Thursday, October 27, 2011


WATCHING THE RIVER FLOW: Our old J-school prof's blue pencil used to wear thin on students' submissions in writing "sez who?" in the margins when their articles contained fully unattributed "facts." It's become one of our pet peeves too- at least add a "reportedly" or the all-inclusive "according to critics."

So it should be too much of a surprise that steam came shooting out of our ears once again this morning when another "according to who?" bit of bull-dinky appeared in a local newspaper article about KIUC's reaction to the FERC decision to "dismiss" two of their preliminary permits and ban future ones in the islands.

In the second paragraph of an article penned by Business Editor Vanessa Van Voorhis, apropos of nothing she writes:

Free Flow Power (FFP) of Massachusetts filed preliminary permit applications with the federal agency earlier this year for projects located on Koke‘e and Kekaha Ditch Irrigation systems. The permits, once issued, were to be turned over to KIUC, under a paid contract agreement with the co-op for an undisclosed amount (emphasis added).

Of course our readers know that that timeline is straight from the Kaua`i Island Utilities Coop's party line and has never been substantiated. As a matter of fact it appears that KIUC was presented with a "deal they couldn't refuse" after FFP obtained preliminary permits from the Federal Energy Regulatory Commission (FERC).

No one really knows for sure whether in fact KIUC actually approached FFP or the other way around because the Memorandum of Agreement (MOA)- the contract between FFP and KIUC- has been declared "proprietary information" by the supposedly member owned and run co-op.

But, as we wrote last July 6 just before the "vote" to invalidate the MOA was closed:

According to documents uncovered by reporter Joan Conrow and information that has been dragged out of KIUC CEO David Bissell and their attorney David Proudfoot, the MOAs came about after FFP filed for six- and already received at least three- FERC preliminary permits that allow the holder to exclusively investigate the possibility of constructing hydroelectric systems for the named areas, potentially leading to FERC licensing of the projects.

But those permits are non-transferable so FFP set up shell corporation to file for the permits and after they were granted they "sold" the shell corporations to KIUC under those MOAs.

There's a reason why we put sold in quotes. Because, according to the information repeated over and over by Bissell and Proudfoot, should the members vote no, the MOAs say that the permits would have to be turned over to FFP- AND we would have to pay them $325,000 to take them back to boot.

We also noted that:

People might be interested to know that the person who approached KIUC for FFP to set up the "offer they couldn't refuse" is said to be investment banker Bill Collett, the same person who set up the whole purchase of Kaua`i Electric from Citizen's Electric for an exorbitant amount of money that was still way more than the book value even after it was decreased by $50 million by the PUC.

But the local newspaper hasn't exactly been in the forefront of investigating the claims of its biggest advertiser, KIUC.
And it seems they're not about to start now.

The article also again raises the question of whether there is indeed a Hawai`i state process for permitting hydroelectric systems. As we first reported last week, in the FERC's dismissal of two of the permits they cited an established state process, one that had been used in developing 13 other hydroelectric projects in the state.

But while, according to the article, KIUC board member Ben Sullivan still questions whether there is an actual state process State Aquatic Biologist Don Heacock explained to us last week that the state process is the same one used for any other stream diversions.

He told us that, as he and Adam Asqueth- who led the effort to get KIUC to abandon federal oversight- said over and over during the membership vote in July, any hydropower effort must use the state standards for water flow and deal with them in light of the effects on the whole watershed and include effects on water use and diversion on the watershed as a whole.

According to the article Sullivan cited problems with the state process in the same breath as questioning whether there is one. But KIUC CEO David Bissell and Sullivan himself had claimed during the voting process that using FERC would never usurp any state regulations.

The article quotes Sullivan as saying:

“One of the (the problems) is the cumbersome nature of the state process —and perhaps even the non-existence of a state process — and that’s an important issue we’ve discussed... There’s high cost involved in a process that has no timeline for ending, and it’s difficult to know whether it’s in the members’ interest to even engage in such a process. The FERC avenue offers an alternate to that, potentially. It also lays out a process that we can limit, as you have suggested, and I think that it’s something that the staff is constantly working with the state to do.”

So which is it? Are they going to follow the state process or claim there isn't one and do a little as they can get away with?

The article also quotes Sullivan as saying "I do believe that we made some mistakes in the early going, but I do believe we’re doing our best in the interest of the community and continue on with an open mind and open options is the way to go,"

If that's at all true it's about time for him and the board to come clean about all the alleged FFP/FERC shenanigans, release the MOA, abandon the other permits and follow the state processes, as they promised during the vote.


Mauibrad said...

Nice deducing Andy.

KIUC ought to just worry about their 4 prelim permits, which will take YEARS to complete, and let PL&P continue work on developing the other 2 with a good faith PPA from KIUC. YOU WIN SOME, YOU LOSE SOME, BETTER THAN LOSING IT ALL...

Fact Check said...

Ben is a dim bulb. You don't have to spend much time talking to him to realize that all the Proudfoot/Bissel/Yakkuza types on the board have befuddle what little brain he has.

Voting him in was a total waste of effort.