Sunday, December 21, 2014

Nextera exerts undue influence

By Henry Curtis

The U.S. Fish and Wildlife Service (FWS) investigated the death of a golden eagle at a NextEra Energy Resources wind. 

In March 2013 they became aware that Steve Black, a senior energy counselor to Interior Secretary Ken Salazar, had a special relationship with NextEra lobbyist Manal Yamout. The Fish and Wildlife Service was concerned that the relationship may have influenced alternative energy decisions.

The Department of the Interior investigation found that Black was dating Manal Yamout.  

"Initially, we focused our investigation on Black’s relationship with Yamout. Later, however, we discovered emails in which NextEra’s VP of Government affairs emphasized having a personal relationship with Black." 

Black was also a friend with a Nextera attorney/lobbyist and had engaged in discussions on NextEra project-related issues. 

While interacting officially with American Wind Energy Association (AWEA) officials Black expressed interest in becoming the American Wind Energy Association chief executive officer. A Nextera official nominated Black for the $600,000 a year job.

The Washington Examiner reported that “Black was working closely with an energy aide to the California governor named Manal Yamout when NextEra’s top lobbyist began attempting to convince Yamout to take a job for the company, noting as a qualification that she was ‘very tight with’ Black. 

She accepted the job, and Yamout and Black’s relationship blossomed into a romantic one as he continued to work on NextEra issues for the federal government.” 

As a governmental employee, Black worked on multi-million-dollar Nextera projects. Black finally resigned from Department of the Interior in May 2013. The U.S. Attorney’s Office for the District of Columbia declined to prosecute the case.

Black resisted recusing himself from involvement in Nextera projects even after others pointed out his conflict of interest.  After he finally recused himself, but while still working for the government, he accepted hotel rooms and dinners paid for by Nextera so he could be with Yamout while she was conducting NextEra business.

Kenneth Salazar served as the  Attorney General of Colorado from 1999 to 2005, as a United States Senator from Colorado from 2005 to 2009 and then as the United States Secretary of the Interior from 2009 until June 2013.

Steve Black hitched his wagon to Kenneth Salazar. Black served as the chief environmental and natural resources attorney for the State of Colorado from 2004 to 2005, as Legislative Counsel in the Office of U.S. Senator Ken Salazar from 2005 to 2009 and then as Senior advisor to Secretary of the Interior Salazar from 2005 to 2009. At the DOI Black advised on energy, environment and natural resources policy.

Manal Yamout served as the Special Advisor to the Governor of California from January 2008 to October 2011. She worked first for Governor Arnold Schwarzenegger until March 2011 and then for Governor Jerry Brown. In late 2011 she was hired as the NextEra Energy Resources Director of Western States Governmental & Regulatory Affairs, and then became the NextEra Energy Inc. / Florida Power & Light Company Director of Governmental Affairs from November 2011 to November 2013.

Nextera had other political connections. Lewis Hay III has been CEO of NextEra Energy for 11 years and served on the White House Jobs Council. According to Forbes, he has received $79 million in compensation from Nextera over the past six year period. He also owns $45.7 million in Nextera stock.

The Department of the Interior report describes the Black and Yamout relationship. 

According to Black and Yamout, they first met in 2009 while working together on the Renewable Energy Policy Group, composed mostly of Federal and State regulators from California working together to streamline permitting for renewable energy projects.”

Internal Nextera emails mentioned Nextera attorney/lobbyist’s friendship with Black when discussing project issues and requested the attorney/lobbyist contact Black. However the emails excluded discussion of how successful the lobbying was. After he finally formally recused himself, he may have still informally been influencing policy but those emails are redacted.

Bakersfield is the major Central Valley city in Kern County, California. NextEra proposed the North Sky River wind project in Kern County's desert mountains. U.S. Fish and Wildlife Service (USFWS) biologists and state officials were concerned about the project's likely impact on protected species, including golden eagles and the federally Endangered California condor. A transmission line needed to be built.

Desert Renewable Energy Conservation Plan (DRECP) Program Manager Vicki Campbell asserted that the eagles and condors that lived there were "not real compatible with giant spinning blades."

In 2011 the Bureau of Land Management asked the US Fish and Wildlife Service to examine the impact of the project's turbines on the condor.

