Tuesday, November 25, 2014

Reforming the Hawai`i Public Utilities Commission

By Henry Curtis

The Public Utilities Commission regulates all private drinking water, waste water, ground carriers, water carriers, telecommunication and energy companies.

Regulatory policy must be reasonable and consistent across regulatory proceedings.

Legislation can be introduced to standardize regulation after an interactive discussion among stakeholders. The get the ball rolling, Life of the Land has proposed the following.

Anybody can file application with the Commission. Once the docket is opened there is no time requirement, excluding rate cases, for any action by the Commission.

Proposal:  The Commission must file some type of decision (schedule, issues or parties) within a year or the proceedings is automatically closed.

Dockets can languish for years without any action. The wheeling docket was opened in 2007 and nothing material has happened in years.

Proposal:  Any docket which has no substantive action for two years is automatically closed.

Entities wishing to intervene in dockets to protect their interests are required to do so within 20 days of the docket being opened, even if this occurs over the Christmas – New Year holidays. The Commission is not required to rule on their filing. Some entities have had to wait years to find out if they are in dockets.

Proposal:  Any motion to intervene in a docket is deemed approved unless the Commission determines otherwise within three months.

Who can access what data is determined by Confidentiality Agreements. There is no consistency about when they are filed or who can make suggestions.

Proposal:  The Commission will establish and post a standardized confidentiality agreement. Any proposed deviation must be circulated among all parties and intervenors and may be approved by the Commission after it has determined who is in the docket.

In the past the Commission has approved confidentiality agreements that assert parties may ask that certain information be declassified, and at the same time the Commission has classified the title of the document and all pages including blank pages within the document.

Proposal:  The title page and a brief description of all classified documents is deemed public information.

Some parties, in responses to Information Requests, include various reports. There is no current way of searching for these reports without opening each Information Request which can be several hundred megabytes in size.

Proposal: The Commission maintain on its web site a list of all reports filed with the Commission and where they can be found.

In the Information Age most documents exist in only electronic format. These can include emails and entire thick documents. Around the country rules on the discovery of electronic documents are being established. As the Senate has gone “paperless,” and HECO is considering the development of a telecommunications infrastructure to implement smart grids, the idea of creating and expanding electronic capabilities is growing.

Proposal: Electronic documents are discoverable.

Numerous wasted effort is made by parties filing brief standardized filings stating that they have no opinion on somebody else’s filing.

Proposal: Standardized documents stating that an entity has no opinion are banned.

In rate cases the Consumer Advocate files electronic Information Requests to HECO which HECO answers. A listing of the information requests is not made public until the end of the year-long discovery phase. This makes it difficult for outside entities to understand what is going on.

Proposal: All Information Requests must be timely filed with the Commission.

The Commission and HECO often meet in proceedings outside of formal dockets. At these meetings issues are discussed that impact open dockets. For example, the discussion may occur at the Hawaii Energy Policy Forum or at meetings of the National Association of Utility Commissioners (NARUC). It is often important that these meetings occur and that Commissioners attend to educate themselves about issues.

Proposal: The Commission maintain on its web site the Financial Disclosure Forms for the three Commissioners, the Chief Policy Advisory and the Chief Counsel. Included as part of the disclosure is an updated list of conferences and meetings attended.

There are many contested energy dockets with parties other than utilities and the Consumer Advocate. How these all fit together can be complex.

Proposal: The Commission maintain on its web page a table listing contested energy dockets, the parties and the next schedule event.

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Monday, November 24, 2014

Why did Governor Abercrombie really lose?

By Henry Curtis

Various political commentators have sought to pinpoint the one reason that could explain Governor Neil Abercrombie's overwhelming loss.

Some die-hard Abercrombie loyalists have asserted that he lost because he had to make the hard choices; that people voted for change because they disagreed with his style but not the substance of who he is.

Abercrombie lost in part because he abandoned his position and sacrificed his power base. He decided that money was more important than values.

In 2011 the Asia Pacific Economic Cooperation (APEC) meetings were held in Waikiki. Free trade advocates and Trans-Pacific Partnership negotiators talked about breaking labor and transforming the world into a global corporatocracy. 

As a member of Congress, Neil Abercrombie strongly opposed free trade agreements. As Governor he did a 180.

Governor Abercrombie held a press conference at the Hawai`i Convention Center on November 7, 2011, the first day of the Asia Pacific Economic Cooperation  meetings. He stressed high tech, the military, astronomy, and the politically connected. 

He concluded by saying that everything is rosy and to ignore those who say otherwise. He did not mention labor, workers, or the general public.

