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HECO in the Spotlight – Part 2

Struck between Shareholder Priorities, Customer Priorities, and States Mandates – HECO is adrift…

Investor-owned utilities (IOUs), as is the case with HECO, are the old-school, for-profit, regulated-monopoly utilities, with a captive customer base and profits guaranteed by law.  Yet, Hawaii’s 2045 clean energy (RPS) mandate requires HECO to institute operating reforms that must, first and foremost, address needed changes without endangering the stability or economic efficiency of Hawaii’s electricity system.

IOUs like HECO, were also the driving force behind their successful drive to slow-to-a-crawl the nationwide expansion of residential and business installed rooftop solar and their independent clean power contributions to the grid.   A strange paradox for utilities like HECO who viewed this subset of utility customers with solar installed as competitors. (for more on this see “HECO in the Spotlight – Part 1”)

Hawaii’s island-based electricity systems are most likely too small to host competing same-island utilities, but not the robust expansion of distributed clean energy options in the form of residential and commercial rooftop solar and storage.

Last week Bloomberg reported that activist investor ValueAct Capital Management (a San Francisco based hedge fund and investor in HECO, is urging that the company to look outside for a replacement and successor to HECO’s current Chief Executive Officer Constance Lau, and one that will lead the utility on path that accelerates its renewable energy goals.  Something the utility has failed to do, and 100% statewide renewable energy objective, and the clock is running down out fast… for Hawaii and HECO.Heco Utilities

 

“The company (HECO) is at an inflection point where management can be driven either by more of the same inertia or, alternatively, by innovative, forward-looking thinking and action,” ValueAct Chief Executive Officer Jeff Ubben said in a letter to the company dated Nov. 11.  “I firmly believe the best candidate for this crucial leadership role will be found outside of the company. The problem starts at the top, Hawaiian Electric Industries executives and its board leadership have been richly rewarded for lackluster performance.” Ubben said.

Ubben said at the time that ValueAct planned to push the utility to accelerate its use of renewable energy, among other changes. He said in the letter this month that he was encouraged by the utility adding three new directors to its board in February. But was disappointed that two of them, renewable energy veterans Mary Powell and Celeste Connors, weren’t assigned to any board committees, and he believes the entrenched leadership style and culture at Hawaiian Electric holds the company and Hawaii back from realizing its full potential.

ValueAct correctly observed that HECO remains far too reliant on imported oil, which is used to produce 63% of its electricity, leading to higher rates for its customers. Also a far distance from reaching its 100% renewable energy mandate in the 20 plus years.

HECO and other investor-owned and regulated electric utilities continue to go back to well, a deep one, managed by Public Utility Commissions across the country. PUC’s generally engage in rate-making (raising the cost of power to ratepayers) in a process that requires utilities to:

1) estimate how much power their customers will need;

2) estimate the investments they’ll need to make in power plants, fuel, transmission lines, etc. in order to meet that demand;

3) estimate what rate they need to charge customers to cover those investments and offer a reasonable “rate of return” to their investors;

4) make a “rate case” justifying the rate increase; and

5) if the PUC signs off, the Utility is free to charge is customers the new rate increase, and until the next time when they make their case for another rate increase.

Hawaiian residents have paid 280% more for electricity per kilowatt hour than the U.S. average over the past 10 years. HECO recently filed with Hawaii’s PUC regulators for another rate increase.  It is more than the retail cost of energy that brothers many of Hawaii’s residents footing the bill for HECO’s slow-motion dance to clean energy, it’s what HECO does with all those ratepayers dollars (pollute or protect Hawaii’s environment) that also matters to the state’s future and to all Hawaii stakeholders.

Sunset Of Fossil Fuels

The real question is just what form should HECO’s electrical system take to best meet the challenges of the state Renewal Portfolio Standards and it’s 100% renewable energy deadline by 2045.  If recent history is any indicator, the utility will be late and short on their regulatory commitment to Hawaii’s residents, and at a cost to ratepayer that is higher than necessary (e.g. HELCO – Hu Honua power purchase agreement).

“The company is at an inflection point where management can be driven either by more of the same inertia or, alternatively, by innovative, forward-looking thinking and action,” ValueAct Chief Executive Officer Jeff Ubben said in a letter to the company dated Nov. 11.  “I firmly believe the best candidate for this crucial leadership role will be found outside of the company. The problem starts at the top, Hawaiian Electric Industries executives and its board leadership have been richly rewarded for lackluster performance.” Ubben said.

HECO and other investor-owned and regulated electric utilities continue to go back to well, a deep one comprised of ratepayers and managed by PUC’s across the country.

Like any business, utilities must justify their product cost to their target customers, and in the case of regulated utilities like HECO they also engage in rate-making processes before their governing public utility commission (PUC) that includes:

1) estimating how much power their customers will need;

2) estimating the investments they’ll need to make in power plants, fuel, transmission lines, etc. in order to meet that demand;

3) estimating what rate they need to charge customers to cover those investments and offer a reasonable “rate of return” to their investors;

4) then, they go to the state public utility commission (PUC) to make a “rate case” justifying the rate;

5) if the PUC signs off, the Utility is free to charge is customers the new rate increase, and until the next time when they make their case for another rate increase.

Hawaiian residents have paid 280% more for electricity per kilowatt hour than the U.S. average over the past 10 years. HECO recently filed with Hawaii’s PUC regulators for another rate increase.  

It is more than the rising cost of energy that concerns Hawaii’s residents, it’s footing the bill for HECO’s slow-motion dance to clean energy while subsidizing high imported fossil fuel costs to power HECO’s grid. And the there is the question of what HECO does with all those ratepayers dollars; pollute or protect Hawaii’s environment. That too matters to the state’s future and to all Hawaii stakeholders.

Another possibility, and one seriously considered during the height of the NextEra takeover controversy, is the transformation of HECO from a privately owned utility to a municipality or electricity cooperative, possible one that is better aligned with the state’s clean energy objectives and that of the public interest – an option with the potential to work well for Hawaii (e.g. Kauai’s KIUC). If Maui’s electric utility cooperative and its advance state of renewable energy deployment and utility scale battery storage is any indication, then the transformation of HECO from a privately owned utility to a municipality or electricity cooperative appears better aligned with the state’s clean energy objectives and that of the public interest.

