A letter to Abercrombie on HEI

SUBHEAD: It is antithetical to free enterprise to a have a monopoly with a guaranteed profit at the expense of consumers.

By edward J, Wagner on 20 December 213 in Island Breath-

Image above: The Lionel toy train Electric Monopoly Car. From (http://www.legacystation.com/LionelToyTrains/display_product_OFGT26477_26477-Monopoly-Electric-Company.html).

Dear Governor Abercrombie,

As the primary plaintiff in John Carroll's class action lawsuit against you AND the State of Hawaii, and on behalf of all Hawaii ratepayers in this class action, I submit to you the following questions for response prior to the opening of the 2014 Legislative session.

First a little background information to set the stage.

You ran for Governor on an energy platform in which you called out the HECO monopoly for its abuse of power and promised bold action to reign in those abuses.

According to your stated energy policy as a newly elected Governor,

"We have a regulatory system and a utility monopoly that were built for a time and public purpose that are in the past. If we do not fundamentally change our approach, we will not reach our goals."

Hawaii’s boundless renewable energy potential is bottlenecked in our archaic utility structure. Their monopolistic control is often at odds with the public interest in the world beyond fossil fuels. Democratizing energy requires the creation of a free market in energy so that we can deploy clean energy sources and our entrepreneurs can create new jobs.

I now ask you to answer the following questions.

Please explain the following statement from HECO today, December 20.  Is this statement the result of its continuing incompetence in moving Hawaii forward to a clean energy future?  Is it just its continued stonewalling to give the PUC more time to approve its biofuel project with Aina Koa Pono so it can declare that geothermal development is no longer needed? Is it the result of HECO’s inability or lack of expertise to evaluate the bids because the technology is too complex for its feeble mindset?
"After careful review of all geothermal bids, Hawaii Electric Light has determined that none of the submitted bids sufficiently met both the low-cost and technical requirements of the Geothermal RFP. We are currently working with the Independent Observer to develop a request that will be sent to the bidders. The request will give the bidders the opportunity to provide additional information so that we can make an informed decision that is in the best interests of our customers and residents and that meets the goals of the Geothermal RFP. These goals include lowering customer bills, reducing our dependence on fossil fuels, allowing for continued integration and management of intermittent renewable resources, maintaining reliability of service, and protecting the health and safety of the public and environment. We appreciate the efforts the bidders have made to date and look forward to working with them and the Independent Observer on next steps."
Do you agree or disagree with the following statement by retired Senator Fred Hemmings? Please justify your response if answering No.
"HEI is Hawaii's most egregious monopoly. It is antithetical to free enterprise to a have a monopoly with a guaranteed profit at the expense of consumers. Our Electricity is the nations highest priced hovering around 200% above the national average. HEI has made Hawaii the most dependent state on fossil fuels. HEI utility lines are a blight on the landscape. HEI executives are amongst the highest compensated in Hawaii. HEI invests excess profits in other business including over seas ventures. The solution is to break up the monopoly for the benefit of consumers."
Residents of Oahu, Molakai, and Maui are discussing plans to form a utility cooperative or municipal utility. Larry Ellison wants to convert Lana'i into a model for sustainability. Kauai KIUC is NOT a true cooperative. It is owned by Touchstone Energy, a profit-making corporation.

The state Legislature has discussed the conversion of the utility monopoly to a consumer owned grid for 30 years. HECO's Robbie Alm stated on January 29 that HECO will cooperate fully with the Legislature in that conversion. Both the Legislature and US Congress can repeal the HECO non-exclusive franchise.

Will you therefore support this public utility model by asking the Legislature to draw up conversion plans and pass a conversion bill that you will sign in 2014? If not, why not? Under what circumstances will you support such a conversion?

Did you know that residents of Hawaii in the beginning of the 20th century were just as opposed to having an electric utility monopoly as our residents today? Did you know that 4 days before the overthrow of the Hawaiian Monarchy, Queen Liliuokalani signed a law to nationalize the electric utility? Did you know that the PUC was established in 1913 with a mandate to protect residents from ever having an electric utility monopoly?  Why then have you not called for ending the HECO monopoly as part of your stated energy policy?

Do you agree or disagree with the following statement that appeared in a 2001 Honolulu Weekly article entitled "HECO - Wired to the Past? If not, why not?

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.

Before answering, you should know that the grid is literally crumbling beneath our roads and sidewalks. I personally have had 10 extended power failures on my street since February 5, and such power failures are bound to occur more frequently across Oahu and neighbor islands as the grid deteriorates further.

In the USA, all states abide by the North American Reliability Standards, except Hawaii. Hawaii is "exempted" just as it was "exempted" in the 2008 Lingle-HECO HCEI agreement from the protections of the federal PURPA law that polices energy 'monopoly' corporations.

Since Hawaii has no reliability standards, then there is no way our State can hold HECO to standards of reliable service for ratepayers & our State energy security.

According to page 43 of the same 2008, maintaining and upgrading the electric grid is essential to supporting reliable, renewable energy.

Where in HECO's 5 year IRP plan does the company state that upgrading the grid is even on the table? The company talks about advanced metering and upgrading in-house technology, but not the grid itself. Is HECO unwilling to upgrade the grid because it knows that it will bankrupt the company?

Ratepayers have paid surcharges for years to maintain and upgrade the grid. Yet, the company is demanding that ratepayers now pay more money for upgrades, essentially paying twice. Where did all the money go, if not set aside in a fund for grid upgrades? Did it go to excessive executive compensation and excessive dividends?

Describe how the HECO companies have complied with the PUC's directive regarding the Integrated Resource Planning (IRP).

How has the State addressed the failing of HECO to address the directive to develop an Action Plan that governs how the utility will meet energy objectives and customer energy needs consistent with state energy policies and goals, while providing safe and reliable utility service at reasonable cost.

How do you justify your inaction when some residents are burning candles at night and cooking with wood because they can not afford electricity? Two homes have burned down as a result. One resident even chained himself to the HELCO front door to protest high electric rates. Senator Solomon submitted petition signatures to you. How do you respond to residents who are making hard choices between paying for food, medicine, school supplies and paying for electricity, when the utility monopoly pays both excessive executive compensation and excessive dividends?

Please explain how you can allow the utility to suddenly crush the solar industry in order to establish itself as a monopoly in renewable energy, starting with the building of the largest solar farm in the state? Would not adding solar to every commercial and residential rooftop in the state be a more effective use of valuable land resources AND cool rooftops in the process? How truthful has HECO been the past 5 years regarding the amount of solar electricity it can safely accept on the grid?

Explain why have you not rescinded the 2008 Lingle-HECO agreement, knowing full well that it only intent was and still is to support, protect and perpetuate the archaic utility monopoly and its profits to the detriment of our economy, our planet, and our residents? Pope Francis calls it the idolatry of money.

Sincerely yours,

Edward J. Wagner


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