I asked the Governor: “Are there any downsides to APEC?” and he replied, “Not for us.” He noted that, “There are a whole lot of people, I'm sorry to say, [with] a vested emotional interest in always seeing us on the losing side.”

He then went over to the Hawaiian Electric Company (HECO) booth. “Have you talked to the Chinese about money?” Abercrombie asked, and seeing perplexed faces, he added, “They have money.” He then left to talk to others.

Sacrificing his base could have played a role in his defeat. but his loss should not be seen in isolation. 

David S. Chang wrote Abercrombie’s “actions inflamed the state’s largest voting bloc, Asian Americans, and he greatly underestimated the lingering power of the “old guard” of the Democrat Party in Hawaii, which represents many of the Americans of Japanese Ancestry, more commonly known as the AJAs, who valued Senator Inouye for his service and his style of leadership.

While the Japanese Old Guard may have played a role in Abercrombie’s defeat, it can’t be the dominant factor. Abercrombie handpicked Brian Schatz to fill a vacancy in the U.S. Senate over Dan Inouye’s specific request that Colleen Hanabusa be given the position.

If Abercrombie lost because of the Japanese Old Guard, then why were Schatz and Hanabusa locked in a virtual tie? 

Ray Tsuchiyama wrote for the Maui News that Ige “represents the new State demographics, a graduate not from the iconic pre-World War II Honolulu high schools that produced many post-World War II political leaders like McKinley (Daniel Inouye, Hiram Fong, George Ariyoshi) or Farrington (Ben Cayetano) or English-Standard Roosevelt (Thomas Gill).

Ige is sensitive to the Neighbor Islands. Ige “describes his childhood as looking eastward at the older Honolulu urban center, the tall downtown buildings and Diamond Head – referred to as ‘town’, different from his western suburbs.”

Not a flamboyant candidate, Ige is more at home in Lihue or Wailuku or Hilo with working-class folks, tired public school teachers, and hotel union members than in Kahala: he is perhaps a reflection of 2014 Hawai'i, struggling with the issues of urbanization and housing costs, income disparities, public education -- plus the frustrations of the under-resourced Neighbor Islands.”

If the race was all about town versus country, why did Ige do better on O`ahu and not as well on the Neighbor Islands? On the island of O`ahu why did Ige win virtually all of the precincts in both town and country? 

Primary Election by County


Many people privately have privately suggested an alternative view.  

Governor Abercrombie, Senators Malama Solomon and Clayton Hee and Representatives Faye Hanohano and Sharon Har are known to be willing to strongly express their views and opinions. They take no prisoners.

Only Representative Har survived the election.

Perhaps voters were stressing the need for aloha over more aggressive in-your-face tactics.

Hawai`i Revised Statutes (HRS §5-7.5) states that the “‘Aloha Spirit’ is the coordination of mind and heart within each person." Five aloha traits are akahai (kindness), lokahi (unity), oluolu (agreeable), haahaa (humility) and ahonui (patience).

In the race for Lt. Governor, Senator Clayton Hee lost to Lt. Governor Shan Tsutsui by sixteen percent (50.8% to 34.1%).

Civil Beat wrote in 2011, “There is arguably no member of either the Senate or the House whose name and reputation elicits more colorful comment than Clayton Hee. Some of the words used to describe the senator will not be printed here. Others will: smart, hard-working, persistent, principled and loyal, for example, but also aggressive, intimidating, egotistical, quick to anger and bipolar.”

In 2013 Derrick DePledge wrote, “State Sen. Clayton Hee took to the Senate floor on Friday to address complaints from other senators about his questioning during a debate Thursday over a bill that would create a new Public-Private Partnership Authority. 

Hee had asked Sen. Russell Ruderman and Sen. Laura Thielen to specifically explain their objections to the bill. Some senators said privately afterward that Hee should not have asked the question. 

In an email to Senate President Donna Mercado Kim and other Senate leaders, Sen. Will Espero complained that the questioning was ‘overly aggressive and borderline harassment and intimidation.’"

In 2011 A. Leiomalama 'Malama' Solomon was appointed by Governor Abercrombie to fill a seat in the State Senate.

In the 2012 primary election Solomon barely held on to her seat in a race against Loraine Rodero Inouye. Solomon won by 69 votes (47.5% to 46.6%). In 2014 Inouye easily beat Solomon (55% to 39.9%).

In 2014 Big Island Video reported that “the Senator is known at the Capitol for her no nonsense style. She speaks her mind and gets to the point, livening up some otherwise stale legislative procedures. She doesn’t back down from controversy. … Her opinionated manner has earned her a few enemies.”