In decision time line more analogous to wrap speed, as compared to HECO horse and buggy decision cycles, Kissimmee Utility Authority (KUA) engaged in a groundbreaking event in November for the “Florida Municipal Solar Project”, a large-scale solar energy project that will enable KUA to provide renewable energy to its customers beginning next summer– a six month timeline from groundbreaking to clean power being delivered to Florida residents.

The Project is one of the largest municipally-backed solar projects in the United States, and is a joint effort between KUA and 11 other Florida municipal electric utilities, the Florida Municipal Power Agency (FMPA) and Florida Renewable Partners, LLC.  A total of 900,000 solar panels will be installed at two sites in Osceola County and at one site in Orange County — enough solar panels to fill 900 football fields and with a  total generating capability will be 223.5 megawatts of zero-emissions solar energy; enough to power 45,000 typical Florida homes.

The question remains… what form should HECO’s electrical system take to best meet Hawaii’s Renewal Portfolio Standards and 100% renewable energy deadline by 2045.  If recent history is any indicator, the utility will be late, and will be short on their regulatory commitment to Hawaii’s residents, and likely at a cost to ratepayers that is far greater than necessary.


Headline Update

“Scott Seu, a senior vice president at Hawaiian Electric Company, will succeed Alan Oshima as president and chief executive officer of the company effective in the first quarter of 2020.” Hawaiian Electric Press Release, December 10, 2019.

…In December 2006 Scott Seu testified as a HECO witness before the Public Utilities Commission:

“Q. Do they believe that climate change is occurring?   A. I — I don’t know off the top of my head…”

By Seu’s answer in 2006, you’d think his answer was from 1986, not 2006. Seu may be good for shareholder interests, until those interests have opportunity costs for both HEI and the state of Hawaii in the form of higher energy costs and lost opportunities to transform the company into a clean energy provider instead of remaining a fossil fuel retailer of dirty energy between now and 2045.

William Giese, executive director of the Hawaiian Solar Energy Association, said he hopes Seu can help HECO embrace changes better than it has so far.

“My quick reaction is that Scott is a nice guy, and it seems like he’s competent,” Giese said. “But he’s also been at HECO for a long time, so hopefully he can shake the chains of institutional bias that have been at HECO for a while.”

 

 

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HECO in the Spotlight – Part 1

Hawaii Electric is the state’s 10th largest employer, employing over 2,700.  Operating as the states’ only power monopoly Hawaiian Electric companies (HECO) include Hawaiian Electric, Maui Electric and Hawaii Electric Light.

The company is use to getting its way.  Under HECO’s power stewardship, Hawaii has the highest residential electricity prices in the United States, averaging more than twice the national average.  To put it another way, even though Hawaii residents consume the least electricity in the country we pay the highest electricity bills. On average over the last 10 years, $7,500 more than the rest of the country. (ValueAct Capital 2019 report)

Altogether, HECO islands’ utilities provide electricity to 95% of residents of the State of Hawaii, operating independent and isolated power grids on the islands of Oahu, Maui, Molokai, Lanai, and Hawaii Island. The company claims a customer base of 462,225 commercial and residential customers – impressive with Hawaii’s population of 1.3 million people.

In 2008, the state of Hawai‘i signed a memorandum of understanding with the federal Department of Energy laying the foundation for a 100% renewable energy (electricity) goal to be fully implemented by 2045.  HECO was there echoing the then governor’s vision for this historic agreement, “On behalf of the people of
Hawaii, we believe that the future of Hawaii requires that we move decisively and irreversibly away from imported fossil fuel for electricity . . . and towards
indigenously (locally) produced renewable energy…”

Fast forward and a decade later and where is HECO today?

Over the last decade the state has seen a series of clean energy failures from Hawaiian Electric, including its early biofuel-led approach to the renewable energy transformation, the failure of the 400 MW “Big Wind” plan, the failure of ten of the eleven wind and solar projects competitively selected in 2013, the collapse of the rooftop solar industry, in no small part is due to HECO’s lobbying before the state PUC. The objective was simple enough, kill Hawaii’s highly successful NEM (Net Energy Metering) program, the same one that ushered in the state’s transition to a clean energySolar Vs Roof Top Solar economy.

Following a national trend, HECO and other electric utilities wielded their political muscle to reduce and eliminate compensation to customers providing electricity back into the grid.  HECO engaged in a analytical paralysis in its effort to develop a response plan to state RPS mandates in the form of a five-year resource planning effort which ended without a firm commitment by HECO and road map for outlining the utility’s clean energy transition.

“…Hawaii continues to enjoy something of an unexamined national reputation as an electricity-policy innovator, but Hawaii has not yet made good on its ambition to lead a clean-energy revolution of global significance.” (National Renewable Energy Lab 2019 report: Hawaii Clean Energy Initiative 2008–2018)

Energy experts – outside the utility wheelhouse – argue that the one-size-fits-all utility performance-based operating model and associated rate schemes now being considered by Hawaii and other PUCs around the country will fail.  The struggle with “performance measured” utility operating models is pretty basic: it’s one thing to measure performance, it’s another to develop a compensation formula that fully factors in all contributing parties working together on a path to a 100% clean energy economy.

These same energy experts also argue that utility compensation and rate schemes designed to address a rapidly changing energy marketplace are unlikely to achieved their intended goals.  Today’s utility operating model requires greater flexibility, it must be cost effective and accountable, and open to multiple and distributed clean energy generation sources connected to the grid. Equally important, it must include a fair compensation plan for all clean energy contributing parties that power the grid.

The Electricity (Supply) Act of 1926 led to the setting up of the National Grid.  So why mess with a working and nearly one hundred year old national power formula which established power monopolies designed to serve as exclusive retailers of electricity operating within exclusive service regions?

As with most historically designed and centralized power generation systems connected by long distance power grids, the core engineering constraint (requirement) are systems designed to match  the need of instantaneously electricity demand (“load”) to electricity generation, aka load balancing of power, that is centrally controlled.  So long as HECO could operate under historic business and technical models of business-as-usual, and serving as its own exclusive power supplier, all was fine.  When you need more money, you have the power and the public needs that power. So you go to the PUC and you generally get what you ask for — rate increases.  Its much easier to raise ratepayer dollars than it is to raise venture capital or go to the banks.  If you fail or succeed has little consequence to raising more capital through higher customer power rates; operating costs and profits are subsidized by ratepayers.

