East Hawaii News

HELCO Proposal Under Fire at PUC Hearing

October 29, 2012, 9:24 PM HST
* Updated October 31, 10:51 AM
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Hawaii Electric Light Co. and its proposed partner, Aina Koa Pono, were roundly criticized by many of the more than 200 people who turned out tonight for public hearings held by the state Public Utilities Commission.

The PUC was in Hilo to hear testimony on two requests by Hawaii Electric Light Co., both of which would raise the cost of electricity it sells.

The regulatory agency has been asked to approve a 20-year contract proposed by Aina Koa Pono to provide HELCO with 16 million gallons of biodiesel a year. The biofuel would be produced from vegetable matter and other biomass at a $450 million plant to be built in Ka`u.

HELCO has also asked the PUC for permission to add a per-gallon surcharge to its customers’ bills to cover the higher cost of the biofuel.

A proposal by HELCO to raise its overall electrical rates by 4.2% was the focus of the second hearing.

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The crowd had thinned out considerably by the time the AKP hearing ended after three hours. Testimony on the rate hike proposal was still ongoing at the time this article was published.

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Another set of public hearings are scheduled Tuesday at 6 p.m. at the Kealakehe High School cafeteria.

HELCO President Jay Ignacio spoke first tonight, telling commissioners that the plan to purchase local biofuel would reduce Hawaii’s dependency on imported fuel and would also serve as a “hedge” against the rising cost of petroleum.

Speaking next, state Consumer Advocate Jeffrey Ono said the proposal would receive heightened scrutiny.

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“Tonight, I’m here to listen to what the public has to say,” he said.

The office of Consumer Advocacy, a branch of the state Department of Commerce and Consumer Affairs, was in support of a previous proposal by AKP that was rejected last year by the PUC.

The company said the current proposal would add from 84 cents to a dollar to the bills of typical customers on the Big Island, which is about half of the surcharge proposed by the company last year which the PUC rejected as being too costly.

Many of those testifying said that the cost of electricity, and the profits of HELCO and its parent company, Hawaiian Electric Co., are already too high.

Noe Kalipi. Photo by Dave Smith.

Noe Kalipi, a member of the Big Island Community Coalition, a recently formed group seeking to lower Big Island electricity costs, said HELCO’s rate of 40 cents per kilowatt hour is four times the national average.

Bill Walter, president of Shipman Co. and another member of the group, said that the proposal “misses the point” when it comes to adding only a dollar or so a month to an electrical bill. He said the high cost of electricity is already making it very difficult for companies to succeed on the Big Island.

“It’s important to remember that there are other alternatives,” Walter said.

Mililani Trask said while HECO President Constance Lau is receiving a reported $5.2 million in compensation annually, there have been house fires caused by candles used by residents who cannot afford to buy electricity.

Others said the technology AKP wants to use, microwave catalytic depolymerization, has never been done on the scale proposed.

“There is no way this proposal can work,” said Ka`u resident Ronald Self. “They’re also trying to finance this proposal on the backs of the people in this state.”

While most of the several dozen people testifying were opposed to the project, about a half-dozen were in favor.

John Cross, a former sugar company executive, was among those testifying in support of the proposal.

John Cross. Photo by Dave Smith.

Cross is the land manager for the Edmund C. Olson Trust, which is one of two landowners looking to lease a total of 12,000 acres of former Ka`u Sugar Co. land for AKP’s project.

Cross said he doesn’t want to see his electrical bill go up, but he wants to see locally generated fuel.

Others testified that Ka`u needs the economic boost the proposal would give.

One woman tearfully said the lack of jobs is breaking families apart and forcing people to move away. In some cases, she said, it has driven people to suicide.

Chris Eldridge, a managing partner of AKP, said the surcharge would be fixed, and if the cost of oil rises sufficiently, the biofuel would become cheaper than fossil fuel.

However, it is not clear at what point that would occur as neither HELCO nor AKP has revealed the price of the biodiesel.

Eldridge testified that HELCO’s customers would pay only if the project moves forward and the biodiesel is delivered to HELCO’s Kona generating plant. He said if for some reason the proposal’s financial backers don’t find the project feasible, it won’t be built.

PUC Chairwoman Hermina Morita told the crowd the deadline for public input on the proposal is Nov. 30.

AKP also wants to produce an additional 8 million gallons of biofuel to be distributed by Georgia-based Mansfield Oil for transportation use, with “preference to Hawaii.”

Also, Aina Koa Pono said today that it had recently commissioned a survey to gauge public support for its project.

The company said the study conducted by Honolulu-based SMS Research and Marketing found that only 10% of those surveyed were already familiar with AKP’s project. Of those, 65% supported the project while 16% did not.

The results were contained in a statement issued by AKP’s public relations company.

According to the statement, Eldridge said the survey was done “to get a sense of the level of acceptance and support” for the project.

“What we learned was that while thereʼs support, we need to do more education and outreach,” Eldridge said. “We have been meeting with folks in Kaʻū and will be increasing our outreach to the community so they are aware of our project.”

After “a description of the project” was provided to respondents, 56% said they were in favor of it and 11% were opposed. Another 33% responded that they did not know enough about it to take a position, according

The statement said the survey consisted of 303 interviews conducted between Sept. 20 and Oct. 3 and had a margin of error of 5.6 percentage points.

The company said the results of the survey were released to coincide with the PUC hearings.

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