The “Malama Solomon Must Go” Facebook page asserted that “Hawai'i Senator Malama Solomon berates and insults testifiers, pushes for bills the public doesn't want, manipulates the system to sneak in special interest bills and has no respect for the public. Her behavior is so bad, she must be stopped.

While Representative Hanohano expressed the need for greater respect for Hawaiians, many people were the target of her anti-Japanese rhetoric.

There are those who assert that Hawai`i is a land of tolerance and aloha. We may disagree but we do so with respect. 

In 2014 the voters spoke. Most of those who were perceived as more in-your-face lost. Governor Abercrombie may have had the most lopsided loss because he was the most confrontational. He seemed to relish attacking people.

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Sunday, November 23, 2014

Eyes Knocked Open

By Henry Curtis

The Progressive interviewed Indian author and political activist Suzanna Arundhati Roy.

"I think my eyes were knocked open and they don't close. I sometimes wish I could close them and look away. …But once you've seen certain things, you can't un-see them, and seeing nothing is as political an act as seeing something."

For me, one of the issues that will not go away is energy efficiency,

In 1865 Lord Jevons analyzed the impact of introducing of a more efficient coal steam engine. 

This technological breakthrough led to decreasing the amount of energy needed to produce each end product, which in turn led to higher demand for the end products, and thus increased the total demand for coal.

The use of energy efficiency increased energy demand.

Suppose everything cost half-as-much due to more efficient resource use. More could be produced for less. More efficient goods would be cheaper and would replace less efficient goods.

Technological innovation leads to more efficient and cheaper ways of producing goods. Cheaper goods mean higher demand.

The use of energy efficiency does not lead to lower fossil fuel use. 

Renewable energy can displace the use of fossil fuel, but only if the definition of renewable energy excludes fossil fuels. 

Sadly in Hawai`i this is not the case. Many fossil fuels can be counted as renewable energy under state law. 

This concept is also known as the Jevons Effect, Rebound Effect, the Khazzoom-Brookes Postulate, David Owen’s “The Efficiency Dilemma” 

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Saturday, November 22, 2014

Falsifying Hawaii’s Greenhouse Gas Emissions

By Henry Curtis

Worldwide there has been a general increase in the release of greenhouse gases.

Hawai`i has a goal of reducing its total greenhouse gas emissions so that by 2020 the state is releasing the amount it emitted back in 1990.

The Hawaii Department of Health’s Environmental Health Administration released a report “Environmental Health Management Report” in 2012.

In 2010 Hawai`i emitted 16.57 million metric tons of CO2 equivalence (MMTCO2Eq). The three biggest sectors were energy (53%), ground transportation (19%) and marine transportation (13%).

The simple solution is to replace gasoline and bunker fuel (used by utility power plants) with liquefied natural gas (LNG).

Gasoline and bunker fuel burn dirty and thus increase our numbers. 

LNG releases methane where it is produced and methane is a very potent greenhouse gas. But LNG burns clean, thus it increases other peoples’ numbers.

To those who focus only on crunching numbers, but are not concerned about understanding the numbers, Hawai`i will achieve its goals, even if the world is worse because of it.

An alternative is to require Hawai`i’s numbers to include a best estimate of the emissions we are responsible for, that is, the production and transportation associated with our consumption. For high import places like Hawai`i, that would produce honest numbers.

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Friday, November 21, 2014

Anti-HECO forces created the PUC

By Henry Curtis

William Richards Castle, President of the Honolulu Gas Company, was upset with high electricity rates. He was a leader in the anti-HECO forces effort working to reign in the electric monopoly.

Through his efforts the Territorial Legislature overrode the Governor and established the Public Utilities Commission in 1913.

The Hawaiian Gazette Editorial dated March 18, 1913 asserted that, One of the most important questions before the legislature, if not the most important, is that of the regulation by a government commission of the public utility corporations, and, it is not going too far to state that there is hardly any question before the legislature of which the general public and the legislators themselves know less.”

The Commission was given broad authority to oversee any entity that was involved in owning, transporting, storing or conveying of gas and electric, light, power, heat, cold, telephone, railroad and street railroad companies.

The Commission’s Annual Report for 1913 described the complexity of the undertaking.

 “At the inception of its work the Commission was confronted by the fact that it was the first commission of its nature to be created in Hawaii and that it would have to traverse a great deal of new ground before it accomplished its organization and got into working order.

