(PNN) FERC DISMISSES PERMITS FOR TWO KAUA`I HYDRO PROJECTS IN FAVOR OF STATE REGULATION; CASTS DOUBT ON STATUS OF OTHERS

FERC DISMISSES PERMITS FOR TWO KAUA`I HYDRO PROJECTS IN FAVOR OF STATE REGULATION; CASTS DOUBT ON STATUS OF OTHERS

(PNN) -- The Federal Energy Regulatory Commission (FERC) has dismissed Free Flow Power's (FFP) and Kaua`i Island Utility Coop's (KIUC) preliminary permits for "Kahawai Power 4, LLC (Kahawai Power) and Kekaha Ditch Hydro, LLC (Kekaha Ditch Hydro)... to study the feasibility of a hydropower project on the Kekaha Ditch Irrigation System near the town of Waimea, Kauai County, Hawaii," according to an order issued today (Oct. 20).

The order is based on the fact that "another developer, Kekaha Ditch Hydro, was already pursuing (the project) through Hawaii’s state hydropower authorization process" calling KIUC's preliminary FERC permit "claim-jumping."

The order also casts doubt as to whether the rest of KIUC's preliminary permits will be allowed stand if the "potential for a preliminary permit issued by the Commission to interfere with existing development activities at the state level is significant."

"While we cannot let a state process interfere with our exclusive mandatory jurisdiction" the order states, "we do not want our preliminary permit program with respect to projects subject to permissive licensing to chill the development efforts of entities pursuing a legitimate state authorization process."

It is unclear what specific state process FERC is referring to. Previous reports and statements from KIUC, opponents of the FERC process and, in fact, state officials themselves have indicated there is no official written state process for developing and approving hydroelectric projects.

In an email today Adam Asquith who has led the opposition to using the FERC process for hydroelectric development on Kaua`i said

This ruling by FERC is significant and fully supports the arguments of the petitioners against the KIUC Board decision to use the FERC process on Kauai...KIUC should voluntarily withdraw all its preliminary permit applications and give up the ones that have been granted. This action would be consistent with the FERC ruling and KIUC's acknowledgment of its wrongful use of the FERC process.

The order indicated that all other FERC permits in Hawai`i- such as the one that, according to FFP's application, would dam the Wailua River- are in trouble too. In further explaining their decision FERC's order states that:

(FERC) has agreed, in a Memorandum of Understanding with the Department of the Interior, to not issue preliminary permits for hydrokinetic projects located on the Outer Continental Shelf. Such decisions are within our authority, so long as we provide adequate justification for them. Examining the facts in the cases before us leads us to conclude that, while the Commission cannot envision every set of facts that may be presented to it, as a general matter we will decline to issue preliminary permits for projects in Hawaii that would be subject to permissive section 4(e) licensing, unless the facts of the particular case present extenuating circumstances that would require the Commission to consider such an application.

The FERC order cited 13 other hydroelectric plants in Hawai`i that had undergone state permitting specifically referring to the example of the Wailuku River Hydroelectric Power Company plant which began producing electricity in May of 1993.

In allowing a state process to supersede the FERC permitting process- as opponents had demanded- the commission wrote that

(w)e note that filing a complete preliminary permit application with the Commission is significantly less demanding than the substantial efforts that appear to have taken place here under the state development process. Thus, the potential for a preliminary permit issued by the Commission to interfere with existing development activities at the state level is significant. While we cannot let a state process interfere with our exclusive mandatory jurisdiction, we do not want our preliminary permit program with respect to projects subject to permissive licensing to chill the development efforts of entities pursuing a legitimate state authorization process...

Nor do we want to force developers of projects not subject to mandatory licensing to engage in the federal authorization process when they have been successfully pursuing authorization from the state, simply because another entity has filed a preliminary permit application with the Commission for the same hydropower site.

The operative paragraph that indicates that KIUC's other hydroelectric projects that have received preliminary permits from FERC will be allowed to undergo state oversight without FERC involvement states that:

in order to avoid similar situations in the future, we will, as a general matter, decline to issue preliminary permits for projects in Hawaii that would be subject to permissive section 4(e) licensing. This proceeding demonstrates the potential for the Commission’s preliminary permitting process to interfere with hydropower development that is proceeding in accordance with a legitimate state authorization process.

(Saturday Special) THE LUNATIC IS IN MY HEAD

THE LUNATIC IS IN MY HEAD: Ever since Thursday we've had a nagging feeling we were missing something after reading the article in the local newspaper about Tuesday's Kaua‘i Island Utility Cooperative (KIUC) board meeting where it was announced that they were going to essentially ignore the Federal Energy Regulatory Commission's (FERC) ruling dismissing of two of KIUC's eight preliminary hydropower permits and throwing the rest into question.

So on Thursday, when we couldn't quite put our finger on it, we decided to rehash the story of the apparently sleazy way KIUC's deal with Free Flow Power (FFP) went down.

But last night it all became clear after we read a Facebook posting by board member Ben Sullivan.

Sullivan for some reason has taken it upon himself to be the spokesperson for the board's insistence that they are not going to abandon the FERC permits or process in favor of what the FERC called the state's "long history of authorizing and regulating hydropower projects."

Last night, in a seemingly tone-deaf statement accompanying a notice for this week's three meetings regarding KIUC's remaining FERC hydroelectric projects, he wrote "I think our approach is a good one, we just have to make sure there is ample communication and that we work together during the evaluation."

"What approach?" we thought. "What communication? The insistence that the FERC process is the right one no matter what anyone says?"

All of a sudden it hit us. Part of the FERC ruling said essentially that they would no longer issue any more permits for the state of Hawai`i. And that makes KIUC's whole stated reason for using FERC in the first place no longer valid.

KIUC has repeatedly said that they had to use FERC because they were afraid someone else would take out preliminary permits and by doing so, under FERC rules, obtain sole rights to develop those projects. That, they said, would have put KIUC over a barrel of having to negotiate with whomever got the permit and buy the power- possibly at an inflated price- denying the coop actual ownership of the facilities.

But now that no one can get one of those preliminary (or final for that matter) permits, nobody can do that anymore so there's no reason that KIUC even needs a FERC permit anymore.

It's that simple.

But there was also one more claim made by Sullivan that flies in the face of KIUC's previous statements regarding the state regulatory process.

It has been a matter of some ambiguity as to whether there is or is not a state "process for approval" of hydropower in Hawai`i. But according to the FERC ruling “Hawai‘i has a long history of authorizing and regulating hydropower projects at the state level,” and has approved 13 projects throughout the state citing a recent one in Wailuku, Maui.

The whole problem with the FERC process, according to Don Heacock and Adam Asqueth- the two aquatic biologists who have been challenging the use of FERC's federal oversight- is that, due to a US Supreme Court (SCOTUS) ruling, the feds apparently have the power to usurp the state's excellent water use laws which protect whole watersheds and ecosystems, regulating stream flow, water distribution and use as well as other essential matters.

KIUC has maintained over and over that they will follow all state regulation and standards in using the FERC process for public participation and decision making, even pointing to a different SCOTUS ruling that they claim may rule out the usurping of state law.

But seemingly contradicting this is another statement made by Sullivan in Thursday’s article.

Sullivan said there are certain advantages to using FERC for permitting.

“One of the them 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,” he said. “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 in other words KIUC does NOT necessarily intend to honor all of the state's water laws as they pledged when state water authorities came out against the use of the FERC permitting.

There is apparently some honest- to-god, double-talking bullcrap going on with KIUC (what else is new). If you care, show up for one or all of this week's meetings and tell them to stop the prevarications and misrepresentations, abandon the FERC process and follow the state law... as they pledged they would.

The meetings are scheduled for Tuesday at Waimea Theater, Wednesday at Hanalei School cafeteria and Thursday at Kapa‘a Middle School cafeteria all from 6 to 7:30 p.m.

JUST FERCIN' WITH YA

JUST FERCIN' WITH YA: Although our editorial Monday concentrated on the incredible arrogance and stupidity regarding the way Kaua`i Island Utilities Co-op (KIUC)- notably via CEO David Bissell and attorney David Proudfoot- has acted in the whole Federal Energy Regulatory Commission (FERC) hydroelectric project debacle, we did mention at least two glaring issues that have underlined efforts to reverse the board's decision to engage with Free Flow Partners (FFP) to go through the FERC process- issues that KIUC has refused to respond to, choosing instead to obfuscate the issues and overwhelm us with costly PR.

