Sunday, April 20, 2014

The Birth of the Hawaii Clean Energy Initiative (HCEI)

By Henry Curtis

For the past six years I have delved into the mysteries and mythologies associated with the founding on the Hawaii Clean Energy Initiative (HCEI).

The two key documents are the Memorandum of Understanding (January 2008) and the Energy Agreement (October 2008).

They key players were two Republican leaders: pro oil  U.S. President George Bush and Hawaii Governor Linda Lingle; the U.S. Department of Energy (DOE), the Department of Business, Economic Development and Tourism (DBEDT), the Consumer Advocate (CA) and Hawaiian Electric Company (HECO).

But that only tells the story of the nominal powers.

Who actually was responsible for initiating, shaping and drafting the agreement?

The recently released Hawai’i Clean Energy Draft Programmatic Environmental Impact Statement (PEIS) appears, at least superficially, to respond to this issue by adding a new wrinkle – The Energy Policy Act of 2005.

The first page of the PEIS Executive Summary states,

In furtherance of the provisions of Section 355 of EPAct 2005, DOE and the State of Hawai‘i entered into a Memorandum of Understanding (MOU) in January 2008. This MOU established a long-term partnership known as the Hawai‘i Clean Energy Initiative (HCEI) to transform the way in which energy efficiency and renewable energy resources are planned and used in the State.”

H.R. 6 was introduced on Apr 18, 2005 by Texas Republican Joe Barton and co-sponsored by two California Republicans, Richard Pombo and William Thomas.

The bill raced through Congress, supported by Hawaii Senators Inouye and Akaka and Representative Abercrombie, but opposed by Representative Case, and was signed by the President on August 8, 2005.

Section 355 required the Department of Energy to write a Report on the “Assessment of dependence of State of Hawaii on oil.”

The Report was to include including “island-by-island” solutions, liquefied natural gas and hydrogen.

The DOE Office of Energy Efficiency and Renewable Energy was required to release the report in June 2006.

Instead the Report was released on January 13, 2009, the year after the HCEI agreements were signed.   

I have been unable to locate the document.

In the meantime more revelations have surfaced on the formation of HCEI.

On April 16, 2014 Rep. Schatz held a Senate Subcommittee on Energy and Water hearing at the East West Center. Dawn Lippert was an invited speaker.

She asserted, “Seven years ago I was fortunate enough to join in drafting the Hawaii Clean Energy Initiative.”

A graduate of Yale University, Dawn Lippert had worked as a senior consultant for Booz Allen Hamilton (2007-09) and then became the Director of the Pacific International Center for High Tech Research (PICHTR) Energy Excelerator (2009- ). 

She is the founder and president of Hawai’i’s Women in Renewable Energy (WiRE).

She is one of several key Hawai’i energy players who previously worked for Booz Allen Hamilton and/or graduated from Yale University.


(a) ASSESSMENT.—The Secretary of Energy shall assess the economic implications of the dependence of the State of Hawaii on oil as the principal source of energy for the State, including—

(1) the short- and long-term prospects for crude oil supply disruption and price volatility and potential impacts on the economy of Hawaii;

(2) the economic relationship between oil-fired generation of electricity from residual fuel and refined petroleum products consumed for ground, marine, and air transportation;

(3) the technical and economic feasibility of increasing the contribution of renewable energy resources for generation of electricity, on an island-by-island basis, including— (A) siting and facility configuration; (B) environmental, operational, and safety considerations; (C) the availability of technology; (D) the effects on the utility system, including reliability; (E) infrastructure and transport requirements; (F) community support; and (G) other factors affecting the economic impact of such an increase and any effect on the economic relationship described in paragraph (2);

(4) the technical and economic feasibility of using liquefied natural gas to displace residual fuel oil for electric generation, including neighbor island opportunities, and the effect of the displacement on the economic relationship described in paragraph (2), including— (A) the availability of supply; (B) siting and facility configuration for onshore and offshore liquefied natural gas receiving terminals; (C) the factors described in subparagraphs (B) through (F) of paragraph (3); and (D) other economic factors;

(5) the technical and economic feasibility of using renewable energy sources (including hydrogen) for ground, marine, and air transportation energy applications to displace the use of refined petroleum products, on an island-by-island basis, and the economic impact of the displacement on the relationship described in paragraph (2); and

(6) an island-by-island approach to— (A) the development of hydrogen from renewable resources; and (B) the application of hydrogen to the energy needs of Hawaii.

