. 2 fuel oil. Steam is injected at approximately 10,000#/hr for NOx control and 56,000#/hr for power augmentation. It appeared to me to be unique in its use of steam injection to enhance power generation. A small part of the CO2 was transported next door to an open raceway algae farm.

Back in 2002, KIUC agreed to pay Citizens Communications of Connecticut $215 million for Kauai Electric’s assets. The National Rural Utilities Cooperative Finance Corporation (CFC) had approved loans to KIUC for up to the total purchase price, plus they had a $25 million secured line of credit and a $60 million disaster recovery line of credit, which was from FEMA following Hurricane Iniki, which had happened 10 years earlier.

The combination of having a very willing seller, plus a line of credit from FEMA, was very helpful.

It did not appear there was much funding for infrastructure upgrades.

It’s clear to me that it took countless hours of volunteer time, plus careful analysis and implementation, to bring KIUC to this place it is at 10 years later. It was certainly not easy then, nor now, and the work continues. I was very impressed.