In this the Commission realized that its experience would not be far different from the experience of utility commissions away from here beginning a work in a new field; and while it was appreciated that the experience of such other utility commissions would be of great assistance to the local Commission in starting its work, it was as fully realized that the local act is much broader in its scope that the acts so far examined on any utility commission away from here.

The principal difference between the local and such acts lies in the definition of a ‘public utility.’

“At a glance it may be seen that this definition is very, very wide in its scope. As was remarked by a chairman of one of the similar commissions on the mainland, the jurisdiction of the Hawaii Commission appears to be limited only by the Constitution of the United States.

Moreover, the authority to ‘regulate’ a rate given the local Commission by Act 89 gives the Commission indirect but, nevertheless, potent authority to regulate everything upon which the rate is based—a point not universally appreciated.”

“After considerable discussion and thought on the matter … the Commission adopted the following definition: ‘The term public utility as defined by Section 18, Act 89, S.L. 1913, means every business which is virtually a monopoly where effective competition is not in operation and which undertakes, on a general or uniform schedule of prices, to serve all comers.

‘The term includes all concerns doing such business whether maintained or operated by a person, firm or corporation. The term is confined to the following kinds of business: transportation of passengers, transportation of freight, telephone, telegraph, wireless telegraphy, light, power, heat, cold, water, gas, oil, storage and warehouse business.’”

The Commission’s second Annual Report discussed the need to regulated monopolistic abuse.

“One of the functions of this Commission is to investigate alleged abuses occurring in the transaction of business which is more or less monopolistic, and in which competition, whereby the public may be assured of proper treatment, has no scope. A good deal of investigation has been done in a quiet way.”

The third Annual Report spent considerable time discussing two passengers who drowned on the steamship Kilauea drowned at Lahaina.

Right from its inception the Commission has covered an extremely broad agenda.

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Thursday, November 20, 2014

The Information Age is transforming the Public Utilities Commission

By Henry Curtis

The three Hawai`i Commissioners on the Hawaii Public Utilities Commission are all in San Francisco attending the National Association of Regulatory Utility Commissioners (NARUC) 126th Annual Meeting.

Commissioner Lorraine H. Akiba is serving on a panel, “Fostering Innovation and Protecting Privacy for Utility Customers.”

“The word ‘privacy’ has become a battle cry in State commission hearing rooms around the country. 

But data access and privacy could be seen as two sides of the same coin: Allow access to data and innovation thrives, and threaten privacy and customers understandably revolt.

Anonymyzing data and aggregating helps, but questions remain about trade-offs and advantages of different approaches. 

Will "big data" be transformative? What are the data use cases that really work?

In this session, panelists will discuss these issues and more-such as, what aggregation thresholds are useful? Participants will learn the value of customer access to data and how their information is protected.”

Another panel is on “Third Party Solar Providers: Should they be regulated?”

“With the advent of rooftop solar systems for the consumer market, is there adequate protection for consumers? 

When leasing a system or purchasing energy through a power purchase agreement (PPA) from a third party provider, are consumers being adequately informed about what they are agreeing to? 

Do solar companies fully disclose costs and potential savings to prospective customers? Are customers really getting what they thought they would? 

What happens if third party solar providers go out of business? 

Should government play a consumer protection role with regard to third-party ownership of rooftop solar systems in the consumer space?  If yes, who should fulfill this role, state Commissions or state Attorney Generals?  If no, how can the solar industry police itself?” 

Meanwhile the Information Age is transforming the Hawai`i Public Utilities Commission.

Some question why agencies are taking so long. Other marvel at how far the agency has come. Some don’t remember the joy of pouring through microfiche!

Although the three Hawai`i Commissioners are all out of the state, the Commission’s electronic Daily Activity Report included several decisions signed by the Commissioners in various dockets.

That fact resulted in my examining the signatures.
The signatures of the Commissioners are exactly and identically placed over their printed names. That is, the signatures not signed but are inserted along with their printed name into the documents.

The electronic information age has led to changes that have jumped ahead of the Hawai`i Administrative Rules (HAR).

Motions to intervene in regulatory proceedings can be electronically signed and electronically submitted to the Commission. The documents do not need an actual signature even though HAR '6-61-16 (c) states “The original of each document, including …motions …shall be signed in black ink.”

Other rules have been modified.

HAR '6-61-18 asserts that, “Unless otherwise required by this chapter or the commission, each party shall file with the commission an original and eight copies of each application, complaint, or other pleading and any amendment to an application, complaint, or other pleading and serve two copies on the consumer advocate at 1010 Richards Street, Honolulu, Hawaii 96813.”

The Commission now requires zero hard copies of motions to intervene. Just one electronic file.

