Friday, November 27, 2015

Pending Life of the Land and Department of Defense intervention requests in HECO rate case

By Henry Curtis

NextEra has proposed taking over the Hawaii Electric Companies  and imposing a four year moritorium on rate cases. If approved, this would affect three recently opened rate cases which are pending before the Hawai`i Public Utilities Commission.

In the most recent new rate case filing, Hawaii Electric Light Company (HELCO) filed a rate case on June 17, 2015 (docket number 2015-0170). In a 2-1 vote, the Commission deferred action for one year.

Maui Electric Company (MECO) file a rate in late 2014 (docket number 2014-0318). The Commission issued a protective order, but nothing else has transpired.

The oldest of the three new rate cases dates from June 27, 2014. Hawaiian Electric Company (HECO) filed their 1600 page rate case application (docket number 2013-0373). Timely motions to intervene were filed by Life of the Land and the Department of Defense. The Commission issued a protective order, but has yet to make a ruling on interventions.

The Department of Defense (DOD) motion asserted that “the nature and extent of DoD's property, financial and other interests are substantial. The fact is that the DoD is one of the largest purchasers of electric services in the State of Hawaii. The DoD has been a party in other dockets related to Rate increases and Rate Design, Integrated Resource Planning, and Demand Side Management. The DoD has a crucial and strategic interest in securing electricity at the lowest but fair cost.

A major issue for Life of the Land is what rate structure will enable higher penetrations levels of indigenous renewable energy which has low climate, social, financial and environmental impacts.”

Life of the Land  asserted that “unbundling rates is key to many things: sending correct price signals, aligning customer expectations with cost-causer principles and encouraging the marketplace to find more efficient and more cost effective solutions. …High electricity rates affect quality of life, business opportunities and the ability to produce our own food. Unbundling rates is of the utmost importance. Unbundled rates offer transparency, minimize cross-subsidies, allow for third parties to offer efficient alternatives and sends the correct price signal to ratepayers. Unbundling rates will enable customers to decrease their electric bills.

The Consumer Advocate opposed neither motion to intervene. HECO opposed both motions.

HECO argued that it was proposing to spend additional money in some areas, while proposing to cut back spending in other areas, resulting in no change in needed revenue, and thus there was no need for intervention. “Intervention is not appropriate and attempts to intervene are premature.”

HECO asserted that if they later supplemented their filing then “Hawaiian Electric would not object to DOD's intervention,” but would still oppose intervention by Life of the Land.

However, traditionally Public Utilities Commission has ruled that late interventions based on supplemental filings is not permitted.

HECO noted that, “the general rule with respect to intervention, as stated by the Hawaii Supreme Court, is that intervention as a party to a proceeding before the Commission ‘is not a matter of right but is a matter resting within the sound discretion of the Commission.’ In re Hawaiian Electric Co., 56 Haw. 260, 262, 535 P.2d 1102 (1975).”

That case was based on HECO’s advertising campaign in the 1960s in which HECO asked people to increase their use of electricity, and then asked the Public Utilities Commission for permission to charge ratepayers for the cost of the advertising campaign. The Commission approved the request!

In that case, Life of the Land was not permitted to intervene but was permitted to participate through the Consumer Advocate. 

Life of the Land appealed. The Hawaii Supreme Court agreed that the Commission can reject motions to intervene, but the Court also reversed the Commission regarding who should pay for the ad campaign.  

Since then the law has stated that ad campaigns are not charged to ratepayers, although the rule is not hard and fast in all cases.

The most recent rate cases for Kauai Island Utility Cooperative (docket number 2009-0050) and for Hawaii Gas (docket number 2008-0081) were both completed in 2010.

#      #      #

Thursday, November 26, 2015

HEI Shareholders are Nervous

By Henry Curtis

Bloomberg reported today that the price of a share of stock for Hawaiian Electric Industries is worth less than the day before NextEra proposed taking over the Hawaiian Electric Companies.


December 3, 2014
December 4, 2014
January 29, 2015
November 25, 2015

The Honolulu Star Advertiser has a lead story today in which Public Utilities Chair Randy Iwase asserts that utility-scale renewables are preferred over rooftop solar.

“No place to plug in: The demise of the island solar power industry is foreseen via a state cap on rooftop systems.”