(b) CONTRACTING AUTHORITY.—The Secretary of Energy may carry out the assessment under subsection (a) directly or, in whole or in part, through 1 or more contracts with qualified public or private entities.

(c) REPORT.—Not later than 300 days after the date of enactment of this Act, the Secretary of Energy shall prepare (in consultation with agencies of the State of Hawaii and other stakeholders, as appropriate), and submit to Congress, a report describing the findings, conclusions, and recommendations resulting from the assessment.

(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry out this section.

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Saturday, April 19, 2014

Free Electricity

By Henry Curtis

About eleven percent of all HECO, MECO and HELCO customers have rooftop solar.

The rooftop solar customer has a Net Energy Metering (NEM) relationship with the utility. The Transmission Grid acts as a battery.

The customer transfers electricity to the grid during the afternoon and pulls electricity out of the grid during other parts of the day. They only pay for the net amount of energy used.

If one month the customer provides more electricity to the grid then the customer pulls out, then the customer has a credit which they can tap into the following month.

At the end of each year the account is zeroed out. The excess credits are given to the utility. In essence, the utility has been given “Free Electricity.”

Under federal law, rules and regulations the utility must zero out the account each year and is not permitted to pay for the excess electricity when the account is zeroed out.

An alternative power exchange scheme is called a Power Purchase Agreements (PPA). 

As opposed to Net Energy Metering, in a Power Purchase Agreement scheme, the IPP sells (exports) electricity to the grid at the wholesale price and buys (imports) electricity at the retail rate.

Some IPPs, such as wind generation facilities, only exist to export electricity to the grid.

Other IPPs, most notably sugar plantations, co-generation petroleum refineries and commercial rooftop solar facilities produced electricity for themselves and for export to the grid and occasionally also buy electricity from the grid.

These customers have two meters, one for export and one for import. Smaller systems use the Feed-In Tariff (FiT) mechanism. 

Thus under a PPA, HELCO might buy solar energy at 20 cents per kilowatt-hour and sell electricity at 45 cents per kilowatt-hour. Clearly this would not be profitable for owners of small residential rooftop solar facilities. 

Rooftop solar owners also don't like to be net importers of electricity from the grid.

Instead, people with rooftop solar overbuild their solar system and wind up giving the utility free electricity rather than the alternative of buying electricity from the grid.

The utility opines that Net Energy Metering customers are a burden on the 89% who are non-Net Energy Metering customers.

The utility argues that Net Energy Metering customers get free use of the grid without paying for it.

The utility asserts that they must maintain the grid but only non-Net Energy Metering customers wind up paying for it.

The utility does not track free electricity. 

Rather, to keep their analysis simply, the utility distort reality by assuming that there is no free electricity.

All of the utility price analyses assume there is no free electricity.

There is another approach that is possible.

The utility could track free electricity. At the end of the year the utility could note how many kWh were given to the utility for free by each customer.

Customers could make a tax-deductible charitable donation of that free electricity to a non-profit which would allocate that credit to those that are economically challenged.

Thus the benefits of renewable energy would not only go to economically secure people but would be spread across the economic spectrum.

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Friday, April 18, 2014

U.S. Department of Energy to hold public hearings on energy policy

By Henry Curtis

Related Articles:

 The U.S. Department of Energy has published the Hawaii Clean Energy Draft Programmatic Environmental Impact Statement (PEIS).