But the Consumer Advocate still must get two hard copies, hand-delivered or by snail mail.

Thus the Consumer Advocate receives an email of the Daily Activity Report the day after the filing and may get snail mail hard copies two days after the filing.

Following the rules and sending the copies to 1010 Richards Street would be a mistake as the building has been boarded up for years and is supposedly undergoing renovation.

Why the Consumer Advocate needs two hard copies while the Commission does not need any remains a mystery.

Why does the Consumer Advocate need to file a standardized letter signed by an attorney stating they have no opinion on every motion to intervene in every docket filed with the Public Utilities Commission?

Why does the Consumer Advocate also need to file a standardized letter signed by an attorney stating they have no initial position on every docket filed with the Commission?

Why does the Consumer Advocate need more staff? Should they instead be adopting some of the Commission's best practices?

Most corporate documents are now in electronic format. Thus courts and regulatory bodies around the country are allowing discovery of electronic documents.

So far, the practice of getting emails associated with documents has not been allowed in Commission proceedings. 

That change, like many other changes, will occur. It is only a matter of time.

Related: Civil Beat Editorial Board Opinion (November 20, 2014)
State IT Woes: Hawaii Needs to Spread a Little Digital Aloha

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Wednesday, November 19, 2014

The Gas Company plays hardball on LNG

By Henry Curtis

The Public Utilities Commission has recently opened regulatory proceedings to review the HECO Companies Power Supply Improvement Plans (2014-0183) and the Gas Company (Hawaii Gas) proposal to import Liquefied Natural Gas (2014-0315).

The Gas Company, like many other entities, filed a motion to intervene in the HECO Power Supply Improvement Plans docket.

HECO and Life of the Land (LOL) were the only two entities that filed motions to intervene in the Gas Company Liquefied Natural Gas (LNG) docket.

The Gas Company filed motions with the Public Utilities Commission requesting that HECO be allowed to participate in the LNG docket while Life of the Land’s motion to intervene be denied.

The Gas Company feels that it has a right to intervene in the HECO PSIP.

HECO's proposal to install new gas pipelines …may potentially negatively impact Hawaii Gas' ratepayers and, thus, directly impact Hawaii Gas' property, financial, and operational interests.”

The Gas Company asserts that HECO has less interest in the LNG Docket.

 “Hawaii Gas recognizes that Hawaiian Electric may have an indirect business interests relating to the importation of LNG to Hawaii, any finding or ruling in this docket could have only tangential impact, if any, on Hawaiian Electric's business interest.”

The Gas Company is moving in the wrong direction.

Over the past decade HECO has increased its use of renewable energy (now around 17%) while the Gas Company has decreased its use of renewable energy from 5% to 2.4%.

In addition the Gas Company is proposing to use fracked LNG, a highly destructive fuel.

Should HECO be required to increase its use of renewable energy while no similar requirement be imposed on the gas utility?

The Gas Company objects to intervention by LOL in the LNG docket.

“‘Life of the Land strongly supports the movement by all utilities towards a sustainable future.’ This statement of a general interest in energy policy does not sufficiently address what effect an order in this docket will have as to LOL's interest.”

Under state law the Consumer Advocate represents consumers in all actions before the Public Utilities Commission.

The Consumer Advocate seek to balance competing financial interests but have never entered the environmental or cultural arena.

Years ago HECO proposed importing rain forest palm oil biodiesel from the Malaysia and Borneo. 

The Wall Street Journal noted in a lead story on the front page that the palm oil industry was destroying one of the world’s last remaining large rain forests. The palm oil industry was causing havoc on the environment, displacing native people and impacting the health of regional communities.

The Consumer Advocate supported HECO’s proposal.

The Gas Company is blind to the fact that environmental issues are also at stake in their LNG proposal.

Hawaii Gas' interests …are clearly unique and are different from the interests which the Consumer Advocate,” the Gas Company wrote in the PSIP docket.

In the LNG proceeding, the Gas Company opined that “Hawaiian Electric's tangential business interests cannot be represented by either Hawaii Gas or the Consumer Advocate.”

The Gas Company asserted that “LOL's interests ...will be adequately and sufficiently represented by the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs ("Consumer Advocate").

The Gas Company asserts that neither HECO nor Life of the Land has demonstrated expertise in the LNG arena.

“Hawaiian Electric fails to explain how its expertise in practicing before the Commission and/or experience in regulatory law and procedure would assist in the development of a sound record in this case or how it would be relevant to the pertinent issues in this docket.”

