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The Honolulu Advertiser
Posted on: Sunday, May 20, 2007

COMMENTARY
Straight talk on quake outage, conservation

By Mike May, president and CEO of Hawaiian Electric Co.

Mike May, president and CEO of Hawaiian Electric Co.

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THIS WEEK

Editorial and Opinion Editor Jeanne Mariani-Belding puts Deputy Assistant Secretary of the Army Tad Davis on The Hot Seat. Davis, who is based in Washington, D.C., will field questions on munitions disposal issues on the Wai'anae coast during a live blog chat Thursday from noon to 1 p.m. at www.Honoluluadvertiser.com/opinion

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Have you checked out The Hot Seat? It's our opinion-page blog that brings in your elected leaders and newsmakers and lets you ask the questions during a live online chat.

On The Hot Seat last week was Hawaiian Electric Co.'s president and chief executive officer, Mike May. Here is an excerpt from that session. (Names of questioners below are screen names given during our online chat.)

Steve Doyle: Mr. May, HECO has enjoyed a virtual monopoly on O'ahu's power supply while we, the bill payers, continue to receive higher electric bills with three-color inserts that boast about HECO exploring "energy alternatives" and "conservation."

Are you trying to pull the wool over our eyes, or are you serious about energy conservation and making changes in the ways we generate power for our society?

Almost 20 years ago, a group of electrical engineers from the Mainland examined the Pearl City area's power generating facilities and saw the the eyesore of HECO's power transmission lines along Kamehameha Highway.

They determined (in a private brief) that HECO's power plant was "even outdated in the 1960s" and needed repair.

The San Francisco Loma Prieta earthquake in 1989 and the October '07 quake off the Big Island showed Hawaiians that while San Francisco suffered many deaths during the Bay Bridge collapse and the freeway disaster, power and telephone service was quicky restored.

Where was HECO during our "manini" crisis?

May: We are very serious about energy conservation and using more alternative resources to produce power.

Regarding the earthquake, the fact that we are not inter-tied to other utilities as they are on the Mainland means it is more difficult to restart our system in times of emergency, like an islandwide blackout.

I can assure you that everyone at HECO did all they could to restore power as quickly as possible while protecting the system from problems that would have meant an even longer blackout. I couldn't be prouder of the way our employees responded that day.

Wesley Kajiwara: Why weren't rolling blackouts implemented when generators started going off-line after the Oct. 15 earthquake? Rolling blackouts would have been better than an islandwide extended outage.

May: Automatic and manual load shedding did take place to try to avoid a total blackout. This is designed to shut off power to customers to balance generation and load to prevent damage to HECO equipment while trying to keep the electric grid up. Given what was happening on the system in real time, it was not enough to stabilize the system.

Rootsrundeep: Although seen in the early discussions as being a superb alternative for fossil fuels, more and more research is coming in daily that, in fact, (shows) growing feedstock crops (to convert into energy) is neither a good idea from an environmental perspective nor does it reduce our dependence on petroleum products.

HECO and its affiliates should be investing in renewables such as solar, wind, wave, and OTEC rather than shifting to biofuels in order to become "greener."

Why aren't you?

May: We agree that solar, wind, wave, garbage-to-energy, geothermal and other renewable technologies must all be pursued as part of diversifying Hawai'i's energy portfolio. And we are in fact doing this.

We also believe that using biofuels instead of fossil fuels in some of our central station power plants is another way to increase our use of renewable energy to provide firm, reliable power 24 hours a day.

Our goal is to create a market for biofuels locally that will lead local agriculture (large and small) to grow the feedstock crops here.

Local agricultural producers aren't likely to invest millions of dollars into switching to biofuel crops until they see firsthand that we really are committed to using biofuels.

In the meantime, it is far better for the environment to use renewable biofuels, even if they are imported, than imported fossil fuel, as long as we import biofuels from sustainable sources.

We are working with the Natural Resources Defense Council, one of the nation's most respected environmental organizations, to develop a sustainable standard for biofuels.

Making the switch to biodiesel will help reduce our contributions to global warming. The National Renewable Energy Laboratory says biodiesel represents a 78 percent improvement in greenhouse gas emissions compared with petroleum diesel.

John K: With the price of crude oil going up, will we see hikes in our electric bill? Are there any safeguards to protect the consumer against these kind of spikes?

May: Customers pay actual fuel costs and no more, no less. We don't make a penny of profit on fuel costs.

The best thing customers can do to avoid rising costs is energy efficiency and conservation. We have also proposed to the PUC that we have tiered rates so that customers who save energy would pay less than those who use more.

We have a number of energy-efficiency programs you can take part in. We encourage you to get solar water heating, if possible (with a $1,000 rebate plus tax credits), that can take one-fourth or more off your electric bill.

Michael S. Ho: Do you believe that HECO's monopoly is still justified?

Apparently we're short of generating/transmission capacity and can expect more blackouts.

What do you say to people who claim HECO has stifled competition in the marketplace and now we will all suffer from HECO's inability to meet our electrical needs?

May: Good question. As a point of reference, a large part of our power capacity is supplied from independent power producers who sell to us under contracts approved by the Public Utilities Commission and competitively priced.

So from a standpoint of power, it is supplied by a combination of our own generation, that of the independent producers and renewable energy. In power distribution — the wires that bring power to your home — it would not make sense to have many companies competing to deliver power and stringing several sets of wires through our neighborhoods.

We are working very hard to bring additional generation on line to meet future energy needs of our customers.

Thomas: HECO professes to be "very supportive" of renewable energy and renewable projects in the media campaign, yet can you explain why HECO has stalled, stymied and impeded every single renewable project (in existence and proposed), so much so, that all renewable energy providers to HECO (and its subsidiaries) in existence today have had to take their cases to the PUC to get their project operational.

HECO attempts to impose constraints on renewable providers (that they would not subject themselves to) which makes it extremely difficult for the renewable provider to be successful — all in the name of "protection, reliability and the best interest of the rate base."

May: HECO and subsidiaries have worked closely and will continue to do so with a number of renewable energy providers including the owner operators of two wind farms on the Big Island and one on Maui, the developers of two proposed new wind farms on Maui, the operators of geothermal energy on the Big Island, a hydroelectric provider on Maui, the provider of garbage-to-energy on O'ahu and the firm that proposes to bring seawater air-conditioning to Downtown and eventually perhaps Waikiki.

We have an excellent relationship with over a hundred solar water heater vendors and we promote their work. Through our Renewable Hawai'i Inc. subsidiary and many other efforts have worked to attract more commercially viable renewable projects to Hawai'i. We send our renewable experts to visit projects elsewhere and we meet regularly with potential providers of wave energy and other renewables to learn what they need to move forward.

All of our fuel contracts and power purchase agreements must be approved by the Public Unities Commission with the input of the Consumer Advocate to look out for the customers' needs. Just this session we supported legislation that would make renewable energy an explicit factor for the PUC to consider in approving our plans. The Consumer Advocate was instrumental in encouraging HECO to go beyond our plan to power a proposed new power plant at Campbell Industrial Park with at least 50 percent biofuels and to make the commitment to power that plant with 100 percent green, clean renewable biofuel.

On Maui, we're supporting efforts to build a biodiesel refinery to switch MECO's diesel-fueled generators to renewable fuels.

Our first responsibility is to our customers to supply reliable power and the lowest cost possible while doing all we can to protect the environment. We also must protect the safety of our workers by making sure that power is supplied to the grid safely.


Correction: An incorrect date was given for the damaging earthquakes near the Big Island in a previous version of this story. They occurred on Oct. 15.