Wednesday, November 10, 2010


Governor Neil Abercrombie’s Opportunity to Change Energy Policy

By Henry Curtis

Governor Neil Abercrombie will pick a new head of Hawai`i Department of Commerce and Consumer Affairs (DCCA).

This new cabinet member will pick the Executive Director of the Division of Consumer Advocacy (DCA).

This person, the Consumer Advocate, represents you, the public, in all proceedings before the Hawai`i Public Utilities Commission (Commission).

These proceedings focus on electric rates, transmission line location, coal, climate change, air pollution discharges, anything involving the electric utility, or any other utility.

Even if you could find their office, which is located in a downtown building, and is hidden within the building in a highly irregularly shaped hallway maze which requires you to go through two closed hallway doors, the office itself is locked to keep the public out.

As a rule the Consumer Advocate dislikes cross-examining HECO in regulatory cases, preferring to work behind the scenes and filing joint settlements with the Commission.

The following are recent quotes made by the Consumer Advocate during the Lingle Administration. As far as the public record is concerned, all of the statements below are still the official position of the Consumer Advocate.

* “Without knowing the specific facts under which global warming is expected to occur, and whether the islands will get impacted, as well as the extent of such impact, if any, the Consumer Advocate is unable to determine the reasonableness of basing Maui’s future on oil.”

* “People concerned with the impact of biofuel production have pointed to the ‘food versus fuel’ observation as one of the criticisms of biofuel production internationally. Whether the ‘food versus fuel’ critique is an ‘issue of great concern around the world’ is a judgment call subject to each person's individual beliefs and personal outlook on the subject. The Consumer Advocate declines to qualitatively describe the relative importance of the issue beyond acknowledging that the critique does exist.”

* “Dedicated biomass-to-electricity crops, biofuels produced from agricultural crops, it’s by-products, or waste products, would have an environmental benefit of being net zero in the overall carbon balance.”

* "Although ethanol presently is not being produced in the State as fuel, a recent advertisement by HECO indicates that six ethanol plants have been proposed for the islands of Oahu, Maui, Kauai and the Big Island; and that three of Hawaii's largest land owners have formed a partnership to research the best crops and technology to make biofuels locally. Thus, there seems to be significant interest by several companies to install ethanol plants in the State."

In October 2008 the Consumer Advocate and Hawaiian Electric Company (HECO) signed an Energy Agreement which states in part:

* “It is necessary to transmit the wind power produced on the other islands by undersea cable systems to Oahu.”

* "The parties [HECO-Consumer Advocate] are looking to the development of a series of projects including, but not limited, to ...Hamakua Biomass (25 MW) or Hu Honua Biomass (22 MW)"

* “The parties will support continued federal tax support for biofuels and will seek their extension to cover the full range of biofuel products including crude palm oil (CPO).”

* “Guiding principles in GHG [greenhouse gas] reduction measures include ... a preference for incentives and market-based measures over regulatory penalties”

* “EPA’s Regional Haze Rules, designed to protect visibility in National Parks, are ambiguous as to the effect of naturally occurring haze. Controlling visibility impairing emissions from Company [HELCO’s electric generation] units would be fruitless and very expensive.”

* “Allow electrical generation units to switch to green fuels (biofuels) without triggering New Source Review (NSR). Fuel switching could result in increased emissions (primarily NOx), potentially triggering NSR. Costs of NOx control on existing units switching to biofuels would be exorbitant with no appreciable benefit”

* “The parties further agree to request Commission suspension of the current intra-governmental wheeling docket”

* “Because of the uncertainties of GHG [greenhouse gas] legislation at the State and federal level, the parties agree to suspend any decision to implement a State REC [renewable energy credit] system until such time when these legislative actions become clear”

HECO and the Consumer Advocate filed a joint statement in the Feed-In Tariff (FIT) proceeding: “One of the greatest challenges to maintaining system reliability and power quality is uncertainty regarding the addition of new resources onto an island grid. One way to reduce the level of uncertainty is to set certain reasonable limits upon the size and system penetration of FIT resources during a particular period of time.” The Commission adopted this approach, limiting penetration of renewable energy.

Why does HECO need a Utility Advocate if they have all the marbles?

Henry Curtis

# # #


Good nuggets.

If Neil Abercrombie pulls a Barrack Obama and appoints corporate shills to his cabinet I am going to "SCREAM".

