Thursday, April 2, 2009


ELECTRIFIED FENCE: This year’s Kaua`i Island Utilities Co-op (KIUC) election is over and for the second time in a row a non corporate “people’s” candidate was elected- last year good governance advocate Carol Bain and this year renewable energy maven Ben Sullivan.

But the problems cited during KIUC’s purchase phase by the “nitpickers”- in fact the problems they found that gave them their name before they successfully challenged the original inflated purchase price, saving members almost $100 million- are apparently coming home to roost and it’s anyone’s guess whether these two new board members will try to tackle the core disconnect within “our co-op”.

One glaring bit of nonsensical jibber-jabber was highlighted in a recent article in the local paper if the report by reporter Michael Levine is accurate.

He wrote:

Just hours after the swearing-in ceremony and officer appointments, the board returned for its first regular monthly meeting under its new leadership and immediately received some gloomy forecasts.

Chief Financial Officer David Bissell said abnormally cold winter weather — February’s average temperature was a chill-inducing 70 degrees and the month’s 139 fueling degree days marked the lowest in more than a decade — allowed hotels to turn off their air conditioners, driving megawatt-hour sales even lower than was expected under the poor economic climate.

February sales were down some 12 percent from the budgeted total of 37,200 megawatt-hours, and down some 20 percent from the projected $10.9 million. KIUC has pulled in just $18 million through the first two months of 2009, compared to $29 million over the same stretch in 2008.
Now wait a gol-darn minute. While the challenge of integrating non-fissile fuel energy into the co-op’s energy portfolio is a hotly debated topic (although it really shouldn’t be- we’ll get to that in as moment) everyone agrees that cutting energy usage is the one thing everyone agrees will help insure a stable energy future.

So why is this a “gloomy forecast”? It should be time for celebration- we’re using less electricity.

It’s because in reality the co-op is, from top to bottom, when all is said and done, is still operated in the same manner as any for-profit electrical utility.

The business model of “we produce electricity and sell it to you” is a ubiquitous one in the “industry”. But the dangers of adhering to many of the particulars in that model was the chief apprehensions cited by the nitpickers who saw the future of diminished demand and knew that the purchase price was way overvalued- even at the lowered price and especially if large users decide to generate their own electricity as is already happening in some hotels and at the navy base.

It could and should be different when the customers own their electric company but a required indoctrination of board members and draconian rules- made up by the board and not approved by the members- to re-enforce the “training” make any difference between a for profit utility and a co-op strictly cosmetic.

Spending on advertising and other frivolous activities including these supposedly “educational” junkets- which are really just brainwashing sessions to insure that the board members operate the company like a for profit- are bad enough.

But nowhere is the “selling electricity” model more apparent than in the recent announcement that the “net metering” program has reached it’s limit and from now on there will be no more households enrolled in the program.

That essentially means that the price for new home generators to buy back the electricity they produce at home via solar or wind power is exorbitant compared to what they sell their excess back to the company for, whereas those who got in on the bottom floor sell and buy back their excess electricity at the same price.

A recent debate in the local paper was punctuated by a bit of distraction and selective fact-citations by one Walt Barnes, one of the chief prevaricators during the purchase phase who, as PR chair, constantly and verifiably lied over and over about the particulars of the purchase, citing “confidential” information of the sellers and making up “facts” our of whole cloth for as long as he could... sometimes even after he was “caught” by the nitpickers.

Barnes’ theory essentially says the co-op cannot afford to buy back the electricity at the same rate as it was put in saying the company has to pay for all the thing associated with producing and distributing a certain amount of electricity to the island because there are times when there is no sun and/or wind.

But that’s a bolus of bullcrap. There are no “extra” expenses for the grid when it’s used to serve those who install their own energy production. It’s there already. And a base fee for hooking up is already charged to all customers even if they don’t use a watt.

Plus, the saving in not having to produce more electricity should surely even save the company money if the model isn’t one of creating and selling electricity.

The reality that Barnes leaves out is that in modern grids and generation facilities the energy production needed is instantaneously “sensed” by the system and generation is controlled by demand at any point in time.

Even if our grid is not fully up to snuff the investment in this technology would surely pay for itself in the long run through generating less and not having to build any more generation facilities.

The proof of this is that the company generates electricity based on demand today. It peaks at certain time- late afternoon and evening- and drops dramatically at night. And current generation is synched to this cycle.

Technology for these “ smart grids” is not just “being developed” but is already actualized in many places across the country. But even current systems should to be able to accommodate another variable in usage- alternative home generate electricity.

But does our co-op seek to accommodate this? Certainly not.

Instead of working on ways to increase net metering and support home generation- with, say a program like the one for solar hot water where low or even zero percent loans are made from a revolving fund to allow people to purchase systems that will pay for themselves over time- they are planning "fields” of windmills and solar panels and other non-fossil sources so they can continue to sell electricity to you.

Because it’s not in their interest to allow people to generate their own juice under the model they are perpetuation. That would cause the gloomy future... and part of the reason why some nitpickers advocated buying only the grid and allowing the generation facilities- especially the old outdated “dirtiest in the state” one that that sits on the toxic waste dump in `Ele`ele.

As long as we- and those we elect to the board- buy into this “can’t do” attitude KIUC will remain a bum deal for everyone involved.

1 comment:

Blahblahblah said...

Ignorant at best. You really haven't put much thought into how this works.

Net metering is welfare for the small producer at the expense of the rest.

Here's a little thought problem for you Andy. Assume 100% of the population installed a solar system that produced all the electricity they needed for the day. So in daytime, they all produce a big surplus to cover their night time useage. Who uses the surplus? Who pays for the night time generation?

A producer who sells a surplus but also has to buy when his system is down gets to avoid the large expense of his own storage system (a battery generally for an off grid user). That's a huge savings that comes at the expense of the rest of us.

There are some fixed expenses built into our rates. The net metering program lets the small producer sell at the full rate including fixed expenses back to the grid. The rest of us then have to eat their share of billing, line maintenance etc. Most of us supported that to get some renewables on line, but you can't have everyone on welfare.

And you miss the largest difference between KIUC and an Investor owned utility. We get rebate checks for part of the profit. How else would you have them operate? Any fool can bitch and moan, but what's the alternative? Trying to cover operating expenses while selling nothing?

The biggest reason KIUC is getting squeezed is the price of diesel/naphtha has dropped significantly. The ERAC has a built in rate increase such that the higher the price, the greater the extra profit (ERAC compensates them as if they are using more fuel than they actually are). This was slid in by Citizens with the blessing of the PUC to avoid a rate case just before KE was sold to KIUC.

KIUC has been run like a plantation, that much we agree on, but this particular flap is based on a lack of understanding of how things really work.