Rather its shareholders, not utility customers, who are the top priority of privately held utilities with ratepayers subsidizing shareholder  dividends – the primary Wall Street measurement of a company’s performance and shareholder value for publicly traded utilities.

Net Metering and Rooftop solar

That all changed when low-cost roof top solar arrived on the energy stage, and utility scale wind, solar, and storage options proved more cost effective than traditional polluting fossil-fueled power stations.  For utilities looking backwards, the overall consideration off operating in mode that is much kinder to the environment is generally not a priority, unless they are forced to address head-on their contribution to an emerging global climate crisis as part of their energy equation.Net Metering

Net Energy Metering (NEM) can be understood as the twenty-first century, distributed power generation system.

NEM gave rise to Hawaii’s rooftop solar industry, which installed more than 500 MW of renewable capacity in Hawaii over the last decade, increasing renewables’ share of total generation by 8 percent. According to HECO, over 60,000 customers have installed solar systems under the successful NEM program within the Hawaiian Electric, Maui Electric, and Hawaii Electric Light service territories.

With NEM, rooftop solar equipment can be sized to produce more (limited to 10 KW) than the customers need during the daytime, generating a bill credit that zeroes out the monthly utility bills (minus HECO’s $25 monthly flat fee for a grid connection).

The capital cost of NEM rooftop solar systems, with a projected life 25 years or more, can be recovered in a few years of operation, with ongoing utility power costs savings costs in what otherwise would have been power consumption costs to meet both day and night electricity demands. For that reason, NEM played a key role in the success of the rooftop solar industry in Hawaii and nationwide, but no more.

Utilities fought NEM from the start, their primary NEM target was the customer power rates that the utility was forced to credit back pay to this new category of utility customer. Within the industry called “prosumers”, but in fact, utilities viewing this special class of customer as … a competitor.

Nationwide in NEM markets, utilities engaged in one-sided and coordinated industry arguments before their governing PUC, and Hawaii was no different.  If they couldn’t completely dismantle the NEM program in their market (as was the case Hawaii), their backup strategy was to proposed that rooftop solar owners be only credited for the solar energy provided back to the grid at a credit equal to wholesale power rates. In effect, a instead of fair dollar-for-dollar exchange of power; in which both parties to the NEM program (the utility customer and the utility) each invested in their own power production systems, the utility sells at retail power rates and the customers sells at wholesale power rates back; creating a complete uneven playing field favoring utilities.

Rooftop Solar Labor

In the death of Hawaii’s original NEM program for which HECO argued before the PUC, the utility naturally failed to point out the capital cost investment by utility customers in their rooftop solar systems and the renewable energy cost off-sets benefits to HECO shareholders for this efficient clean power contribution — yielding environmental, social, and regulatory clean-power cost offset benefits to HECO, lowering utility cap-x and fuel costs, and by extension lowering HECO costs to non-NEM utility customers.

Hawaii’s then PUC board bought HECO’s arguments hook, line, and sinker.  Ending a program, by any measurement that benefited power consumers, the state’s clean energy transition objectives goals, and contributed to HECO’s meeting its 2045 statewide RPS obligations

After Hawaii’s PUC ended the highly successful “original” NEM rooftop solar program in 2015, a year later the Business Journal reported that the majority of Hawaii solar energy firms reporting significant job losses, once driven to record growth levels in rooftop solar installations across the state.

Today, the collapse of Hawaii’s once robust solar industry has been cut half, losing more than 50% of local (high paying) jobs from the industry’s high water mark in 2012 — mostly, directly attributed to the loss of the state’s original NEM program.

As renewable generation increasingly displaces fossil-fueled generation, the HECO Companies are increasingly planning to supplement this traditional power generation and power delivery formula with batteries, demand response, and dispatchable intermittent renewable facilities.

Tesla Powerweall Insllation

In the meantime, technology and power consumer options continue to expand, the clean power marketplace continues to surpass HECO’s management timelines for reform, and its heavy resilience on imported dirty energy to fuel its power plant investments or a genuine grid transition to clean energy.

Once considered a far future opportunity for advancing the future of state’s clean energy goals, residential battery storage systems are now beginning to provide Hawaii’s flagging solar industry a needed breath of life.  This nascent solar revival now needs reforms in regulations that match customer power storage technology opportunities and options — now readily available to Hawaii’s residents and businesses seeking power security in an uncertain power climate.

The missing piece Hawaii’s promise for clean energy independence is the removal current regulatory barriers to wide scale adoption of solar plus storage – barriers designed by HECO to do just that.

The PUC may discover, with little effort or regulatory wrangling, that enabling distributed storage and distributed solar to be an effective way for to achieve its Hawaii’s 2045 100% renewable energy goals, with HECO full and enabling cooperation. Certainly not the NEM replacement regulations now in effect that establish walls, not bridges to clean energy innovation — and regulations that do not rely in HECO’s permission to proceed with residential and business battery systems that sit behind the utility’s meter.

A coordinated statewide path to clean energy independence

Both the state’s PUC and HECO have yet to realize that rooftop solar plus batteries could also address HECO’s current power management deficiencies with their grid in accepting added solar customers, and re-open the economic benefits of a renewed statewide transition to roof top solar — without delay and unnecessary cost barriers.

 

 

Dirty Power Plant Emissions

Hu Honua Update – October 2019…

Cutting Down Hawaii Island’s Forests to Burn to Make Electricity is one of Hawaii’s dumbest and costly power production ideas yet.

See what we mean: https://youtu.be/-Q0xUXo2zEY

 

The origins of Hu Honua date back to 2008, and like a malignant cancer, the Hu Honua power project proposal has been difficult to eradicate.

A total absence of County and State due diligence helped enable HuHonua and its investor advocates bypass elemental questions as to project’s justification, overall costs to ratepayers and environmental impacts of this ill-conceived power production project.  Now it’s up to the PUC to decide (again), but this around it is the question of Greenhouse Gas emissions that will be produced or off-set by the operation the Hu Honua power plant.

