Advocates For Consumer Rights

HAWAI`I ENERGY 101

Kahe Point Power Plant

Kahe Point: Hawaiian Electric Company’s largest plant with a generating capacity of 650,000-KW using a reheat steam turbine generator.

What does a new power plant cost these days? Learn more about HECO’s existing infrastructure HERE.

One of the more important things the interested consumer would want to understand about the generation and distribution of electricity in our islands is the fact that Hawai`i is a series of “stranded markets.” Simply put, our various islands have no access to neighboring electric grids when major outages occur. Without a neighboring grid, when an extraordinary mechanical failure or catastrophic weather event occurs in Hawai`i, sometimes the power goes off.

Hawaii’s bumpy transition from fossil fuels to what’s now being called “clean energy” or “renewable energy” is a very complicated and expensive proposition with many, many unknowns. And Hawaii is not alone, because many other states (and indeed countries) are grappling with the virtual seachange in electric power generation and distribution required to wean us off of the fossil fuels contributing to (some say “causing”) the dramatic climate changes we are now witnessing.

TO SET THE STAGE, in 2015, the Hawaii State Legislature passed and Governor David Ige signed House Bill 623 “Relating To Energy Standards.” This law is “the most ambitious” commitment to date by any state in the nation with the worthy goal of “moving Hawaii to 100% renewable energy by 2045.” Read the details HERE.

WHAT WILL THIS TRANSITION COST YOU?

The first hint about what the failed NextEra-HECO “merger” would have cost was dropped on Monday, November 9, 2015, after Eric Gleason, President of NextEra Energy Hawaii LLC told a Waikiki business luncheon, “getting the state off its dependence on oil would cost $30 billion over the next three decades.” This was later reported in a November 11, 2015, Honolulu Star-Advertiser article, “$30 billion estimate burdens consumers, NextEra critics say.” Read that HERE.

Inflammatory headlines aside, it’s important to note that NextEra President Gleason had further explained in the above article that, “the full $30 billion would not be paid by ratepayers; that it would be paid by a mix of the utility and third parties; customers; solar and other distributed-energy companies; and independent power producers.” When the subject of  “$30B over 30 years” was broached during day 1 & 2 of the PUC hearings, Gleason pointed out that HECO is currently spending $1.4B annually for oil and that $30B figure might be cut in half after HECO’s aging oil-fired generators are upgraded or replaced. Whatever the final number, the transition to clean energy anywhere is proving to be very costly. The price tag in Hawai`i is bound to be a jaw-dropping number for all the reasons we hapless island consumers understand.

One thing we do know for certain is that every dime invested in the much-needed new infrastructure will ultimately be paid for, one way or another, by Hawaii’s consumers aka “ratepayers” via our monthly electric bill. With this in mind, we must be very careful about what we might wish for and not be steamrolled into taking one position or the other regarding the NextEra-HECO sale. This is a time to listen and learn. To learn more about how our electric bills are calculated and what corporate debt (bonds) has to do with it, read the fascinating February 2015, article “Which NextEra Will Hawaii Get?” by Hawai`i Business Magazine writer Dennis Hollier.

The Hawai`i Electric Company (HECO), which includes Maui Electric Company (MECO) and Hawaii island’s Electric Light Company, (HELCO) is the largest supplier of electricity in Hawai`i, providing electric power to 95% of Hawaii’s population.

Kauai is the only island not serviced by HECO. The consumer-owned Kauai Island Utility Cooperative (KIUC) also has the responsibility of managing the company. A public debate has begun over the possible wisdom of HECO’s three island companies being converted into local electric cooperatives. It should be noted that the Kauai co-op has 30,000+ accounts while HECO services over 300,00 accounts on Oahu, 70,000+ on Maui and 83,000+ on Hawaii Island. Whether or not startup co-ops in Hawaii would be able to borrow the $4.3B needed to match the NextEra offer — plus somehow acquire the huge amount of additional investment needed to convert and upgrade Hawaii’s “antiquated electrical grid and oil-fired power plants” remains to be seen. More about the nation’s electric co-ops HERE

ENERGY STORAGE?