NextEra's president emailed NextEra staff describing the delays as “nutty,” and “wacky beyond belief," asserting that biologists were using the endangered species issue as a "way of delaying or killing the project." Nextera stated that they were “using every contact it had to” rein in the review.  

Nextera worked with Black and Yamout to block any attempt to delay the project on environmental grounds. Black may have pressured regulators to accept an Environmental Assessment instead of a full-blown Environmental Impact Statement.

A month after the North Sky River project began operation in December 2012, its turbines killed a federally protected golden eagle.

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Saturday, December 20, 2014

Florida Power and Light moves into fuel production market

By Henry Curtis

Bloomberg News (December 19, 2014) reported that “NextEra Energy Inc. (NEE) won approval from Florida regulators for its utility to skip the middleman and drill for its own natural gas.”

FP&L proposed investing nearly $50 million in a joint venture with Petroquest Energy Inc. to develop wells in southeastern Oklahoma’s Woodford shale.

Read more here:

The Miami Herald reported that "Florida Power & Light wants to get into the natural gas fracking business."

Florida’s official consumer advocate called the proposal “a speculative investment” and asserted that the risk was too high. Ratepayers would save 2 cents a month over 50 years but would be left holding the bag if the investment failed.

The Florida Public Service Commission (PSC) announced that the hearing was being held on December 18, 2014 in Tallahassee, Florida.

The Commission Conference is broadcast on the Florida Channel (check your local listings) and is available online at (look for the “Watch Live Broadcast” icon on the left side of the web page). For additional information, visit Follow the PSC on Twitter, @floridapsc.”  

The regulatory review took half a year to process. The Staff analysis was completed in November.

Florida Power & Light Company (FPL) filed their petition opening the regulatory proceeding on June 25, 2014.

FPL wanted a ruling that their proposal was prudent and the costs would be recoverable through the Fuel Clause. FPL proposed establishing a wholly owned subsidiary named USG Properties Woodford I, LLC.

On August 22, 2014 the Office of Public Counsel filed a motion asking that the petition be rejected because the Commission lacked jurisdiction. Specifically, OPC felt the Commission lacked jurisdiction over unregulated subsidiaries and the production of fuel that would later be burned to generate electricity.

The Commission noted that “an administrative agency has only such power as granted by the Legislature and may not expand its own jurisdiction.”

Jurisdiction of the subject matter does not mean jurisdiction of the particular case but of the class of cases to which the particular controversy belongs. …The Commission may consider other legal authority beyond that set forth in the petition, motion, and response. … The Commission may properly go beyond the four corners of the complaint on the issue of law.”

The Commission has jurisdiction over the subject matter of FPL’s petition under its broad statutory authority to set rates for a public utility. The fuel clause is a rate proceeding and FPL’s petition requests a prudence determination for its gas reserve project and a ruling that the costs are recoverable through the fuel docket.

The Commission does not have to assert jurisdiction over unregulated entities to rule on the merits of the petition.

The issues raised in the motion mainly address the prudence of FPL’s request, which are appropriate for a hearing on the issues and not a motion for subject matter jurisdiction. Staff recommends that the Commission find that it has jurisdiction over the petition, deny OPC’s motion to dismiss, and proceed to hearing.

Florida Power and Light is becoming the ultimate in vertically integrated utilities by  owning fuel production, generation, transmission and distribution while minimizing alternatives like rooftop solar and energy efficiency. 

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Friday, December 19, 2014

Are utilities causing the Public Utilities Commission to implode?

By Henry Curtis

In a recent blog post “Hawai`i Public Utilities Commission needs to expand,” this blog discussed high profile departures from the Public Utilities Commission during the Abercrombie Administration including Joshua Strickler, Stacey K. Djou, Lisa Kikuta, Michael Col√≥n and Kaiulani (“Lani”) Kidani Shinsato.

Several of the departures have been hired by regulated industries or their sister companies.

The blog article from last week needs to be updated to reflect additional losses.

Ryan Hurley was hired as a Commission Counsel in October 2013. He is now gone.

Brooke Kane served as the Public Utilities Commission Administrative Director since at least 2005. She has also recently departed.