“The PUC decided to halt new rooftop solar installations to prevent damage to the grid and allow other renewable energy sources – such as wind and geothermal – to catch up with residential.”

“PUC Chairman Randy Iwase said the cap was necessary because Hawaii needs a variety of renewable energy resources to achieve its goal of 100 percent renewable electric power by 2045, and that problems with HECO’s old grid leave little space for all resources to connect.”

“Iwase said he wanted to see more community solar, community wind farms, utility-scale battery storage, hydrogen fuel cells and geothermal development.”

Oahu Grid

O`ahu System
Megawatts (MW)

Sherry Menor-McNamara, president and CEO of the Chamber of Commerce Hawaii, stated on Wednesday that the Chamber supports the merger.

The Chamber supports the merger of Hawaiian Electric Company and NextEra Energy. We believe that the merger will help Hawaii move forward with reducing its reliance on oil through renewable energy efforts, upgrading its power infrastructure, and increasing efficiency and use of technology to improve reliability and reduce costs for all consumers, both residential and business ratepayers.

The merger as it is configured today is opposed by the Department of Defense, the Consumer Advocate, the State Office of Planning, DBEDT, the Counties of Maui and Hawai`i, and 2 dozen other community, environmental, and cultural organizations and businesses.

The Consumer Advocate wants the Public Utilities Commission to require that HEI CEO Connie Lau and NextEra CEO Jim Robo be available next week for cross examination at the evidentiary hearing.

#      #      #

Wednesday, November 25, 2015

State asserts HECO-NextEra merger based on speculative and exaggerated savings

By Henry Curtis

The Consumer Advocate is the state agency that analyzes utility rates. The Consumer Advocate filed their Prehearing Conference Brief on November 23.

The Consumer Advocate noted that a much needed rate case would lower rates, but the rate moratorium proposed by NextEra would maintain high rates. In addition, during the rate moratorium, NextEra actually proposes to raise numerous surcharges that would raise rates further.

The Consumer Advocate asserted that NextEra used “speculative” cost estimates that are “clearly exaggerated,” an ownership model that is “likely to expose Hawaiian Electric customers to new and unreasonable costs,”  the use of “backdoor rate increases,”  and the use of “speculative cost estimate savings.”

NextEra would increase risk to ratepayers while they “conveniently avoid discussion of financial drawbacks.” Then there are the problems of cost shifting between NextEra’s 900 regulated and unregulated subsidiaries and a “lack of corporate transparency.”

“The Merger represents a challenging mix of claimed benefits for electric customers, offset by new uncertainties, risks and regulatory complexities. The Consumer Advocate does not support Commission approval of this Merger in the form proposed by Applicants because it does not provide tangible and substantial net benefits to Hawaii's consumers.”

When carefully analyzed, it is obvious that the Applicants failed to provide sufficient support and enforceable commitments that truly guarantee customer benefits while mitigating the many costs and risks arising from the Merger.”

“While Applicants' estimated potential future cost savings are large, the amounts of rate reductions are paltry, temporary, and not ‘guaranteed’ because of the many conditions that are attached to Applicants' rate plan and rate case moratorium, both of which are hostile to customers' interests.”

“Applicants assume no job losses in Hawaii for at least five years, despite only committing to two years with no workforce reductions. Applicants relied on nine other mergers to estimate savings, all of which involved significant job losses.”

The Chinese Chamber of Commerce of Hawaii, the Hawaii Korean Chamber of Commerce and the Filipino Chamber of Commerce of Hawaii issued a joint statement on November 23 asserting that the NextEra deal is great because it will “lower customer bills.”

The Department of Defense testimony focused heavily on ring fencing, that is, ways “to protect HECO companies and their ratepayers from a range of risk factors that could cause harm.  Put simply, the purpose of ring-fencing is to avoid harm.”

Ring fencing is used similar to insurance, it protects assets from risks that occur on the other side of the fence, that is, NextEra risk beyond the borders of Hawai`i.

“Modern ring-fencing conditions have been a key component of a number of recent mergers involving U.S. utilities,” testified the Department of Defense.

“Effective ring-fencing measures that have been developed in the utility regulatory arena due to intense regulatory scrutiny that has been applied to other recent and currently pending mergers.”

Earlier this year Ellen Lapson testified before the Washington D.C. Public Service Commission in the Exelon-PHI merger proceeding.

