Open Letter to Gov. Ige: Municipalize HECO

Dear Governor Ige:

The Case For (Non-Profit) Municipal Power (MP) In Hawai’i. The impending sale of Hawaiian Electric (HE) to NextEra Energy must not be allowed. The time has come for a different energy model in Hawai’i. Corporate HE (not individual workers) is unresponsive, or at best sluggish, to the economic and environmental needs of the people of Hawai’i, and for good reason, HE is not egalitarian, it’s a privately owned power monopoly motivated by profit. HE charges the highest electric rates in the United States. These high rates, the steady drop in renewable energy costs, and the effects of carbon fuel pollution on the planet, have permanently altered the energy landscape, and have made energy sources like roof-top solar a great economic and ethical choice for residential energy consumers. Unfortunately, HE discourages roof-top solar because it’s not profitable for them . Allowing the change of ownership, of a for-profit power monopoly, from HE to out-of-state NextEra, delivers the company to individuals having no endemic connection to Hawai’i. It allows NextEra to control the energy fates of all Hawaiians, the sun, wind, tides, and Pele herself, all for the profit of NextEra. These energy resources are a public trust, belonging to the current and future generations of Hawai’i, not to any private entity. Your obligation as Governor is to uphold this public trust, and I therefore petition you to municipalize HE instead of allowing its sale to NextEra Energy.

Some people will be shocked by the proposition of MP, claiming it’s unworkable or untried. Others will call it Socialism, wagging their tongues about the free market, the word Capitalism spilling reverently from their lips, and they will tell you that competition is the best solution. And some will caution that MP is just “big government” intruding into our lives. Well… to those who are shocked, or wagging, or afraid of government, the truth is simply eye-opening. MP is an old idea, beginning in America as early as 1917, and widely accepted all across this country. MP got its start because, “Many [Americans in the early 1900’s] believed privately owned power companies were charging too much for power, did not employ fair operating practices, and were subject to abuse by their owners (utility holding companies), at the expense of consumers.” Indeed, Americas exploitation of power resources is an older story than MP. A recent example of this exploitation happened in 2000, in the Southern California energy market, which was manipulated by energy traders, who under the guise of the “free market” caused an 800% jump in energy costs, all the while promising that competition would bring the price down. The only SoCal energy provider that did not raise its rates was the LA Municipal Power Authority. The truth is, in the United States, MP is a well tested and continuing success, with “251 publicly owned electric & gas utilities,” and “44 State and Federal” utilities . The entire RED state of Nebraska is a municipal power State . And to erase any doubt, in the State of Hawaii, the “Kauai Island Utility Cooperative (KIUC)” has the following information on their web site :

“(KIUC) is a not-for-profit generation, transmission and distribution cooperative owned and controlled by the members it serves. Headquartered in Lihue, Kauai, Hawaii, the cooperative currently serves more than 32,000 electric accounts throughout Kauai. Committed to reinventing how Kauai is powered, KIUC is
aggressively pursuing diversification of its energy portfolio to include a growing percentage of hydropower, photovoltaic, bio-fuel, and biomass.”

“Goals in the plan include:

• Reducing the average residential energy bill by at least 10 percent over the next 10 years even as petroleum fuel prices are forecast to rise 35 percent. The amount of the reduction could be greater or less depending on the actual price of oil and assumes that KIUC completes its switch to at least 50 percent renewable power generation.
• Reducing greenhouse gas emissions from KIUC operations to 1990 levels by 2023. That would eliminate about 52,000 tons of carbon dioxide emissions annually.
• Holding operations budgets at or below the inflation rate, something KIUC has done since 2010, while maintaining system reliability.”

Municipalization is the legal process whereby the State, County, or City forms its own non-profit utility company. In Hawai’i, this could be done Island by Island, County by County, or State wide. Municipal conversions have been successfully accomplished all around the country, and are the less expensive alternative to for-profit monopoly power. Recently, the City of Boulder Colorado took its for-profit power company municipal, a movement that started with people who wanted to make a positive change in Boulder.