“LOL has not demonstrated or provided any reliable evidence that its intervention as a party would contribute in any significant or material way to the development of a sound record.”

Rulings by the Public Utilities Commission are pending.

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Tuesday, November 18, 2014

State of the State re Renewable Energy

By Henry Curtis

EarthJustice has just released “Coming Clean: The State of U.S. Renewable Energy.” The document includes a state-by-state analysis.

The document is a good seque to what I was planning on writing today.

 A number of my readers have privately asked me about what will change in energy policy in the very near term (the next few months).

Who are the players? Who is currently creating policy? How will Governor David Ige change policy? Who will step into the policy vacuum being created by HECO?

Several people have also asked me about DBEDT’s $150,000,000.00 GEMS project which was intended to provide funding so that economically-strapped ratepayers could install rooftop solar. Funds will become available in December.

Goldman Sachs consulted with DBEDT, wrote the legislative bill, did more consulting and will be compensated. DBEDT will oversee the program. The program could work as intended and many people are hopeful.

At the same time many are wondering if a state-run bank makes sense. 

No caps were placed on the percentages that can be carved off to consultants and management. The funds can be diverted for unlimitedly large projects. Inadequate safeguards were established. There is little oversight.

Think Kaka`ako funded by a state bank. What could possibly go wrong with Governor Abercrombie’s dream?

Currently Hawai`i ratepayers pay three to four times more for electricity than the US average. One in nine ratepayers have a rooftop solar system, by far the highest rate in the nation.

The HECO Companies are wrestling with rooftop solar and the approaching revolutions in energy storage, micro-grids and nano-grids.

Many believe that the utility is locked in the paradigm of yesterday: nothing is changing and the utility must simply provide reliable electricity.

The Legislature, the HECO Companies and the Public Utilities Commission each want to see change. But they do not want to carry the burden for advocating and pushing for a policy that fails.

In various ways these three forces are pushing to modernize the utility grid.

But Parker Ranch is threatening to build an alternative renewable grid in Waimea on the Big Island. They plan to lower ratepayer bills. Parker Ranch’s energy subsidy Paniolo Power might one-day replace HELCO.

One successful Hawai`i-based micro-grid could launch a revolution.

EarthJustice, the Hawaii Solar Energy Association and Blue Planet Foundation are all supporting some version of modernizing the transmission grid.

But Blue Planet Foundation’s Big Island research center at Pu`u Wa`awa`a and Blue Planet Foundation founder Henk Rogers home on Tantalus have both cut their electrical transmission umbilical cords and are now operating independent of the utility grids.

Pu`u Wa`awa`a Ranch over produces solar energy and converts the excess to hydrogen to power vehicles.

The Gas Company could enter the solar-gas hybrid industry. They could install rooftop solar and provide natural gas or propane to power small generators as a supplement. The Gas Company could gain at the expense of the electric monopoly.

This could explain why the Gas Company and HECO have each filed motions to intervene in the other company’s application for recently opened Public Utilities Commission regulatory proceedings.

It could also explain why Macquarie Infrastructure Company  (owner of Hawai`i Gas) invested in two proposed Anaergia energy projects on Maui and why the Anaergia-MECO power purchase contract talks are sluggish.

With the explosive growth in rooftop solar there may only be sufficient remaining utility demand to support either the Gas Company or the HECO monopoly, but not both.

The military is working on micro-grids so in case the HECO grid crashes they can maintain power. They could also disconnect is there are large kWh price variations between the grids.

Life of the Land would like to see a side-by-side comparison (reliability, cost, impacts and risks) for each of the ten distinct paths forward.  

Most people have little knowledge of energy policy. They want to see more solar and less fossil fuel. They want lower prices.

Some industry types want change in energy policy and are committing their money. Others see the Hawai`i energy future as a cash cow waiting to be exploited.

Never before have so many diverse plans been presented.

The danger is picking a plan because it closely resembles what we currently have, or is backed by money or has slick advertisements.

Meanwhile this week the National Association of Regulatory Utility Commissioners (NARUC) is holding their 126th Annual Meeting in San Francisco.

One conference topic is “Fugitive Methane Emissions” caused by natural gas facilities.

What is the incremental benefit of eliminating all leaks in terms of the total anthropogenic and non-anthropogenic inventories of methane emissions? How much do rates need to increase to satisfy the combined safety and environmental goals? And most importantly, are consumers willing and prepared to pay for it all?”

Six members of the Hawai`i Public Utilities Commission are in San Francisco attending the NARUC meetings: Commission Chair Hermina Morita, Commissioner Lorraine Akiba, Commissioner Michael Champley, Chief Counsel Thomas Gorak, Chief Researcher James Griffin and Chief Auditor Carolyn Laborte.