Traci Ho Kim was the Director of Investor Relations and Strategic Planning at Hawaiian Electric Industries (HEI) from 2010 to 2012. She was hired as a DBEDT Branch Chief to shepherd passage of the green infrastructure (Green Energy Market Securitization a.k.a. GEMS) Program (2012-14) through the Legislature and the Public Utilities Commission. She has moved to California.

One high-level energy stakeholder told me that every one of the key positions at the Public Utilities Commission have turned over at least once in the last four years.

HECO Headquaters on King Street

Meanwhile HECO’s Chief Regulatory Attorney has built up amazing institutional knowledge as he has been overseeing HECO’s regulatory actions since the late 1970s.

State law restricts HECO from hiring Public Utilities Commission employees and assigning them to work in areas that they were directly involved in as state employees. But the law does not restrict HECO from hiring them and assigning them to other work areas for one year.

The loss of key people may have slowed down the approval process for Power Purchase Agreements. HECO spin may blame the regulator for the slowness that in fact was caused by the utility.

Hawaii Revised Statutes §84-1  "This chapter shall be liberally construed to promote high standards of ethical conduct in state government." 

 "§84-18  Restrictions on post employment.   (c)  No former employee, within twelve months after termination of the former employee's employment, shall represent any person or business for a fee or other consideration, on matters in which the former employee participated as an employee or on matters involving official action by the particular state agency or subdivision thereof with which the former employee had actually served.  This section shall not apply to a former task force member who, but for service as a task force member, would not be considered an employee."

“'Employee' means any nominated, appointed, or elected officer or employee of the State, including members of boards, commissions, and committees, and employees under contract to the State or of the constitutional convention, but excluding legislators, delegates to the constitutional convention, justices and judges."

One solution would be to require regulated utilities to disclose contacts with Public Utilities Commission staff regarding employment. The utility form would need to be timely filed with a requirement that the utility explain why they need to hire from within the regulatory agency. 

A less effective solution would be to add seven words to HRS §84-15(b): "A state agency or public utility shall not enter into a contract or approve any contract with any person or business which is represented or assisted personally in the matter by a person who has been an employee of the agency within the preceding two years and who participated while in state office or employment in the matter with which the contract is directly concerned."

The Public Utilities Commission would then post the filing on their web site for everyone to see.

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Thursday, December 18, 2014

Native American Tribes fight NextEra

By Henry Curtis

The Seminoles have developed a Florida panther protection and education plan to protect the wild panther population which numbers less than 200. The Seminoles are mandated by their U.S. Fish & Wildlife Service obligations to safeguard the panthers and their habitat.

Nextera subsidiary Florida Power & Light proposed an immense natural gas plant on environmentally sensitive, historically significant land about a thousand feet north of the Seminoles Big Cypress Reservation. Water consumption at the plant could exceed 20 million gallons a day.

A Florida state court judge ruled against Florida Power & Light in September 2014.

The Colorado River Indian Tribes (CRIT) filed a federal lawsuit last week alleging that the Bureau of Land Management (BLM) and the Department of Interior violated the National Historic Preservation Act, the National Environmental Policy Act and the Federal Land Policy and Management Act in their handling of the solar project.

Filmmaker Robert Lundahl explored the Mojave and Colorado Deserts and realized that the cultural resources were under threat. 

The Blythe Intaglios are giant Earth drawings of human forms, geometries, and pictorial representations that embody the world-view of tribal communities and cultures, which have co-evolved with and within desert ecosystems for thousands of years. 

The concentration of geoglyphs, petroglyphs and other human-made Earth Images, in and around Blythe, California, along the Colorado River is rich and varied.”

His film “Who Are My People?” was released this fall.

The film “explores the sites, their spiritual connections, and choices today’s society must make regarding energy production and behaviors in another, more modern era of changing climate. …Destroying Cultural Treasures for an arguable ‘only option’ is not something civilized nations do.”

The Colorado River Indian Reservation straddles the California-Arizona border, covering 432 square miles including parts of San Bernardino and Riverside Counties in California and La Paz County in Arizona. 

The 2000 census registered a population of 9,201 persons, of which 3,389 were enrolled tribal members. The political entity is called the Colorado River Indian Tribes (CRIT). The tribal headquarters are in Parker, Arizona.

The Genesis Solar Energy Project was constructed by Genesis Solar LLC, a subsidiary of NextEra Energy Resources, LLC. 