The first was the state's opposition to the project, specifically through statements by William Tam, deputy director for water at DLNR. The second was regarding the Supreme Court of the US (SCOTUS) case California vs FERC in which the court rules that FERC rules preempt state laws and regulations regarding water use.

But although KIUC has generally ignored the real issues and has attempted subterfuge and extortion in trying to win the ballot vote to reverse the decision, they are finally fighting back in the person of board members (and, full disclosure, our long time friend) Jan TenBruggencate, with whom we spoke on Monday.

Apparently TenBruggencate has also been speaking to the local newspaper and today they published an article in which TenBruggencate essentially claims that KIUC has only received "preliminary permits" and that the state only opposes actual final FERC permits.

They also said they couldn't reach Tam for the article but state that TenBruggencate met with Tam last week.

However in a piece by Joan Conrow in her Kaua`i Eclectic blog today she says that

I was able to get some clarification from Tam for my Honolulu Weekly article, which comes out today...

I asked Tam, who previously told me he’d taken no stand on the FERC permits, if that was a correct statement of his position and got this email in response:

"Hypothetical situations have been considered under certain assumptions, but no resolution has been reached."

And I can’t help but wonder, if the state supposedly doesn't oppose the use of preliminary permits to scope hydro projects, why have two state agencies — the Agribusiness Development Corp. and Department of Hawaiian Home Lands — already filed formal motions to intervene?

Clearly, they're alarmed about something.

Clearly.

But TenBruggencate's other contention- one made earlier to attorney-blogger Charley Foster- was that another SCOTUS case could mean that, as Foster headlined "FERC supremacy over Kauai water regs overstated?"

Seems a case called Jefferson County Et Al. V. Washington Department Of Ecology Et Al. (1994), which came after the 1990 California case, apparently held that some state regs could actually trump federal law as TenBruggencate claimed to us on Monday

Foster said in a comment on our Monday editorial:

It's an interesting situation before the Supreme Court. While California v. FERC said the Federal Power Act supersedes state law under all but certain enumerated circumstances, the Court later ruled in PUD No. 1 of Jefferson County v. Washington Dept. of Ecology, 511 U.S. 700, that the Clean Water supersedes the Federal Power Act and gives the power back to the states to set licensing requirements. In pointing out the seemingly schizophrenic decisions, the dissent in the later case pointed out that California would have prevailed in the earlier case had it asserted its requirements through the Clean Water Act rather than through the Federal Power Act.

In any case, I wouldn't want to be the attorney having to navigate through that legal mine field.

But in reading the two opinions, while California is a wide ranging and broad reaffirmation of a previous case called First Iowa Hydro-Electric Cooperative v. FPC, which held for federal supremacy in all water issues, Jefferson County v. Washington Dept. of Ecology, deals narrowly and specifically with the Clean Water Act and water quality, although it does say one cannot separate water flow from water quality.

It doesn't even mention First Iowa or California and only touches obliquely on California at the end by saying

In addition, the Court is unwilling to read implied limitations into § 401 based on petitioners' claim that a conflict exists between the condition's imposition and the Federal Energy Regulatory Commission's authority to license hydroelectric projects under the Federal Power Act, since FERC has not yet acted on petitioners' license application and since § 401's certification requirement also applies to other statutes and regulatory schemes.

Which means that the case didn't even touch on any FERC supremacy issues because, at the time of the decision, there was no FERC involvement yet.

Which is exactly what opponents of the FERC process are saying- that if and only if FERC isn't involved in hydroelectric development, state laws and regulations would be enforceable- otherwise, all bets are off.

While it's nice that someone with some integrity from KIUC is finally, after all this BS, at least trying to address the specifics of why members are trying to reverse the board's decision, TenBruggencate is apparently shooting blanks- blanks most likely provided by Bissell and Proudfoot.

(PNN/gw?) REJECT EXTORTION, LIES, INCOMPETENCE; VOTE "NO" ON KIUC'S BALLOT MEASURE

PNN: REJECT EXTORTION, LIES, INCOMPETENCE; VOTE "NO" ON KIUC'S BALLOT MEASURE

Please vote "no" to the ballot measure that recently arrived in your mailbox and send KIUC a message that subterfuge, laziness and a lack of due diligence is not acceptable.

The issue is not hydro-electric power development as they would have you believe but Kaua`i Island Utilities Co-op's (KIUC) ill-considered decision to engage in the Federal Energy Regulatory Commission (FERC) process despite the state Department of Land and Natural Resources' (DLNR) opposition to the use of FERC in Hawai`i- opposition which dates back to a previous attempt to use FERC in the 1990's.

Not only did the KIUC board of directors either ignore or fail to discover the state's opposition but they were apparently unaware of a US Supreme Court case, California vs. FERC, which would give FERC the power to override the unique water use laws of Hawai`i.

The FERC process is so odious that Senator Daniel Akaka (D- HI) introduced legislation to remove Hawai`i from FREC control.

The KIUC board of directors was sold a bill of goods by new KIUC CEO David Bissell apparently, whether by malpractice or malfeasance, without discovering these factors and now has used lies and an overwhelming expenditure of co-op funds for a PR campaign to try to make people believe that they must vote "yes" in order to ever develop hydroelectric facilities on Kaua`i.

Nothing could be further from the truth. But the board has continued to try to make up for the lack of attention to their true fiduciary responsibilities- to serve the members of the co-op- and instead protect themselves from being accused of blowing, by some reports, up to $400,000 which has already been spent.

If KIUC members don't stop the process here it could cost KIUC members even more in defending a planned intervention by the state attorney general’s office as well as planned lawsuits by opponents federal control of Hawai`i water resources.

According to a Pacific Business News interview with William Tam, deputy director for water at DLNR, Tam threatened the intervention saying that

"the state does not want Hawai‘i’s in-stream flow standards to be decided by a federal agency in Washington D.C. that does not have any experience with or understand Hawai‘i’s streams. Hawai‘i stream-flow standards should not be decided 5,000 miles away where it’s very hard for the people of Hawai‘i to effectively participate.”

In the Supreme Court of the US (SCOTUS) case the justices ruled that FERC's rules trump state regulations if the two conflict, despite assurances from Bissell and KIUC attorney David Proudfoot that all state regulations will be followed.

The fact is that Bissell, Proudfoot and the board have refused to directly engage with opponents on the specifics of the FERC process raised by Tam, Akaka and the SCOTUS ruling, rather taking a paternalistic "trust us" tact.

But trust is difficult if not impossible given KIUC's track record and the surreptitiousness of the vote to engage Free Flow Partners- the company applying for the FERC permits with which KIUC has a so far secret "memorandum of agreement."

Though they promise to engage "stakeholders" from now on, not only is the damage to any trust already done but they have made it clear that on the key issue of FERC involvement they will not budge no matter what future discussions with the community yield.

As a matter of fact Bissell and Proudfoot have admitted using the fact that they controlled the "voters' guide" that came with the ballot to misrepresent opponents' views.

An article in the local Kaua`i newspaper states that:

KIUC legal counsel David Proudfoot acknowledged the petition was ultimately about FERC issues, but indicated the co-op was not required to state the position of the opposition.

“There is a difference between the ballot, which needs to be neutral, and which is neutral, and the position of KIUC and its board,” Proudfoot said. “KIUC and its board, who were elected by its members, they obviously believe in the process they are using and they’re entitled to support it. They are not required to help someone else support their decision, that they don’t like, with the members’ money.”

(Opponent Pat) Gegen asked, “And that’s a democratic process?”

“Yes, it is,” Proudfood said. “Of the 250 members that signed the petition, if they want to be able to PR their case, they can do it as much as they want, but it’s not up to KIUC, who doesn’t believe in their position, to pay their money for it. It’s no different than any political democratic process. If you’re a republican, you don’t pay the democrats for their publicity. They pay their own and that’s why the Voters Guide is very carefully labeled as the KIUC Voters Guide.”

It's apparent that the extortionate efforts by KIUC to misrepresent the issue by threatening Kaua`i with a "vote yes or you will never have hydro" lie are, in and of themselves, a reason for continued mistrust.

In fact, an effort to recall all board members and fire Bissell and Proudfoot is being discussed by opponents of the decision to engage with FERC.

