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.

WHO DAT MAN?

WHO DAT MAN?: Now that deputy county attorney in charge of Kaua`i Police Department (KPD) matters Justin Kollar has made his run for County Prosecutor official- opposing current Prosecutor Shaylene Iseri-Carvalho who had been thought to be mulling a run for her former county council seat but recently said she will stand for re-election- it's only fair to ask Kollar... "what are you nuckin' futz?".

While it appears that his work with KPD has Chief Darryl Perry gushing and Iseri has the community up in arms over her use of the office as a weapon of vindictiveness and race-based retribution, three year resident Kollar has about 17 strikes against him going in to the 2012 race.

Much as many would like to deny it, "running while white" still puts any candidate at a distinct disadvantage on Kaua`i even for well known long time denizens. But in a battle against Iseri- whose ethnicity-based hiring in the prosecutor's office is anything but a secret- the issue of race will inform the race more than any other.

And on Kaua`i that's still a losing proposition for any "haole."

Even though Kollar promises to "walk to every house on this island, if that’s what it takes"- and of course that, minimally, is what it would take- the long-awaited "changing demographics" on Kaua`i is still a futuristic paradigm that FOB candidates believe in at their peril.

But even if the majority of the voting populace were to be suddenly blanched, Kollar has pretty much cooked his goose with his rabid anti-marijuana activities this past legislative session when he participated in Iseri's rally to block medical marijuana reform, cutting into any possible widespread support from progressive Caucasian voter.

It harkens back to the time when local attorney William Feldhacker thought the demographics had changed enough for him to challenge them-prosecutor Ryan Jimenez a couple of eons ago. Despite the fact that many saw Jimenez as lackluster in his performance, Feldhacker- then the preeminent criminal defense attorney on the island- came up way short, after taking an "how can I possibly lose to this guy" approach to the race.

It isn't even just the medical marijuana issue as far as drugs go. Kollar seems to be a nut for interdiction in an age when there have been so many families touched by their kids' drug problems that most see the fact that scarce dollars go to a "lock 'em up and throw away the key" approach to hard drugs like methamphetamine and not to treatment, as a failure of public policy that, in many cases, has destroyed their family as much as the drug abuse itself.

The shame is that the scourge that Iseri represents begs for change at the ballot box next year. But the reality is that it's hard enough to get someone to challenge an incumbent prosecutor without having to deal with a three-way race where they'd have to split the anti-Iseri vote with Kollar.

One thing we can count on- given that Kollar was among those fired by Iseri for "practicing law while white" this race will get ugly. Which, while great for a curmudgeonly columnist, is anything but for a community that sorely needs a justice-based office of the prosecutor.

STRIKE THREE?

STRIKE THREE?: What's really unfortunate about the underhanded, secretive and sleazy way Kaua`i Island Utilities Co-op (KIUC) and their partners in corruption Free Flow Partners (FFP) have gone about hydroelectric development is that it will inevitably delay- if not kill- immanent development of the cheapest, most dependable of carbon-free energy systems.

Add to that the fact that, because of the unique position of Kaua`i as the world capitol of various endangered bird species, there will never be large scale wind farms on the island and even backyard windmills may eventually be banned, once the county catches on to the fact that our "probation" with the feds- as a result of a settlement federal suit- probably requires us to severely restrict, if not ban, them too without prohibitively costly "take permits."

And with home windmills gone that leaves roof-top solar as the last, best bet to reverse the "we sell you electricity" business model KIUC seems to be hell-bent on perpetuating as if it were an investor based utility.

But today any hope for making it easy to put photovoltaic systems on people's homes took a kick in the nuts when Governor Neil Abercrombie put HB 1520 on the "Intent to Veto" list.

In April, as the bill went to conference committee, we detailed a decade long fight, first with the solar installation firms and currently with the utility companies to pass a bill requiring on-bill financing for home solar electric systems.

And even though the bill was watered down further in committee- changing the wording from directing the Public Utilities Commission (PUC) to "consider implementing an on-bill financing program for residential electric utility customers" to "investigate an On-bill Financing Program (Program),"- and passed the legislature it appears on today's list.

Strangely it is one of a very few bills on the potential veto list for which a reason hasn't been given, as yet.

But a veto isn’t certain and you can call Abercrombie at 808-586-0034 or write him him using a handy-dandy form (http://hawaii.gov/gov/contact/contact-gov) and urge him to get the ball rolling on home solar generation with on-bill financing.

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."

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.