Hawaii PUC Denies HECO, Aina Koa Pono Application

The Hawaii Public Utilities Commission has denied HECO and Aina Koa Pono's application for a biofuel plant in the Ka'u district. Click the following link to be redirected to BigIslandVideoNews.com for the full story.

http://www.bigislandvideonews.com/2013/12/26/aina-koa-pono-proposal-rejected-by-hawaii-puc-again

HELCO, Aina Koa Pono PUC Hearing: Kona

Richard Ha writes:

The Kona PUC hearing took place on Tuesday evening.

From West Hawaii Today:

Powerful Resistance to PUC

By Erin Miller

West Hawaii Today

"West Hawaii residents described to the Public Utilities Commission how they have cut back on energy usage, and questioned why Hawaiian Electric Light Co. shouldn't have to bear the costs of upgrading its own equipment.

The questions continued as the PUC heard comments from residents Tuesday evening on a proposed contract between HELCO, Oahu’s Hawaii Electric Co. and Aina Koa Pono for a biodiesel project in Ka‘u.

Albert Prados, manager of the Fairway Villas at Waikoloa Beach Resort, was one of more than 20 people who testified against HELCO’s rate increase request, which HELCO officials would raise rates 4.2 percent, or about $8 per an average 500 kilowatt hour monthly bill. Prados described the measures he has taken in his own home, including shutting everything off except the refrigerator at night, to lower his electricity bill." Read the rest

Mayor Kenoi took a very strong stand on renewable energy. He made clear that it is not sufficient that it be renewable; it also needs to be affordable. He is concerned about the most defenseless among us.

He said, This is the kind of project that 20 years from now, we will be asking, "How did we let that happen?" He also said that we are doing this for the benefit of HEI and HECO – but that there is no benefit for the Big Island. The Mayor is very aware that high and rising electricity costs threaten our economy and also the folks on the lowest rungs of the economic ladder.

Rep. Denny Coffman asked, “How is it we are here? This is not even proven technology.” He pointed out that the electric utility is setting the state’s energy policy, and that that should stop while we finish the Integrated Resource Planning process that’s happening right now. Rep. Coffman understands the energy situation worldwide and he knows it’s foolish to be chasing unproven technology. It is both a waste of time and money. In Hawai‘i, we do have proven technology that is affordable.

My testimony:

To answer the Consumer Advocate’s question, “Would we change our minds if all the costs were given to the Oahu rate payers?,” the answer is no! I think that giving AKP a 20-year contract will forego the opportunity of developing lower cost alternatives. And it will take up valuable time. Liquid natural gas is an option. Ocean energy might be ready within the 20-year period. Geothermal is an affordable, proven technology. For instance, there is an 11 cent difference between geothermal and oil today. We could replace liquid fuels with 80MW of geothermal electricity, and apply that savings to pay the remaining debt of the Keahole 80 MW liquid fuel burning plant.

(80 MW is equal to 80,000 kilowatts. That 11 cents/kilowatt hour savings multiplied by 80,000 kilowatt hours equals $8,800 that you save each hour. And the savings per day is $211,200. That times 365 days equals an annual savings of $77 million. That is enough to write off the plant and still give the rate payers a break.)

Consumer Advocate Jeff Ono asked: "If O‘ahu rate payers would pay the cost, would you still be against the AKP project?"

Most of the time, making electricity has to do with making steam to turn a turbine. You can burn coal to make steam, or you can burn oil to make steam. You can burn firewood to make steam, or use the steam from underground – that’s geothermal.

AKP takes the long way. They grow plants using fossil fuels, then they use electricity to make microwaves to vaporize the plants, then take the liquid that rises and convert it to a burnable liquid, and haul it to Keahole, where they burn it to make steam.

It isn't surprising that it is expensive.

More than a few engineer folks tell me that this process uses more energy than it makes. And if that is the case, it will always be more expensive than oil. This is not a good bet for us.

Palm oil is the only biofuel today that can compete heads up with petroleum oil. It produces 600 gallons of oil per acre. AKP strives to produce 16 million gallons per acre, plus another 8 million gallons – or 24 million gallons from 12,000 acres. That is 4 times as productive as palm oil, the only biofuel that competes straight up with petroleum oil. If it works, they don't need any subsidy from us. If it works, they will all end up billionaires.