“The package of ring-fencing provisions that the Joint  Applicants have proposed represents the leading edge in utility ring-fencing, and it will become the utility industry  standard for providing the highest degree of protection going forward.”

But in this proceeding the Department of Defense noted that NextEra witness Ellen Lapson describes proposed similar ring fencing proposals as “’extreme ring-fencing,’ ‘more stringent,’ ‘most stringent,’ and ‘extreme form of ring-fencing.’”

The Department of Defense’s expert witness concluded, “I would thus urge the Commission to discount Ms. Lapson's disparaging comments in the current NextEra-HECO case.”

NextEra and HECO proposed to the Commission that NextEra CEO Jim Robo and HEI CEO Constance Lau be exempted from testifying.

On November 24 the Consumer Advocate filed an objection.

“The proposed merger transaction is the largest utility transaction in the State’s history and has generated more interest and participation than any prior Commission docket.

With the interests of over 450,000 customers, numerous stakeholders, and claims of offering customer benefits totaling nearly $1 billion, it is inconceivable how the Commission would not require the chief executive officers of the merger principals to answer questions about the proposed merger.”

The Applicants have not filed a request to substitute witnesses. Therefore, Applicants are barred from substituting witnesses without Commission approval. The Prehearing Order, paragraph 22, clearly sets forth the requirement that Parties are to file ‘requests for substitution of witnesses who provided pre-filed testimonies on or before November 23, 2015.’

 The Applicants requested accommodations for three sponsoring witnesses, however, there are no requests for substitutions. Applicants’, simply, have made no such ‘request’ for Commission approval to substitute Applicants’ witnesses Mr. Robo and Ms. Lau with Mr. Gleason, Mr. Dewhurst, and Mr. Ajello.

Further, the Applicants seemingly ignored the fact that the Commission granted the witness substitution requests received from Hawaii Solar Energy Association, Tawhiri Power LLC, Friends of Lanai, Puna Pono Alliance and Life of the Land."

“Applicants have not offered any reason to provide substitute NextEra witnesses Eric Gleason and Moray Dewhurst, in addition to Hawaiian Electric Companies’ representative James Ajello. Mr. Robo and Ms. Lau possess unique and superior knowledge regarding their involvement with the merger transaction and their personal discussions with respective company management and board of directors.

As demonstrated by their testimony and related exhibits in response to Consumer Advocate information requests CA-IR-545 through CA-IR-584, Mr. Robo’s and Ms. Lau’s participation in the evidentiary is necessary due to their direct involvement in numerous communications and meetings concurring the proposed transaction.”

“The Consumer Advocate and the Commission should not be relegated to testimony that is limited to a substitute’s perspective or representations of what may be directly attributable to James Robo and Constance Lau nor should the Consumer Advocate be denied an opportunity to cross-examine both Mr. Robo and Ms. Lau.”

“Cross-examination of both sponsoring witnesses, before the Commission, affords the Commission to receive testimony which has not been reviewed, filtered and edited by legions of attorneys and company representatives.”

#      #      #

Tuesday, November 24, 2015

Public Utilities Commission has New Headache: HECO Squirming under Pressure

By Henry Curtis

The Public Utilities Commission must decide whether to go along with latest NextEra-HECO scheme.

PUC Bldg at King/Punchbowl. Photo by Author

The Consumer Advocate was authorized by the Public Utilities Commission to issue Information Requests to Hawaiian Electric Industries CEO Constance Lau and NextEra Energy CEO Jim Robo.

The Public Utilities Commission’s Hearing Officer recommended that Constance Lau and Jim Robo appear at the evidentiary hearing and be subject to cross-examination by all parties. HECO and NextEra made a filing in opposition.

The Commission issues a Prehearing Conference Order that was silent on the issue.

Yesterday HECO and NextEra filed a table with the Commission identifying which witness would be responsible for testifying about each reply to each Information Request.

Jim Robo will not appear. Instead his answers have been assigned to NextEra witnesses Eric Gleason, Moray Dewhurst and John Reed.

Constance Lau will not appear. Instead a new witness is named. ‎ Hawaiian Electric Industries EVP & CFO James Ajello will testify on all answers provided by his boss Constance Lau.

Under normal rules of the game, James Ajello must provide all parties with his biography and provide copies or links to all testimony he has filed in the last decade. That has not happened.