Don't knuckle under to KIUC's threats to deny us hydroelectric projects or believe the prevarications, misrepresentations and efforts to overwhelm us with false PR statements by voting "no" on the KIUC FERC "hydro" ballot measure.

WATCHING THE RIVER FLOW

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.
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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.

WHILE WE'RE ON THE SUBJECT

WHILE WE'RE ON THE SUBJECT: Oh there was fear. Oh there was loathing.

But the when KIUC CEO David Bissell "debated" anti-FERC petition originator Adam Asquith at a packed Kapa`a Library conference room on Saturday there was mostly misdirection and stonewalling on Bissell's part- especially when we asked about the origins of KIUC's dealing with Free Flow Partners (FFP).

We decided to confront Bissell as to how exactly the deal came about, quoting a Honolulu Weekly article by Joan Conrow that made pretty clear that FFP had gotten the preliminary Federal Energy Regulatory Commission (FERC) permits, set up shell corporations and then held a gun to KIUC's head forcing them to either deal with FFP to get dibs on the exclusive right to develop six water runs on Kaua`i for hydroelectric or FFP would tie up the rights indefinitely.

Bissell at first denied that the permits were issued before KIUC's initial involvement (which Bissell said was last October) something documentation reveals to be a lie. But then, when we were allowed a followup question, he refused to say who exactly approached whom and how the deal was struck other than saying an unidentified intermediary brought the parties together, saying "what difference does it make?".

We approached Bissell after the meeting seeking to get some answers to that matter as well as a couple of others. But Bissell as soon as we approached him as he spoke to others, quickly scurried to his car, saying he would not answer any more questions and leaving us, note pad in hand, chasing him through the library parking lot.

So what is the truth? Well, according to Conrow's blog post today, the truth is that "FFP had already done the “poaching” by filing its applications for hydro projects on Kauai waterways prior to entering into a contract with KIUC."

Not only does she clarify and reiterate what we suspected she was saying on Friday but she details how "it appears the circumstances that led to their union were more akin to a shotgun wedding than a love match. What’s more, it seems that “grab 'em with both hands” is FFP’s standard MO."

Seems that, although FFP hasn't developed a single project as opponents have reiterated, they have scooped up hundreds of these "preliminary permits" across the country including "141 project sites covering all but a few miles of (an) 850-mile reach of the (Mississippi) river" causing FREC "to decline to issue additional permits on this stretch of river, and instead allow potential developers to advance their projects through the commission's licensing process."

Another part of their scam seems to be to find existing dams without any hydro projects and get permits for exploring exclusive development.

While we suggest you read Conrow's post today for all the gory details of that and other FFP mainland scams, what remains is yet another reason to distrust Bissell himself and everything that comes out of his mouth.

The other questions we didn't get answered included one as to why the "members" of the co-op aren't entitled to examine full Memorandum of Agreement (MOA) between KIUC and FFP which, as far as we have been able to determine by asking board members, is "confidential" for no particular reason other than it's confidential.

One thing that Bissell refused to say was whether KIUC would commit to abandon the seeking of full FERC licensing, in light of the contention of late that KIUC/FFP has only obtained "preliminary permits" to look into hydroelectric projects on Kaua`i and not full "FERC licensing"- the latter of which is opposed by the state DLNR's water division chief and attorney general's office.

It's particularity irksome that Bissell has claimed that, because there is no state process for hydro development, we need to follow the "FERC process" contained in a flow chart that was waved about at the dais. But he avoided commenting on why that process couldn’t be followed without FERC.

Could it be that the reason why KIUC never approached the state to set up a state-based process for developing hydro was because FFP had already gotten the preliminary permits and was holding a gun to KIUC's head saying that they would hold up any hydro development indefinitely unless KIUC signed on the dotted line?

That would sure explain a lot of things such as why all of a sudden without any advance notice KIUC was suddenly gung ho for hydroelectric development. It would also explain why they signed an MOA that "purchases" the permits and shell corporations but allows both to revert to FFP should KIUC change its mind, as will happen should the ballots be returned with more "no" than "yes" votes.

We had prepared a question for Bissell on the off-chance that we would get a second round at the meeting along the lines of "given that almost everyone- including some board members- agrees that your communications with the public have so far been severely bungled with a lack of transparency, the 'no FERC, no hydro' threat and the refusal to release the MOA, is there anything you'd personally do differently if you had it to do over?".

But after the a couple of hours of misinformation, threats, misdirection and, when necessary, stonewalling in reiterating all the past bunk we've been fed, the question seemed to have answered itself.

ASK ALICE

ASK ALICE: It didn't take long for our phone to start ringing yesterday and, as is usual when we describe someone- in this case people with Kaua`i Island Utilities Co-op (KIUC) - grasping at straws, trying to overcome past stupid foibles by spewing additional half-truths and outright lies, as things get clearer and clearer they also get curiouser and curiouser.

KIUC's latest "claim,"- as we called it yesterday even though we know how charged that word is as opposed to simply "said" that essentially KIUC has only thus far received "preliminary permits" through the Federal Energy Regulatory Commission (FERC) process and that the state doesn't oppose that, has a few people confused.

Because for it to mean anything at all it would mean that those urging a "no" vote on the ballot question co-op members are currently being asked to decide, have won and KIUC is stopping the FERC "process" with these "preliminary permits."

The question that we came away from those calls with is "so what." Because unless KIUC has decided to reverse course and end their involvement with Free Flow Partners (FFP) and abandon the actual development of the hydroelectric projects, it's an absolutely meaningless red herring.

Because, although we can't be sure what in the heck KIUC has agreed to in their super-secret Memorandum of Agreement (MOA) with FFP because they won't let anyone see it. It's quite obvious that the "FERC process" they speak of includes the actual development of the projects and the granting of full FREC "licenses" to do so.

That bit of obfuscation and some other things were made a bit clearer with the on-line availability of Joan Conrow's Honolulu Weekly article on the subject.

But one thing, if we're reading it right, just adds another layer to the original sins of KIUC in secretly signing up with FFP.

Joan writes that:

The utility actually followed the lead of Free Flow Power (FFP), a Massachusetts-based consortium of consultants and investors that filed the permit applications that created a community uproar. The utility became embroiled when it bought Free Flow’s permits and hired the firm (emphasis added) to guide it through a hydro development process administered by the Federal Energy Regulatory Commission (FERC) in Washington, DC...

To stake its own claim, KIUC purchased the shell companies that FFP formed to file six applications on waterways (emphasis added) from Hanalei to Kekaha. FERC has already approved three, giving KIUC preliminary permits that carry the exclusive right to study hydroelectric development for three years.

Now those following the the issue down the rabbit hole will remember the original claim by KIUC CEO David Bissell and their attorney David Proudfoot was that the reason they went to FFP and engaged in the FREC process was so that they could make sure that someone else didn't apply for a permit, which grants the exclusive rights to a three-year period to consider development.

But if we're reading Conrow's contention right it sounds like that "someone else" might just have been... drum roll... FFP.

That would certainly explain why, as opponents have said, KIUC chose a company with no hydroelectric track record that sounds more like a venture capital firm- with shady connections- than an energy developer.

While as KIUC has indicated there may have been others who they were afraid of it makes you wonder who is extorting whom.

As we said in our "editorial" Monday- and as Conrow makes abundantly clear- "nothing but a pack of cards" KIUC has created a situation where anyone who didn't, as they say, think that "a sign that they're lying is that their lips are moving" before this episode, is certainly convinced of it now.

Yet unbelievably, Bissell is quoted as bizarrely having said:

“I encourage everyone to have trust in KIUC, have trust in your elected board, have trust in me and, most importantly, have trust in yourself. The only way these projects will go forward is through overwhelming community support.”

All we can say to that is "eat me."

FOLLOWING THE MONEY

FOLLOWING THE MONEY: In addition to our wholesale advocacy of a "no" vote on this FERCin' mess KIUC has gotten us into with their capitulation to Free Flow Partners' (FFP) extortion, we've been doing quite a bit of retail, taking a slew of phone calls from people for whom computers are anathema- all essentially asking "WTF?".

Many just want an answer as to whether to vote "no" or "yes." But far more have read both the newspaper articles and the ballot itself along with KIUC's unbelievably slanted voters' guide.

Under "your no vote means" the guide makes the claim that:

The contracts with FFP will be terminated, and all preliminary permits will revert back to FFP. This will make progress on hydro in the near term very difficult and more expensive, and more than $325,000 in contractual obligations will be due to FFP.