During the past 5 years, public (and ratepayer) opposition to the project has grown, and with increased scrutiny the economics and environmental life cycle impacts of the project (although only partially considered by the state and the current PUC process) increasingly looks bad for Hu Honua.  Faced with more cost-effective and environmentally benign power substitutes now available to HELCO, Hu Honua makes little sense as it may have its vested interests when first proposed.

On October 21, 2019 HELCO submitted to the state PUC their reasoning and their defense to questions raised by a Hawaii-based citizen group (Life of the Land) lawsuit. They questioned the public merits of the project and its environmental implications.  The utility’s response to the question of added greenhouse gas (GHG) emissions  resulting from Hu Honua’s operation was, and is, the primary issue now at hand.  HELCO’s reply can be summed up in their submission as...”It is Hawaiʻi Electric Light’s understanding that assumptions and detailed calculations for the lifecycle emissions from Hu Honua Project will be presented in the Hu Honua GHG Analysis report to be filed separately by Hu Honua.”   

The Hu Honua reply side to the PUC followed HELCO’s submission and mostly copies the utility’s statements with one exception, HuHonua failed to include the biogenic carbon dioxide emissions in determining compliance with the CO2e emissions cap.  By failing to fully answer this key question as the proposed plant’s GHG pollution emissions impact, Hu Honua should be denied their permit to proceed, plain and simple, but it remains to be seen what the PUC decision will yield.

HELCO invested considerable ratepayer dollars in hiring a sophisticated energy consulting firm, Ramboll, known for their work in lending life to fossil fuel plants and advancing waste-to-energy (burning trash to create electricity). There is nothing wrong with Ramboll, expect that their consulting expertise is heavily weighted to projects and technologies that do little evaluate impacts or measure the net production of global warming emissions from power plants. The requirement for weighing “lifecycle greenhouse gas emissions” in energy decisions, although new to Hawaii and its PUC, is an increasingly common metric in other power markets.

With every consultant or attorney there is the art of language.

If language is plain and clear it does not always serve its intended purpose.  Such is the case in the field of energy and from an entire dirty energy industry sector that is now scrambling to respond to public and regulatory pressures to address “their” role in an emerging global climate crisis.  Thus the name invention of bio-fuels and bio-energy as clean or renewable energy sources, which in some cases they and others they are not.  Hu Honua falls into the latter category.

Convincing Hawaii’s state legislators that their creation of a well meaning 100% 2045 renewable energy mandate for the state that includes both dirty and clean energy substitutes as qualified fossil fuel energy replacements is another matter entirely.  Biological based energy sources or Bio-energy, as is the case of the HELCO-Hu Honua power agreement, is a controversial energy fuel replacement strategy and one that is at the heart of this power application before the PUC.

Increasingly, replacement substitutes for fossil-fueled electricity sources must be weighed not only on their direct cost ratepayers, but their total costs to society and taxpayers.

Greenhouse Gas Emissions – include, but not limited, to CO2 (carbon dioxide), methane, etc. Primary GHG sources: Fossil Fuel Power Plants, Transportation, Oil-Gas extraction.

Biogenic (carbon dioxide) Emissions — include emissions from a stationary source directly resulting from the combustion or decomposition of biologically-based materials other than fossil fuels, in the case of Hu Honua: Trees.  When sustainably sourced, combustion from such fuels (it is argued) do not result in significant or lasting increases in atmospheric CO2 concentrations.

The basis for this theory goes like this…Bio materials burned for power are then replaced with new plants and trees which serve carbon sink replacements for those bio materials harvested for power production — this, however, is not the case with HuHonua and its business case that is built on burning free Hawaii County trees and until the supply is exhausted, at which time added fuel (trees) will be imported to burn when and as needed cost and GHG transportation are unknown, but accumulative.

The 30 year long HELCO power-buy agreement from Hu Honua does not consider the costs and implications of an exhaustible Hawaii Island based bio fuel source for which the proposed power plant has been designed.

Energy Emissions Pic

Not all sources of biogenic carbon are rapidly renewable, if they’re renewable at all. Clear examples of this include old growth forests, peat bogs, or other sensitive and enduring ecosystems. In fact, use of biogenic carbon as a fuel source could even result in damage to that ecosystem while increasing atmospheric CO2

In the case of the HELCO-Hu Honua power agreement, both parties must now weigh and project the GHG (lifecycle) impacts of the proposed bio-energy planet on Hawaii and the planet.

HELCO just presented to the PUC (10-21-19) its own data as to potential replacement of GHG emissions output by substituting HuHonua energy for some of its predominantly fossil fuel (diesel-fired) power plants, and in two scenarios: with and without, the reactivation of the island’s Puna geothermal power plant.

The HELCO GHG emission assumptions include Hu Honua serving as an operating power replacement for some the utility’s fossil fuel-based power generation sources. The utility asserts that the HuHonua will reduce GHG emissions from the grid’s status quo assumptions, but it lacks the inclusion of some fundamental factors Hu Honua represents to ratepayers, Hawaii’s environment (air,water, and land), and utility’s other clean power replacement opportunities for Hawaii Island.

HECO/HELCO have announced plans for utility scale solar, wind, and storage projects, but the substance of these projects remains uncertain, and the utility continues to talk clean energy, but fails to walk their talk.  Rather, HECO has consistently worked (effectively and statewide) to retard the advancement of rooftop solar and consumer-based power storage options, and instead has spent ratepayer dollars to protect its power monopoly status

None of these zero emission power options carry with them the environmental and socioeconomic impacts of the HuHonua power plant if allowed to go online.

It’s now up to the PUC to decide on docket 2017-0122 and the future of energy on Hawaii Island.


Public Comments on HuHonua Requested – Response Deadline: Nov. 26th, 2019

Posted on November 1, 2019, by Henry Curtis

The Hawai`i Department of Health has opened another climate change public hearing regulatory process that many consider meaningless.

 The Hawai`i State Legislature asserted that climate change is an existential threat to mankind, the Department of Health should regulate greenhouse gas emissions, and that the regulations can be developer-friendly and extremely weak to non-existent.

DOH issue permits dealing with existential threats to planetary ecosystems.  The DOH permit to pollute remains in effect during public comment periods, contested case proceedings, and legal challenges. Expired permits remain valid until renewed.

In the case of Hu Honua, the public is requested by DOH to submit comments until November 26 and may ask for a public hearing or a contested case proceeding. 