The public comment period ends on July 17, 2014. Comments may be sent by email to

The Draft PEIS evaluates the potential environmental impacts associated with 31 energy efficiency activities and renewable energy technologies that could assist the State of Hawaii in meeting  the goals established under the Hawaii Clean Energy Initiative (HCEI).

The Hawaii Clean Energy Initiative (HCEI) was an agreement between Republican Governor Lingle, Republican President Bush and Hawaiian Electric Company.

A Memorandum of Understanding (MOU) was signed in January 2008 and an Energy Agreement was signed in October 2008.

The MOU established working groups to address key sectors of the energy economy (e.g., electricity, end-use efficiency, transportation, and fuels) which allegedly led to the Energy Agreement.

Life of the Land had to file the State equivalent of a Freedom of Information Act (FOIA) request in order to find out who served on the committees and who the chairs were. Subsequent to the release of the information Life of the Land asked some committee members how policies were developed. They were as much in the dark as those who did not participate in the secret process.

The HCEI Agreement focused on rewarding HECO and Big Wind developers. Among the ideas presented in the HCEI Energy Agreement was doing away with Net Energy Metering and affirming that a shift to renewable energy would raise rates in the short run.

For five years the HCEI Energy Agreement was available only as a non-searchable pdf document that prevented copying sections. Life of the Land has since made a copy available which is searchable and which allows copying.

On December 14, 2010, DOE issued a notice of intent to prepare a PEIS, with the State of Hawaii as a joint lead, on the wind phase of the Hawaii Interisland Renewable Energy Program.

In light of scoping comments and regulatory and policy developments, DOE  was forced to follow federal law and to broadened the range of reasonable energy efficiency and renewable  energy activities and technologies to be analyzed in the PEIS and  issued an amended notice of intent to prepare the Hawaii Clean Energy  PEIS.

The Hawaii Clean Energy Draft PEIS was prepared with assistance from the Hawaii Department of Business, Economic Development and Tourism, U.S. Environmental Protection Agency Region  9, Bureau of Ocean Energy Management, National Park Service, Natural  Resources Conservation Service, U.S. Marine Corps, U.S. Navy, and  the Federal Aviation Administration.

The purpose of the PEIS is to allow DOE to develop guidance so DOE can create a guidance document to shape its expenditures. The No Action Alternative states the DOE will do the same thing but without a guidance document. With or without a guidance document, DOE will continue to fund projects with inadequate public disclosure.

The second purpose of the document is to streamline future Environmental Impact Statements. The future EISs will be able to say that alternatives were examined in this document.

DOE will hold a series of public meetings

May 12: Kauai, Kauai War Memorial, Convention Hall, 4191 Hardy Street, Lihue, HI 96766.

May 13: Hawaii, Kealakehe High School, 74-5000 Puohulihuli Street, Kailua-Kona, HI 96740.

May 14: Hawaii, Aunty Sally Kaleohano's Luau Hale, 799 Piilani Street, Hilo, HI 96720.

May 15: Maui, Pomaikai Elementary School, 4650 South Kamehameha Avenue, Kahului, HI 96732.

May 19: Molokai, Kaunakakai Elementary School, 30 Ailoa Street, Kaunakakai, HI 96748.

May 20: Lanai, Lanai High & Elementary School, 555 Fraser Avenue, Lanai City, HI 96763.

May 21: Oahu, Kawananakoa Middle School, 49 Funchal Street, Honolulu, HI 96813.

May 22: Oahu, James B. Castle High School, 45-386 Kaneohe Bay Drive, Kaneohe, HI 96744.

Each hearing will begin at 5:00 p.m. and end at 8:30 p.m. Each hearing will start with a 45-minute open house. The open house will be followed by a 15-minute presentation by Dr. Summerson. Then the public will have two and a half hours to make comments.

A court reporter will transcribe the comments presented at each hearing. Individuals wishing to speak at a hearing should register when they arrive. DOE will initially allot three minutes to each commenter to ensure that as many people as possible have the opportunity to speak.