Four other new witnesses will testify. 

Lon Okada, Hawaiian Electric Industries Manager of Corporate Taxes

Jimmy D. Alberts, HECO Senior Vice President for Customer Service

Patricia Uyehara Wong, HEI Administrative Vice President and Corporate Secretary

Peter Young HECO Pricing Director 

#      #      #

The Burden of Intervening

By Henry Curtis

Protecting the public through intervening in proceedings at the Public Utilities Commission can be daunting.

There is the issue of data. In the last week or so, The Gas Company provided a compact disc with a single confidential 11,000 page file containing a compilation of files.

During the same time frame the Applicants (NextEra, HECO, MECO and HELCO) sent over a compact disc containing over 3,000 confidential files in Adobe pdf format. 

Without opening each file to determine how many pages it contained, it is reasonable to assume that 100,000 pages were provided. Opening each file would also be necessary to determine if the content matched the title.

No one could read over 100,000 pages, while simultaneously meeting Commission requirements to file three documents in the two pre-hearing weeks, including a Prehearing Brief.

In addition, The HECO Companies are required to file their revised Power Supply Improvement Plans (PSIPs) later this week. 

These documents must also be reviewed prior to the start of the hearing.

The hearing will be held at the Neal S. Blaisdell Center, Hawaii Suites, located at 777 Ward Avenue, Honolulu, HI 96814.

On November 18 the Commission issued a Prehearing Conference Order giving most parties some bad news. 

The Applicant and the Consumer Advocate will each have two tables with eight chairs. 

The 25 intervening parties will be able to sit at a table only when cross-examining a witness, but at all other times they will have to sit in two adjacent chairs in a long row of chairs without any tables. This new arrangement has never before been used in a Commission hearing.

In addition, the room will not be secure. All material should be removed during breaks, lunch and at the end of each day. During weekends all material must be removed as the Hawaii Suite will be used by other events.

The planned site visit has been cancelled. However, “the commission has been informed that wireless internet will be available at the Neal S. Blaisdell Center. Parties may request the access information from commission staff at the evidentiary hearings."

"The commission has been informed that there are ample electrical outlets in the hearing room. However, if the needs of the Parties exceed the capacity of the hearing room, it may become necessary for Parties to share power strips and/or extension cords.”

There is also a possible issue with parking. “The commission has been informed that parking will be free on most days at the Blaisdell between 9:00 a.m. and 5:00 p.m., Monday through Friday, during the scheduled dates for the evidentiary hearing. Parties are responsible for determining whether or not free parking is available on any given day of the evidentiary hearings.”

Tentative Schedule of Witnesses

November 30, 2015 –
December 9, 2015
December 10, 2015
SunPower Corporation
Consumer Advocate
December 11, 2015
Consumer Advocate
Department of Defense
County of Hawaii
Blue Planet Foundation
Sierra Club
December 14, 2015
Sunedison, Inc.
Hawaii PV Coalition
Hawaii Renewable Energy Alliance
Hawaii Solar Energy Association
Hawaii Island Energy Cooperative
Kauai Island Utility Cooperative
Renewable Energy Action Coalition of Hawaii, Inc.
December 15, 2015
Department of Business, Economic Development, and Tourism
Office of Planning, State of Hawaii
County of Maui
Hina Power Corp
Life of the Land
Ka Lei Maile Alii Hawaiian Civic Club
Puna Pono Alliance
December 16, 2015
The Gas Company, LLC
The Alliance for Solar Choice
Tawhiri Power LLC
Ulupono Initiative LLC ,
Friends of Lanai

Cross Examination of Applicants Witnesses

In every hearing the Commission has the right to ask questions at any point. Traditionally in cross-examining witnesses the Commission has gone last. The Commission and the Consumer Advocate can spend as long as they need asking questions.

Consumer Advocate

After the Commission and the Consumer Advocate ask their questions, the intervenors get to ask questions using a rotation manner.

There will be “time intervals for the cross-examination of Applicants' witnesses by the Interveners, specifically, a maximum of fifteen (15) minutes, followed by successive ten (10) minute periods until cross-examination is completed or the commission determines that further cress-examination either is not required, or would be cumulative or repetitious.”