Even those that have read both our coverage and Joan Conrow's awesome Honolulu Weekly article and meticulously researched and presented Gold Diggers (parts 1 and 2) blog posts have asked an important question.

Basically they ask "well, yes- the whole deal stinks and we should never have entered into any deal with FFP. But now that we have we stand to lose $325,000 (some reports claim it's as high as $400,000) which will inevitably show up on our bill. And we will have paid that money and not be any closer to hydroelectric power project development. Shouldn't I vote 'yes?'"

The answer to the first part is that while yes, it will cost hundreds of thousands to cancel the deal with FFP, many have not heard or glossed over a quote from Conrow's Honolulu Weekly piece which says that:

Bissell said no specific price was placed on the applications, which were purchased as part of a larger consulting contract. The utility has refused to disclose the full value of the contract, which includes an incentive for delivering completed projects, but KIUC attorney David Proudfoot said FFP will be paid “several million dollars if none go past the first stage."

Given the opposition to FERC and the likelihood that, with the state's long-standing opposition and threats to sue, we will never proceed to full FERC licensing. What a yes vote means is that, although we'll have to forfeit the $325K we'd potentially be throwing away a lot more.

As Conrow concluded in her second Gold Digger post:

In its permitted applications, FFP states, “The studies will be financed by the applicant.” No mention is made of KIUC. For each project, FFP estimates the cost of doing all the first-year studies — the feasibility stuff — at $100,000. The rest of the work — consultations, developing a notice of intent and pre-application document, and beginning scoping activities — is estimated to “not exceed $500,000."

So even if FFP were to take all six projects all the way up to the license application, it would cost no more than $3.6 million. KIUC won’t tell us exactly what we’re paying, but KIUC attorney David Proudfoot told us at the June 4 community meeting that FFP will be paid “several million dollars if none go past the first stage.”

Several is defined as “more than or three but not many.” So it sounds like we’re paying close to, if not more than, the full estimated price for bringing all six projects through the first stage, even though KIUC CEO David Bissell and some Board members have acknowledged that some of the projects will never get off the ground.

On top of that, FFP will get an incentive for delivering completed projects.

The second question is a bit trickier but perhaps more revealing.

The reason why KIUC says it is going through the FERC is that there is no state process for developing hydro. But we must remember a couple of things.

What many including petition initiator Adam Asquith have said, is that what we should have done- and should do- is to go to the state and say "we want to do hydroelectric projects and want to work with the state to establish a system for development and introduce and pass enabling legislation and eventually administrative rules so that we can develop environmentally and culturally sensitive and water-wise projects into the future.

And, as a matter of fact, a good place to start is the KIUC ballyhooed flow chart that FERC has already developed for public participation and alter it for our unique water laws.

Certainly we're not the only ones in the state who want to develop hydropower. HELCO has the same renewable energy portfolio requirements as KIUC for the other islands. If and when they wake up to the insanity of their "Big Wind" project and the fact that it is doomed to failure, hydroelectric is probably the next best technology in terms of cost of both development and future rates.

But whether through pure laziness, corruption or pure stupidity the KIUC board of directors and administrative staff seems hell bent on committing us to a costly and widely-opposed way of going about it- one that, even if it were to succeed, would still leave us without a simpler, less costly statewide system for the next round of hydroelectric development.

The $325-400,000 we stand to lose in a "no" vote is peanuts compared to the cost of a "yes" vote down the road. Whether as a way to say no to FERC or to, in fact, SAVE us money, a "no" vote is the best option to get us out of this mess that the board of KIUC has gotten us into.

That and remembering this fiasco during the next KIUC board of directors election.

FERC YOU

FERC YOU: Anyone surprised at the FERC KIUC debacle wave your electricity bill in the air.

Okay- you can go back to sleep now. Because unless you were under the proverbial rock for the past decade you must have been fast asleep to be shocked at anything "this co-op" does.

Since day one when barnacle-on-the-butt-of-Kaua`i Gregg Gardiner convinced a group of good old boys and girls and Democratic Party bosses to pay way too much for the liability that was Citizen’s Electric- and stick the resultant debt on the backs of the island working people- the hew and cry of warnings has been a loud if ineffective undercurrent of stomach churning rage from rate payers.

"We're all for a co-op- just not THIS co-op" was the slogan of the original "nitpickers" whose moniker was proudly taken from former Mayor Marianne Kusaka's attempt to denigrate the effort that saved members $50 million and should have brought the price down by another hundred million.

But the makeup of the board was a who's who of the then, two factions of the Democratic Party- the old guard represented by aging, "442nd" party boss Turk Tokita vs the new guard of then-former Mayor and then-out-of-politics progressive JoAnn Yukimura.

And when the bylaws and rules were forced down the throats of members in an all-or-nothing vote- removing the promised precepts of the Sunshine law and giving all power to the board- the course was set for today's dictatorial decision-making by a handful of the power elite.

With today's news from Pacific Business News (via the local newspaper) that William Tam, deputy director for water at DLNR said that "the state does not want Hawai‘i's (sic) in-stream flow standards to be decided by a federal agency in Washington D.C. that does not have any experience with or understand Hawai‘i’s streams" and the announcement of an effort from anti-FREC forces leader Adam Asquith to get signatures to a full page ad fully explaining all that's insanely stupid about going through the feds, the tide seems to be turning- that despite the "that's my story and I'm stickin' to it" stance of the stumble-bums on the KIUC board.

And that includes the original three opponents- Carol Bain, Ben Sullivan and Jan TenBruggencate who were elected to be the voice of reason but who now, reportedly, have switched sides.

What the board seems to have forgotten are the lessons of another recent debacle- the ill-conceived and supremely bungled Superferry and the resultant battle.

The reason why, shockingly, the people of Kaua`i seemed to oppose the big bad boat was not the boat itself but for the way it usurped the processes that, although usually ineffective, are at least supposedly there to protect us from deregulatory invasion from Washington D.C. and Honolulu.

Just as the feds and state conspired to remove the environmental assessment and impact statement process for the Superferry, once again a bunch of power mongers have decided to allow a federal process to negate the unique water rights and management laws that have been carefully developed over decades in Hawai`i.

Then when challenged the powerful wielded their power to lie and deceive in such a blatant way that nobody failed to get the "sit down and shut up" message that General Linda Lingle and her unified command threw in the faces of those who usually, unless riled up by a lack of respect, act like sheeple.

And now though few understand the ins and outs of water usage, citizens feel the same kind of "like it or lump it" missive coming from elected officials who fail to get the message that their arrogance, not the project, is the becoming the issue.

Though it's too early to tell the rising tide of indignation over the attempted FERC KIUC sleight-of-hand indicates that the same kind of outrage that swept the island over the Superferry fiasco might just be at hand.

Because, as "this co-op" circles the wagons, the natives are getting restless.

STOP MAKING SENSE

STOP MAKING SENSE: With Friday's high noon deadline for the ballots to be received in Kaua`i Island Utilities Co-op (KIUC) "Hydro Vote"- as they insist on calling it, with the words Federal Energy Regulatory Commission (FERC) being entirely absent on the the ballot- looming, the lack of full disclosure, straight talk and transparency in the process are what stand out to those voters who have done their own "due diligence."

In examining the ballot one question that hasn't received much attention is, what exactly are co-op members being asked to vote upon?

In asking "As a KIUC member do you approve of the Board action set out above?" the "above" part says, in main:

This ballot allows KIUC members to approve or reject a KIUC Board action that authorized contracting services for hydroelectric development and acquiring those hydroelectric assets...

A valid petition... requests a member vote on the KIUC Board’s action taken at its Regular Board Meeting on March 29, 2011, approving a Development Services Agreement and an LLC Assignment Agreement that had been negotiated by KIUC Staff with Free Flow Power Corporation.(emphasis added)

So in essence members are being asked whether they approve of the "Development Services Agreement and an LLC Assignment Agreement."

We aren't just being asked to approve or disapprove of a board decision. It's not the decision that's central to the vote. Instead members are being asked to approve or disapprove the contracts the board approved.

The problem is that, as we all know, those agreements- referred to as a Memoranda of Agreement or MOAs- are not being made available to the voters making the decision on whether they are in the best interest of members effectively impossible.

How exactly are members to decide if they approve of the "contracts" if they have no idea what exactly they say?