Mail: Department of Health, Clean Air Branch, 2827 Waimano Home Road, #130, Pearl City, HI 96782

Email: cab@doh.hawaii.gov

 Hu Honua wants to chop down and burn forests to generate electricity.

Life of the Land has requested a contested case proceeding.

The public is invited to participate in commenting on the proposed Hu Honua “updated greenhouse gas (GHG) emission reduction plan dated August 2019.”

The Hu Honua Covered Source Permit (air pollution permit) issued “on February 18, 2016, and amended on December 11, 2018, shall not be affected and shall remain valid.”

The Hu Honua facility will have a greenhouse gas emission limit. “Hu Honua Bioenergy Facility shall not emit or cause to be emitted carbon dioxide equivalent (CO2e) emissions in excess of 3,979 metric-tons (4,386 short tons) per calendar year.”

The cap does not include biogenic emissions — which is the only type of emissions that Hu Honua will emit.

Hawaii Administrative Rules (HAR) specify that “Except for fee assessments and determining applicability to this section, biogenic CO2 emissions will not be included when determining compliance with the facility-wide emissions cap until further guidance can be provided by EPA, or the director, through rulemaking.”

HAR defines Biogenic CO2 emissions.

“CO2 emissions from a stationary source directly resulting from the combustion or decomposition of biologically-based materials other than fossil fuels and mineral sources of carbon.

“Examples of biogenic CO2 emissions include, but are not limited to: CO2 generated from the biological decomposition of waste in landfills, wastewater treatment or manure management processes; CO2 from the combustion of biogas collected from biological decomposition of waste in landfills, wastewater treatment or manure management processes; CO2 from fermentation during ethanol production or other industrial fermentation processes; CO2 from combustion of the biological fraction of municipal solid waste or biosolids; CO2 from combustion of the biological fraction of tire-derived fuel; and CO2 derived from combustion of biological material, including all types of wood and wood waste, forest residue, and agricultural material.”

http://www.ililani.media/2019/11/hawaii-meaningless-laws-regulation-to.html

For further details:

 

Halloween Pollution Horror

Trick or Treat Halloween 2018, A Forthcoming Hu Honua Decision

Earlier this year, Hawaii’s PUC gave a green light to the Hu Honua biomass plant representing another example of Hawaii’s broken (RPS) Renewable Portfolio Standard law, this specific decision carries with it significant consequences for the Big Island. 

The PUC decision process was also a case in point in a public process leading to the PUC’s failure to measure the benefits and costs of renewable energy power plant replacements with the consequences to the public and Hawaii’s environment. 

During the opening remarks before he Supreme Court,  Associate Justice Wilson supports Solicitor General Wadsworth remarks in his statement that “…the PUC was asked to consider a biomass project, wasn`t given a range of alternatives” …  Justice Wilson must assume the PUC is unaware of renewable energy alternatives to Hu Honua’s biomass proposal, or clean energy options currently available, e.g., utility scale clean energy wind,  solar, and storage.Hawaii Supreme Courrt

The primary question Life of the Land (LOL) poses on behalf of the public interest and to the Hawaii’s Supreme Court is straight forward enough —

Does Hawaii’s PUC have the responsibility and authority to fully consider the implications of its power plant decisions, and should not greenhouse emissions, social impacts, and other pollution factors merit equal consideration in such plant approval decisions by Hawaii’s PUC? 

Representing the state’s PUC before Hawai’i supreme court justices this week, Solicitor General Wadsworth said he doesn’t think so. Wadsworth told the court “…there aren’t any other options to compete with it (Hu Honua biomass plant)…”.  Failing to qualify his statement, Wadsworth did not mention recent HECO-HELCO plans that call for the development of two new low-cost and emissions-free solar-storage utility grade generating facilities scheduled for the Big Island, totally 60 megawatts.

Wadsworth further asserts that wind and solar are unreliable and not dispatchable (on-demand) without batteries, adding that such options he asserts …”explodes the price”.  His statement to the court begs the question, relative to what?

Wind, solar and storage combinations offer 24×7 on-demand power options for utilities. Solar-battery power generation alternatives are very cost effective and highly competitive (below 11 cents per KWh based on recent Big Island contracts).   Compare these zero emissions alternatives that to the life cycle power costs from Hu Honua, and (dirty power) biomass plant can’t compete.

The PUC decision favoring the Hu Honua application didn’t fully consider the social and economic supply-chain operating costs associated with Hu Honua’s tree-burning power plant, nor the 24×7 supply-chain that will no doubt prove to be very costly to the public and the environment.  A supply chain liability totally unnecessary with alternative solar and wind power plant options.

In short, the PUC decision approving Hu Honua is Hawai’i state’s current energy policy at work, and it’s failure.

The PUC decision failed to fully consider the cost to ratepayer and taxpayer subsidies on which Hu Honoa business case has been sold to the public and the commission. But this decision did not occurred in a vacuum.

1-      Hawai’i County’s planning department was complicit in its absence of due diligence and cheer-leading for a project which will have fundamental impacts on County roads from Hu Honua’s tree-fed supply-chain of trucks on which the plant depends. Life of the Land also raises the question of Hu Honua’s plans for importing cut trees to further feed the plant and the fossil fueled supply-chain that will deliver those trees.

2-      Hawaii’s well-intended state legislature failed in its outdated and misguided RPS law, which continues to allow Hu Honua and other polluting biomass alternatives to be considered on an equal footing with emissions-free clean energy options.

3-      DLNR turned a blind eye to the wanton destruction off Hawaii’s forests as a fuel source for the Hu Honua plant.

4-      Department of Health (Clean Air Branch) failed in any meaningful participation or regulatory due diligence in the Hu Honua decision.

Hu Honua fails any reasonable economic, social, and environmental test. It also fails as a clean energy replacement to fossil fuels. It does NOT benefit the environmental goals on which Hawaii’s push to fossil fuel-free power generation objectives are based.  Equally important, its fails the Hawai’i Island community which HELCO serves.

The process which allowed Hu Honua to go forward demonstrates how our government stakeholders have failed to represent the public’s interests, and if and when the court allows Hu Honua to proceed beyond this last pubic objection, the public conclusion will be why was this plant allowed to go forward, how could it possibly be a benefit to the public and the State of Hawaii’s intent to transition to a clean energy by 2045?