The Bureau of Land Management (BLM) and NextEra agreed to notify CRIT of any cultural resources discoveries on the Genesis site within 24 hours. 

Large quantities of prehistoric artifacts were unearthed including hundreds of manos and metates (grinding tools used by the ancestors of CRIT's Mohave members), a stone pendant, and a possible cremation site.

CRIT asserts that the tribes were kept in the dark about discoveries. The mass disturbance of these resources caused CRIT's members substantial emotional, spiritual, and even physical pain.

Since the Genesis project, CRIT has played an active role in California Energy Commission regulatory proceedings.

The solar project currently under contention was first proposed by the German firm Solar Millennium. Nextera acquired the Modified Blythe Solar Power Project in 2013.

The CRIT filing states, 

"The Project site is located within the ancestral homelands of the members of the Colorado River Indian Tribes ("CRIT" or "Tribes"), whose reservation begins just a few miles northeast of the site. 

The religion and culture of CRIT's members are strongly connected to the physical environment of the area, including the ancient trails, petroglyphs, grindstones, hammerstones, and other cultural resources known to exist there. 

The removal or destruction of these artifacts and the development of the Project as planned will cause CRIT, its government, and its members irreparable harm.”

“BLM conducted no government-to-government consultation with CRIT prior to approval of the Project. 

It then allowed the project developer to begin ground-disturbing activities before any cultural resource monitoring or treatment plans were in place. 

The Environmental Impact Statement ("EIS") prepared for the Project failed to take the requisite "hard look" at its impacts. 

And the Project itself is plainly inconsistent with the land use designations adopted by the United States under FLPMA to protect the fragile desert ecosystem and cultural resources found at the Project site."

The Palo Verde Valley Times & Quartzsize Times notes that “the complaint also paints a broader picture, suggesting a ‘fast-track’ strategy of developing solar and other renewable energy projects in California and other western states has harmed tribal land the resources on that land."

"'Shifting the burden of renewable energy development to the unique communities that have occupied this landscape since time immemorial, while providing such communities with no identified benefits, is the very definition of environmental injustice,’ CRIT Council Chairman Dennis Patch said in a statement.”

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Wednesday, December 17, 2014

PeakNRG offers a solution to lava inundation of the HELCO grid

By Henry Curtis

PeakNRG submitted a micro-grid proposal to Hawaiian Electric Company (HECO) earlier this week.

There are different ideas about what a micro grid is. The island of Lana`i has three or four distribution lines and no transmission lines. Thus some people say Lana`i has a micro-grid.

Other people assert that a micro grid is an island-able portion of a larger macro grid. 

The University of California San Diego (UCSD) La Jolla campus provided a beacon of light surrounding by darkness on September 8, 2011 when San Diego, and portions of southern California, Arizona and Mexico blacked out.

Byron Washom developed the La Jolla micro grid. Washom was hired by Larry Ellison to work on developing a renewable micro grid for Lana`i.

Parker Ranch proposed a micro-grid with the HELCO grid as backup.

The military proposed relying on the HECO grid but building a micro-grid for backup.

Advocates of traditional micro-grid approach asserts that micro-grids are simply smaller versions of larger macro-grids.

In a phone conversation, Eric Clifton of PeakNRG described this to me as “making baby macro-grids.”

This approach involves carving out a piece of a large grid to secure it in the event of a blackout. This top-down approach is expensive and complex as all of the costly control mechanisms including balancing frequency and voltage are required.

By contrast, PeakNRG supports granular, bottom-up micro-grid architecture.

The process starts at the user end of the equation. First it identifies which facilities must stay active during disasters such as community centers, hospitals, police stations and emergency response.

Individual building are made resilient with on-site generation and batteries.

Building-based nano-grids are agnostic about where the power is coming from. They can accept power from on-site solar panels and diesel gensets as well as accepting power from the grid. Standardized commercial storage can be added to stabilize the nano-grid.

Individual nano-grid buildings can then be linked together to build a micro-grid. As new nano-grid modules are established they can be added to the micro-grid.

PeakNRG submitted a proposal to HELCO to establish a two phase approach to securing Puna in the face of lava inundation.

 “A short-term energy sustainability plan (ESP) to meet the current needs of the critically affected areas within the Pahoa or other critically identified areas.”