We cannot predict the price of oil. But people are hurting right now. And if oil prices reach $200 per barrel, the tourism industry will be devastated and everything connected with it will shrink. We do not have the luxury of time. We need a lower cost alternative right now.

Well-respected Council of Revenues economists Paul Brewbaker, of TZE Economics, and Carl Bonham, Executive Director of the University of Hawaii Economic Research Organization (UHERO), agree that low-cost energy is a key component of our economic future. 

There are alternatives to $200/barrel biofuel. Geothermal is the equivalent of $57/barrel. Liquid natural gas is low cost now on the mainland, and maybe ocean energy will be an alternative within the time period of the contract.

We need lower cost electricity, not higher, and AKP is not the answer. The AKP project is wasting valuable time, and we need to put it to bed so we can focus our attention on the next projects.

I agree with the electric utility from here forward. The next PUC hearing will be on the Hu Honua biomass plant at Pepe‘ekeo. They will use wood chips to boil water and make steam. This is proven technology and it looks to be cost effective.

After that will be a proposal for 50MW of geothermal. Geothermal does not have to burn anything. It just uses the steam underground to make electricity and it is cost effective.

At that time, HELCO with its leverage should be able to successfully renegotiate the old contract that is tied to oil. Then we will be well on our way to protecting ourselves from the volatility of world oil prices. Those two projects will result in a total of 110 MW of stable, affordable electricity using proven technology.

We need to strive for balance and common sense as we try to make things work for everyone. 

Hospitals, schools, hotels and businesses need the electric services provided by the grid. Fifty percent of our people rent and so cannot get off the grid. We need to be practical, and help to make sure the electric utility is healthy as we strive for a lower cost to the rate payer.

Hawaii PUC Hearing on Aina Koa Pono

The following is a video of the hearing before the Public Utilities Commission at Hilo High School on October 29th, 2012, regarding the application of HECO and Aina Koa Pono to build a biofuel plant in the Ka'u district.




Video: Courtesy of YouTube user Occupy Hawaii

Hilo's PUC Meeting Successful: 'Enough is Enough'

Richard Ha writes:

Monday night’s PUC hearing in Hilo went very well. The overwhelming sentiment was that enough is enough. People will not take any more electricity rate hikes.

Big Island Video News has posted a video about the PUC meeting.

VIDEO: Aina Koa Pono, HELCO rate hikes blasted at PUC hearing 

October 30, 2012 

Video by David Corrigan, Voice of Stephanie Salazar 

HILO, Hawaii: Residents of East Hawaii packed the Hilo High School cafeteria, to tell the Public Utilities Commission what they think about a proposed electricity rate hike and and biofuel surcharge…. Watch the Big Island Video News video here.

It's hard to remember that until the BICC dared say it, no one could imagine we could actually get lower rates. We have made good progress. People are now saying they want lower rates, and expecting it.

In its “Off the News” section this morning, the Star-Advertiser wrote: 

Electricity bill too high? Wear slippers

"Not to make light of a serious situation such as rising electricity bills, or a consumer group's desire to show solidarity. In an era when pennies – and dollars – must be pinched to get by, solidarity over cost-of living issues is a good thing. 

That said, it was interesting to see that the Big Island Community Coalition opposed to a surcharge to finance the use of biofuels to produce power, urged its members to wear rubber slippers to last night's public hearing as a show of uniform solidarity. This being Hawaii, what other footwear would folks don for a pau hana (after work) forum? 

Of course this may have been a smart strategic move. This way the PUC might have scanned the room and figured that every last person was opposed. It also ruled out slippers as a footwear choice for commission members, too…"

It was a civilized hearing and most of the many testimonies were on point.

About 150 people were in attendance and it was a diverse audience, including: Faye Hanohano, Fred Blas, Jeff Melrose, Richard Onishi, Russell Ruderman, PGV people from Nevada, Jim Albertini, Deborah Ward, Patrick Kahawaiola‘a, Mililani Trask, John Cross, Ka‘u people, ILWU, IBEW, Carpenters, Laborers, HELCO group, the Aina Koa Pono (AKP) core group, Sierra Club and other community members.

