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Maui County Conference Explores the Future of Energy

“The eyes of the nation are on Hawai‘i as a living laboratory.”

April 10, 2014
Chris Mentzel - Contributing Writer , Maui Weekly

At the end of March, Maui hosted a conference--"Electric Utilities: The Future Is Not What It Used To Be."

As Mayor Alan Arakawa said in his welcome address, electricity has become an important issue for Maui, as utility bills average $250, even though the island has an abundance of natural resources.

Together with the wind farms, solar has replaced a quarter of diesel-generated electricity, placing Maui Electric Company (MECO) at the forefront of an epochal, nationwide change.

Article Photos

Women in power: TIME magazine’s “Hero of the Planet” Hunter Lovins (left), gave a powerful keynote to set the tone of the conference. Connie Lau (center), the head of Hawaiian Electric and American Savings Bank, co-created the Hawai‘i Clean Energy Initiative in 2009. (See the “Why Maui Folks Still Work Fridays” commentary on page 4.) Mina Morita (right), head of the state PUC, explained that the core theme of the conference is about making the power industry and private producers work together.

The two-day conference at the Maui Arts & Cultural Center was the brainchild of Kihei's Maui Economic Development Board (MEDB) and the Mayor's Office.

MEDB's Jeanne Skog, Energy Commissioner Doug McLeod and Economic Development Director Teena Rasmussen had the initial idea, and Sandy Ryan with her team presented an extremely well-organized event.

Great care was taken to facilitate friendly discussion among the leaders of Hawai'i's journey toward clean energy. This included the CEOs of all Hawai'i utilities and members of the state Public Utilities Commission (PUC), Maui Tomorrow, Friends of Lana'i, the federal government, and more. Often they are on opposing sides on the issues, but here, they could "talk story"--some for the first time.

Mina Morita, Hawai'i's most experienced energy politician and head of the PUC, explained that the core theme of the conference was the move from "Clean Energy 1.0," which was about rewarding early adopters of solar and wind power technologies to "Clean Energy 2.0," which is about making it work together. This includes microgrids, electric vehicles, storage and new policies.

The conference organizers counted 85 women and 185 men. While the men brought in a lot of energy, clearly, the women--literally--hold the power. Women lead MECO and Hawaiian Electric Industries. TIME magazine's "Hero of the Planet" Hunter Lovins gave a powerful keynote speech to set the tone of the conference. Two of the three PUC commissioners are women, and almost all of the organizers.

Seventy people flew in from the Mainland. The energy rebels of Boulder, Colorado, and Marin, California, who fought huge conglomerates and won, shared their advice. The president of the Solar Energy Power Association, Julia Hamm, came to see the island the organization recognizes as the number one place in solar installations in the U.S. She told the audience that the eyes of the nation are on Hawai'i as a living laboratory.

Much of the discussion was about opening up the grids to the customer.

America's 100-year-old grids were meant to reliably transport energy from central power plants to the ratepayer. Now there is a wide assortment of power producers and many see the utility's role shrinking to grid management.

What does the customer want? Mayor Arakawa said it most clearly in a radio interview: a 50 percent drop in energy prices. Smart-grid protagonists want to offer reduced prices at certain times of the day, driven by a complex computer network. Their critics note that prices will go up and networks introduce risks. And smart customers want to generate energy and sell some back to the utility.

The most applauded speaker was the CEO of Parker Ranch on Hawai'i Island, whose operations are severely damaged by high costs for the electricity needed to pump water. He is angry. And said he is ready to leave the grid and build a microgrid for the ranch and the adjoining town. And indeed, Parker Ranch took action one week after the conference and formed the Paniolo Power Company.

If more customers go solar, the utility may go into a death spiral, explained Lovins. As overburdened ratepayers leave the grid, the fixed costs are borne by less customers and the resulting rate increases will prompt even more to leave. Finally those who don't have the roof or the money for their own solar generation will face unbearable electric costs. This will hurt the poor and will likely end the century-long right to electricity.

What is best for Maui? Jonathan Koehn, Boulder's sustainability coordinator, cautioned to watch how much money is flowing out of the community and to take the long view.

A rough estimate reveals that Maui Electric will spend a billion dollars in the next four to five years in fuel costs alone. Bob King of Pacific Biodiesel, remarked that the Saudi's are certainly good people too, but we could use the jobs here.

Lovins held up an article by Citigroup, which declared solar to be cheaper than oil, gas or coal, even though fossil fuels get 10 times the subsidies that solar receives.

In Hawai'i, solar costs as little as 14 cents per kWh, but in Austin, Texas, it is as low as 5 cents. MECO's costs for diesel fuel are above 20 cents.

The core technical issue is storage.

Bright Energy Storage, one of the 20 companies exhibiting at the conference, conducted promising tests with the Navy at Pearl Harbor.

David Bissell, named "Utility CEO of the Year," explained that Kaua'i's utility has 80 companies interested in building a storage system.

Parker Ranch is exploring pumped storage.

In private conversations over lunch, it became clear that storage comes with huge costs. Maui needs to invest many hundreds of millions of dollars, but it would be a worthwhile investment in the long run.

Ron Binz, veteran utilities commissioner from Colorado, said we need to "tweak the system" to pay for that storage. So far, most utilities avoid investing in storage.

Of course, there's nothing new about it. Back in the old times, Hina complained that she needed solar energy to last longer to dry her tapa. She sent her son Maui to take care of it. Maui then lassoed the sun from Haleakala, the House of the Sun--the ancient version of solar energy storage. The island needs him to return.

The conference sessions are available on Akaku: Maui Community Television's Website.

Read commentary by Chris Mentzel: "Why Maui Folks Still Work Fridays"



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