Is the goal of “100% renewable energy by 2045” possible or just wishful thinking — given the current energy storage technologies? We know how to use the Sun and the winds for energy generation but we do not yet have the technology capable of storing energy on the scale needed for the “gap times” — at night, on cloudy days when the sun’s power can’t be tapped or when there are no winds. It’s this inherent intermittency of solar and the current lack of the needed energy storage technology that requires the massive investment in a smart grid and upgraded or new “firm” power plants in order to keep our electric power supply stable at all times as the penetration of solar continues to grow. Read the November 29, 2015, Star-Advertiser article Energy storage options will be state’s next frontier HERE

The storage problem might be eventually overcome, given the intense research now taking place with international companies such as Tesla and their recently introduced Powerwall. One of Hawaii’s resident billionaires Henk Rogers is conducting his own research in a solar laboratory located on his Big Island ranch near Kona. Read Henk Rogers And His Quest For Energy Independence HERE. Henk Roger’s Blue Planet Foundation is one of the more-strident and well-funded organizations who worked against the NextEra purchase of the Hawaiian Electric Company.

Aside, of the new Tesla Powerwall, a May 1, 2015, Forbes Magazine article headline reads, “Why Tesla’s Powerwall Is Just Another Toy For Rich Green People” and Bloomberg News (May 11, 2015) says the Tesla Powerwall “doesn’t make economic sense.” Read Bloomberg HERE.

WHAT ABOUT BATTERY TECHNOLOGY?

Without going too deeply into the details and disposal problems of any kind of storage batteries, one must be aware of “ …a future shortage of cobalt, nickel, and lithium …” and the problems of recycling of what we are currently using. This is already a massive problem and sending America’s used batteries to Mexico for recyling (as is now happening) will not solve the problems. Read the February 26, 2016 Washington Post article, “America’s car-battery waste is making Mexican communities sick” HERE. For a primer on batteries, this WIKI article is worth a read.

In any event, at this point in time, electric storage technology remains very expensive; out of reach for Hawaii’s average working family who need it the most.

Because of the energy storage situation, we consumers are facing some immediate dramatic lifestyle changes in the transition to renewable energy — and soon — if HECO’s “time-of-use program” is any indication. The proposal, filed at the PUC on November 13, 2015, laid out HECO’s plan for an optional “time-of-use” rate program “for customers on Oahu, Hawaii island, Maui, Molokai and Lanai. Under the time-of-use proposal, customers who opt in to the program on Oahu would pay 11.04 cents per kilowatt-hour from 9 a.m. to 4 p.m., 36.20 cents from 4 p.m. to midnight and 13.68 cents from midnight to 9 a.m.” Try think about this for a few minutes. Read the complete article HERE.

To further complicate the matter, yet another thorny situation has developed. Read the November 25, 2015, Star-Bulletin article, Isle solar power industry’s demise expected via cap on rooftop systems HERE.

While the mainland has been moving away from coal to cleaner burning natural gas, Hawai`i cannot access the web of natural gas pipelines that criss-cross the mainland. For the time being, we’re stuck with using expensive low-sulfur oil to power our old-school power plants. Until the storage problem is solved, a cleaner-burning transition or “bridge fuel will be needed to get us to a renewable energy foundation — and in order to meet the looming U.S. Environment Protection Agency’s Clean Power Plan.

Watch for the next installment of this Hawai`i Energy 101 update which will shed more light on the feasibility of cleaner burning transition/bridge fuels such as liquified natural gas [LNG] and methanol.

If you want an informative “crash course” about the HECO sale, the following archived PBS Hawai`i TV program Insights might help you better understand Hawaii’s many energy challenges and the failed $4.3B sale of HECO to NextEra Energy. Mahalo to moderator and veteran Hawaii journalist Daryl Huff for asking many “hard” questions and for putting it all in layperson’s language we can all understand.

insights

10/22/2015
What is the Future for Hawaii’s Largest Power Utility?

“NextEra Energy says it will provide a more affordable clean energy future for Hawaii, but opponents have concerns over how a merger might impact consumers and Hawaii’s renewable energy goals. The pending deal has also prompted some to examine the merits of other available options, such as utility cooperatives or county-run utilities.” View the video HERE

PANEL

Alan Oshima,
President and CEO of Hawaiian Electric Company

Jeffrey Ono
Executive Director, Division of Consumer Advocacy State of Hawaii

Eric Gleason
President, NextEra Hawaii

Representative Chris Lee
Chairman, Hawaii State House Committee on Energy & Environmental Protection

InsightsEnergyPanel

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