HECO Vice Presidents Joseph Viola and Darcy Endo-Omoto are also among the 1300+ people attending.  

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Blog Series on Hawaiian Civic Clubs

Future Articles

The Queen Liliʻuokalani Statue

Ka Lei Maile Ali`i Hawaiian Civic Club

Monday, November 17, 2014

Fracking LNG is latest sustainable energy issue

By Henry Cyrtis

The use of energy affects everything.

Energy powers the world economy. Petroleum products are everywhere. They include plastic, detergents, pharmaceuticals, lubricants, polymers, paraffin wax, tar and asphalt.  

Every energy project has positive and negative economic, environmental, social, cultural, taxpayer and ratepayer impacts.

Life of the Land believes that people are part of the environment and issues such as justice and equality must be considered as vital elements of a truly sustainable energy system.

Life of the Land works with community groups throughout the state to increase community understanding and knowledge of energy options for Hawai`i nei.

In 1988-89 AES Kalaeloa Venture LLC signed an agreement to sequester carbon in the Mbaracayu Reserve in Paraguay as an offset for anticipated lifetime emissions from its proposed Campbell Industrial Park coal plant.

Negative health impacts caused by our energy choices costs Americans tens of billions of dollars per year.

Fights over energy resources are responsible for numerous Middle East wars. Climate change threatens the future. Climate Migration has already started. Perhaps a billion people will need to move by 2100.

There are several Hawai`i-based examples of the negative impacts of our energy choices.

On February 23-24, 1977, the Hawaiian Patriot leaked 18,000 tons of oil, then caught fire, exploded, and sank.

On May 14, 1996, a Chevron pipeline ruptured, discharging No. 6 bunker fuel oil adjacent to HECO’s Waiau Power Plant. Over 41,000 gallons of oil gushed into Waiawa Stream.

Power plants introduce dioxins, furans and polychlorinated biphenyls (PCBs) and mercury into our environment.

Puna Geothermal has a troubled emissions record. 

Hawaiian Commercial and Sugar (HC&S) operates a coal/bagasse-to-energy power plant. The biogas is for local operations. The coal is needed to provide constant output for MECO.
The decision by Hawai`i to import Rain Forest Palm Oil Biodiesel and Liquefied Natural Gas (LNG) affect Native Peoples in other parts of the world.

Energy policy plays a vital role in everything we do. Citizen involvement is absolutely required.


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Sunday, November 16, 2014

The continuing saga of PUC Non-Dockets

By Henry Curtis

The Public Utilities Commission has an open regulatory docket, “Instituting a Proceeding to Establish and Implement an On-BiII Financing.” (Docket 2014-0129)

The idea is that ratepayers can install solar with no money down, have lower monthly bills, and use part of the saved money to gradually pay off their rooftop solar system.

The Commission granted Party status to the Hawaii Solar Energy Association, Hawaii Renewable Energy Alliance, Blue Planet Foundation and DBEDT.

The Commission granted Participant status to the Attorney General’s Division of Financial Institutions, Sierra Club, Environmental Defense Fund and Honeywell International.

Hawaii Energy – the energy efficiency utility – filed a motion to participate in the docket but was denied.

"Hawaii Energy …is denied participant status. Hawaii Energy, also known as the Public Benefits Fee Administrator {"PBFA") or Leidos, is the independent third-party under contract with the commission to operate and manage energy efficiency and demand-side management programs within the State.

Because Hawaii Energy acts as contractor to the commission within the scope of the Hawaii Energy Program, the commission finds that Hawaii Energy does not require participant status."

The Public Utilities Commission staff has written and filed the draft Hawaii Energy Bill $aver Program Manual. The Commission has scheduled a November 19, 2014 Informal Technical Conference for parties and participants.

Often in formal regulatory proceedings the Commission issues protective orders (confidentiality agreements). These agreements allow parties to challenge the use of confidentiality.

"If a party or any interested person disagrees with the designation of information as confidential, the party claiming confidentiality and the party or person so disagreeing shall first make a good faith attempt to resolve the dispute on an informal basis. If the dispute cannot be resolved, the party or person contesting the confidentiality shall file a motion to compel disclosure or any other appropriate motion with the Commission.

The party claiming confidentiality shall bear the burden of proof in supporting its claim, and the Commission will determine whether the information shall continue to be designated as confidential under this protective order. Pending a disposition of the motion, the information in question shall be treated as confidential information and shall not be disclosed except as permitted in this protective order."