Well, that "Star Chamber" aspect of this whole affair will certainly be central to any legal action by "no" vote proponents should the co-op members approve of the contracts- that and KIUC's costly, "vote yes," disinformation campaign and suppressing the claims of the petitioners

That alone should be enough for a judge to grant an injunction to enjoin a suit to invalidate the vote, giving the shareholders- the co-op members- derivative injunctive relief, according to a legal expert we spoke to who asked not to be identified.

In other words, we were told, "the guy in the robe would, most likely, tell Proudfoot 'no way'" can you ask voters to approve or disapprove of a document they're not allowed to see.

But let's examine the central claims that we do know concerning the whole deal.

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.

Of course we have no way to know how much of this is the truth because no one can see the MOAs. But one thing rises to the top.

If the preliminary permits were part of the deal to "purchase" the shell corporations- which KIUC apparently now "owns"- how can the "non-transferable" permits be transferred back to FFP? And why would we have to pay them almost a third of a million dollars for taking them off our hands?

Especially if the MOA has been invalidated by the vote- something that all involved knew was a possibility when they were signed.

Another note before we take a long weekend and await the vote...

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.

We've heard from many of the opponents of the FERC process that they are waiting to see the outcome before filing suit, saying that they would be satisfied if the contract is rejected.

But frankly as someone who smells corruption behind the whole deal, at this point we care less about the outcome of the vote than the contents of the two contracts that are likely so explosive that KIUC would go to these extraordinary measures suppress contents.

Regardless of what happens at 12:00 noon on Friday we hope members will still be demanding to see those MOAs at 12:01 pm. Because if we don't you can be assured that we'll be right back here again after the board and executive staff of KIUC gets the message that they can get away with withholding vital information from its members.

IT'S BEN DOVER TIME

IT'S BEN DOVER TIME: Our "extra" post yesterday- a news item on Ben Sullivan's hiring by the county to be the new Energy Coordinator- was confirmed in a county press release today.

But apparently others weren't as caught off guard as we were. We heard from quite a few readers saying that they were Casablanca-style "shocked-shocked" that Sullivan parlayed his short stints as founder and head of Apollo Kaua`i and election to the Kaua`i Island Utilities Coop (KIUC) Board of Directors into a well-paid job in the administration of Mayor Bernard Carvalho, Jr.

But looking back on Sullivan's rise from FOB malahini to appointment to Carvalho's crony-filled staff shouldn't come as a surprise to anyone who watches the administration's hiring practices and has interacted with Sullivan since his election to the KIUC board.

We began getting them soon after Sullivan's election- emails, comments and phone calls increasingly expressing disillusionment and dissatisfaction with Sullivan's apparent unwavering shift from perceived dissident to KIUC defender of the realm.

It came to a head with his support for the whole FERC-FFP deal followed by the propaganda- some say misinformation- driven vote that allowed the co-op to go ahead with federal involvement in hydropower projects rather than rejecting FERC in favor of strictly state oversight... especially given the potential for federal "trumping" of the more environmentally-protective local regulations and approval process.

But that alone wouldn't be enough to be a "good fit" for the yes-men and women that kow-tow to Carvalho, in an administration where "never is heard a discouraging word" from appointees... or at least not if they expect to serve in their "at-the-pleasure-of" positions for long.

Sullivan didn't just support board decisions as is required under KIUC rules- he firecely defended them. Board Rule 27 mandates lock-step public adherence to board-determined positions and policies and requires all public statements by board members to be cleared by either the chair or (get this) the CEO. The latter creates a potentially unethical if not illegal situation whereby employees of the not-for-profit are directing members of the board.

He has seemingly relished engaging members of the public in support of those positions and dove in head-first in a rare-for-Kaua`i trait of personal engagement with dissidents... of which there are many when it comes to the electricity coop.

And that is what has made Sullivan a perfect fit for the Carvalho administration. It seems to matter not that he is an architect by education and, although his non-profit work has dealt with electrical power issues, one would think that a highly paid, highly skilled position like this would be filled by someone with training and/or experience in the field... although that hasn't stopped most of Carvalho's appointees from landing jobs with a notable lack of credentials.

Sullivan has proved his worth to Carvalho simply through his ability to stick to the guns of his higher-ups, as evidenced by his stick-to-it-ive-ness in taking on all comers in defending the KIUC realm.

It matters not that he is a relative newcomer to the island or that he is a not "local"- usually a negative for patronage hires under Carvalho. It matters only that he is ready, willing and able to act as a human shield for arrows directed at his boss.

We like Ben. He's the nicest of guys and actually we're sure he actually believes in what he says and what he does. It's likely he will bristle at this analysis of why he got his "dream job."

But given the history of the hiring practices since Carvalho took office just over three years ago, it's hard to come to any other conclusion.

SHOCKING REVERSAL

SHOCKING REVERSAL: Another chapter from the "are you gonna believe me or your lyin' eyes" department today from an otherwise- or maybe we should say formerly- unimpeachable source.

In a letter-to-the-editor of today's local Kaua`i newspaper, former long-time Honolulu Advertiser Kaua`i Bureau Chief Jan TenBruggencate- who is now the Vice Chairman of the Kaua`i Island Utilities Cooperative (KIUC) Board of Directors- excoriates columnist Walter Lewis for a piece published in the paper on Friday.

In it Lewis basically describes how a bill headed for apparent passage in the 2013 state legislature would, in his estimation, allow KIUC to get out from under regulation by the Public Utilities Commission (PUC).

He leads his column by saying:

The state legislature is currently considering two companion bills — HB 815 and SB 1045 — which could remove the Public Utilities Commission (PUC) from much or all of its regulatory function as to cooperatives.

He goes on to say how basically KIUC doesn't act like a co-op- something we've covered extensively in this space- and cites many of the known debacles like the FERC, federally-controlled hydroelectric projects as well as pointing out many potential benefits of PUC oversight.

But in a colorful and many times personal attack on Lewis, TenBruggencate say that it is not true of the bill and that Walter, as usual in TenBruggencate's view, has it all wrong. Rather he says:

The bills take away no authority, and indeed give the PUC new authority over KIUC. That includes the authority to protect consumers by exempting KIUC from expensive regulatory dockets that don’t apply to cooperatives.

So who is right?

Well, as an aside, we must point out first that of course it would "take away no authority" if indeed "regulatory dockets don't apply to cooperatives."

But to directly address the conflict, maybe the "description" of the bill will tell us. The official "description" of SB1045 SD1 HD2 says that it:

Authorizes the Public Utilities Commission to waive or exempt an electric cooperative operating in the State from compliance with the provisions of chapter 269, Hawaii Revised Statutes, as well as any other applicable charters, franchises, rules, decisions, orders, or any other laws

Sounds clearly like Lewis has it right. Although if our "aside" is any indication there may be some wordsmithing going on in TenBruggencate's letter that could obscures the facts.

We would also add something that TenBruggencate might not know but that Lewis- who was one of those most responsible for saving members up to $80 million in the lead-up to the purchase of the utility- seems to have forgotten.

One of the other proposals at the time that Citizens' Utilities was trying to sell "Kaua`i Electric" was that, rather than setting up a co-op the county would set up a government owned and run utility. As a matter of fact, the Kaua`i County Charter contains a section, passed by voters, on how a "Municipal Power Authority (MPA)" would work.

But one of the reasons the co-op idea won out was that decision makers with the county- specifically County Council Chair at the time Kaipo Asing and then-Mayor Marianne Kusaka- together extracted a promise from the co-op's organizing board that they would abide by two things. The first was that they would adhere to the provisions of the State Sunshine law which an MPA would have had to do.

The second was to put themselves under the control of the PUC.

The first never happened. Like a promised beach access that is fenced as soon as the construction of a development is finished, the Sunshine Law provision was obliterated when the by-laws replaced the articles of incorporation. But nobody noticed because the "nit-pickers" were too busy going over so many other details of the purchase, using their time to follow the money rather than the process.

Actually the group of infamous council curmudgeons led by legendary activist Ray Chuan. appropriated the name at the time when they were disparagingly given it by Kusaka for what she called the "nit-picking" the of the deal- nit-picking which later led up to the revised price.

And now the part of about the putting themselves under PUC regulation is about to be eliminated like the fence that goes up across the beach access when the development is sold... no matter what our good friend Jan says and how much virtual spittle he got on his letter.