There is a long list of good reasons to implement Municipal Power in Hawai’i:

1. Moral Obligation – Renewable energy resources (solar, wind, tidal, geothermal) are a public trust, belonging to the current and future generations of Hawai’i and not to any private entity. The sun, wind, tides, and geothermal energy are everyones. To be a free people, we must collectively own these resources.
2. Lower Electric Rates – Based upon the existing examples of MP Cities and States, rates will decrease and service will increase. This will especially help Hawai’i Island where rates are $0.45/KWhr, the most expensive in the nation by 3 to 5 times.
3. No Longer Under The Thumb Of A For-Profit Monopoly – NextEra Energy is an out-of-state for-profit company that will hold a monopoly on electric power in most of Hawai’i. They will determine the fate of renewable energy in Hawai’i for the foreseeable future. Promises of lower rates, and a move toward solar, which NextEra has tended to develop in large industrial farms (more profitable for them) rather than roof-top installations, are hollow promises that disappear the minute oil prices increase or their profits are in jeopardy.
4. Accountability & Transparency – A for profit company has no obligation or accountability to the State, or the people of the State, and is not transparent in its spending practice or resource allocation. When creating the MP authority the State can mandate “sunshine” laws.
5. Potential Of Renewable Power In Hawai’i – Of all the US States, the Hawaiian Islands and particularly Hawai’i County have the most potential for renewables. Hawai’i State has limitless quantities of sun, wind, tidal, and on Hawai’i Island, geothermal.
6. The Climate Perspective – To moderate the effects of global warming, renewables are the answer. In a warming world the continued reliance on extractive carbon based energy, or even biofuels is foolish.
7. Future Energy Costs – Oil and natural gas costs only promise to increase. Renewable energy is free. After the initial investment in panels, inverters, windmills, turbines, and geothermal wells, the cost is only in maintenance (which has identical cost counterparts in traditional power plants), but the energy s free. I repeat, no fuel cost, free!
8. Fuel Transportation Costs – There are no transportation costs for renewable energy. Oil and gas have to be brought to Hawai’i, and as the transportation cost of fuel increases so will the cost of the fuel, and so will the cost of electricity.
9. Sustainability and Continuity of the Energy Supply – If there’s catastrophe, a natural disaster, a war, a fuel oil fire, a long freight strike, if power plants are bombed or exploded by terrorists, this will disrupt the carbon energy “pipeline” into Hawai’i. Solar, wind, tidal, and geothermal power are endemic to Hawai’i.
10. Distributed Power Is More Reliable – Especially in the case of roof-top solar, the energy source is distributed, not a point source like a power plant. Distributed sources tend to be more robust than point sources because it’s impossible for any disaster to shut down all roof-top solar panels.
11. Save Existing Electric Utility Jobs.
12. Create New Jobs – From new services that a MP utility can provide.
13. Use Low Cost Green Energy to Attract Industry to Hawai’i – Following the model of Iceland (a country that generates 100% of its energy from green sources (geothermal and hydroelectric), energy intensive clean industries could be attracted to Hawai’i by our low cost green energy. This will generate long term, sustainable, higher paying jobs, and end Hawaii’s dependence on boom or bust low paying tourism sector jobs, the military, and real-estate and building trade jobs, which are dependent on the economy, states of war, and the development of the precious little land that is Hawai’i.
14. Energy Efficiency – Use the MP authority to advertise energy efficiency, and establish a grant program for home owners to receive money to insulate their homes (lower AC cost), convert to solar hot water, electric cars, etc. The Counties could use grant money to purchase LED street lamps, or convert to electric powered or solar fueled (hydrogen) vehicles (which will again lower our dependence on imported oil).
15. Power the HART Train System – Instead of building another oil fired power plant to supply power to the new train system, use the MP authority to encourage roof-top solar to such a degree that one of the existing oil fired power plants is freed-up to supply power to HART. By utilizing rooftop solar, the foot print of the new power plant will be ZERO, no land, no ugly plant, no noise, no fuel delivery system, no atmospheric or oil spill pollution.
16. Include the Geothermal Plant on Big Island in the MP Authority – MP on the Big Island can be used to stop the excesses of Puna Geothermal (PG), which continually vents H2S from its well heads, doesn’t effectively monitor the H2S releases, and blights the land where it sets up or abandons wells. A fund could be set up in the MP system to reclaim the blighted lands, monitor the H2S, end noisy night-time well drilling, and buy out property owners that are too close to wells, giving these land owners the opportunity to move to a home farther from the geothermal wells. Geothermal is a vast resource that should belong to the Hawaiian people and not Ormat.
17. Create Municipal Broadband – By using the power poles to run fiber optic cable, or using the power wires for broadband-over-power-lines, bring high speed Internet to Hawai’i, at speeds comparable to the rest of the developed world but rarely found in the USA. This would encourage information technology (IT) companies to move to Hawai’i (as it has in Chattanooga, TN, and Santa Monica, CA), and change Hawai’i from an IT back-water into the high tech hub of the Pacific. Current average Internet speeds in the USA are 10 Mb/S, at costs from $19.00 to $40.00 per month. The Internet of much of the rest of the developed world runs at speeds of 0.5 Gb/s, at costs of $5.00 per month, with faster speeds up to 1 Gb/S for $35.00 or less per month (depending upon the country).