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Thursday, April 17, 2014

The Hawai’i Energy Policy Forum turns 12

By Henry Curtis

According to its own mythology, “the Hawaii Energy Policy Forum had its beginnings in May 2002, when the University of Hawaii at Manoa was funded by the Hawaiian Electric Company to bring together energy stakeholders to chart a new future for energy in Hawaii.”

In May and June 2002 the Hawaiian Electric Company (HECO) was in the final weeks of its three decade attempt to ram through the highly unpopular Wa`ahila Ridge 138-kV Transmission Line.

HECO gave the transmission project more than a dozen names over its long history and filed for three Conservation District Use Applications. HECO consultants wrote two Environmental Assessments and three Environmental Impact Statements.

A State law was passed requiring public hearings for overhead high voltage transmission lines built through residential communities.

HECO decided they needed a new approach, “a collaborative effort of government, business, academe, and community.”

HECO funded the Hawaii Energy Policy Forum (HEPF) through the Social Science Research Institute (SSRI) at the University of Hawaii, Manoa.

Initial meetings were secret. Meeting notices were not posted anywhere. The meetings were by invitation only. The public was not allowed to attend except with permission.

SSRI served as the ceremonial leader. HECO pretended they were playing absolutely no role in organizing or running the meetings, but they were in fact pulling the strings and controlling the process.

The 30 forum members who attended the inaugural June 10, 2002 HEPF meeting were Don Thomas, Matt Matsunaga, Jeff Mikulina, Mina Morita, Gregg Kinkley, Yukio Naito, Robbie Alm, Scott Seu, David Waller, Mike Hamnett, John Harrison, Sharon Miyashiro, Sam Pintz, Rick Rocheleau, John Crouch, Ruby Hargrave, Hideto Kono, Brenner Munger, Karen Nakamura, Andy Nomura, Gayle Ohashi, Richard Paglinawan, Rick Reed, Murray Towill, Keith Yoshida, Eileen Yoshinaka, Faye Hirono; Christy Alarcon, Regina Gregory and Irene Takata.

Guests showed up at subsequent meetings: Maurice Kaya, Catherine Awakuni and Chris Nakagawa on July 23, 2002, Bruce Anderson on December 9, 2002, and Jerry Sumida, Heidi Sumida and Cully Judd on January 17, 2003.
In March 2003 the HEPF expanded its membership with six new members: Ray Carr, Energy Coordinator for the Big Island; Kal Kobayashi, Energy Coordinator for Maui; Bruce Miller, Director of the UH Center for Sustainability;  Steve Holmes, Energy Coordinator for the City and County of Honolulu; Susan Kusunoki (Tesoro); and Senator Kalani English, Chair of the Senate Energy and Environment Committee. Also attending were Carl Freedman and Warren Bollmeier.

Crashing the March meeting were Life of the Land’s Kat Brady and Henry Curtis.

UH programs were converted into HEPF programs. HECO-funded work at the University was transformed into the HEPF Cultural Issues Working Group (CIWG).

The early goal of the HEPF and the CIWG was to develop a “preferred future” that coincided with what HECO was planning to do anyway.

At first the HEPF was funded entirely by HECO, but then subsequently funding was provided by the Legislature. Then that tap ran dry.

Who now funds HEPF is a mystery. So is their annual budget.

I tried to unravel the financial structure of HEPF but to no avail. It appeared that at most one or two people had any idea how the funding works. So I must leave this effort to others.  

The meetings and agendas are now public. Representation has been expanded. Staff members to Hawai’i’s Congressional delegation, state Legislators, County Energy Coordinators, Energy Trade Groups, the fossil fuel industry and renewable energy companies all serve as HEPF members.

HEPF co-chairs are Dr. Sharon Moriwaki (Miyashiro) and Michael Hamnett 

Jay Fidell (ThinkTechHawaii) serves as the Chair of the Communication & Outreach Working Group. The Communication & Outreach Vice Chairs are Peter Rosegg (HECO) and Mitch Ewan (Hawaii Natural Energy Institute).