“A Comprehensive Energy Master Plan (CEMP) to meet the long-term energy goals of the entire District of Puna.”

“PeakNRG calls this approach “Network Operated Distributed Energy Storage” (NODES).  PeakNRG has teamed up with Power Analytics, a recognized leader in electric grid monitoring and control.

“PeakNRG will be the principal point of contact with HELCO for program management matters and will be engaged in all aspects of strategy development, planning, and technical review throughout the life of the project.  Power Analytics will be the key partner to develop the Comprehensive Energy Management Plan (CEMP) and its related work.”

Eric Clifton, the founder of PeakNRG, has been involved in energy for a decade. He served as a member of the National Board of Directors of the U.S. Green Building Council (2006 – 2008).

The PeakNRG concept could be merged with a few proposals being floated as alternatives to the Nextera-HECO acquisition deal. These alternatives involve chopping off HELCO from the Nextera-HECO deal and establishing a cooperative. Geothermal expansion is one of the dividing lines between competing co-op proposals.

The Big Island Community Coalition, the Hilo Hamakua Coast Development Corporation, and the Hawaii Farmers and Ranchers United are sponsoring an informational briefing on electric cooperatives this Friday at 11:30 a.m.

Dennis Esaki, a founder of Kauai Island Utility Cooperative (KIUC), and David Bissell, CEO of KIUC, will speak about community-based electricity utility cooperatives.

The event will be held at Wainaku Executive Center at 26-238 Hawai`i Belt Road about one mile north of Hilo. The Ed Olson Trust bought the 12-acre ocean-front facility from C. Brewer in 2012. The room can seat 50 people. People who want to attend should RSVP Richard Ha at <>.

The 2015 International Battery Association (IBA) and Pacific Power Source Symposium (IBA-PPSS 2015) joint meeting will be held on the Big Island of Hawaii, the Hilton Waikoloa Village, during January 5-9, 2015. 

"The IBA meeting has a great tradition and unique style of blending fundamental research with practical applications to provide a vibrant mix of discussions on electrochemical power conversion and energy storage."

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Tuesday, December 16, 2014

HECO requests approval for six utility-scale solar facilities

By Henry Curtis

Hawaiian Electric Company (HECO) is a public utility where “public” means providing a public service as opposed to being public about what they are doing with our money.

For more than a year HECO has been working on a series of utility-scale solar Power Purchase Agreements (PPA). While the high-level information is public the details have been secret.

Now that they are filed, the utility has asked for expedited approval from the Public Utilities Commission.

HECO wants rulings by early July 2015. “The Company recognizes that this is a very compressed timeframe for the Commission to issue its decision and order.”

The time frame is not only short but it occurs while the Public Utilities Commission must deal with the Nextera purchase of HECO, MECO and HELCO.

A few of the projects require overhead high-voltage transmission lines in residential areas which triggers a public hearing which triggers the right for a contested case hearing which would have to be curtailed in order for HECO to promptly receive approval in order for the independent power company to qualify the project for the expiring federal Investment Tax Credit.

The size of each system is listed in megawatts. Together the six systems total over 200 MW,

Eurus Energy America, LLC
(Toyota Tsusho Corp. and Tokyo Electric Power Co.)
Ala Akau St, Waianae near Kamaile Elementary School and Waianae High School
Hanwha Corp. (South Korean) and Forest City Sustainable Resources, LLC
Plantation Road, Kunia north of Royal Kunia Country Club
First Wind
Co-located with the existing Kamehameha School's Kawailoa Plantation in Hale`iwa.
First Wind
Oahu's central plain, just south west of Mililani, near Kealalaa St and Akoa Pl
Sun Edison
H2 Ka Uka exit and Mililani Memorial Park Rd, Waiawa
First Wind
Adjacent to H-2 Freeway, just north of the Ka Uka Blvd.

HECO filed each application on December 4, 2014.

The Public Utilities Commission sent a letter to HECO on December 8 asking that HECO answer three questions by Christmas Eve.

“Prepare and submit one or more charts which compare and describe the similarities and differences between the material provisions of each PPA, including the applicable provisions governing price and curtailment.”

“Prepare and submit one or more charts which compare and describe the material similarities and differences between the text of each PPA application.”