Other than HELCO, AKP and those who needed to be cautious, most of the rest were allies of low-cost electricity.

In today's Hawaii Tribune-Herald, Mayor Billy Kenoi made it very clear that he is against the AKP project for several reasons.

Kenoi criticizes biodiesel proposal 
By ERIN MILLER
Stephens Media 

Aina Koa Pono’s biodiesel proposal isn’t a good deal for Hawaii County residents, Mayor Billy Kenoi said Monday, hours before the Public Utilities Commission was set to begin its first Big Island hearing on the subject.

“This to me looks like one of those deals, after 10, 20 years, we ask how did we let that happen?” Kenoi said. “Ultimately, there is no benefit to the people of the Island of Hawaii...." Read the rest

The Hawaii Tribune-Herald also wrote about the PUC meeting itself.

Online Extra: HELCO rate hikes blasted
By COLIN M. STEWART
Tribune-Herald Staff Writer

"No more increases.

That seemed to be the main message relayed to members of the state Public Utilities Commission on Monday night by more than 100 Big Isle residents who showed up at a public hearing at the Hilo High cafeteria to weigh in on two separate electricity rate hikes proposed by Hawaii Electric Light Co. Inc...." Read the rest

Tonight is the West Hawai‘i PUC meeting (Tuesday, October 30, 2012) at 6 p.m. in the Kealakehe High School cafeteria. And the third and final meeting will be held this Thursday, November 1, 2012 at 6 p.m. at Farrington High School.

Wear your rubbah slippahs!

The following news article was written by Peter Sur and published in the Hawaii Tribune-Herald on Friday, September 29th, 2012:

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.

The Dawn of a New Day

The following editorial piece was published in the Hawaii Tribune-Herald, West Hawaii Today, and the Honolulu Star-Bulletin in August 2012:

Hawaii Electric Light Company (HELCO) 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?

We – Ku‘ulei Kealoha Cooper, John E.K. Dill, Rockne Freitas, Michelle Galimba, Richard Ha, Wallace Ishibashi, D. Noelani Kalipi, Ka‘iu Kimura, Robert Lindsey, H.M. “Monty” Richards, Marcia Sakai, Lehua Veincent, Bill Walter –  invite you to join our newly formed group, the Big Island Community Coalition. Our mission is “to work together as an island community for the greater good of Hawai‘i Island and its people.”

Our first priority: To make Big Island electricity rates the lowest in the state by emphasizing the use of our ample local resources.

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

“Yes, we understand the regulatory system,” said Kalipi, “which is rate-based. But if HECO profits from it, they should be investing those profits into a sustainable grid. At the end of the day, the utility is only loyal to its shareholders right now, rather than to the rate payers. 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 firm, reliable, renewable energy resources that can be harnessed effectively to provide lower cost electricity in the long run for our residents,” she said.

“One example is geothermal, which costs about half the price of oil,” she said. “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 the ability to do studies needed to bring on board other, cheaper renewable energy sources.  They also mean that when the grid needs repairs, or the cost of oil goes up again, it would 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 will be a triple whammy price hike on your electric bill.

Big Island Mayor Billy Kenoi has sent a strong message that the County will not support new renewable energy projects – such as Aina Koa Pono, which would add surcharges to every electric customer’s bill – unless they result in cheaper energy. “Unless it has lower rates, we will not support it,” he said recently.

UH Hilo just had a $5.5 million electric bill – almost $500,000 more than last year – and HELCO’s proposed 4.2 percent rate increase would add another $230,000 to their bill. The same thing is happening at hospitals, hotels and businesses. Farmers’ expenses are going way up, which threatens our food security. Electricity rate increases ripple through every part of our economy. They are already rippling.

People are already struggling with their monthly HELCO bill. Some are having their lights turned off.

As rates continue to increase, more people will leave the grid and fewer will remain to pay for the infrastructure, meaning that those households and businesses that remain (because they cannot afford to get off the grid) will pay even more.

You may think the electric utility is a big powerful entity that you cannot affect, but you can. Pay attention! Show up! Write a letter! Do something! If you leave your name and contact information at http://www.bigislandcommunitycoalition.com, we will send an occasional email to keep you informed of what’s happening, and how you can help.