Unless there's some provision in the current text of the bill itself to reverse 180 degrees the purpose/description- something we can't find but which would make the bill invalid at any rate because a bill is supposed to reflect it's original description- it appears that the one who has a "gross misunderstanding" is our good friend Jan, not Walter of whom we are more often critical than anything else... unless that is there are some clever semantics going on on the part of our pal with the skilled pen

We invite you to read the bill and both Lewis' and TenBruggencate's opposing "opinions" and decide.

It feels funny for the "Rabid Reporter" to be criticizing the great mainstream, "objective" journalist but apparently there seems to be a "fiduciary matter" that has turned the worm.

As they say, you're entitled to your own opinions but not your own facts; the description of the bill seems to indicate that this time for once it's Walter who has a firm handle on those nasty little facts.

DISCONCERTING DISCONNECTION

DISCONCERTING DISCONNECTION: It gets harder and harder each year to get excited- make that "involved" since we left "excited" behind years ago- in the election of board members of Kaua`i Island Utilities "Co-op" (KIUC).

Note the word co-op in quotes.

Every year it's the same thing. First a short list of "good" candidates is circulated, promises are made to shake things up, and then those that do manage to get elected do absolutely nothing. Not only do they do nothing but they magically seem to get KIUC-style religion and suddenly start toeing the "company" line.

Note the word company in quotes.

When asked "what the heck happened," they claim that they "can't do anything without a majority" on the board, But of course there is one thing they could do- speak out or at least stop parroting whatever the "official policy" happens to be. And when asked again "why the heck?",they pull a "Board Rule" out, claiming that it prevents them from even speaking unless they speak for the whole board.

That of course is utter bullshi*t. We'd love to see what would happen if those who say this would actually get together and put out a press release- or even verbally inform people who ask- stating that they disagree with the direction of the co-op and espouse their supposed "real thoughts." If the rest of the board tried to remove or otherwise discipline them we'd expect to see a public battle and a public relations nightmare for KIUC that would make the FERC debacle look like the annual picnic.

We've yet to hear the real issues with KIUC addressed by any candidates, even Pat Gegen and Ken Stokes, two on the slate of hopefuls upon whom many are placing their hopes.

We'd support them if we weren't symbolically boycotting the "Soviet-style" election where voters and candidates are limited to "party" members- we say "symbolically" because we don't get a vote in the first place.

But our message to them, should they be elected, is: if you are going to run as "dissidents" and talk about change, act like dissidents and demand change.

So rather than tell you why to vote and who to vote for we'll go over what we'd do if we ran the zoo.

First of all, let's get one thing straight- KIUC is not a cooperative. In a cooperative, according to all definitions of consumer co-ops. members make all major decisions leaving a board of directors to oversee daily operational matters

As we wrote last month,

KIUC is what's called a "Consumers' Cooperative" in which, according... to Wikipedia, "(m)embers vote on major decisions and elect the board of directors from amongst their own number."


With the lack of democracy has come a corporate mindset where the idea of "serving and facilitating members' electricity needs" is an alien concept and, just like an investor-owned electric utility "selling electricity to customers" is the way KIUC operates. In order to become a co-op, KIUC must change its business plan.

Yet no one running has pledged to do this in the materials we've seen and heard.

And that brings up the matter of who is a member. The current set up is one of divide and conquer. Only those whose names appear on the bill has a vote. No account? No accountability. The fact is that there is no one on this island who is not a consumer of electricity in one way or another.

All adult residents must be allowed to become members and be entitled to a vote in order for KIUC to function as a true cooperative.

Yet no one running has pledged to change this.

Many do not know that when KIUC was first forming there was a competing plan to set up a municipal electric utility. As a matter of fact a structural format for doing so was voted upon by the electorate and passed and is now enshrined in our county charter.

It was done by the county council so as to leverage certain accountability standards from the formative board. It was a serious competitor at the time especially because, as would be prescient, many did not trust the co-op to be operated as an open and transparent entity.

Promises were made at the time- alas not in writing- to make sure that the initial by-laws would, to a large degree, reflect the state's open meetings and record law. But when the dust settled nothing of the sort was so enshrined.

KIUC must start to operate, not just as a co-op, not just with an expanded membership, but under, if not the letter at least the spirit of the state's Sunshine and Freedom of Information laws.

Now let's get to the real heart of the problem with the resultant corporate- as opposed to the co-op- concept.

Much of it is explained in excellent fashion in three of recent posts by Life of the Land's Executive Director Henry Curtis, who has been a public interest watchdog of the electricity industry and the Public Utilities Commission (PUC) for many years:

What is the relative cost of different types of electricity?

Is Avoided Cost to blame for high electric rates?

Why is my electric bill so high?

We urge you to read them. But in a nutshell here's why your rates are sky high and why they will never come down under the current way business is done--even though the use of renewable, non-carbon electricity generation should be ultra-cheap compared with the use of fossil fuel.

Theoretically, through things like solar and wind power (although many say that with current technology wind on Kaua`i may be impossible due to the danger to endangered bird species), we should be able to cut our bills by as much as 75%--some say by even more.

Solar however is "intermittent"--it doesn't generate anything when the sun doesn't shine. So theoretically there is a limit as to how much we can depend on it for our electricity needs

Without storage- not just batteries but other technologies like thermal storage- for now, there's a limited amount of solar that the whole "grid" can use. As time goes by, and newer and better storage mediums come on-line, that amount will rise significantly.

But let's assume for now that there is a limit to the amount of solar.

Even with that assumption, rather than be a facilitator for individuals to generate their own electricity through on-bill payment of zero-percent loans for photovoltaic systems (and maybe even storage), KIUC is selling off whatever solar capacity the island has for use in solar "farms" where they can buy the electricity and sell it to the consumers.

The problem is that the amount of electricity from solar farms built and owned by our "co-op" is minimal as compared to the amount we contract for with investor-owned and operated farms

That's bad enough. But according to Curtis it is federally mandated that electric companies- and co-ops- buy all the electricity produced from investor-owned farms at the same rate that it would cost to generate the same amount of kilowatts of electricity with fossil fuel.

That's a vast simplification and Curtis goes into detail--but you get the idea.

Certainly if all this were to be opposed by KIUC and the PUC, the county and state might put limits on, possibly even ban, investor-owned solar through land-use laws.

But in our name KIUC has gone before the county council and state legislature and asked for- and received- laws that will insure automatic approval with no permits necessary.

And that's where the capacity for solar is going- not onto your roof where you could take advantage of the savings but to investors who will charge the same arm and a leg as we are paying for fossil-fuel-generated electricity.

KIUC should be making sure that as many users as possible are able to self-generate their electricity with photovoltaic systems, and either help provide storage on site or via central storage facilities. And they should be taking all that "investor-owned solar-farm" capacity to expand "net metering"- selling and buying back the electricity at the same rate.

But instead KIUC is not just using up all the capacity the grid can handle for intermittent energy to build vast facilities which are mandated to be bought by us at close to the cost of fossil fuels, but they are discouraging home generation by denying any more net metering and charging high buy-back rates.

And- believe it or not- they are charging huge up-front payments- sometimes up to tens of thousands of dollars- for "studies" to show the grid can handle each user, one at a time.

In a nutshell the reason your rates are so high is because KIUC is doing everything they can to put money into the pockets of investors- those who buy the land and build the facilities and then sell the electricity to our "co-op" at multiples of the price people would pay for those same types of facilities on their roofs or in their back yards.

Some have pointed out many technical issues as well as some issues of fairness with the facilitation of net-metering photovoltaics for individual homeowners. But those are solvable problems and certainly there are even more "issues," as we've raised here, with the "we sell you electricity" model that KIUC insists on using despite the opportunity that being a unique type of co-op presents.

KIUC is apparently the only electric co-op in the country to both generate and distribute electricity. Others do one or the other. KIUC has said that this is problematic. But with a different type of business plan this could actually help provide the savings that home generation facilities provide.

Additionally if we're going to "farm" things like hydro, geothermal and wave generation, they should be done internally by the co-op and owned by "us" rather than allowing others to sell us electricity at exorbitant rates.

We certainly haven't heard this discussion from any candidates.

There are other things we'd like to hear from candidates and, when and if they are elected, board members.