Renewables are the energy of today, not the energy of the future, because without green energy humanity may not have a future. The United States lags behind the rest of the developed world in implementing renewable (non-carbon, non-nuclear) energy. As Americans struggle to change energy sources, we face propaganda from the extractive carbon energy companies, who promise energy independence, who say there is no climate change due to carbon dioxide, who not admitting carbon is an environmental problem promise “clean carbon technologies,” who have historically blighted the land, polluted the air, rivers, lakes and oceans, and who understandably want to profit from every single drop of oil. We also have to face our own familiarity and acustomness to the carbon economy, and have to confront the problem humanity has with making large long-sighted systemic changes. Quoting Tyson Slokum , “We can do a lot more for cheaper if we focus on how to get off of oil and become more energy efficient. And what we need to be doing is looking at ways to more easily and affordably get alternative[s] like electric vehicles into the market, to invest in ways to make our buildings more energy efficient, [and] to focus on getting 20 million roof top solar panels installed in the next couple of years. These are all the kinds of initiatives that are actually going to lead to affordable energy and energy independence. But of course, the big money in terms of electoral politics is not in roof-top solar, it’s in maintaining the monopoly status of oil industries control over our economy”

In the world outside the United States there are many countries who are successfully moving off carbon and nuclear energy. The country Denmark just announced its pledged to be a totally renewable society by 2050. Germany, the most successful economy in the world, is already 25% renewable energy. Iceland is a totally renewable energy country, deriving power from approximately 80% geothermal, and 20% hydroelectric power from glacier melt.

None of what I’ve proposed is new. Every idea has been gleaned from successes in the USA and the world. As a new governor, not elected by a majority of the electorate, at a time when the population does not trust and is disconnected from government, a government that most assiduously serves the rich and exiguously serves the poor, you need a people’s issue. If you said to your fellow Hawaiians, we have tried a for-profit power monopoly and it did not work, so now we are creating a non-profit Municipal Power Authority to substantially lower your energy bills and enrich the State, well… that’s big Aloha. To do this you must eliminate the profiteers, uphold the “public trust,” and for the “collective good,” return the sun, wind, tides, and Pele herself to the people of Hawai’i.

I look forward to your response, and your action on Municipal Power.

Best Regards,
Larry Pollack
Hilo, Hawai’i

2 replies
  1. marco mangelsdorf
    marco mangelsdorf says:

    How about the County of Hawaii owning and operating the electric utility?
    I believe that a better case can be made for member-owned and controlled electric cooperative compared to the muni model.

    In a cooperative the ratepayers, utility customers, own, control and elect the members of the board of the utility. In a municipal utility, or muni, the ratepayers are indirect owners as they have no direct ownership; the municipal government actually is the owner. In Hawaii, the muni would likely be a subdivision of the County of Hawaii. In a cooperative, the members directly own the equity in the utility. They directly elect the board. The cooperative is a private corporation, not a governmental body. In Hawaii, any muni utility, of which there are none now, would be completely exempt from regulation by the HPUC under HRS 269, which is the statute that regulates all utilities.

  2. James Weatherford
    James Weatherford says:

    Yeah, Marco. I was left wondering from this writing what the distinction was between a “muni” and an electric cooperative. The Kauai cooperative seemed to be given as an example above??
    As for a cooperative, my own experience with a rural electric cooperative (in Kentucky, using TVA power) was reasonably favorable. Like any cooperative, keys to success are quantity and quality of membership participation and competent management.

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