The Commission issued a Protective Order for On-Bill Financing.

"WHEREAS … in Docket No. 2014-0129, the Commission opened a docket to establish and implement an on-bill financing program, to be known as the Hawaii Energy Bill $aver program …WHEREAS, in connection with the Bill $aver Program, the Commission expects the parties to provide each other with certain confidential information, as well as the Commission, its staff, and consultants or contractors who are involved with the Bill $aver Program … 

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED …that the Commission issue a protective order covering the confidential information provided by any party."

The November 13, 2014 Protective Order (2014-PO-35) covers the HECO Companies, the Consumer Advocate, AFC First Financial Corporation (Finance Program Administrator) and Leidos Engineering LLC (Program Administrator).

BUT, even though the document covers the exchanging of confidential information regarding the On-Bill Financing docket, the protective agreement was not filed in that docket. Nor were docket parties and participants in that docket informed of the filing.

Instead it was filed in a parking lot, a docket containing 66 random documents involving numerous water, gas, electric and telecommunications companies.

In a preceding blog post I have written about this strange non-docket docket.

The Public Utilities Commission (PUC) Document Management System (DMS) states that Docket No. 2014-0000 has a “Docket Title” called “2014 Non-Docketed Orders.”

Perhaps the intent is to make it difficult for outside parties in the on-bill financing docket (2014-0129) to challenge the confidentiality of documents since the confidentiality agreement is in a docket  (2014-0000) in which they have no status. 

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Saturday, November 15, 2014

The Strange Biofuel Saga

By Henry Curtis

One of the strangest sequence of events at the Public Utilities Commission occurred in regulatory proceedings on biofuels.

It all started in 2007 with a proposed long-term contract between Hawaiian Electric Company (HECO) and Imperium Renewables Inc.

HECO had proposed buying palm oil from Indonesia/Malaysia, shipping it to Seattle for conversion into biofuel, having it specially treated to handle subzero temperatures (to pocket a federal tax credit), and then burning it on O`ahu to produce electricity.

Life of the Land intervened and lined up more than a dozen expert witnesses. A full Evidentiary Hearing was held. Briefs were being prepared.

Then Imperium asked HECO to take the existing contract and to modify it such that risks would be transferred from Imperium to HECO ratepayers with no adjustment in the amount of money Imperium would receive from ratepayers.

HECO readily agreed and a second Evidentiary Hearing was held.

The proposed HECO-Imperium contract may be the only Commission proceeding with two hearings. Furthermore, the risk transfer process may reflect the height of arrogance by the utility. But that is not what made the proceeding so strange.

In subsequent biofuel contracts, HECO and MECO submitted short-term contracts for testing biofuel in their generators.

Life of the Land also intervened in these proceedings.

The Public Utilities Commission denied party status to Life of the Land, and instead granted participant status (a lower level of intervention) on the grounds that these proceedings were just for limited importation of biofuels for testing purposes.

Then the utilities went back to submitting long-term contracts. 

Life of the Land again intervened.

The Public Utilities Commission again denied party status to Life of the Land, this time arguing that they were just following precedent. Since the Commission had granted Life of the Land only participant status in recent biofuel dockets -- that level of involvement should continue.

HECO then submitted two sequential requests for approval of extremely costly but very politically connected contracts with Aina Koa Pono.

In Aina Koa Pono I the Public Utilities Commission denied Life of the Land’s motion to intervene altogether. Neither party nor participant status was granted.

HECO asserted that the Aina Koa Pono contract would be so expensive to HELCO ratepayers that HECO ratepayers should subsidize the operation.

Life of the Land determined that the subsidy would be $250,000,000.00 (250 million dollar)  over a 20-year period.

Although not in the docket, Life of the Land’s analysis was referenced in the Public Utilities Commission rejection of AKP 1.

Life of the Land was permitted into AKP2.

The Public Utilities Commission found that AKP2, while marginally better than AKP1, was still proposing to rip-off ratepayers. The contract was rejected.

Three caveats.

First, the bizarre biofuel intervention sequence was initiated and developed under the Lingle administration.

Second, exluding an attempted intervention by a community group in a biomass docket, Life of the Land was and is the only non-utility, non-government entity who has sought to intervene in any Public Utilities Commission biofuel proceeding.

Third, in a recent Pacific Business News article it was suggested that Hermina Morirta should not be re-appointed as Chair of the Public Utilities Commission because the Commission rejected AKP.

Why someone should not be reappointed because they saw through a contract that would  rip-off ratepayers is not clear.

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