The current members of the Forum are largely fossil fuel companies, regulators, legislators and governmental types.

The members are Jeanne Schultz Afuvai (Hawaii Institute for Public Affairs), William Kaneko (Hawaii Institute for Public Affairs), Ron Nelson (Defense Energy Support Center), Tim O'Connell (USDA) and Joelle Simonpietri (US Pacific Command).

Senator Mike Gabbard, Rep. Chris Lee, Rachel James (Tulsi Gabbard), Dale Hahn (Senator Brian Schatz), Wintehn K. T. Park (Colleen Hanabusa), Lauren Montez-Hernandez (Mazie Hirono)

Hermina Morita (Chair, Public Utilities Commission), Maria Tome (PUC), Jeffrey Ono (Division of Consumer Advocacy), Randolph Perreira (Division of Consumer Advocacy), Mark Glick (DBEDT), H. Ray Starling (Hawaii Energy)

Justin Gruenstein (City and County of Honolulu), Kal Kobayashi (Maui County Energy Office), Doug McLeod (Maui County), William Rolston (Hawaii County), Ben Sullivan (Kauai County).

Joseph Boivin (Hawaii Gas), Albert Chee (Chevron), Dan Giovanni (HECO), Jim Kelly (Kauai Island Utility Cooperative), Melissa Pavlicek (Gas Lobbyist, Hawaii Public Policy Advocates), Lance Tanaka (Tesoro).

Mitch Ewan (Hawaii Natural Energy Institute), Mike Hamnett (Research Corporation of the University of Hawaii), Stephen Meder (University of Hawaii at Manoa), Sharon (Miyashiro) Moriwaki (University of Hawaii at Manoa), Rick Rocheleau (Hawaii Natural Energy Institute).

Jay Fidell (ThinkTech Hawaii), Kyle Datta (Ulupono Initiative), Laura Dierenfield (Queen Liliuokalani Trust), Gladys Marrone (Building Industry Association of Hawaii), Riley Saito (SunPower), Ah Linn Yamane (HGEA).

Carl Freedman (Haiku Design & Analysis), Darren Kimura (Enerdigm Group), Warren Bollmeier (Hawaii Renewable Energy Alliance), Leslie Cole-Brooks (Hawaii Solar Energy Association), Kelly King (Sustainable Biodiesel Alliance), Robert Harris (Sierra Club Hawaii Chapter), Elizabeth Cole (Kohala Center).

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Wednesday, April 16, 2014

The reality of climate change

By Henry Curtis

Yesterday former Vice President Al Gore spoke at the Stan Sheriff Center at the University of Hawaii at Manoa.

Although sold as a speech on climate change, it was really a political stump speech to support Senate candidate Brian Schatz, and to a lesser extent, Gubernatorial candidate Neil Abercrombie.

Al Gore did touch on climate change and the need to confront climate deniers.

There is near consensus among the world’s leading scientific bodies.

Climate change is man-made. Each year 35 billion tons of greenhouse gases are released into the atmosphere and it is impacting the climate.  

In February 2014 the U.S. National Academy of Sciences and the United Kingdom’s Royal Society released a joint statement that explained the clear evidence that humans are causing the climate to change.

But how can anyone determine whether global warming is occurring?

How can anybody measure the average surface temperature and global temperature of the planet?

The Deepwater Horizon exploded 50 miles southeast of the Mississippi River delta in water with a depth of one mile. The government was unable to get reliable data from that one ocean spot.

How can data be collected and analyzed from everywhere?

How would anyone know whether greenhouse gases and heat are moving between the ten layers of the atmosphere and the ocean?

The Earth’s ocean is divided into five layers: the Epipelagic (sunlight zone), Mesopelagic (twilight zone), Bathypelagic (midnight or dark zone), Abyssopelagic (where water exists with crushing depths, no light and near freezing conditions) and the Hadalpelagic (located more than 6000 meters deep including deep water trenches and canyons).