Order of Questioning

County of Maui & County of Hawaii
Department of Defense
Kauai Island Utility Cooperative & The Gas Company
Blue Planet Foundation, Sierra Club, Hawaii PV Coalition, Hawaii Renewable Energy Alliance, Hawaii Solar Energy Association, Hawaii Island Energy Cooperative, Renewable Energy Action Coalition of Hawaii, Hina Power Corp, Life of the Land, Ka Lei Maile Ali`i Hawaiian Civic Club, Puna Pono Alliance, The Alliance for Solar Choice, Ulupono Initiative, Friends of Lanai
SunPower, SunEdison, Tawhiri Power

 #      #      #

Monday, November 23, 2015

Top-Heavy, Monolithic Monopolies are a Relic of the Past

By Henry Curtis

Starting in just one week, the Hawaii Public Utilities Commission will hold a three week trial-like evidentiary hearing in the proceeding reviewing NextEra's proposed take-over of the Hawaiian Electric Companies. 

The Public Utilities Commission offered each party the right to file a Prehearing Brief, which if filed, was due last Friday.

The County of Maui filed a Prehearing Brief.

"Though they once defined the electric utility industry, the time for top-heavy, monolithic monopolies has long past. 

Over many years, Hawaiian Electric Company, Inc.’s (HECO) underlying infrastructure have become outdated, and they have proven themselves unable or unwilling to sustain the pace of modern developments. 

The utility has not demonstrated the flexibility demanded of the swiftly changing environment, as the Commission urged them to do last year when it issued its inclinations.

The Applicants praise NextEra Energy’s 'access to capital' 'best practices' 'virtuous circles' 'lower cost of debt' as though these economies of scale were enough mass to weigh against the leviathan of challenges it faces. It is not. 

Permitting this merger to go forward enlarges and entrenches a vertically integrated, monopolistic business model: it empowers a massive corporation to take control over an entity already characterized by steep barriers to entry. 

It would give this power to a corporation that does not consider itself subject, as a whole, to this Commission’s jurisdiction, and it would do blindly, as it is unclear what NextEra Energy (NEE) plans to do, or even truly hopes to do, here in Hawaii.

In this Commission’s own words, 'it would be difficult to understate the importance of this docket, not only to the ratepayers of the HECO Companies, but to the State of Hawaii’s citizens and its economy.'

 For reasons stated herein, and the in the County of Maui’s (COM) previously submitted testimony, the COM believes Applicants fail to meet their burden of demonstrating that the merger is reasonable and in the public interest, and this Commission should, respectfully, deny the merger."

To counter the widespread opposition to the merger, a pro-merger PR campaign is underway. 

A pro NextEra viewpoint appears in the Honolulu Star Advertiser yesterday. Eric Draper and Eric Eikenberg wrote NextEra has been a partner in protecting Florida's environment.”  

Eric Draper is the Executive Director of Audubon Florida. Previously, he was National Audubon’s Senior Vice President for Policy, staff director for the Florida House of Representatives Majority Office, led The Nature Conservancy’s Florida government relations program and was part of the Clinton-Gore Transition Team.

Eric Eikenberg is the CEO of the Everglades Foundation, a seasoned Republican strategist and the former deputy executive director of the Florida Republican Party. He served as chief of staff for former Gov. Charlie Crist and former U.S. Rep. E. Clay Shaw. Eikenberg worked as a staff member of the House Ways and Means Committee in Washington D.C.

Audubon Florida and Everglades Foundation rely on corporate connections and political influence for mutual advancement of their interests. The Everglades Foundation is a very politically connected organization with a board of directors headed by a billionaire hedge fund manager. 

The two organizations receive financial support from NextEra subsidiary Florida Power & Light (FPL), as noted in the Viewpoint article.  

“NextEra has been a valued collaborator and supporter of our organizations for many years.”

The flow of mutual benefit is two ways. In 2011 Florida Power & Light opened a solar generation facility. Eric Draper was a featured speaker at the dedication.

The Sabal Trail Transmission project is a highly controversial multi-billion dollar proposal to ship fracked natural gas into Florida. The natural gas pipeline would cut through Alabama's and Georgia's rural communities, farms and ecosystems in order to increase the flow of fracked natural gas into Florida.

Audubon Florida endorsed the project. "Natural gas, especially when used in combination with solar energy, generates far fewer emissions than coal or oil," said Eric Draper, executive director of Audubon of Florida. "Audubon provided guidance on the proposed pipeline route, and we commend FPL for working to avoid sensitive habitats.”

