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| `Aina Koa Pono would use pasture lands between Pahala and Na`alehu, clearing them and attempting to grow biofuel crops. Photo by Julia Neal |
They pointed out that electric bills would rise and that Hawai`i Island residents, businesses and government already pay the utility company more than three times mainland rates; expensive electricity holds back economic development and burdens the poor. They said the AKP model could “crowd out” other less expensive ways to make electricity. They contended that more research needs to be done to prove the feasibility of the AKP plan to grow biofuel crops in Ka`u and to prove that a refinery can be built off Wood Valley Road near Pahala without risks to the community. They questioned the plan to use electric bills to “jump start” and finance the unproven AKP plan.
Testimony came from the county’s energy coordinator, William J. Rolston. His background includes projects administrator and manager of the Natural Energy Laboratory of Hawai`i Authority – the facility near Kona Airport. At NELHA, he facilitated projects involving solar photovoltaic, solar thermal, Ocean Thermal Energy Conversion and a net-zero energy facility with seawater air conditioning. He developed a micro-grid master plan for NELHA. Previously, Rolston worked as a director in charge of research for institutional and private investors on energy industry developments for Gilmartin Capital, studying renewable energies, as well as oil and gas supply and demand. At Gilmartin, he supervised 11 analysts on feasibility and investment potential of energy companies and projects. He worked at Janus Mutual Funds. He served as project engineer for Siemens-Westinghouse Power generation, providing technical support for wind, photovoltaic, solar-thermal and geothermal projects. Rolston has a degree in mechanical engineering and an MBA in marketing and finance.
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| William J. Rolston, Hawai`i County's energy coordinator, said microwave depolymerization is an "unproven technology." |
When asked, “What have you concluded with respect to the reasonableness of the AKP Biofuel Contract?” the county’s energy coordinator responded that the AKP proposal “is not reasonable and should not be approved by the Commission based on its excessive biofuel price, long-term contract, unproven technology, lack of due-diligence, associated negative externalities (including ‘crowding- out’ of better alternatives) that will impact the community and environment for many years to come.”
Rolston testified that “dramatically increased prices for electricity have been experienced by Island of Hawai`i residents over the past several years. These high electricity prices come at a time when the population is suffering economically, unemployment is at record rates and disposable income is shrinking dramatically. In response to these high prices, residents have cut back on their electricity use (as shown by HELCO statistics). Wealthier residents that are able to install solar panels, sign-up for net-energy-metering agreements and pay for energy efficiency measures are doing so at exponential rates. Unfortunately, the shrinking number of kilowatt-hour sales and residents that can; installing solar panels to opt-out of the cycle of high prices, puts the burden of the rising rates disproportionately on the low-income customers.”
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| Rolston said the burden of rising rates is disproportionately placed on low-income customers who cannot afford alternative energy sources. |
He pointed out that “the County of Hawai`i Department of Water Supply, the largest single customer on the HELCO system (approximately five percent of Utility kWh sales), has experienced a total electric bill cost increase (23 percent per kwh over calendar year 2011); these costs are also directly passed on to water ratepayers.
Rolston concluded that “this Biofuel Supply Contract, with it excessive price contract (if approved), would fall on remaining electricity ratepayers (that substantially pay for utility power) and negatively impact the lower-income population segment struggling for basic necessities.”
When asked, “What have you concluded with respect to the public interest of the Biofuel Supply Contract?” the county energy coordinator testified: “Island of Hawai`i electricity prices are 35 percent higher than those on O`ahu and exceed the mainland average by more than 300 percent (through Dec. 31, 2011). Projects that could lower the cost for utility ratepayers could be “crowded-out” over the time period allowed for this experimental project, and the ratepayers would be burdened by subsidizing a biofuels technology that is largely unproven. Committing to a twenty-year supply contract that represents the largest contract for biodiesel on this island (16 million gallons per year), this contract effectively crowds out alternative, potentially more cost-effective and more proven biofuels technologies; ultimately undermining the future for the Island of Hawai`i ratepayers. Making biofuel price comparisons to short-term contracts already approved in the state that are experimental and blend with fossil fuels are not comparable to this long-term premium contract and the long-term financial consequences that can result from this large-scale unproven technology.”
Rolston concluded that “this Biofuel Supply Contract, with it excessive price contract (if approved), would fall on remaining electricity ratepayers (that substantially pay for utility power) and negatively impact the lower-income population segment struggling for basic necessities.”