For a full summary of the current Hu Honua court proceedings, please visit: http://www.ililani.media/2018/10/hawaii-supreme-court-oral-argument.html

PART II – Hu Honua power, but at what cost?

The Hawaii Tribune reported last year “...If Hu Honua Bioenergy’s long-delayed biomass power plant were to go online by the end of 2018, Hawaii Electric Light Company’s ratepayers would see increases in their electricity bills, according to an analysis HELCO filed Wednesday with the state Public Utilities Commission of a proposed power purchase agreement”.

Cost efficient, competitive, and clean energy power alternatives to the Hu Honua’s tree-burning power plant for the big island were obvious to everyone, but the vested stakeholders: HELCO and Hu Honua.  Solar and wind options, without or without batteries or pumped storage abound for the Big Island. These clean energy power production alternatives carry none of the pollution baggage and public costs associated with the operation of the Hu Honua Bioenergy plant. 

Hu Honua claims could be selling electricity at 8 cents per kilowatt-hour, and can compete against solar at 9 cents or solar plus storage at 11 cents, even though the total payments to Hu Honua would average over 20 cents per kWh with public-funded Agricultural subsidies, and this estimate only represents the basic power production costs, none of the downstream environmental costs (air, water, climate, infrastructure, and marine costs) paid for by the public and the local environment have been factored.

Hu Honua proposes to use underground injection wells to send the heat through a coastal aquifer and then into the ocean seabed. The discharge of pollutants, including heat, is regulated at the state and federal level by the National Pollutant Discharge Elimination System (NPDES).  With little to no government oversight, permits are granted and valid for five years.

Who speaks for the Hawai’i Island’s residents, marine environment, and aina

To date, motions for a contested case proceeding have been filed by four entities: Pepe‘ekeo Shoreline Fishing Committee (PSFC) which is a committee of the Pepe‘ekeo Community Association, Life of the Land, Sierra Club Moku Loa Group, and Claudia Rohr.

The Pepe‘ekeo  Shoreline Fishing Committee “oppose the injection of over two dozen hazardous chemicals into injection wells, along with wastewater to be discharged. The manufacturer’s labels for each of these chemicals is listed in Hu Honua’s application to build the UIC wells. Most of them are listed as ʻhazardous,ʻ many of them strictly warn ʻdo not expose to groundwater,ʻ and one of them indicates that it is seriously harmful to aquatic life. 

  • “This is of great concern to the PSFC, because we rely on aquatic life for our economic livelihood and also to put food on the table.”
  • “The shoreline we steward begins about two miles south of the Hu Honua facility and ends about four miles north of the facility, at Honomu. Protection of this shoreline and these waters is our primary mission.
  • No more than three miles out are our state buoys where the limu grow, and attract ‘ahi, ono, mahimahi and other fish that the local fishermen catch. The chemicals will impact the fish. If bagasse can travel ten miles to Hilo Bay, those chemicals will travel the three miles to the buoys. The state buoys is where the limu grow and ecosystems flourish.”

Claudia Rohr noted that Hu Honua’s storm water drainage system uses state-owned land designated ʻconservationʻ by the Land Use Commission (LUC) for Outfalls 001 and 004, which falls into two of the categories of action listed in HRS section 343-5(a)(1) and (2), that are not minor activities exempt under HRS section 343-6 or HAR section 11-200-8. Hu Honua’s use of state-owned land designated conservation by the LUC requires that Hu Honua completes at the minimum an environmental assessment before decision-making under HEPA.”

Make no mistake, power plant ash can be toxic, and that degree of toxicity being dependent on the fuel source burned to produce electricity.  Rohr went on to point out… “Ash is not a listed pollutant and Hu Honua’s ash handling procedures and BMPs for ash are not integrated into the draft permit. Inevitably some ash will end up  in stormwater washing ash laden surfaces and flowing through the facility– where ash is loaded into containers under the ash silo, the outside of ash containers, the outside of trucks, on roads, and in the ash container storage area off Sugar Mill Road (where coal was formerly stored).”

“Furthermore, the contaminated soil from the old settling ponds that was never re-mediated is spread out in the area where logs will be transferred to and dropped at the chipper house, causing environmental concerns of health risks from exposure to polluted stormwater.”

The Sierra Club Moku Loa Group represents over 1000 members on the island of Hawaii, and has noted that their members regularly use the Hamakua coastline, and particularly the Pepeekeo cliffs and shoreline, with four miles of public access trails along the coastline for recreation, scientific pursuit to understand biologic and geologic events over time, and for enjoying and gathering of near-shore resources. “…Several of our members live in the Pepeekeo community affected by the Hu Honua proposed bioenergy facility.”

Sierra Club’s concerns can be summed up in just how can the County and the State reconcile the advancement of this project with the further erosion and landslides accelerated by the force of 21.6 million gallons of power plant water discharges being injected in wells located less than 100 feet from the edge of our already unstable cliffs near the Hu Honua plant site’s operation.  Their concerns are with Hu Honua’s contribution to the area’s geologically unstable cliffs, already impacted from stormwater sheeting over the area in recent months, and the corresponding cliff face softened during Hurricane Lane that produced a significant landslide.  Since the landslide on-going cliff erosion remains problem with soil continuing to fall into the ocean, damaging coral reefs in the area and the overall marine ecosystem and serving as a source for mortality in area fisheries.

Public Hearing, November 14, Hilo

The Hawai`i Department of Health has scheduled a public hearing for the Hu Honua water permit on Wednesday, November 14, 2018, at the ‘Imiloa Astronomy Center of Hawai‘i, Moanahoku Hall, 600 Imiloa Place, Hilo.  The two-hour “public information” meeting will start at 10:00 am. Both verbal and written testimony will be received at the public hearing starting at 1:00 pm, and prior to the meeting, comments may be emailed by the close of the business day to cleanwaterbranch@doh.hawaii.gov.

Beyond Kona Powerlines Solar Field

Hawai’i Island Energy At A Crossroads

Hawai’i Island is at a crossroads… reactive public policies and misguided private investment are not helping – enough. 