The Earth's atmosphere is also divided into five layers: the troposphere, the stratosphere, the mesosphere, the thermosphere, and the exosphere.

European and American teams dug two mile deep ice cores in Greenland and independently analyzed the annual rings of deposited ice to determine the types and levels of pollen, the amount of dust and the chemicals and isotopes present.

Only after establishing the data sets over hundreds of thousands of years were the data sets compared to determine if they matched up.

Similar to ice cores, sediment cores can be dug out of the bottom of lake beds, ocean floors and bog deposits.

Some layered rocks have been formed from annual dust deposited over eons. Mineral deposits (stalagmites, stalactites) from underground caves that have not been contaminated by past human activities provide another window into the past.

The material left behind from advancing glaciers provides yet another data set.

Fossils can be carbon dated to determine when they died. Dead trees and coral can be analyzed ring-by-ring to determine weather conditions that existed when they were alive. 

The type of pollen, bacteria and insects that existed in any given year can reveal the weather that existed during that time period.

The analysis can determine volcanic eruptions, solar variability, temperature, precipitation, vegetation and stream flow.

Boreholes, whether in ice, soil or rock formations require the retrieval of a column without contaminated it or crushing together the layers. 

Ice cores must be examined in laboratories under nearly freezing temperatures to prevent melting.

How has the Earth’s surface changed?

When continents collide they cause compression, earthquakes, tsunamis and mountain ranges. Data from the top of a mountain could reflect historical conditions that existed at the bottom of the ocean.

Serbian astrophysicist Milutin Milankovitch was held as a prisoner of war (POW) in WW1.

While in prison he developed mathematical formulas for calculating the Earth’s orbital variations which are in turn are responsible for variations in the amount of energy transferred from the Sun to the Earth.

The Earth revolves around the Sun. The shape of the orbit (eccentricity), the tilt of the planetary axis (obliquity) and the change in the direction of the Earth's axis of rotation (precession) occur in cycles some of which take 100, 000 years to complete.

Climate historians are interested not only in historical conditions, but also in periods of stability and periods of transition.

Historical periods have been identified. But were the Medieval Warm Period (11th to 14th centuries) and the Little Ice Age (17th to 19th centuries) planetary or merely regional events?

How rapidly did transitions between periods of stability occur? Were the changes so dramatic that mass extinctions occurred?

Computers data bases must maintain data sets and also estimates on the reliability of each data stream.

Climate deniers have adopted the tactics and techniques used by the tobacco industry. Backed by conservative billionaires, think tanks and the fossil fuel industry they have sought to sow seeds of doubt.

What has changed the minds of many is the massive planetary weirdness that is currently happening, the intensity of Hurricane Sandy and Typhoon Haiyan, the wildfires in the American West and the heat waves that pounded Europe.

Something is definitely happening.

Climate change analysis has transformed scientific study.

Ivory tower silo mentally led to ever smaller fields of study. The impact of climate change has altered this trend. Multi-disciplinary analysis is required.

The study of climate change involves computers, statistics, mathematics, chemistry, physics, biology and geology. Climate change impacts are being played out in political fields.

The Association of the U.S. Army held a conference at the Sheraton Waikiki last week where Army Generals talk about the dangers caused by climate change impacts.

They discussed the need to find alternatives to petroleum and the need for humanitarian aid to stricken areas. Both solutions are needed to avert instability and war around the world.

Elements of the fossil fuel industry have teamed up with some politicians and environmentalists. They argue that there is nothing you can do to stop the problem from occurring so why not focus on adaptation?

The car is about to drive off the cliff. How can we add extra padding to lessen the damage?

Climate change has become the first field of study that cuts across all other fields. Some have said that makes sense because the fate of the world is at stake.

In reality, if we do nothing, the world will survive. The question is which species will survive?

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Monday, April 14, 2014

First Wind undercuts need for Inter-Island Cable

By Henry Curtis

Lanikuhana Solar would build, own and operate the 20 MW Mililani South Solar Park.