Why in the world we are paying millions every year for public relations, advertising, community activities, scholarships and all the rest of that crap is beyond comprehension. It is a remnant of the investor-owned utility that were designed to "give back to the community"- something a co-op doesn't need to do by definition, especially if they, as we said, allowed every adult user of electricity on the island to be members.

(Actually there is one candidate who talks about this but she is a right-wing nut that perennially comes out at election time- one who wants us to use nuclear energy.)

Also because KIUC operates with a corporate mind-set there's a tendency to "cheat" on "renewables" targets as mandated by law. Rather than defining renewables as being "carbon-free" we include things like bio-diesel and ethanol as well as bio-mass and even garbage-to-energy in meeting those "goals."

Finally the ultimate goal of any strategic plan- which of course should be done through membership participation and be membership-approved instead of written in some back room and approved by the board only- should have a target of, not reducing but, eventually eliminating fossil fuel from our generation mix. It may be a long range target and one that will be very difficult to achieve but there's no good reason not to put the goalposts where they belong.

There are others- if we listed everything and fully discussed each issue we'd be here until after the election is over. But the bottom line is that if any of the "good" candidates get elected this time, unless we hear from them throughout their terms and they don't just sit down and shut up like they're told, then this election, like those in the past, will have been another exercise in futility.

EXTRA, EXTRA- DON'T READ ALL ABOUT IT

EXTRA, EXTRA- DON'T READ ALL ABOUT IT: The mutual admiration society known collectively as the Kaua`i County Council and the administration has evolved in the face of a dedicated group of, if not delusional at least, disillusioned voters.

Their "if only we could elect an honest mayor or four honest councilmembers..." mantra presumes that half a government is better than no governhttp://www.blogger.com/img/blank.gifment at all.

But if the the town Gould, Arkansas is any example it's going to take a lot more than merely getting a foot in the door.

Seems that, according to the NY Times, when the ad-hoc Gould Citizens Advisory Council- "a nonpartisan group that educates voters and raises money for public causes"- recruited the town's Mayor Earnest Nash Jr. to their ranks the city council simply passed an ordinance banning the formation of any group without their permission and "made it illegal for the mayor to meet with any organization in any location' either 'inside or outside Gould city limits' without the Council’s permission."

Of course Kaua`i is in no danger of a similar law, not because the council would never do it but because the fact is that the combination of the lack of transparency and the manipulation of public input has effectively made any group that might form, ineffective before they ever meet.

That and the fact that the local newspaper is dedicated to making sure that the county gets free access to its pages through the papers' pre-spun regurgitated press releases and news by photo-op.

Even when meetings are "covered" by reporters, the reporters are unable to discern when they're being led around through the chamber-of-commerce-installed rings through their noses. They are so hopped up on the power that being the single news source in town confers upon them that, even if they knew how to do it, they wouldn't dare present the causes of dissident groups in any coherent manner.

In the last month, the paper allowed its top advertiser, Kaua`i Island Utilities Co-op, (KIUC) to have free reign of their pages, even going so far as to simply quote a KIUC release on the state's opposition to the federal "FERC" process rather than actually talking to the state official that was quoted.

Then the administration of Mayor Bernard Carvalho held a series of meaningless meetings, supposedly about the location of the proposed teen drug rehab facility in Lihu`e, presenting it- as the administration claimed in their press releases- as a chance to give input on the location.

But when the last meeting suddenly turned into an announcement that the site had been selected they failed to note that as irrefutable evidence that the whole thing was a sham to begin with, as many of those opposing the location maintained.

The question is whether if the Kaua`i County Council tried to surgically remove the basic constitutional rights of its citizens anyone would notice since the only stories that appear behind the dual paywalls of the Honolulu print and on-line news outlets are ones generated by our local paper. Neither publication seems to think that anything we do here is of interest to anyone at all, if the lack of Kaua`i news bureaus is any indication.

There's more to a functioning democracy that three branches of government- that's the reason why a free press is enshrined in the constitution. But the press is only as free as the flow of information and without some attention from the outside we're headed for the kind of corruption that is limited only by the imagination of those who make the laws.

ELECTROCUTION ELOCUTION

ELECTROCUTION ELOCUTION: Perhaps the biggest chuckle we got during the whole KIUC FERC vote debacle was the electric co-op's promise that, like any five year old who had lied and misbehaved, they would never do it again.

So the new era of openness and transparency that was promised after the vote failed, is upon us, right?

OK you can stop laughing now. Because as many have heard, after the second petition- one to try to force a re-vote due to the massive abuse of the voting process on KIUC's part- allegedly failed to garner enough signatures, they wouldn't even allow the petitioners to go over the petition and the membership list to ascertain the co-op's claim that many of the signatures were either duplicates or those of non-members.

But for a real eyeful of what the future of "member relations" is going to look like nothing can beat the "Fear and Loathing" style first hand account of Tuesday's KIUC Board meeting by Tek Nickerson- a regular guy who was outraged by many of the things he saw and got involved with the second petition.

So we hand over the rest of today's column to Tek's "report" on what went down (all SIC).

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UPDATE ON PETITION TO RECALL ELECTION by Tek Nickerson

KIUC held their regularly scheduled Board meeting yesterday, Tuesday, 7.26.11. In response to the Members’ Second Petition and strong request for a verifiable count of signatures, KIUC simply issued a statement, defining a valid signature vs an invalid signature, plus a restatement of the count. They completely sidestepped the question about verification and that they might have a vested interest in protecting their own privacy how the determination was made on each signature.

I was the only one from the public signed in to talk, which was first on the agenda. Chairman Phil Tacbian said only members could talk and they could only talk in items on the agenda for three minutes.

I was called “to the stand.” I introduced myself as the point person on the second petition (to recall the election). The chairman said the petition was not on the agenda, and therefore COULD NOT BE DISCUSSED, so I could not talk. I thanked him and sat down, setting my precedence for respect.

(It was later explained to me that items are put on the agenda five days prior to the meeting. The agenda is posted on the KIUC web site. Since Tuesday was the sixth day after they received the petition, they CHOSE to avoid the issue by ignoring it on the agenda.)

I sat and listened as each person at the table gave their report. Consulting Counsel Proudfoot reported that he advised the Board how to proceed in response to the Second Petition.

Paraphrasing:

“A point of order, Mr. Chairman! Mr Proudfoot just brought the subject of the Second Petition to the table! I may now speak on the subject!”

“No, you may not.”

This is the second time the Chair CHOSE to be dismissive.

Steve Raposo, Vice Chair and chairman of the Members Relations Committee, did not mention the Second Petition in his report. This was the third time that a KIUC elected representative chose to ignore their commitment to being open and reaching out to the public.

During a break, Consulting Counsel Proudfoot approached Director Jan TenBruggencarte and me. He said he was intending to tell Jan something to tell me. Finding me pleasant and inviting his advice, he said that I could ask the Chair to wave the rule and allow me to speak. This is encouraging, especially coming from him. We showed each other we were reasonable men and could work with each other.

Raposo’s Members Relations report centered on defining exactly what their course of action would be for outreach with the public. After ten minutes of discussion, it was still a quandary for them what it would look like.

Knowing that Raposo probably categorized me as an unreasonable obstructionist, I approached him with a suggestion. He was a bit taken aback, but he listened. I reminded him that history has taught us the approach that works under similar circumstances: the Dolley Madison solution of giving weekly parties for opposing political sides in the neutral territory of her home. I.e. Take the budget for talk-down “dog and pony shows” and apply it to island-wide regional parties, where the public is attracted first by the food and then by the opportunity to ask questions of their elected directors and opposing views one-on-one. Raposo listened. Time will tell if he is receptive to Dolley Madison’s ingeniously iconic solution, used in the White House to this day.

Raposo is one of the Gang of Five, who controls the direction that the board votes. (About the First Petition, he reportedly remarked that some people are only obstructionists. This is the third opportunity they passed up.)

At each opportunity ANY one of the directors could have interjected an objection…and did not.

A CALL TO ACTION:

During a break, Jan B. told me that until the elections give them FIVE votes aligned with our thinking, the board will continue to vote as they have. I characterize this as an archaic corporate/plantation-style mentality. The progeny of field hands have come of age to think on their own without the aid of the dumbing down from a political machine.

The three up for re-election are Ben Sullivan, Stu Burley and Steve Raposo. Jan explained that if we vote out Stu and Steve with strong candidates, we’ll have purged the Gang of Five with our own Five Alive.

This is the light at the end of the tunnel.

