Hawaii tried to end HECO monopoly

SUBHEAD: The Territorial government passed legislation for a PUC to end HECO's monopoly on electric power.

By Ed Wagner on 21 October 2013 for Island Breath -

Image above: HECO Kaha Point power plant on west Oahu. From (http://en.wikipedia.org/wiki/Hawaiian_Electric_Industries).

Once again, HECO is doing its best to portray itself as our saint and savior when, in fact, it is a wolf in sheep's clothing.

It recently declared in a recent MidWeek article that it is proud to carry on the legacy of King Kalakaua and even had a new logo designed to celebrate and memorialize its distinguished history of fulfilling its royal legacy, granted as a franchise from King Kalakaua & continuing in Hawaii to this day.



However, Hawaiian Electric has falsified history to support its propaganda machine in its ongoing effort to deceive our residents, manipulate our politicians, and maintain its monopolistic control over our energy future.

Hawaii’s historical records indicate that its claim to be following in King Kalakaua's legacy is false.

Here are the facts as shown in historical records as researched by Hawaiian attorneys, Mililani B. Trask, and Dexter Kaiama.
  1. King Kalakaua granted the first energy franchise to a group of 3 individuals (George Lucas, M.G. Elmor and W.W. Hall). Although the franchise was granted to “individuals”, the Act noted that the 3 were doing business as “the Honolulu Gas Company”. The Act also provided that the individuals involved could further incorporation “as a company, private company or copartnership” and could transfer or sell their interests.  ( See Section 10, Right to Incorporate)The franchise as not in perpetuity but was limited to a period of 25 years. The Act was approved & signed by King Kalakaua July 11th, 1884.

    The franchise was limited to the sale of light in Honolulu, it was not a franchise in “perpetuity” (forever), which is what Hall & Lucas had sought.

    See Laws of His Majesty KALAKAUA I. 1884 Legislative Assembly , Chapter XVII: An Act Granting a Franchise to the Honolulu Gas Company.

  2. Six years later King Kalakaua granted another franchise to Emmet Wilson, an individual, for the Hawaiian Gas Company for gas lighting for all “city, towns and villages” of the Kingdom “other than Honolulu”.

    The term of the franchise was 25 years and the individual  was also granted the right to incorporate and transfer ownership to a corporation. King Kalakaua signed the Act into law on November 14th, 1890.

    See Laws of His Majesty KALAKAUA I, 1890 Legislative Assembly,

    Chapter LXXXIII: Granting a Franchise to the Hawaiian Gas Company.
  3. The Hawaiian Electric Company was incorporated by Mr. W.W. Hall & his associates under the Laws of the Kingdom following the above franchises being awarded on the13th day of October 1891, the record reveals that stocks & shares were increased & issued by HECO in 1893 & 1895. See State of Hawaii Archives, Incorporation of Hawaiian Electric Company documents.

  4. Following King Kalakauas death, Liliuokalani ascended the thrown. She as approached to affirm the Hawaiian Electric franchise but refused. Instead Liliuokalani signed into law an Act requiring that empowered the Kingdom's Minister of Interior to sell, at public auction “ the exclusive right and franchise to furnish and supply electric light and electric power” for “The upset price of such franchise shall be two and one-half percent of the gross receipts of the contractor from all electric light an power furnished to consumers”. Liliuokalani was ‘nationalizing’ Hawaii’s Energy for Hawaii’s people.

    The Law signed by Liliuokalani did not affirm a monopoly for HECO but specifically provided that…“nothing in the law would prevent a person or corporation from developing electricity for his or its own use as long as the premises were subject to inspection of the Minister of the Kingdom.

    The Act provided in Section 13, for the Contractors Plants to be taken by the Government “ at the termination of the franchise”.

    Liliuokalani signed this Act into law on January 12th, 1893 as witnessed by G.N. Wilcox, her Minister of Interior. This Act effectively nationalized the HECO corporation.

    See Laws of Her Majesty LILIUOKALANI – 1892 Legislative Assembly, Chapter CVII – To Regulate and Control the Production and Furnishing of Electricity in Honolulu.
  5. Five days later, the lawful government of Liliuokalani was overthrown by military forces of the US acting in league with those who held the above franchises & other American businessmen …”in order to protect American lives & Property.”

The Kingdom & its Monarchs opposed any monopoly for HECO & never granted them an exclusive franchise forever. In fact, Liliuokalani tried to protect the right of Hawaii’s residents to produce their own electricity for their own use on their premises. The monarchy opposed the HECO monopoly rather than facilitating it.

If you review early 20th century newspaper accounts and other documents, you will learn that there was strong opposition to allowing HECO to have a monopoly on electricity generation and transmission. Here is just a sample of what I found online at www.fundinguniverse.com.

Momentum was building to bring the increasing powerful utility under public regulation. Led by W. R. Castle (who, not coincidentally, was an executive of the Honolulu Gas Company), anti-HECO forces accused the electric company of charging exorbitant rates. General manager Hepburn responded to the accusations by noting two recent rate cuts. 

The utility's opponents introduced a bill to the territorial legislature that called for the creation of a Public Utilities Commission (PUC) and an end to HECO's government-sponsored monopoly on electric power.

The legislature passed the bill, but when Hawaii's governor vetoed it, the bill was returned to the legislature, where anti-HECO representatives won out in 1913.

The bold face text above shows that history is repeating itself, but our politicians just don't get it! They haven't gotten the message that our residents want the HEI monopoly dissolved and converted into non-profit, publicly owned utilities on each island, just as our legislators have been talking about doing for the past 30 years.

Here is one paragraph from a 2001 Honolulu Weekly article, HECO - Wired To The Past
"You bring in any engineer from any big utility company on the Mainland, and they're horrified at what the system looks like, at the technology they use and at what it costs. It's appalling," says Al Hee, president of Waimana Enterprises Inc., a locally based energy company that proposed private, small-scale power plans that have been opposed by HECO.
Does this sound like HECO is following in the legacy of King Kalakaua? I have had 9 extended power failures on my street since February 5th and no end in sight. Is this HECO's idea of providing reliable electrical service? Is this its idea of following in the legacy of King Kalakaua?

HECO should not be allowed to use the logo it has created for its stationary, its website, its vehicles, and more. Nor should the company be allowed to continue airing its TV ad about this logo because the logo is based upon its falsification of history. The company should be renamed Wolf Electric Industries and use a wolf-themed logo!

I encourage the news media organizations on this message to publish the above researched history lesson in its entirety as a public service for Hawaii's residents to set the record straight, lest they continue to be deceived by our manipulative and abusive utility monopoly and its propaganda machine.


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