Isle’s Energy at Center of Debate
By PETER SUR
Tribune-Herald staff writer
The Public Utilities
Commission’s public hearing on Hawaii Electric Light Co.’s rate increase and
biofuel surcharge proposals is a month away, and all sides are digging in for
what could be an explosive meeting.
The PUC has scheduled
public hearings to gather community input on Oct. 29 at the Hilo High cafeteria
and Oct. 30 at the Kealakehe High cafeteria. Both meetings start at 6 p.m.
At issue are two proposals
by HELCO. One is for a $19.8 million increase in revenue, or 4.2 percent in the
coming year. The other, which is being jointly proposed by Hawaiian Electric
Co., is the establishment of a biofuel surcharge provision of between 84 cents
to $1 per month to support a Ka‘u biodiesel refinery to be built by Aina Koa
Pono.
HELCO said in its filing
for a proposed rate increase that the additional hike is necessary to keep up
with higher costs to maintain its facilities, to continue the transition to
renewable energy, and to maintain the company’s financial integrity.
Both proposals are opposed
by the Big Island Community Coalition, formed by a group of prominent citizens
who are asking people to come out and tell the PUC the effect of HELCO’s
utility prices on their lives.
One of the members of the
steering committee, Richard Ha, is a major advocate of geothermal energy,
although he says that “we’re not choosing a particular technology. We’re
actually technology-agnostic.”
“Our first priority: To
make Big Island electricity rates the lowest in the state by emphasizing the
use of our ample local resources,” wrote Noelani Kalipi on BICC’s behalf in an
op-ed published Aug. 26 in the Tribune-Herald. “The proposed HELCO rate
increase, coming at a time of record profits, does not sit right with us.”
Ha said the group has
gathered “lots” of support, but he suggested its organization was minimal.
“It’s actually a
people-to-people kind of thing,” Ha said. “We don’t have a budget, and we don’t
plan to.”
Ha, the owner of Hamakua
Springs Country Farms, identified two theories for the future price of oil as
global supplies get harder to find. One theory says that as oil gets scarcer,
the cost of a barrel — and with it, everything that runs on fossil fuel or is
transported to Hawaii using oil — will rise, and in 20 years a dollar-a-month
premium over today’s electricity bill will be a bargain.
The other school of thought
says that rising oil prices will lead to a recession, which will cut demand and
cause oil prices to fall, keeping it within a narrow range over time.
Aina Koa Pono is proposing
to build a $450 million facility in Ka‘u that would harvest the feedstock of
12,000 acres of underused agricultural land near Pahala. The plant would
process 900 tons of biomass a day into biodiesel via a patented microwave
catalytic depolymerization process. Aina Koa Pono would sell 16 million gallons
of fuel per year to HELCO to displace the oil-burning Keahole power plant, and
an additional 8 million gallons would be sold to Mansfield Oil for distribution
in Hawaii and the U.S. mainland.
HELCO’s filing with the PUC
says that Aina Koa Pono’s project will “stimulate a large-scale renewable fuel
industry in Hawaii that will spur future projects, as the industry develops,
and will also create approximately 400 construction jobs over a two-year
period, and over 200 permanent management, professional, operations,
maintenance, agricultural, and administrative jobs.”
The PUC is being asked to
approve HELCO’s biodiesel supply contract with Aina Koa Pono. The sticking
point is that the surcharge will increase utility bills, but by a fixed amount.
“Aina Koa Pono’s plan was,
upon PUC approval, was to go ahead and produce one module, one 33-ton module,”
as a prototype, said Chris Eldridge, a partner in the company and son of
chairman Kenton Eldridge. After that, the module would be scaled up to a 900-ton
processing facility. The surcharge would not kick in until HELCO begins buying
the biodiesel for its plant.
“We’ve also begun an
environmental assessment process,” Eldridge said.
Eldridge said he would be
fine with releasing the purchase price, but HELCO is keeping it under wraps as
it negotiates agreements with other power producers. The price is lower than
what the PUC rejected last year as “excessive (and) not cost-effective,” but
the public does not know how much lower.
“You don’t want to hear
that we’ll pay a dollar (per month), but it’ll even out in the future,” said
Barbara Hastings of Hastings and Pleadwell, a public relations firm hired by
Aina Koa Pono. “All of the energy experts in the world say the demand in China
and India is voracious for oil.”
The next step, Eldridge
said, would be a traffic study to determine the route of the fuel trucks and
what impact they will have on the roads between Pahala and Kailua-Kona.
Eldridge said that biofuels
and geothermal energy are not in conflict with each other. If there comes a
time that the Keahole plant is no longer needed, he said, Aina Koa Pono could
focus more aggressively on transportation fuels.
Ha, who was named the
chairman of Ku‘oko‘a, the “not active” startup that was formed to buy out
HELCO’s parent company, said he had no problem with Aina Koa Pono turning out
fuel for transportation. But when it comes to electrical generation, the idea
is to create steam to drive a turbine.
The steam can be made with
oil, biodiesel, coal or geothermal energy, Ha said. He questioned the
efficiency of a business model that produces energy by harvesting feedstock,
driving it to the plant, processing the feedstock into biodiesel and driving it
80 miles to a power plant.
“It’s such a roundabout way
to get steam,” Ha said.