“Prepare and submit one or more charts which compare and describe the material similarities and differences between the requests for relief of each PPA application.”

For each of the questions the Public Utilities Commission also requested that the answer be available to the public.

“To the extent possible, describe the similarities and differences in non-redacted format.”

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Monday, December 15, 2014

How Green is Nextera?

By Henry Curtis

Altamont Pass is known for birds and wind turbines.

Since the 1960s, and especially after the oil embargoes of the early 1970s, Altamont Pass has been a test bed for wind generation.  California’s Altamont Pass has a wind resource area covering 58 square miles. The region has nearly thousands of turbines.

Interstate Highway 580 travels over the Altamont Pass about 40 miles southeast of Oakland, California between the cities of Livermore and Tracy.

In March 1998, the National Renewable Energy Laboratory (NREL) initiated research on bird kills in the Altamont Pass Wind Resource Area (APWRA). Their 2005 Report summarized research over the previous 15 years on the killing of birds. 

Many birds, including raptors, which are protected by the Migratory Bird Treaty Act (MBTA), the Bald and Golden Eagle Protection Act, and/or state and federal Endangered Species Acts.”

 Altamont Pass became a red flag, a sign of greed. While some view green energy projects as a way to protect the planet, others appear to be more interested in using green tax credits and mitigation studies to fund green greed.

Legal Battles ensued. “Altamont Pass ...was seen as the poster child for the wind industry’s drawbacks because of the high number of birds caught in the turbine blades. The Altamont wind turbines were sited in the path of a major migratory bird route and next to the Diablo Range, home to the highest concentration of golden eagles in the world.” 

 In 2004 the Center for Biological Diversity charged a Florida company, FPL Group Inc., and a Danish company, NEG Micon A/S with violating the federal Migratory Bird Treaty Act by illegally killing about 1,000 golden eagles, red-tailed and ferruginous hawks, American kestrels, turkey vultures and great horned, barn and burrowing owls every year, an environmental group argues in a lawsuit filed Monday.

Rick Wiebe, an attorney for the Center for Biological Diversity, asserted that “Altamont is one of the richest raptor habitats in the world with the highest density of breeding golden eagles in the world, together with the fact the companies are using this obsolete, first-generation killer technology.

If you look at the 20 years that Altamont's been in existence, that works out to between 15,000 and 25,000 eagles, hawks and owls killed during that period of time. This can't go on."

 California's Attorney General Edmund G. Brown Jr. announced a settlement in 2010 between environmental groups, the state, and NextEra Energy Resources.

Nextera agreed to pay mitigation fees: $2.5 million to be split between the Livermore Area Regional Park District, the East Bay Regional Park District and the California Energy Commission’s Public Integrated Energy Research Program.

In essence Nextera ripped out old, inefficient turbines and re-powered their sites with new efficient higher megawatt turbines.

NextEra Energy acquired the 485 megawatt Blythe Solar Power Project (BSPP) in 2012. The Riverside County site is located eight miles from the Colorado River, about 220 miles east of Los Angeles, California and 150 miles west of Phoneix, Arizona.

The site is in bird migration corridors and nearby bird refuges. The lake effect phenomenon refers to birds flying over flat, dark solar panels and diving into them assuming that they are water bodies.

The Desert Sun quoted Kenny Stein, an environmental manager for NextEra.

There are a lot of places in the staff assessment (saying) that impacts to avian species would be significant and unavoidable. I don’t think there’s been any information from projects that says we’re having significant impacts. …Let’s focus on doing really good mortality monitoring and see if we have an issue."

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Sunday, December 14, 2014

Life of the Land, HECO & the Future

By Henry Curtis

Life of the Land was founded in February 1970 by 15 women. In 1971 Life of the Land sued the Navy over the bombing of Kahoolawe and intervened in a HECO rate case. On appeal Life of the Land won the case at the Hawai`i Supreme Court.

 Over the years Life of the Land has been involved in military toxic cleanup efforts,  the heptachlor poisoning and the Waipahu health contamination cluster.

Life of the Land joined with Malama O Manoa and The Outdoor Circle in the successful efforts to protect Wa`ahila Ridge (HECO’s failed 30-year attempt to build a high-voltage transmission line) and spearheading the successful drive to prevent HECO from using rain forest palm oil.

