BY TERESA TICO – As a homeowner in Pahala, I am writing in response to Hawaiian Electric Light Company’s (HELCO) application seeking the Public Utility Commission’s approval of HELCO’s Modified Biodiesel Supply Contract with Aina Koa Pono Ka’u LLC.
The substance of the application is a request to increase utility rates on the Big Island and Oahu to pay for a biofuel refinery plant near Pahala that allegedly will turn feedstock into biofuel using an experimental microwave technology.
According to an August 2, 2012, press Release from Hawaiian Electric Company, ”Hawaii Electric Light Company and Maui Electric Company are subsidiaries of Hawaiian Electric Company. Together they serve more than 95% of the population of Hawaii on the islands of Oahu, Hawaii, Maui, Lanai and Molokai. Hawaiian Electric is a subsidiary of Hawaiian Electric Industries (NYSE: HE).”
For the following reasons, the current application for the rate hike is inconsistent with the public interest.
According to Hawaiian Electric Industries’ CEO Connie Lau in her August 3, 2012 Earnings Call, HEI’s “Second quarter 2012 earnings were $0.40 per share consistent with $0.40 in the linked quarter and $0.28 per share in the same quarter last year.
In other words, Hawaiian Electric Industries’ (HEI) profits have soared in the past year. HEI is the parent company of HELCO, responsible for HELCO’s decision making, and the beneficiary of HELCO’s profits.
Ms. Lau is the highest paid CEO in the State of Hawaii, higher than Bank of Hawaii’s CEO. According to Forbes, her combined compensation for 2012 is $5.29 million.
In light of the soaring profits of HEI and the unprecedented compensation package it pays its CEO, we must ask ourselves why we tax payers are paying the highest energy rates in the United States and why HEI isn’t footing the bill for the biofuel project.
Big island Mayor Kenoi has gone on record stating that we need AFFORDABLE alternative energy. HELCO’s proposal is not affordable nor is it reasonable and necessary. It places the burden of an alternative energy, that may not be good for the environment, on the rate payers who can’t afford it, and returns the guaranteed profit to the corporation that is already enjoying soaring profits.
Aina Koa Pono’s goal is apparently to secure a contract with HELCO (and HECO, and HEI) in order to bolster its chances of financing a refinery that would ultimately be used for transportation fuel. This hui should not be allowed to use the customers of the electric company as its security for financing.
Approval could also set a bad precedent. The Aina Koa proposal is to make fuel for one power plant but will result in hiking electric bills for people across the board, even for those not served by the Keahole power plant. How would the PUC handle similar proposals for biofuel contracts for other power plants – contracts that would also raise rates across the board to finance them? How could the PUC protect the ratepayer if it sets this precedent?
While I endorse clean, affordable, renewable energy, the current application is not consistent with the public interest and should, once again, be denied.