In 2014 FPL advanced a voluntary solar program. In May 2015 FPL launched SolarNow. Ratepayers can donate $9 a month toward building community-based solar arrays. FPL President and CEO Eric Silagy asserted that the FPL program had four partners: the Everglades Foundation, Save the Manatees and the Florida chapters of the National Audubon Society and The Nature Conservancy.

FPL’s voluntary solar partnership plan is an example of the leadership and innovation needed for a better and greener Florida,” opined Eikenberg.

Floridians for Solar Choice is pushing a solar initiative to be voted on by voters in Florida. The broad coalition includes The Tea Party Network, Christian Coalition of America, Solar Energy Industries Association, Florida Retail Federation, Physicians for Social Responsibility and Greenpeace USA.

The Koch Brothers, NextEra and other entrenched powers formed an opposition coalition, Consumers for Smart Solar, which is “working to promote solar energy without sacrificing commonsense consumer protections.

Audubon Florida and Everglades Foundation have sought the neutral middle road of not endorsing either approach.

#      #      #

Sunday, November 22, 2015

Live Streaming of HECO-NextEra hearing

By Henry Curtis

In August Life of the Land filed a motion with the Public Utilities Commission requesting permission for `Olelo Community Media to film the HECO-NextEra evidentiary hearing.

The Commission had twice previously approved Life of the Land requests to film in other proceedings.

The Commission asserted that the motion “is a reasonable request, given the potentially significant and long-term effects this docket may have on the State of Hawaii.” 

The Commission approved the motion, writing that it “appears to be for the purpose of allowing the commission's evidentiary hearing to be streamed to Oahu and Neighbor Island communities.” 

The Commission asserted that the “County of Maui, has stated that statewide media access will complement the commission's scheduled public listening sessions by further engaging the Neighbor Island residents in this proceeding.”

The PUC Order defines the term “Media Coverage” to include “any visual or audio coverage of Commission proceedings by any entity or media agency or such coverage of the conduct or comment of any individual in the hearing room during, prior to, and/or following Commission proceedings.”

At the prehearing conference in early November, Life of the Land, in response to a question by HECO and NextEra, “reported its understanding that ‘Olelo is going to attempt to film it all but they have not committed to that yet. What they have committed to is that it will not be live-streamed.’”

The Applicants (HECO and NextEra) filed a motion with the Commission on November 16.

The Applicants believe that subsequent to the prehearing conference, `Olelo “may have confirmed that they will be both filming and live streaming the proceedings.”

“To the extent this understanding is correct, Applicants wish to express their sincere appreciation to Olelo for agreeing to provide audio and visual coverage of the proceedings for the public.”

“In addition to informing and engaging the general public throughout the State, being able to hear and view the proceedings reliably and in real time from locations other than the hearing room at the Blaisdell Center in Honolulu, will be critical to the ability of all Parties to hear testimony, stay informed as to the status of the twelve (12) scheduled days of proceedings, appropriately prepare witnesses, and present their respective positions on the issues identified by the Commission.”

However, in case something goes wrong, the Applicants have proposed a back-up plan. 

The Applicants will “secure a reliable provider of media access at Applicants’ expense.” The provider will “will live stream the proceedings to a to-be-identified website address which can be accessed by the Commission, general public and all Parties.”

#      #      #

Snapped HECO Power Line not Reported

By Henry Curtis

A snapped power line in Kalihi Kai “fell to the ground, torching three parked vehicles and damaging a building." 

KHON2 inquired about the incident which occurred on Friday, November 13.

Apparently the snapped power line was not caused by contact with vegetation nor ws it the result of a vehicle-pole interaction.

Nine fire companies and 35 fireman responded to the fire at 125 Mokauea Street. The fire was reported shortly after 3 p.m. Power was lost to 540 customers. Power was restored to all but 15 customers by 7 p.m.  

Public Utilities Commission Chair Randy Iwase asserted that Hawaiian Electric Company is required to inform the PUC about such incidents but has failed to do so. 

Is this an isolated incident? Was this something that was an anomaly, that there was something with this wire, or is it something more systemic? We have to go find this out.”

Following a PUC practice adopted back in 1913-14, HECO reports accidents to the PUC when workers are injured.