When asked, “What have you concluded with respect to the public interest of the Biofuel Supply Contract?” the county energy coordinator testified: “Island of Hawai`i electricity prices are 35 percent higher than those on O`ahu and exceed the mainland average by more than 300 percent (through Dec. 31, 2011). Projects that could lower the cost for utility ratepayers could be “crowded-out” over the time period allowed for this experimental project, and the ratepayers would be burdened by subsidizing a biofuels technology that is largely unproven. Committing to a twenty-year supply contract that represents the largest contract for biodiesel on this island (16 million gallons per year), this contract effectively crowds out alternative, potentially more cost-effective and more proven biofuels technologies; ultimately undermining the future for the Island of Hawai`i ratepayers. Making biofuel price comparisons to short-term contracts already approved in the state that are experimental and blend with fossil fuels are not comparable to this long-term premium contract and the long-term financial consequences that can result from this large-scale unproven technology.”
Rolston said that, “It is well-known on this island that electricity-related expenditures are a particular burden on low-income households because they cannot easily reduce consumption in the face of rising prices. Consequently, low-income households tend to spend a higher percentage of their disposable income on energy than other households. Hawai`i County (compared to Maui, Kaua`i and Honolulu Counties) has the largest population of low-income residents, the lowest median household income, the lowest median family income and the highest poverty rate in the state. Many of these ratepayers are struggling with their ever-increasing electric bills; this would add to that burden. On the Island of Hawai`i, low-income families spend more than twice as much of their income on electricity compared to the state average.”
When asked, “What have you concluded about the associated externalities of the Biofuels Supply Contract?, the county energy coordinator testified: “County of Hawai`i believes that this large-scale project being placed in a small town setting has significant negative externalities,” and said they should be “further explored before deciding upon this project.
“Externalities include: fuel spills or leaks associated with fuel storage or transportation of the biofuel, traffic congestion on the very narrow-curvy roads from Ka`u to Keahole Power Plant, a negative impact on tourism and future land use in the Ka`u area, roadway damage and increased noise levels. There is an overall quality of living for residents who live around the proposed project area or continue to be attracted to live there because of the small town setting. These are negative externalities based on the project’s success. There would be more negative externalities associated with the project’s failure including restoration of the area and environmental clean-up. The information we have to determine this project’s chances of success is based upon a large amount of unknowns, and failure is a distinct possibility.
When asked, “What have you concluded about the associated externalities of the Biofuels Supply Contract?, the county energy coordinator testified: “County of Hawai`i believes that this large-scale project being placed in a small town setting has significant negative externalities,” and said they should be “further explored before deciding upon this project.
“Externalities include: fuel spills or leaks associated with fuel storage or transportation of the biofuel, traffic congestion on the very narrow-curvy roads from Ka`u to Keahole Power Plant, a negative impact on tourism and future land use in the Ka`u area, roadway damage and increased noise levels. There is an overall quality of living for residents who live around the proposed project area or continue to be attracted to live there because of the small town setting. These are negative externalities based on the project’s success. There would be more negative externalities associated with the project’s failure including restoration of the area and environmental clean-up. The information we have to determine this project’s chances of success is based upon a large amount of unknowns, and failure is a distinct possibility.
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| Rolston said Hawai`i Island is fortunate to have geothermal resources to create electricity. |
When asked, “What ratepayer risks should the commission consider in evaluating the Biodiesel Supply Contract? What quantitative or qualitative values should be assigned to such risks?” Rolston replied, “For the year ending Dec. 31, 2011, HELCO had already achieved an RPS penetration level of 49.9 percent, with 41.1 percent of its energy generated from renewable resources (on an hourly basis it has reached 69.5 percent and on a weekly basis has reached 51.6 percent). This exceeds the state’s Renewable Portfolio Standard goal of 40 percent (by the year 2030), and while we are proud of this achievement, it has come with a high-cost per kWh. HELCO's own statements attest that the HELCO grid has among the highest percentages of renewable energy penetration in the world, but with such high penetrations, the discussions should be moved to mitigating the high cost associated with that. Lower-cost solutions, such as the recently added eight-megawatt geothermal energy (not linked to oil), moves us toward a lower cost of electricity on an island fortunate to have this renewable resource. De-linking existing Renewable Power Purchase Agreements from oil (with the existing Independent Power Producers) on this Island should be a more productive course and less intrusive than constructing and experimenting with an unproven, high-cost biofuels technology project. Energy efficiency and demand response programs should be more cost-effectively and aggressively pursued, setting a more beneficial trajectory for an island that has achieved such high renewable generation. The most immediate ratepayer risks are pursuing this biofuels supply contract rather than more cost-effective paths to lower our utility rates.”
When asked, “To what extent, if any, will utility customers assume any economic risks, if the biofuel is not truly a ‘drop-in diesel’ or a substitute fuel or in the event that HELCO’s Keahole power plant must be subsequently modified, or operations altered, to accommodate biofuels?” the county energy coordinator testified: “If this project is approved, with its high cost and ratepayer subsidy, the utility customer should assume no further economic risks if the biofuel is not truly a ‘drop-in diesel’ or a substitute fuel or in the event the HELCO’s Keahole power plant must be subsequently modified, or operations altered, to accommodate biofuels. The decision to negotiate and promote the prior biofuels supply contract (PUC Docket No. 2011-0005) and this current one (PUC Docket 2012-0185) has been led by the utility.”
