Image: Matthew kain

Environment / “…pursue energy independence.”–Gov. Neil Abercrombie

Hawaii Electric Light Company (HELCO), Hawaiian Electric Company (HECO), and Maui Electric Company (MECO)–all owned by Hawaiian Electric Industries, Inc.–have come up with a proposal to produce biofuel. On Jan. 6, 2011, the HECO companies applied to the Public Utilities Commission (PUC) for approval of Docket No. 2011-0005, in which their plan is detailed.

The idea of using sustainable biofuels to produce energy is appealing at first, but further scrutiny raises questions, particularly with regard to the upward impact on our utility bills.

According to the proposal before the PUC, the HECO companies are seeking to advance Gov. Abercrombie’s “New Day” plan, which dictatees: “Hawaiʻi’s most important economic enterprise right now is to pursue energy independence.” The companies are also seeking ways to meet the state legislature’s mandate calling for them to provide no less than 15 percent of their energy through renewable sources by 2015. For this reason, HELCO has entered into a 20-year Biodiesel Supply Contract with a company called Aina Kona Pono-Ka’u LLC (AKP), which will provide them with 16 million net U.S. gallons annually of locally produced biodiesel.

The biodiesel will be produced in a facility on the island of Hawaii by way of a microwave catalytic depolymerization technology (think vaporizing, not burning), using various forms of biomass (e.g. eucalyptus, Christmas berries, wood chips), all of which is to be grown, harvested, and converted to fuel on the Big Island.

Beneath the Green Veil

The contract calls for the AKP biorefinery to be completed within 24 months of the contract’s effective date of Jan. 6, 2011, and to be producing biodiesel at a rate of 300,000 gallons a week by 2014.

Problem: AKP, as of August when Big Island public hearings were held, had not yet planted a single seed of biomass on the 12,900 acres of fallow land they have secured leases to grow on.

Another question: How are the HECO companies paying for all of this? In a word: you. Docket No. 2011-0005 also requests PUC approval of a Biofuel Surcharge Provision passing along the costs to the customer base.

Customers of HECO, HELCO, and MECO will pay a biofuel surcharge based on kilowatt-hour usage, even though all of the biofuel produced will be used to power HELCO’s Keahole plant on the Big Island.

The HECO companies are seeking to recoup “the costs of the Biodiesel Supply Contract, including without limitation, the costs associated with the biodiesel, transportation, storage, and related taxes, in the Energy Cost Adjustment Clause (ECAC)…”

For those of you who don’t thoroughly inspect your electric bill, the ECAC is a way for the HECO companies to ensure that they cover their fixed costs each month. Rather than raising rates, the ECAC can easily be raised or lowered as needed.

Another uncertainty: The process through which the HECO companies intend to make this biofuel has never really been tested in these proportions. Their case study was a much smaller plant in Denmark where local farmers were using excess straw.

Finally, the HECO companies claim that biofuel is more expensive than regular diesel, yet they refuse to list any information about AKP’s pricing and have blacked out the price-related sections of the docket on the PUC website.

Motions to intervene by Life of the Land and the Hawaii Renewable Energy Alliance have been denied.

Critics of the project agree that biofuels are an expensive way to provide renewable energy when the energy sector in general has so many more sustainable and cheaper options (e.g. solar, wind, geothermal, etc.). The proposal itself says that the biofuel could also be used for transportation or heating. Since these sectors have few other options, it makes much more sense for AKP to sell to them. Next, agricultural land should be used for food before it is used for energy. Last, the Biodiesel Surcharge Provision is not fair to the HECO companies’ ratepayers on O’ahu since most all of the benefits of the project go to the island of Hawaii. That would be like the City of Honolulu asking Big Island residents to help pay for the rail. That wouldn’t be fair. Would it?

Out of Control

This proposition is not about HECO wanting to reduce emissions, or reduce the state’s dependence on imported fuel. This is about HECO wanting to continue increasing revenue under the guise of green technology; and paying lip service to the state’s Renewable Portfolio Standards using biofuel to sandbag requirements for 2015 when they could be using more viable and cheap energy methods.

This company, with a monopoly supplying power to 95 percent of Hawaii’s population, is asking for the power to raise charges as much as they like while answering to virtually no one. At this point, the Department of Commerce and Consumer Affairs may be our only hope.

Or perhaps O’ahu residents should just sit back and pay the devil his due. We can at least feel good about the fact that–even though we are getting financially sucker-punched–we are helping to reduce the state of Hawaii’s dependence on imported fuel. We’re paying through the nose for it, but we are doing it. Admittedly, that isn’t exactly a horrible worst-case scenario. But how high will the HECO companies’ profits soar before we call their business practices into question?