PUC Chair Iwase believes that the law requires reporting all incidents. In any case, the PUC has the power to demand the reporting of all incidents.

#      #      #

Saturday, November 21, 2015

PUC Commissions split on HELCO Rate Review

By Henry Curtis

The Hawaii Electric Companies are required to file rate cases every three years. NextEra proposed taking over the HECO Companies and imposing a four year moratorium on rate cases. 

The Consumer Advocate, a state agency, has asserted that the next round of rate cases would lower rates. Thus a rate case moratorium would allow NextEra to receive unreasonable windfall profits. NextEra would be using some of this profit to allegedly give consumers money in exchange for taking over the HECO Companies.

Hawaii Electric Light Company (HELCO) filed a rate case in 2009 (docket number 2009-0164), in 2012 (docket number 2012-0099), and in 2015 (docket number  2015-0170).

Life of the Land was admitted as a participant in the HECO rate case of 1971 and in the HELCO rate case of 2012. A rare 2-1 vote by the PUC Commissioners occurred in the 2012 rate case when Chair Morita opposed Life of the Land's intervention.

Although others have filed motions to intervene in HECO, MECO and HELCO rate cases, the Public Utilities Commission has never permitted any other intervention in rate cases with the exception of the Department of Defense.

The 2012 HELCO rate case was aborted when the Consumer Advocate settled the last MECO rate case. As part of the MECO settlement, the HELCO rate case was shut down before it had a chance to really begin.

The 2015 HELCO rate case had another rare 2-1 vote. HELCO asked for a one-year delay in filing the rate case. The PUC voted in favor of the delay.

By delaying the initial start of the proceeding until December 30, 2016, the rate investigation would start after the merger docket was over. If the merger was conditionally approved with various conditions and a moratorium, then there might not be a rate case until the 2020's.

Thus determining how much consumers are being overcharged, and whether and by how much rates should be lowered, would be delayed.

The Consumer Advocate found the delay acceptable. The PUC approved the delay on November 19.

Chair Iwase dissented. Iwase noted that a rare case could lower rates for consumers.

"The commission has previously stated that 'unless and until the proposed acquisition is approved by the commission, it is incumbent upon the HECO Companies to operate as stand-alone entities.'

 Despite this, one of the primary reasons advanced by HELCO in support of its Motion is that the outcome of the merger proceedings may moot the need for a rate case. 

The merger proceedings are ongoing, and no decision has been rendered at this time. Given other previous statements in Docket No. 2014-0299, the merger proceedings do not constitute a valid basis for approving HELCO's requested extension, or for delaying the ongoing independent operations of any of the HECO Companies.

HELCO also states that 'unique circumstances' exist that justify its request. HELCO alleges that such circumstances include the following: 

'However, the progress in (sic) and outcome of the following pending proceedings would likely have a significant impact on Hawai'i Electric Light's 2016 projections, revenue requirements and test year filing: Hawaii Electric Light's Power Supply Improvement Plan ("PSIP"), currently under review in Docket No. 2014-0183, the Companies' Distributed Generation Interconnection Plan ("DGIP"), currently under review in Docket No. 2014-0192, the Companies' Integrated Demand Response Portfolio Plan ("IDRPP"), currently under review in Docket No. 2007-0341, and the investigation into the Companies existing "decoupling mechanism" which is continuing in Docket No. 2013-0141. The Companies have' also embarked on a series of initiatives lo transform how the Companies operate.'

It will always be the case that other ongoing proceedings may affect the outcome of any particular rate case filing. The fact that such proceedings exist does not, by itself, provide any justification for delaying a scheduled rate case filing. 

Moreover, should any updates be considered appropriate during the course of the rate case proceedings, those may be brought to the attention of the commission through a properly filed request or motion. 

Finally, the motion does not contain sufficient evidentiary support to justify a conclusion that the current rates are just and reasonable, and will remain just and reasonable for an additional year. Such a showing is critical to any request for a delay in the filing of a rate case."

"To paraphrase Yogi Berra 'it's deja vu all over again'. 

Again we grant a deferral of a rate case, again we grant based on insufficient reasons, again we ignore our prior Order which mandates a triennial rate case and the reasons therefore, and again, the interest of the ratepayer and the public is lost in the fog of sophistry."