When asked, “To what extent should utility customers be required to provide financial assurances for indigenous biofuel development, and if so, under what terms and conditions,” the county energy coordinator testified:
“The role of the ratepayer is not to provide financial assurances for “jump starting” a local biofuels industry. At 40+ percent Renewable Generation on the Island of Hawai`i with its diverse, already-proven, cost-effective renewable resources, the utility customers on this island should not be required to provide financial assurances for higher-priced biofuel development. The ratepayer has already carried a high financial burden for supporting high penetrations of renewable energy they thought was meant to achieve lower-priced electricity on this island. At the highest electricity rates in the nation, the Island of Hawai`i utility customer is already burdened with enough financial liability. When biofuels and biomass projects can compete to effectively lower the cost of utility customer bills, we will consider those projects, provide support and help make them happen.”
See more testimony from the county on AKP in tomorrow’s Ka`u News Briefs. The entire testimony can be read at www.puc.hawaii.gov. Click on `Aina Koa Pono and on documents to read the history of this case.
A HEALTH FAIR TAKES PLACE AT MILOLI`I tomorrow from 10 a.m. to 2 p.m. for anyone to receive health screenings for blood pressure, diabetes, cholesterol and weight. Education will be on diabetes, women’s health, heart health and pharmacy. Family fun will include a keiki sport camp, Easter Egg Hunt, raffle giveaways and keiki crafts. The event is sponsored by the University of Hawai`i-Hilo College of Pharmacy PHI DELTA CHI Hawai`i Chapter.
DISCOVERY HARBOUR COMMUNITY CENTER holds its bi-annual rummage sale to benefit the volunteer fire department today and tomorrow from 9 a.m. to 4 p.m. and Sunday from 9 a.m. to 1 p.m.
TOMORROW’S CONCERT AT Pahala Plantation House features piligrass music with Aloha Bluegrass Band and Keoki Kahumoku performing at 7:30 p.m. Suggested donation is $15 to $20. For more information, call 938-6582.
SUPPORT OUR SPONSORS AT PAHALAPLANTATIONCOTTAGES.COM AND KAUCOFFEEMILL.COM. KA`U COFFEE MILL IS OPEN SEVEN DAYS A WEEK.
“The role of the ratepayer is not to provide financial assurances for “jump starting” a local biofuels industry. At 40+ percent Renewable Generation on the Island of Hawai`i with its diverse, already-proven, cost-effective renewable resources, the utility customers on this island should not be required to provide financial assurances for higher-priced biofuel development. The ratepayer has already carried a high financial burden for supporting high penetrations of renewable energy they thought was meant to achieve lower-priced electricity on this island. At the highest electricity rates in the nation, the Island of Hawai`i utility customer is already burdened with enough financial liability. When biofuels and biomass projects can compete to effectively lower the cost of utility customer bills, we will consider those projects, provide support and help make them happen.”
See more testimony from the county on AKP in tomorrow’s Ka`u News Briefs. The entire testimony can be read at www.puc.hawaii.gov. Click on `Aina Koa Pono and on documents to read the history of this case.
A HEALTH FAIR TAKES PLACE AT MILOLI`I tomorrow from 10 a.m. to 2 p.m. for anyone to receive health screenings for blood pressure, diabetes, cholesterol and weight. Education will be on diabetes, women’s health, heart health and pharmacy. Family fun will include a keiki sport camp, Easter Egg Hunt, raffle giveaways and keiki crafts. The event is sponsored by the University of Hawai`i-Hilo College of Pharmacy PHI DELTA CHI Hawai`i Chapter.
DISCOVERY HARBOUR COMMUNITY CENTER holds its bi-annual rummage sale to benefit the volunteer fire department today and tomorrow from 9 a.m. to 4 p.m. and Sunday from 9 a.m. to 1 p.m.
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| `Ukulele builders will be the youth this weekend, making their instruments out of koa. Photo by Julia Neal |
`UKULELE BUILDING WORKSHOP takes place today and tomorrow with about 35 students using koa to create their instruments. The workshop is sponsored by Center for Hawaiian Music Studies and is held at Pahala Plantation House.
TOMORROW’S CONCERT AT Pahala Plantation House features piligrass music with Aloha Bluegrass Band and Keoki Kahumoku performing at 7:30 p.m. Suggested donation is $15 to $20. For more information, call 938-6582.
SUPPORT OUR SPONSORS AT PAHALAPLANTATIONCOTTAGES.COM AND KAUCOFFEEMILL.COM. KA`U COFFEE MILL IS OPEN SEVEN DAYS A WEEK.
ALSO SEE KAUCALENDAR.COM AND FACEBOOK.COM/KAUCALENDAR.