KIUC Ferc Flim Flam

SUBHEAD: The $325-400,000 we stand to lose in a "no" vote is peanuts compared to the cost of a "yes" vote down the road.  

By Andy Parx on 30 June 2011 for Parx News Daily - 

Image above: A reproportioned photo of Kauai's Secluded Falls. From Apollo Kauai masthead (

 In addition to our wholesale advocacy of a "no" vote on this FERCin' mess KIUC has gotten us into with their capitulation to Free Flow Partners' (FFP) extortion, we've been doing quite a bit of retail, taking a slew of phone calls from people for whom computers are anathema- all essentially asking "WTF?". Many just want an answer as to whether to vote "no" or "yes." But far more have read both the newspaper articles and the ballot itself along with KIUC's unbelievably slanted voters' guide. Under "your no vote means" the guide makes the claim that:
The contracts with FFP will be terminated, and all preliminary permits will revert back to FFP. This will make progress on hydro in the near term very difficult and more expensive, and more than $325,000 in contractual obligations will be due to FFP.
Even those that have read both our coverage and Joan Conrow's awesome Honolulu Weekly article and meticulously researched and presented Gold Diggers (parts 1 and 2) blog posts have asked an important question. Basically they ask "well, yes- the whole deal stinks and we should never have entered into any deal with FFP. But now that we have we stand to lose $325,000 (some reports claim it's as high as $400,000) which will inevitably show up on our bill. And we will have paid that money and not be any closer to hydroelectric power project development. Shouldn't I vote 'yes?'"

The answer to the first part is that while yes, it will cost hundreds of thousands to cancel the deal with FFP, many have not heard or glossed over a quote from Conrow's Honolulu Weekly piece which says that: 
 Bissell said no specific price was placed on the applications, which were purchased as part of a larger consulting contract. The utility has refused to disclose the full value of the contract, which includes an incentive for delivering completed projects, but KIUC attorney David Proudfoot said FFP will be paid “several million dollars if none go past the first stage." 
Given the opposition to FERC and the likelihood that, with the state's long-standing opposition and threats to sue, we will never proceed to full FERC licensing. What a yes vote means is that, although we'll have to forfeit the $325K we'd potentially be throwing away a lot more. As Conrow concluded in her second Gold Digger post:
In its permitted applications, FFP states, “The studies will be financed by the applicant.” No mention is made of KIUC. For each project, FFP estimates the cost of doing all the first-year studies — the feasibility stuff — at $100,000. The rest of the work — consultations, developing a notice of intent and pre-application document, and beginning scoping activities — is estimated to “not exceed $500,000." So even if FFP were to take all six projects all the way up to the license application, it would cost no more than $3.6 million. KIUC won’t tell us exactly what we’re paying, but KIUC attorney David Proudfoot told us at the June 4 community meeting that FFP will be paid “several million dollars if none go past the first stage.” Several is defined as “more than or three but not many.” So it sounds like we’re paying close to, if not more than, the full estimated price for bringing all six projects through the first stage, even though KIUC CEO David Bissell and some Board members have acknowledged that some of the projects will never get off the ground.
On top of that, FFP will get an incentive for delivering completed projects. The second question is a bit trickier but perhaps more revealing. The reason why KIUC says it is going through the FERC is that there is no state process for developing hydro. But we must remember a couple of things.

What many including petition initiator Adam Asquith have said, is that what we should have done- and should do- is to go to the state and say "we want to do hydroelectric projects and want to work with the state to establish a system for development and introduce and pass enabling legislation and eventually administrative rules so that we can develop environmentally and culturally sensitive and water-wise projects into the future.

And, as a matter of fact, a good place to start is the KIUC ballyhooed flow chart that FERC has already developed for public participation and alter it for our unique water laws. Certainly we're not the only ones in the state who want to develop hydropower. HELCO has the same renewable energy portfolio requirements as KIUC for the other islands.

If and when they wake up to the insanity of their "Big Wind" project and the fact that it is doomed to failure, hydroelectric is probably the next best technology in terms of cost of both development and future rates. But whether through pure laziness, corruption or pure stupidity the KIUC board of directors and administrative staff seems hell bent on committing us to a costly and widely-opposed way of going about it- one that, even if it were to succeed, would still leave us without a simpler, less costly statewide system for the next round of hydroelectric development.

The $325-400,000 we stand to lose in a "no" vote is peanuts compared to the cost of a "yes" vote down the road. Whether as a way to say no to FERC or to, in fact, SAVE us money, a "no" vote is the best option to get us out of this mess that the board of KIUC has gotten us into. That and remembering this fiasco during the next KIUC board of directors election.

See also:  
Ea O Ka Aina: Say NO! to KIUC/FFP Deal 6/13/11


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