#      #      #

Friday, November 20, 2015

NextEra's Maui Wind Farm Advances

By Henry Curtis

The Hawaiian Homes Commission (HHC) approved a right-of-entry permit to NextEra subsidiary Boulevard Associates LLC to survey 500 acres on the southern flank of Haleakala in order to construct a 60 megawatt wind generation facility.

NextEra consultant Doug McLeod opined, “We believe Kahikinui is an excellent wind resource and can provide the sort of proven low-cost power described by the PUC.”

Boulevard worked with the Ka Ohana O Kahikinui homestead organization. Many Kahikinui homesteaders support greater infrastructure in the area.

The proposed coastal facility will need an Environmental Impact Statement. NextEra will have to win a competitive bidding process to sell the electricity to Maui Electric. Any power purchase contract would need approval from the Hawai`i Public utilities Commission.

The Department of Hawaiian Home Lands (DHHL) completed a Kahikinui Regional Plan in 2011.

"Kahikinui was traditionally part of a larger moku that contained the present DHHL homestead area and some additional neighboring ahupua’a from Kanaio to Nu’u. …It has always been a remote area and was often neglected in the accounts of oral traditions of the ali’i.”

“Ranching has dominated the region for nearly 140 years. Ulupalakua Ranch and Haleakalä Ranch continue this activity today.”

“The DHHL lands include 22,860 acres on the southern flank of Haleakalä. The elevation ranges from sea level to 9,700 feet near Haleakalä’s summit. The steep sloping land affords beautiful vistas of the south Maui coast, ÿAlenuihähä Channel and the Kohala district of the Big Island.”

Additional DHHL background documents on the proposal are available.

#      #      #

Thursday, November 19, 2015

Battle over Rooftop Solar explodes

By Henry Curtis

Rooftop Solar is very popular.

SMS, a Honolulu-based polling firm, conducted a poll on public attitudes towards rooftop solar.

PUC Building on Punchbowl

“After hearing about the PUC's recent decision to eliminate net energy metering, 4 out of 5 people view the PUC unfavorably. After learning that a Commissioner took steps to install solar before voting to eliminate net energy metering, the PUC's favorability drops to about 1 in 10.”

The PUC originally planned for the utility to do a cost-benefit analysis of centralized versus distributed generation.

While large solar facilities can provide power at cheaper rates, they also stress the transmission grid to a greater level.

Most national independent studies have found that higher rates for rooftop systems makes sense, but these studies are all based on systems with far lower intermittent wind and solar than the grids in Hawai`i.

Without a comparison of the costs and benefits of centralized versus distributed, all comments on the desirability of one over the over is pure speculation.

However, regardless of the technical and cost issues, rooftop solar is incredibly popular and has extremely low environmental and cultural impacts.

The poll was funded by SunRun and released by The Alliance for Solar Choice (TASC).

The poll found that “70% of respondents feel that Governor Ige should ask one PUC Commissioner to resign after learning that the Commissioner applied to install a solar system, taking advantage of the existing net metering rules, before voting to eliminate net metering for future customers. The Hawaii State Ethics Commission is currently investigating the issue.”  

“Governor Ige's approval ratings substantially decline after respondents learned that he publicly supported the PUC's decision. Before learning about his support of the decision, his ratings were fairly even. After hearing about Governor's Ige's statements in support of the PUC's decision to eliminate net metering, however, the support drops drastically: 16% favorable, 70% unfavorable, and 14% no opinion.”

Leaving the grid is a two-edged sword. A super majority of 91 percent would consider disconnecting from the grid if solar and batteries would reduce their electric bills, but at the same time, a majority of 63 percent believe that a move in that direction is not moving Hawai`i in the right direction.

On the other hand, the telecom revolution is taking time. Half of all residents across the country now have only a cell phone and no land line. The idea of a grid-less electric future might be low today, but the concept and acceptance appear to be trending upwards.

The SMS poll of 400 Hawaii residents across the Islands was released yesterday. Afterwards a rally was held in front of the building that houses the PUC at the corner of Punchbowl and King Street.

TASC filed a lawsuit to block the PUC’s termination of the Net Energy Metering program. “The lawsuit seeks an injunction on the decision, and alleges that the PUC exceeded its statutory authority, violated state and federal law and violated constitutional due process requirements.”

The Alliance for Solar Choice (TASC) is a party in the HECO-NextEra proceeding.

#      #      #