Just days after the Intergovernmental Panel on Climate Change (IPCC) released a terrifying report confirming the world (in which Hawai’i is not exempt) must act immediately to avoid catastrophic climate change, Hurricane Michael has slammed into the Florida panhandle, supercharged by overly warm ocean water, and showed us another example of the devastation climate disasters can cause, especially to vulnerable communities.

Ok, you’ve heard it before, but it bears repeatingHurricanes are becoming stronger, slower and wetter; recent storm events in Hawai’i bears this out.  And yes, the changes to our climate and increase in global temperatures are primarily driven by human-induced demand for fossil fuel energy and the consequences of that demand and energy consumption.  If you still drive a gas or diesel truck, SUV, or car, then you’re burning fossil fuels and part of the problem.  When you shop at the local grocery store, you’re contributing to the problem, when you turn on your lights with power supplied by Hawaii Electric Light Company (HELCO) or take a shower with DWS supplied water, you’re also part of the problem, and life’s list goes on…

Let’s face it, we are all part of the problem, but the time is now, and long overdue, that we all become part of the solution.

ENERGY PROBLEMS

HELCO’s decision to buy power, and thus enable, the controversial (yet to be activated) tree destroying and wood-burning Hu Honua power plant, is one example of Hawai’i Island being on the wrong path in its energy transition with state-sanctioned renewable energy options that include wood-burning biomass power plants.   The Hu Honua is the kind of power plant project you would expect to be sited in marginally developed areas of the world with limited power options, not Hawai’i.

A recent name change to Honua Ola (Living Earth) from Hu Honua does not change the reality that this form of so-called renewable energy is a bad example of state and county energy policy, and a poor choice by HELCO to meet its 2045 RPS goals, and completely fails to address the growing state of impacts from power plant emissions that are driving climate change.  This problem example is especially true when HELCO has cost-effective clean and renewable energy options available today.

Renewable energy is often falsely linked to low pollution and low climate change impacts.  The current deficiencies in state’s all-in energy policy designed to transition off fossil fuels allows many types of renewable energy and numerous ways it can be applied.  Some reduce and some raise pollution levels, some have lower and some have higher climate impacts, and some, as is the case with wind and solar are zero emissions (clean) energy options.

For Hu Honua, making electricity is all about cutting down Hawai’i Island’s forests to burn for energy, clogging local and inadequate road systems with a supply-chain of logging trucks, polluting the local air shed and producing waste by-products potentially toxic to Hawaii Island’s earth and water assets, altogether, here is an excellent example of taking Hawai’i in the opposite direction of becoming a self-sufficient and clean energy economy.

While HELCO continues to struggle to meet its 100% RPS goal by 2045, historically picking losers instead of winners to replace its costly and polluting diesel-fired power plants, it bet heavily on the Puna Geothermal Ventures plant, now shuttered thanks to Pele. Their announcement to, for the first time, embrace utility scale solar and battery storage area, is welcome news to Puna area residents who can now breathe easier and sleep at night, if and when they return to this very volcanic-active part of Hawai’i Island.

The historic utility grid model of a centralized power plant with miles and miles of cable and other utility infrastructure running in all directions only to serve customers at the end of those cables – represents the weakest point of failure for utility service reliability, and HELCO’s grid operation is no different.

Without power we are quickly back in the stone age.  Hawai’i Island residents also face another consequence from potential major power outages, one that keep emergency planners up at night: it’s a loss of water supply from the Department of Water Supply (DWS) and to its customers throughout the island.  Since January 2017, DWS has had a jaded reliability record, beginning with a series of still not fully explained well site failures. Only one of the five affected well sites has been restored to service in nearly two years.

A prolonged loss of HELCO-supplied power to DWS, by its own estimates, would result in the department’s ability to only operate and supply water to its customers for no more than 24 hour period.  No power to pumps – no water to customers.  There is no rooftop customer solution to this DWS water dependency, except a better prepared DWS operating with under back-up power in the event of the next major storm and an extended power blackout. One power-independent solution, the Lamamilo Wind Farm, currently serving as a dedicated alternative power supplier to DWS.

ENERGY SOLUTIONS

Hawaiian Electric, HELCO’s parent company announced on Oct. 9th, the company’s intention to establish two 30 Megawatt (MW) utility scale solar farms with back-up / load balancing battery systems equal to 240 MW in power storage. This is a major development for HELCO and the advancement of the Big Island’s clean energy future.

Not only are these two new zero-emissions power plants the right choice for Hawaii’s solar rich environment, with the promise to operate at a considerable lower cost to HELCO’s conventional power plants, while providing essential power security (at least their grid connection points) that otherwise would not be possible.   These two solar plants, if approved by the Public Utilities Commission (PUC), will help displace 1.2 million barrels of fossil fuel per year, and hopefully save ratepayers money.

Following in the highly successful footsteps of KIUC (Kauai’s people’s utility), solar, wind, and batteries (in combination) are just arriving in time as utility-scale clean power solutions for HELCO. The utility right now needs help meeting its clean power power RPS requirements, and with community input, making the right power choices — no burning trees required.

Hawaiian Electric, Maui Electric and Hawai‘i Electric Light (HELCO) already have more than 500 MW of renewable energy under contract, in addition to nearly 80,000 private rooftop systems in operation. The missing element for rooftop solar, by Hawaiian Electric standards, has been the four operating utilities seeming inability to accept clean power generation from their customers. These new clean power solar energy producers are not only solving the problem of Hawaii’s dependence on dirty energy, regardless of its source, but they are assisting HELCO and its sister companies in their state-mandated quest to go all-in with renewable energy by 2045.

If you already have solar panels on your rooftop or apartment building, you will clearly understand what follows…

Ask any solar rooftop homeowner, what is their number one priority for going solar. They may say with some pride, it’s being independent of the utility, saving money, doing the right thing, and/or charging their recently acquired Electric Vehicle (many more EV choices are coming to a dealer near you) with fuel-for-free from the sun.

A Tesla Energy (Solar City), customer benefit audit of an average Big Island home installed with a 8KW rooftop solar and four years operating history, looks like this:

  • $10,788 annual energy savings
  • 32.8 tons of CO2 (global warming gases) eliminated by avoiding through self-supply, utility-supplied and fossil-fueled electricity
  • The elimination of the equivalent exhaust pollution emissions, equal to NOT driving an internal combustion engine (ICE) vehicle a total of 77,638 miles

Whatever their reason, Hawaii’s residents and businesses with rooftop solar, especially in combination with battery back-up, find comfort in knowing they are ready to meet the challenges of an increasingly uncertain power security future, with preparedness, reliability, and power on-demand when the next super storm hits Hawai’i.