Although the Net Energy Metering program is fairly straightforward, the utility has pulled out all the stops in sending their minions of lawyers and pseudo experts to craft the FIT into a confusing, ambiguous, document that will scare even the screfullest of readers. A punitive $25 per month fee further discourages the implementation.

The term of the contract is, well maybe, 20 years where it appears that the "customer" would be locked in to receiving the same rate as in year one. Even if oil had doubled 3 times in that period, i.e. and 800% increase in energy cost, but HECO would be paying the rate rate to the FIT generator. Buying at .21, and selling at $1.60. They would be making out like bandits.

More stuff about Photovoltaic and Hot Water at this blog---

economics of biofuels from a farmers perspective
There are close to 286 pounds in a barrel of oil. When that barrel of oil sells at $80, each pound of oil is worth 28 cents. If the farmer needs to grow 4 pounds of stuff to make one pound of liquid, the farmer can get no more than 7 cents per pound. Forget it!!

If the farmer needs 5 times more than 7 cents, then the oil must sell for 5 times $80 per barrel or $400 per barrel to send the proper price signal. By then we'll all be toast.

This is not rocket science.
Richard Ha

The Hawaii Clean Energy Initiative low estimation is that there will be 140,000 acres in biofuel production. To be very efficient, mainland folks estimate that they need a 50 mile radius of flat land with sunshine and water with the refinery in the center to be competitive. The closest any operation can come to duplicating this is HC&S with 35,000 acres. But, it is not clear that HC&S can be sucessful. So, the amount of actual biofuel production could be close to zero if HC&S cannot do it.
Richard Ha

About food and fuel. If the farmer makes money the farmer will farm. If the price to grow biofuels is higher than growing cucumbers, the farmer will quit growing food to grow fuel. Farmers have aspirations for their kids. Why do we expect they would not choose fuel over food? It is not rocket science.
Richard Ha

In modern times, the economy has taken, taken, taken and the culture has given, given, given.
We all know that it will be the folks on the lowest rungs of the economic ladder who will get their lights turned off first if we choose expensive options for generating electricity--too often they will be Hawaiians. Geothermal is the cheapest source of "base power", it is proven technology, it has a smaller foot print than biofuels by far and it emits no greenhouse gases. In this changing world of high priced oil, this gift from Pele, can allow the economy to give, give, give so the culture can receive, receive, receive. Under these conditions, the Aloha spirit will flourish. This is not rocket science.
Richard Ha

Energy Return on Investment (EROI) This is the energy that it takes to get energy--not dollars.
In the 1930's to get a hundred barrels it took the energy in one barrel. In the 1970's it was 30 to 1. now, it is getting closer to 10 to 1. Clearly the trend is not good. People who do thses kinds of analysis say that we need a ratio of 3 to 1 to keep the oil infrastructure running. The ratio for biofuels is less than 1.5 to 1. Easter Island comes to mind. The ratio for geothermal is around 10 to 1 but it will never decline. This is not rocket science.

Six ethanol plants have been proposed. HC&S had the opportunity to do ethanol. They had the best circumstance to be sucessful. They decided not to. That means these six ethanol plants starting from scratch all have to be subsidized to survive. This will result in expensive electicity. And, when the subsidies run out they will close up and go away. Why don't we go straight to geothermal instead?It's cheap, simple, environmentally friendly,takes care of the rubbah slippah folks as well as the rest of us and would last for 500,000 to 1,000,000 years. This is not rocket science

The thing that bothers me about geothermal is, the chemicals injected through the injection wells into Pele to keep the pipes from corroding, I think they even used the word, fracking. I know there is a huge uproar on the mainland in regards to fracking and a movie has even been made about it. According to what I've read, fracking is poisoning groundwater in the communities where it is used including home water facets bursting into flames. Richard, can you explain the difference between Hawaiian fracking and mainland fracking? I know that they seem to have worked out most of the earlier problems with geothermal but the idea of injecting chemicals into Pele is concerning.
I know the geothermal company is looking for investors to expand. I've heard some of the five spots on the Big Island are not "as hot" as necessary, thus not money makers. I'm concerned that state money may be used for a possible boondoggle.
As to the statement geothermal "would last for 500,000 to 1,000,000 years", I've read that some California wells are petering out already.

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