Meanwhile, sitting in the back of the room for a while was Free Flow Power representatives, Jason Hines and his assistant, Dawn. The chairman invited them to report an update on their progress. THIS WAS NOT ON THE AGENDA.

Then we all took a break before they went onto Executive session. I took the opportunity to complain to Ben Sullivan that FFP should not have been given the floor, since they weren’t on the Agenda. Ben said he let it go, because they wouldn’t be taking a vote. That’s contrary to their own rules! Thus, there is NO WAY in which the situation can be “corrected” if the Board can continue to “pick and choose” what it can do accordingly.

Will KIUC consider the “possibility” of a forum approach in getting to the root of the matter discussed in a neutral venue with an opportunity for both sides of the issue to be in the planning process of determining what should be discussed and how both sides can be fairly presented?

If you are a member of KIUC and wish to express your position on any of these matters, you are encouraged to contact the KIUC Board of Directors at KIUCBOD@Hawaii.rr.com.

DIVIDING BY ZERO

DIVIDING BY ZERO: Is it possible that the pablum that passes for the product of the press on Kaua`i is actually getting less informative? It's kind of like asking whether the sound of zero hands clapping is quieter than the sound of one.

We expected to get shafted with KIUC-spun articles in the FERC vote debacle, given that the electric co-op remains one of the local newspaper's biggest advertisers... that and the fact that it was made abundantly clear to the current business editor- who covered the story- that the last business editor was fired for not toeing the Chamber of Commerce line.

Coverage of the planning commission's wholesale permitting of the new transient vacation rentals on ag land shouldn't have to fall to Joan Conrow whose KauaiEclectic blog told the sad tale Monday of how "county planner Mike Laureta prepared Bruce Fehring’s TVR application" as well as other eyebrow raising horror stories from last Tuesday's meeting.

But in reading her exclusive report we could not help but ask how the planning commission is able to get away with violating the now-not-so-new, citizen-petitioned charter amendment that was supposed to give "teeth" to the growth numbers contained in the general plan.

The amendment essentially put a hold on the processing of any new tourist accommodations by the planning commission and gave that job to the county council unless and until the council enacts an ordinance delineating the nuts and bolts of how the limitations are to work and then and only then return the power to the planning commission.

At the last full council meeting just such a proposed ordinance finally returned from the scrutiny of the planning department and commission- albeit in the form of a totally new bill- which passed first reading and is headed for a public hearing on August 3 at 1:30 p.m.

Bill 2140- which, along with all the other documents accompanying council agendas, is still not on-line even though a year has gone by since they were supposed to be made available there- is apparently still a long way from being a legitimate reflection of the intent of the amendment, with some of the "creative interpretations" of the starting point that were contained in the previous version of the bill, still being a point of contention.

The point is that the pointed disregard of the charter shown in the planning commission's approval of these TVRs is just another example of the predictable results of the lack of effective media scrutiny of county government on Kaua`i.

Rote regurgitation of press releases and unquestioned repetition of officials' political talking points does not a watchdog make.

Our local newspaper is bought and paid for, there is no local TV and there are enough shenanigans in Honolulu to keep both the Honolulu newspaper and the on-line "Civil Beat" busy over there, eight days a week, thank you very much.

That has left Kaua`i citizen's with no recourse but to file expensive lawsuits in order to put a stop to these violations of the law, especially those dealing with land use where the big money interests have sewed up just about every attorney in town.

That makes the lack of funding secondary to the availability of a lawyer to take the case- and don't think they don't know and count on that.

Because when it comes enumerating potentially effective opposition to rampant lawlessness, it doesn't take very long to count to zero.

WATCHING THE RIVER FLOW... OR NOT

WATCHING THE RIVER FLOW... OR NOT: The outrage over Kaua`i Island Utilities Co-op’s (KIUC) anachronistic, 20th century plans for hydro-electric dams- despite the fact that all over the country people are actually trying to tear them down and use flow of the river generation- continues with word that Wailua isn’t the only river on their destructive target list.

According to an article in yesterday’s Honolulu Advertiser:

The Hanalei River, Makaweli River and Wailua River proposals involve constructing dams and weirs that would result in reservoirs of various sizes. The largest would be a reservoir with a surface area of 35 acres that would be created by a 503-foot-long, 23-foot-high earthen dam on the Wailua River. The Kokee Ditch project would tap two existing reservoirs that would be upgraded, (KIUC senior energy solutions engineer Steve) Rymsha said.

But the article goes on to point out that:

residents who submitted written comments on the Wailua plan suggested developers opt for a "run-of-the-river" approach, where the natural flow of the river could be tapped to generate electricity without building a dam. The majority of existing hydro projects in Hawaii are run of the river ( emphasis added).

Why is it that every decision made on Kaua`i seems to fly in the face of the latest “best practices” around the world? Do they issue some sort of “worst practices” manual whenever someone moves into a decision making position? Are we that far from the mainland that information takes decades to reach here? Do they lose the ability to do research when elected or appointed?

One of the more rabid opponents of this latest insanity is architect Juan Wilson who has been a voice for perma culture and sustainability on the island.

In a scathing yet well reasoned indictment of KIUC and its latest debacle Wilson writes at his Island Breath web site:

KIUC's... plan is to continue an affordable American Dream of suburban consumption. The scale and activity of their hydroelectric dreams are unaffordable and will have only damaging affect on the ecosystem of their locale...

I wrote FERC the following;

Do not permit Free Flow Power a preliminary permit application for the Wailua Power Project for Kauai Island Utility Co-op (KIUC). We do not need another hydro-power plant on Kauai.

He then gives a blunt, factual history of the financial foibles at KIUC and how they’ve managed to raise our bills since their inception, rather than lowering them as promised.

As it came into being (2002) KIUC agreed to pay Citizens Communication Co. $215 million for the assets of Kauai Electric. That was the first mistake. A ridiculous price that burdened the "Co-Op” from day one with a debt that will never be paid off.

They have locked us into a debt obligation that assumed and relied on continued economic growth for decades into the future. The bursting housing bubble, peak oil and peak food ended that dream. Now KIUC thrashes to find a gimmick to keep up with that old General Electric motto "Progress is our most important product." Nonsense!

We need our power utility co-op to help finance residential (and small business) solar PV projects.

KIUC has squandered members money and avoided facing the reality of the future. Their perception of progress is to continue on a "business as usual" consumption model that will inevitably lead to greater damage to the Kauai's ecosystem and continue to fail to serve its members.

KIUC have had several bad business ideas. One was to grow sugarcane as fuel. KIUC is oblivious to the reality that we need to grow our own food more than we need to grow biofuel for electric power generation.

KIUC is an abysmal failure as a cooperative power utility with no insight or planning that will alleviate the pain we on Kauai will experience in the next year or two as oil prices again reach the levels of the summer 2008.

But the untenable financing and idiotic business model our so called co-op has locked us into doesn’t have to be the way the future of energy looks on Kaua`i. Wilson suggests that:

The real solutions here are rather simple.

1) Promote demand destruction (50% reduction for starters).
2) Enable widespread distributed generation (using solar PV and some wind)
3) Accept system resilience over reliability.
4) Implement a 5 year plan to get off diesel fuel for electricity.

The idea of damming the Wailua River to fulfill the imagined needs of pre-collapse suburban America would be laughable if it were not so tragic. Talk about bad ideas.

This island is way too fragile to consider using geo-engineering projects like major dams to satisfy air-conditioning loads and our Chevy Volt recharging expectations. Any investment in these pipe-dreams by the idiots running KIUC is a waste of our precious treasure that could be focused on those things within our grasp.

And people wonder why our electricity is the most expensive in the country. The best thing that could happen to KIUC is that they go bankrupt and the county takes over their operation as a public utility. Then we could get down to the business of planning for the downsizing our the current grid and the affordable alternatives that are achievable in the real future we face.

For some reason it doesn’t seem to matter who we elect to KIUC’s board of directors. So far three directors who seemed to “get it” before their election- Carol Bain, Ben Sullivan and recently Jan TenBruggencate- have remained silent and apparently gone along with the majority, supposedly, we hear, because they don’t have the majority they need to overturn some “stifle rule” that forbids them from speaking on their own.

Assuming their thoughts on this and other KIUC actions are in dissent of the majority it’s time for them to rise to the to challenge by speaking out publicly, at least as individual co-op members- and letting the chips fall where they may.