Castle & Cooke Homes Hawaii formed Lanikuhana Solar and then sold it to First Wind.

The facility would include 86,800 panels and 20 inverters on 143 acres and would be grid tied to the Kahe-Wahiawa 138 kV transmission line.

Without state tax credits the price of the electricity generated would be 15.6 cents per kilowatt-hour.

If the project qualifies for a state tax credit, First Wind would pocket 10% and the other 90% would be used to lower the cost of the electricity.

The energy price of 15.6 cents per kilowatt-hour will not change over the term of the 20-year Power Purchase Agreement (PPA).

Shipping electricity via an undersea inter-island high voltage transmission cable between Maui and O`ahu would cost a minimum of 6 cents per kilowatt-hour.

Thus a competitive Maui renewable generation facility built to supply power to O`ahu would have to generate electricity at less than 10 cents per kilowatt-hour.

First Wind operates four wind generation facilities in Hawai`i: Kaheawa Wind Power I and II on Maui and Kawailoa Wind and Kahuku Wind on O'ahu.

On April 11, 2014 Hawaiian Electric Company (HECO) submitted the proposal with the name “Hawaiian Electric Application Exhibits 1-8” to the Public Utilities Commission (PUC) for approval.

The PUC gave the docket the title “U” and assigned it Docket Number 2014-0077.  Intervenors have 20 days to file motions to intervene in the proceedings.

HECO proposed that the project evade current PUC rules regarding the Competitive Bidding Framework established back in 2006.

The Competitive Bidding Framework has largely failed as a procurement mechanism.

A few dockets were opened under the Framework including the inter-island cable proceeding and the Geothermal Request For Proposal (RFP).

All Competitive Bidding dockets are bogged down in administrative technicalities.

The Framework allowed for numerous waivers. However no waivers are permitted for new renewable energy projects that exceed 5 MW in size.

HECO has proposed that the four adjacent 5-MW solar facilities be simultaneously approved as part of a single agreement.

There is precedence for this approach.

The PUC approved a 10 MW Emergency Power Facility (EPF) for Honolulu International Airport.

HECO worked with the Hawai`i Department of Transportation to package the proposal as four separate but linked projects each of which individually qualified for the Competitive Bidding exemption.

Alternatively HECO has suggested that the PUC could re-write the competitive bidding rules providing an exemption for this project.

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Collaboration favors insiders

By Henry Curtis

Earlier this year Hawai’i attorney Robert H. Thomas (Damon Key Leong Kupchak Hastert) wrote an essay on Administrative Law for the Hawaii State Bar Association Appellate Law Section.

So here’s your strategy: when in doubt, demand a contested case. If granted and you lose on the merits after the contested case, appeal. If denied a contested case, appeal. If the agency doesn’t act on your request, appeal. Got it?”

The first step is always to exhaust the administrative process.

The Hawaii Supreme Court has ruled that those who seek to intervene at the administrative level, by filing a motion for a contested case, have a legal right of appeal.

Those who do not seek to intervene at the administrative level usually have no right of appeal.

In 1971 Life of the Land sought to intervene in HECO’s 1971 rate case.

The Public Utilities Commission (PUC) denied LOL that right, but allowed the non-profit to ask questions through the office that is now called the Office of Consumer Advocacy (Consumer Advocate).

LOL objected to the final PUC’s final decision to require ratepayers to finance utility ads encouraging customers to increase their use of electricity.

LOL filed a legal appeal to the Hawaii Supreme Court. The PUC argued in court that because the PUC had denied LOL the privilege to intervene LOL had no right to appeal.

The Hawaii Supreme Court felt otherwise, and granted LOL standing to appeal.

Furthermore, the Supreme Court reversed the PUC decision to require ratepayers to finance utility ads encouraging customers to use more electricity.

It is clear why agencies and project proponents do not like contested case proceedings.