Henry Curtis and Kat Brady came to Life of the Land in the early 1990s. This ililani media blog seriously took off in September 2013.

The focus of the blog is to raise questions, provide options, link silos and to document change. Advocacy is kept to a minimum.  Many people have provide deep background information. I will not reveal their identities. I welcome further suggestions.

Large amounts of water are used in energy production. Large amounts of energy are used to move fresh water, irrigation water and waste water. Large amounts of water and energy are used in food production. Together, water, energy and agriculture have transformed landscapes and created the modern economy.

All energy projects have positive and negative economic, political, social, environmental, cultural, ratepayer and taxpayer impacts.

The current paradigm and the Aloha Spirit requires us to be hard on the issues but be soft on people. We will all shape the transformation that is occurring.

The world has seen a phenomenal change. Global solar installations have grown at 43% per year for each of the past 12 years. While solar is only 1% of the global scene, at a continued growth rate of 43%, the expansion would reach 100% in 13 years.

The absolute highest penetration of intermittent renewables (wind, solar) on a reliable transmission grid in the world is Maui followed by the Big Island. The latter has higher renewable energy levels but some of that is baseload geothermal.

HECO used to have a monolithic internal structure. In the last five to ten years there have been major internal struggles over who should lead the utility down which path forward.

The inability of a slow, conservative, rigid utility to adapt to rapid change is not surprising.

There are now major options on the table: micro grids (Parker Ranch, Pearl Harbor), smart grids (Maui), leaving the grid (nebulous but growing), interconnecting grids (Nextera), cooperatives (KIUC), municipal ownership (like water departments) and community acquisition of a grid (proposed by various parties).

The Nextera proposal to buy out Hawaiian Electric Industries have placed all of these on the table as possible conditions to the community, legislative and regulatory acceptance of a future utility structure.

Now is the time to raise possibilities, to think outside of the box, to contemplate change.

One of the first changes that must occur is to resolve the instability at the Public Utilities Commission. There has been a stunning exodus of key staff members. 

Many people in a wide cross section believe that Governor Ige should appoint a telecommunications expert, or possible a water expert, to be the next Commissioner.

Many believe that Lorraine Akiba should be the new chair. Some believe Michael Champley should be chair. A few want to wait and see who the new Commissioner will be.

Maui County is working on the agenda for their second annual energy conference. Their first conference brought together key stakeholders and thinkers envisioning a new energy paradigm.

In late March 2014 Maui County and the Maui Economic Development Board sponsored the “Electric Utilities: The Future Is Not What It Used to Be” conference, held at the Maui Arts & Cultural Center, 

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Saturday, December 13, 2014

The Inside Scoop on HECO’s Four Year Death Cycle

By Henry Curtis

On March 1, 2012 the Hawai`i Public Utilities Commission opened docket 2012-0036 initiating the HECO Companies’ Integrated Resource Planning (IRP) process.

The Public Utilities Commission appointed Carl Freedman to oversee the IRP process and staff member Jay Griffin to monitor the process.

The Commission established an Advisory Group including representatives from five islands. 

The Advisory Group and the HECO Companies met for a dozen full-day meetings over a one-year period.

The Commission appointed Life of the Land Executive Director Henry Curtis to review HECO’s use of a proprietary black box resource optimization program called Strategist.

On June 28, 2013 the HECO Companies filed a 2000+ page report that was long on words and short on analysis.

HECO was unable to develop a holistic business plan to handle the rapid growth in distributed rooftop solar.

In his 2014 State-of-the-State address, Governor Neil Abercrombie singled out a single company – Nextera.

During late March 2014 the County of Maui in partnership with the Maui Economic Development Board held a conference on the "Electric Utility of the Future." A number of in-state and out-of-state experts discussed alternative paths forward.

On April 28, 2014 the Public Utilities Commission issued Decision and Order 32052 which rejected the Hawaiian Electric Companies Integrated Resource Planning Report.  

Included in the Decision and Order was a thirty page policy statement –- the “Commission's Inclinations on the Future of Hawaii's Electric Utilities: Aligning the Utility Business Model with Customer Interests and Public Policy Goals.”

On April 30 the Hawaii Island Economic Development Board (HIEDB) held their 2014 Hawaii Island Renewable Energy Solutions Summit (HIRESS). Similar to Maui there were substantive discussions on the future of the HECO Companies.

