Hawaii’s Power Out(r)age: A powerful play in six acts

Robin Kaye

Senate Bill 367 would allow the creation of an interisland high voltage electric transmission cable system to transfer what amounts to 10 percent of O’ahu’s energy needs. The cable would connect O’ahu to the islands of Moloka’i and Lana’i, on which 170 wind turbines, each higher than the tallest building on O’ahu, over 22,000 acres of land. Senate Bill 367 will be heard by the Senate on Tuesday, April 12. If the Senate disagrees with any amendments made by the House, a conference meeting will be scheduled at a later date. If the Senate agrees with the current draft, Senate Bill 367 will head to the Governor’s Office for a signature.

The following, by Lana’i resident Robin Kaye, of Friends of Lana’i, is an account of how the plans to drastically redevelop Lana’i came to fruition.

Opening Acts: An island’s legacy

The rascal Kaululaau is banished to Lana’i from Maui. He finds the island home to hordes of evil spirits, but with cunning and wit, he vanquishes them and returns to Maui a local hero (although many still believe that a few of those evil spirits remain today).

Peace and sustainability reign over the island of Lana’i. However, in the 1850‘s Walter Murray Gibson, under the auspices of the The Church of Jesus Christ of Latter-day Saints, began to define Lana’i’s real estate history, collecting title to almost all of the island. He was later ex-communicated, but kept all of the titles in his own name. Gibson is largely responsible for the importation of sheep and goats that has almost completely denuded the island of native plants. Lanai residents are still attempting to recover.

Several different economic ventures were attempted, sugar cane and ranching in particular. Both failed, due to limited water, weather, and arable land. Ownership of most of the island passed through several hands, but in 1922, Jim Dole began what would eventually become the largest pineapple plantation in the world. 

Until 1985, Dole Company provided jobs, homes, and education for several generations of Lana’i residents. The centerpiece of Dole Company’s labor was the avoidance of layoffs. When there was no pineapple to pick, workers cleaned culverts and cut brush away from cultural sites. They kept working.

Act Two: Age of the pineapple ended

In 1985, real estate developer David Murdock purchased Castle & Cooke and began his ownership of Lana’i by telling the community that pineapple will remain. Two years later, he told the community that pineapple will be pau, and he turned to a completely different sector: developing two luxury hotels and high-end luxury home building. 

Murdock mortgaged Lana’i for over $600 million dollars, but still found that his Lana’i investments did not provide the income he expected. Sales of his luxury homes and condominiums were scant. The economy didn’t help, as the worldwide recession’s profound impact on a tourism-based industry took its toll. Massive layoffs occured.

Intermission: Hawai’i elects a Republican as Governor 

In 2008, Linda Lingle introduced the Hawai’i Clean Energy Initiative (HCEI), with the goal of significantly reducing Hawai’i’s dependence on imported oil. 65 percent of that imported oil goes to transportation, like jet airplanes, boats, and cars; only 30 percent is consumed by Hawai’i’s electrical demands.

HCEI became a hammer. Despite numerous exemptions and loopholes, the utility company morphed into a “mandate” and becomes a rallying cry for big business.

Act Three: David Murdock’s greening

David Murdock announced to the world that he would “make Lana’i a green island.” His privately-held company owned 98 percent of Lana’i, which included about 500 of the island’s 1,500 homes. 

Murdock owned every business building, save one. He announced that he would build a wind power plant on Lana’i and construct a cable to take that wind-generated power to O’ahu

Residents on Lana’i at first responded favorably, given a history of paying the highest prices in Hawaii for electricity and the highest prices in the United States for gasoline. Lana’i’s ancient, diesel-powered grid gave us many black outs around 2005-2006. 

Unfortunately, the “green” that David Murdock was referring to soon became clear to island residents. Residents in the homes and apartments he owned were not allowed to hang their clothing outside to dry. Not a single Castle & Cooke property had solar hot water, let alone photo-voltaic power.

The solar “farm” he built in Palawai did not reduce Lana`i’s rates, and effectively shut down penetration into the grid by any home-based solar from the Manele Beach area. Permanent employment at the solar “farm” translated to a landscaping department of six sheep. Huge tax credits, however, made it all worthwhile.

Rather than working to conserve water use during a prolonged drought, Murdock fought to increase the allotment for the luxury home development, so he could “sell” a lush, tropical landscape in a desert environment.

Act Four: The EIS process begins

Castle & Cooke began its Environmental Impact Statement (EIS) process, which proposed to build 170 turbines, each as tall as the First Hawaiian Bank building in Honolulu at 410 feet, that would consume over 22,000 acres of Lana’i—a quarter of the island. They commenced the required cultural assessment, but quickly put a halt to that process after finding over 50 significant cultural and historic sites in the first few weeks.

Castle & Cooke began a series of “community meetings.” Those who attended were mostly company employees, and most gatherings involved Castle & Cooke presentations and no answers to questions.

Lana’i residents learned that none of the power produced by the wind turbines would stay on Lana’i.

Opposition began. Longtime community organization Lanaians for Sensible Growth (LSG) undertook a year-long survey of the community, ultimately taking a position of opposition to the wind power plant, saying that the absence of any knowledge of the impacts of the wind power plant outweigh the benefits proposed for Oahu. 

The community group Friends of Lana’i formed, stating unequivocal opposition to this proposal, no matter what benefits emerge.