Hurricane Chart

 

THE BIG PICTURE

Today’s energy decisions that we let others make for us affect our daily lives and have far-reaching consequences to our families, friends, and community.  

Our current assumptions about weather, climate, emergency preparedness and sustainability are now in question as fast-moving global and local developments challenge this thinking on which Hawaii’s private and public dollars are spent.

The world’s oceans continue to warm at a fast rate, coupled to coral die-offs, sea-level rise, more hurricanes, and super storms that are becoming the norm.  This is especially important to Hawai’i, an island state, as hurricanes draw their energy from deep below the ocean’s surface – up to depths of 2,000 meters. The temperature at these depths is measured by Ocean Heat Content, a metric that has soared since 1970, driven largely by four of the world’s major oceans. Last year was the hottest on record.

One thing island residents can rely on is the rising cost of daily living.  The role energy plays is central to that cost of living, and the food, water and power security on which we depend. The technology and system costs associated with clean energy choices, such as solar, wind, and battery storage continue to drop.

When Hawai’i considers alternatives to it current fossil fuel energy dependencies, the cost of kilowatt hour (KwH) delivered, a gallon gas-diesel pumped, to Hawaii’s environment on which we all depend, the sum of Hawaii’s energy costs are greater than its parts.

 

 

 

Dirty Power Plant Emissions

Judge Dismisses Suit Against Hu Honua, County

First reported  in Hawaii Tribune-Herald | Friday, September 21, 2018 — What’s wrong with this legal decision … just about everything that’s wrong with Hawaii’s power plans for a transition to a clean energy economy by 2045.

On one hand, the state is working to free Hawai’i of its fossil fuel dependency and the pollution impacts associated with that dependency. On the other hand, Hu Honua is an example of replacing one bad polluting energy dependency for another.  Dirty Power Plant Emissions

The legal decision failure to stop the Hu Honua biomass plant was built on a combination of government failures:

A Legal Failure – Judge Nakamura states the obvious deficiency in his ill-conceived “dismissal” decision…”The court’s view is that Hu Honua’s request to the PUC does not … for example, request approval of any use of land. … As such, the request does not trigger the requirement of an environmental assessment …”

Hawaii’s State Auditor’s recent findings on Hawaii’s Public Utilities Commission (PUC) actions summed things up perfectly with relationship to Hu Honua and similar decisions… “Although the utility regulators are not vested by law with any specific environmental control responsibility, since utilities and their facilities and operations have a tremendous impact on the environment, and in light of the laws on environmental control, it would be completely unreasonable and unrealistic to consider public utilities in isolation from matters relating to environmental protection.”

A Hawai’i County Planning Failure – This is certainly a failure of procedure and policy by Hawaii’s PUC in fulfilling its regulatory responsibilities, however it does not dismiss Hawaii County’s Planning Dept. allowance of the Hu Honua plant, its basis and supply chain impact of continuously transporting and then burning the island’s trees as feedstock for fuel with social and environmental impacts on the surrounding community and the island’s ecosystem.

A State Regulatory Failure – The PUC original decision to green-light the Hu Honua Biomass Power Purchase Agreement was as a supplier source of electricity for HELCO.  The PUC’s approval of the Hu Honua plant, in effect, totally ignored the climate change impacts of the facility’s operation and thereby sanctioned the destruction of mature Hawai’i Island trees which serve a valuable and significant carbon sink for greenhouse gases. Once these local trees are cut down and then burned as fuel for the HU Honua plant, the stored Greenhouse Gas (GHG) gases are then released back into the atmosphere, along with out combustion emissions.

Hu Honua is a classic example of the disconnect between PUC grants that allow new power plants to be built and operate, but then pollute and impact an island air shed (in this case, Hawai’i Island), and all the while contributing to the very problem the state’s 2045 Renewable Portfolio Standard (administered by the same PUC) is designed specifically to address.

A State and & County Policy Failure – The Hu Honua biomass power plant is also an example of the legislative disconnect within the state’s current renewable energy policy allowing for both clean and dirty (emissions-emitting) power replacements of current fossil-fueled power plants.

Burning trash (so-called waste-to-energy) or cutting down and burning trees for fuel, or for that matter anything else that burns with a smokestack to produce power, and then results in the release of Greenhouse Gases and other airborne pollutant emissions being pumped into the air is bad enough as an energy policy, while permitting at the same time power plant byproducts that include toxic waste incinerator by-products which can contaminate the ground and water sources.

Solar, wind, pump storage, batteries, microgrids, other clean (emissions-free) energy production and grid management options totally eliminate the need for electricity production that relies on dirty energy, and do not pollute Hawaii’s air, water, and land.

Just because Hu Honua replaces the need for burning oil, coal, or gas to produce electricity does not make it better or right for Hawai’i.

HELCO, are you listening?

California Generates Enough Solar Power to Meet Half Its Energy Needs

In a state with a population more than 30 times greater than that of Hawai’i, California is writing the how-to book on converting to a clean and sustainable energy-based economy. Are Hawai’i lawmakers, regulators, and Hawaiian Electric paying attention?

California Gov. Jerry Brown (D) took a shot last week at Sec. of Energy Rick Perry, a former Republican governor of Texas. Remarking on Perry’s view of Texas as an energy powerhouse, Brown said, “We’ve got more sun than you’ve got oil.”

The state’s goal to generate 50 percent of its power from renewables by 2030 – for short period on March 3, 2017 …it did just that! Read more

America’s first wave-produced power goes online in Hawaii

By some estimates, the ocean’s endless motion packs enough power to meet a quarter of America’s energy needs and dramatically reduce the nation’s reliance on oil, gas and coal without adding to global warming emissions.  But wave energy technology lags well behind wind and solar power, with important technical hurdles still to be overcome.

Hawaii would seem a natural site for such technology. As any surfer can tell you, it is blessed with powerful waves. The island state also has the nation’s highest electricity costs — largely because of its heavy reliance on oil delivered by sea. Read more