Sometime in May 2014 Alan Oshima, Hawaiian Electric Industries (HEI) Executive Vice President (EVP) for corporate and community advancement received an additional job title as a member of the HECO Executive Team.

There was no public announcement made of Oshima’s new position. 

This probably indicates that Nextera had made contact with HEI.

Oshima had a history of being involved in corporate mergers and reorganizations.

The first involved Citizens.

Frontier Communications Corporation was formerly known as Citizens Utilities Company (1935 – 2000) and then Citizens Communications Company (2000 - 2008).

In 2000 Citizens sought to sell their Kauai Electric Division to the newly formed Kauai Island Utility Cooperative (KIUC).

In Hawai`i Public Utilities Commission docket 2000-0108 Alan Oshima represented both the buyer and the seller. The deal was overpriced and was rejected by the Commission.

In 2002 the Public Utilities Commission opened docket 2002-0060 to review a second attempt by Citizens to sell their Kauai operations to KIUC. The price was lowered by nearly $100 million. Alan Oshima represented only the seller. The Commission approved the purchase.

In 2005 Oshima served as the lead Hawai`i regulatory counsel to the Carlyle Group in its acquisition of Verizon Hawaii.

Oshima served as Hawaiian Telcom’s General Counsel, Senior Vice President, and Corporate Secretary (2005-08).

In 2008 Oshima joined the HECO Board. During these HECO days, Oshima helped Hawaiian Telcom to emerge from reorganization in 2010. In 2011 Oshima moved to the HEI Board.

During May 2014, the month that Oshima received his new role, HECO CEO Richard M. Rosenblum announced that he would be gone within a year. 

The Public Utilities Commission directed the HECO Companies to file Power Supply Improvement Plans to fix the shortcomings in the HECO Companies IRP Report.

On August 26, 2014 the HECO Companies filed their Power Supply Improvement Plans. 

The plans received extensive opposition from the community. A large number of entities filed motions to enter the regulatory proceedings. 

On September 19, 2014 the Hawai`i Legislature held an informational briefing "to get an update on the impacts of Hawaiian Electric Company’s September 2013 policy changes on solar interconnection, learn more about Hawaiian Electric Company’s future plans for distributed generation, and hear alternative perspectives on resolving the challenges related to the integration of distributed generation."

Four committees sponsored the hearing: the Senate Committee on Energy and Environment (ENE), the Senate Committee on Commerce and Consumer Protection (CPN), the House Committee on Energy & Environmental Protection (EEP)  and the House Committee on Consumer Protection & Commerce (CPC).

Legislators grilled the utility.

In September HEI announced that Oshima was going to step down from his HEI position, and focus his full effort at HECO. Effective October 1, Oshima became HECO’s President and CEO.

On December 3-4, 2014 the very expensive 4th Annual Hawaii Power Summit was held. The total attendance was around 150 people with perhaps a quarter of the attendees from the HEI/HECO Companies.

Fifty speakers addressed the audience including five from HEI/HECO, three from Blue Planet Foundation and three from the Hawaii Public Utility Commission.

Mid-way through the first day speaker Constance H. Lau, Hawaiian Electric Industries President & Chief Executive Officer, announced the HECO-Nextera deal.

HECO and MECO learned about the acquisition that day just like everyone else. 

HECO Senior Vice President Jim Alberts, MECO President Sharon Suzuki and other utility executives are now making the rounds trying to convince the community that everything will work out fine.

The Agreement is posted on the U.S. Securities and Exchange Commission website. 

The Securities and Exchange Commission website will serve as a repository for all legal documents related to the sale.

The Hart–Scott–Rodino Antitrust Improvements Act of 1976 requires that the documents be posted 30-60 days before any regulatory action can occur.

Thus the Public Utility Commission application will probably be filed in the first week of February.

It is likely that most of the usual suspects will intervene in the proceedings. 

Large utility mergers also tend to attract a large number of non-traditional intervenors including businesses, unions, governments and community groups.

The Agreement specifies that the Initial End Date for completing all regulatory reviews will be December 3, 2015 and the final End Date will be June 3, 2016.

The Agreement specifies that the parties can amend the end dates.

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