The State, through the Department of Business, Economic Development and Tourism (DBEDT), the U.S. Department of Energy, and the Hawaiian Electric Company (HECO) decided to turn the required EIS process on its head, importing a process used primarily on the continental United States where many similar projects are being considered at multiple sites, called a “programmatic” EIS. 

No one really knows what this means, except that it will not consider anything specific to a wind power plant site on Lana`i or Moloka`i, the cable, or on-island infrastructure on O`ahu. The government agencies tell us those will come later. So they held four “scoping” meetings for what they now call “Big Wind” on O’ahu, Maui, Moloka’i and Lana’i as required by law, and asked us what they should include in the “scope” of the “programmatic” EIS.

We told them we want to know the impacts to our islands, our wildlife, and the ocean. They heard almost unanimous opposition to this project. They declined to answer any of our questions, and they would not react to comments about the cable or the Moloka’i, Lana’i, and O’ahu impacts as there is so little “known” about any of these sites. We told them, “We know right where they are, why are you not telling us?” They said that they are very sorry.

Act Five: The PUC gets involved

In 2006, the Public Utilities Commission (PUC) adopted a process to insure that when HECO plans for integration of renewable resources into its grids, it will use competitive bidding when it posts any request for proposals (RFP) to potential energy providers.

Three years later, the PUC opened a docket for HECO to use that competitive bidding process to obtain up to 100 MW of “non-firm,” or wind power, for O`ahu to be operating by 2013. HECO sent out an RFP, and guess who showed up to play? Castle & Cook and Kaheawa’s First Wind. Both wanted to give HECO 400 MW—Castle & Cooke on Lana`i, and First Wind on Moloka`i.

DBEDT mediated and both companies agreed to provide 200MW each and not fight over it.

Meanwhile HECO forgot to ask the PUC for a waiver from the fact that they failed to follow the competitive bidding process for the two big projects, clearly over 100 MW, and asked for one after-the-fact.

In late 2010, the PUC blasted HECO for its oversight, saying the utility should have opened a separate RFP for projects larger than 100 MW, and had “ceased its substantive evaluation of Big Wind altogether.”

The independent observer appointed by the PUC said he had been told “some time before that there was consideration being given to special treatment of the Big Wind proposals.”

The PUC nonetheless granted HECO the requested waiver because Big Wind met “a stated governmental objective”—the non-binding goals of Hawaii Clean Energy Initiative (HCEI). 

The PUC did, however, impose two conditions: “A fully executed term sheet” had to be secured from both Castle & Cooke and First Wind by March 17, 2011 and the price paid had to be in the best interests of the ratepayer—meaning we would not pay the same price for non-fossil fuel as for fossil fuel, and any savings from non-fossil fuel use would pass back to us, the ratepayers.

On January 7, 2011, Castle & Cooke and HECO agreed to terms. First Wind is still trying to secure land on which to build their turbines.

Act Six: The Legislature gets involved

In late 2010, two Senate committees jointly hosted a Senate Information Briefing. Castle & Cooke got scolded for making new promises of benefits that are, in reality, unfulfilled promises from when they first began their hotel developments over 20 years ago.

HECO and the Department of Energy were scolded for withholding taxpayer-funded reports. HECO drafted legislation (Senate Bill 367) proposing a regulatory scheme for the cable, essentially passing on all costs to the ratepayers, and bypassing the process outlined by the federal and State government officials at the EIS scoping meetings.

The State and the Department of Energy deemed it OK because it was “too early” to consider impacts to specific sites.

Next, the House and Senate both held hearings, and various committees each voted to pass the bill.  Many votes were “with reservations.” The bill was discussed on the floor, and Rep. Cynthia Thielen gave an impassioned floor speech decrying the prematurity, opacity, and sheer chutzpah of this entire process.

Then, just before the curtain came down, the early stages of what is sure to be a long odyssey of further obfuscation and opacity (or perhaps a Roman tragedy), came the closing scene.  The legislation written by HECO to establish a scheme for how the cable is to be built, paid for and regulated, crossed over from one legislative body to the other. 

First up was the House Committees review of the Senate’s version. Over 90 individuals and organizations submitted testimony; all but HECO’s and DBEDT’s in full opposition to Senate Bill 367. 

The Consumer Advocate complained that they were only just given DBEDT’s critical amendments to the legislation, and hadn’t had the time to adequately review them. Acting Chair Rep. Denny Coffman postponed the hearing until the following Monday. The writers of the amendments, along with the PUC, DBEDT, and HECO met behind closed doors. Fast forward to April, when Senate Bill 367 had passed the House Committee on Finance and was a few steps away from being sent to the Governor.

The people of Hawaii, on all islands, need to see the power play that is going on and understand the outrage of Lana’i residents.

To read Senate Bill 367, click here

[CORRECTION on Monday, April 11 at 9:03 p.m.: There would be a total of 170 turbines depending on which company gets to supply all 400 MW, not 260 as originally stated in this story’s introduction. The turbines would cover 22,000 acres for whoever gets all 400 MW. If all 400 MW goes to Lāna‛i, as Castle & Cooke originally requested, there would be 170 turbines on 22,000 acres of land. But if Moloka’i and Lāna‛i split the 400 MW, There would be less turbines and less land for both islands.]

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