The Hawaii Supreme Court has repeatedly reversed decisions by the Water Commission in water cases such as Waiāhole Ditch and Nā Wai ʻEha (“The Four Great Waters”).

Hawaiian Electric Company (HECO) lost their three decade long desire to build the Kamoku-Pukele 138-kV Transmission Line on Wa`ahila Ridge.

The Outdoor Circle, Malama O Manoa and Life of the Land engaged in an intense six year contested case hearing process, including a seven day Evidentiary Hearing, that ended the utility boondoggle project.

Life of the Land was admitted into PUC contested case proceedings where HECO was forced to admit that climate change is real and caused by fossil fuel, where HECO was denied the use of rainforest palm oil biofuel to power their power plants, and where with the able support of Hawai’i County, the controversial `Aina Koa Pono microwave biofuel proposal destined for Pahala was killed.

One tactic recently used by agencies is to issue regulatory permits before deciding whether to grant intervention status to a would-be intervenor.

Thomas wrote that the Hawaii Supreme Court “has now concluded that an appeal lies from an agency’s decision to grant a use permit even though it did not hold a contested case, if it has not resolved a third-party’s demand for a contested case.”

Contested Case Evidentiary Hearings are powerful.

The American Bar Association (ABA) asserts that “the purpose of Cross-Examination is to test the credibility of statements.” 

Cross-examination creates a written record, and sometimes a video record, that has altered the course of events.

Agencies and project proponents fight against the use of contested case proceedings.

HECO has privately asserted they do not want to face Life of the Land in any Evidentiary Hearing.

Recently PUC Chair Hermina Morita stated on ThinkTech Hawaii that the Legislature is advancing a key bill that would increase staffing and resources at the PUC, and that this added capacity will increase public trust.

It's necessary to have the capacity to deal with these complex issues so people are confident in our decisions that we're truly there to serve the public interest and the public good.”

 Some believe that it is agency transparency and not resource capacity that builds trust.

Chair Morita also talked about moving beyond contested case proceedings to a utility-regulator collaboration model.

People see the PUC process, the contested case hearings as adversarial, very legal adversarial kinds of proceedings, and one of the things that we're trying to do at the PUC is, you know we've got big technical and  economic challenges before us, so  we're kind of moving more towards  a working group problem solving process.”

This model of collaboration was used in the recent Reliability Standards Working Group.

The PUC opened the proceedings in 2011. The PUC admitted parties into the process. The PUC appointed a person to oversee the working groups. The intervenor process ended in early 2013.

For the past 13 months the PUC has been meeting privately with their consultants and with HECO to shape and craft the eventual policy decision.

In 2009 Kauai Marriott sought to intervene in a KIUC rate case. They asserted that “the Consumer Advocate represents a much broader range of interests …and may, in fact, take positions that are adverse to the Kauai Marriott's interests here.”

Preserve Pepe'ekeo Health and Environment sought to intervene in the PUC proceedings involving the proposed Hu Honua-HELCO biomass project.

Makani Pono 'O Kahuku sought to intervene in the PUC proceedings involving the proposed HECO-Champlin Wind contract.

The Consumer Advocate is on record asserting that “it is not the role of the Consumer Advocate to make decisions based solely on the perceived majority view of those residents who would appear to be most directly affected.

It is my role to consider and balance various state policy objectives as well as general and specific consumers' interests to make sometimes difficult and sometimes objectionable decisions based on policy considerations that may be unpopular to certain Hawaii consumers.”

The PUC admitted Kauai Marriott “the commission finds persuasive Kauai Marriott's assertion that the Consumer Advocate and other parties, in this specific instance, do not appear to adequately represent Kauai Marriott's interests.”  

The PUC denied the two community groups.

It is the commission's belief that the Consumer Advocate can effectively represent the concerns of both the general public, as well as specific community concerns ...opposition to a project does not, in itself, provide sufficient justification to grant participation or intervention in a docket.”

Collaboration favors insiders while contested case proceedings make processes more open, transparent and community friendly.

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