A reader asked a question in response to yesterday’s entry:
So what’s the reason for the pot shot at a women who’s clearly trying to make some good things happen in Hawaii?!
A fair question, and I’ll try to answer, although this “off the top of my head” reply won’t be elegant.
It’s all about politics, power, and public policy.
Frankly, I don’t know Kimberly Dey and couldn’t recall where I had heard her name before. But as part of the management team in a company at the center of one of the key deals impacting our energy future, I wanted to know more, as I’m sure others do. It’s not personal. I just think we deserve to know more about the private parties trying to steer public policies their own way.
We get the opportunity to elect political leaders. Even that electoral system currently looks more like “one dollar, one vote” than “one person, one vote,” but at least we can all take part and have some influence in the political process.
Another whole layer of power and influence lies in the private sector. We don’t elect these folks, but they have as much or more impact on us than the people we elect. They use their abilities, track records, lobbyists, along with personal, political and financial influence, and more, to advance their own economic interests. And while elected officials are supposed to be looking out for the common good, private economic interests are legitimately looking out for themselves. It’s the way the system works.
But sometimes those “and more” factors have included back room deals, unacknowledged political trades, self-dealing, agreements to look the other way to avoid seeing violations of law and policy, even old-fashioned corruption, and in the process the public’s interest is pushed aside by the most aggressive private interests.
In hindsight, we can see how Land and Power
worked in the post-statehood era. It’s much harder to get such clarity as it’s all happening. And to keep in mind that it’s not just the “bad guys” who may use undue influence to get their way.
Enter the race to develop renewable energy.
Alternative or renewable energy is part of the latest areas of economic “opportunity” backed by federal and state dollars and policies, and those with money to risk are drawn with the prospects of making more of it. That’s the way our economic system works. And it’s no secret that everyone would like to leverage public resources in support of their particular projects. And that’s where things get interesting.
We’re in a period where those with political power and influence, and those wielding power and influence in the energy industry, are increasingly interdependent. It’s a small circle of friends, and likely enemies. We need to know more about who is involved and what their particular interests are in order to understand our developing energy policy and have any chance of participating in shaping it. Without more understanding, there won’t be much accountability.
And when some of those within these power structures openly express the view that public participation is really just distracting “noise”, you know the public is in for a bumpy ride.
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Many thanks, well stated!
In terms of power and influence, much of it derives from the appearance of power and influence. But what happens when those appearances change?
Many politicians seem to support HEI simply because it is a utility. Here is an interview between State Representative George Fontaine and Peter Rosegg with the Hawaiian Electric Company and Maria Tome, Renewable and Transportation Energy Program Manager /Hawaii State Energy Office about Hawaii Clean Energy Initiative.
http://www.youtube.com/watch?v=48jYmGONKPs
What is interesting is that half way through the interview Fontaine states that we all need to support HEI because it is the only utility in Hawaii.
First of all, that is not true. Kauai has its own independent utility company. Here’s a bit of information from wikipedia:
http://en.wikipedia.org/wiki/Hawaiian_Electric_Industries
“Hawaiian Electric Industries Inc. (HEI; NYSE: HE) is the largest supplier of electricity in the state of Hawaii, suppling power to 95% of Hawaii’s population through its electric utilities: Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc. and Maui Electric Company, Limited. In addition, HEI owns a financial institution serving Hawaii, American Savings Bank.[1] (The island of Kauai is the only island in the state not supplied by HEI. Instead, the consumer-owned Kauai Island Utility Cooperative manages the island’s electricity.)
“HECO, HELCO, and MECO employ more than 2,000 people. Approximately 20,000 Hawaii residents are shareholders of HECO’s parent company, Hawaiian Electric Industries (HEI).[2] The company is headquartered in Honolulu.”
That seems to be the only real rationale that the politician gives in the interview for supporting the Hawaii Clean Energy Initiative. He asks Tome and Rosegg some basic questions, but he does not seem to support the HCEI for its own sake. He seems to support it because he has an emotional need to support the utility. It’s the herd mentality to gravitate to authority or power. As Al Gore says about the rise of Islamic fundamentalism in the face of rampant globalization, when people find themselves in the midst of a hurricane, they grab on to the biggest tree around, and that tree — even in the US — is religion (and its roots, Gore pointed out, run deep into something that is not religion but rather tribalism, which is the anti-religion).
The politicians are rallying around HEI because it is big, and HEI is rallying around the Big Wind primarily because its a big project.
But what happens when the utility is failing? It’s odd enough that it owns a local bank, which gives it influence locally, but what happens when that bank starts writing off bad real estate loans, as banks are beginning to do?
And what happens when new players come into town and want to take over the local utility? What happens when the new players want to take energy development in a different direction?
What happens is that HEI loses much of its appearance of invincibility, and its projects lose their luster.
Let’s look at the changing nature of technology.
We could be in a new world where massive investments in certain technologies might turn out to be as unwise as buying a Betamax VCR (remember those?). What seems to be the future becomes obsolete as soon as it gains ascendancy.
Blockbuster killed the mom-and-pop video store, but it was rendered obsolete by Netflix and Redbox; but now Netflix and Redbox are obsolete because studios can simply bypass them.
Borders killed the mom-and-pop bookstore, but it was rendered obsolete by Amazon and now the Kindle and the Nook; but now authors like JK Rowling with her Pottermore website can simply bypass distributors like Amazon.
Facebook killed Myspace; but now Facebook is obsolete because of Google+. (Up until recently Facebook has been valued at $100 billion to $200 billion, but the amount of time Facebook users are using Facebook has plateaued, and the number of new users of Facebook has actually been decreasing.)
And what about bio-fuels in Hawaii? What are they for? Auto production is shifting almost entirely to electric vehicles. So perhaps Hawaii needs bio-fuels the way a fish needs a bicycle.
So don’t buy stock in Netflix or Amazon or Facebook, and think twice about stock in HEI.
It could be that in the medium term, all these efforts are going to collapse because HEI is betting on the wrong horses. And then seemingly — perhaps inevitably — Hawaii will start using more natural gas and coal. Gradually, home-generated solar will eventually become the norm, with radical changes in consumption patterns.
In the meantime, the amounts of money wasted could be impressive, and political careers killed. A big project is like a tar baby.
Here’s a little example:
Some people are saying that Hawaii can be a model for the rest of the world in energy development. But isn’t that what the University of Hawaii was saying about itself ten years ago in terms of higher education reform? What ever became of that? Is UH now a world leader? Or is UH still basically a fourth-rate university trying hard to appear like a third-rate university?
Especially when the company she is affiliated with is in the top 5 in lobbying expenditures. And when it gets a favorable legislation passed without much public scrutiny – the PUC higher rates approval.
I’ll echo Pat’s words and add a few more.
It’s my view that when the government opens project bids to the private sector, they are supporting a free market as much as they are chancing a project’s success to failure. Capitalism is Darwinian to a degree, and it is accepted by leaders and voters. But where our leaders and direct government programs (like health care) are routinely scrutinized, the leverage of public resources into these opportunities is, as you put it, ‘where things get interesting.’
Investigating the accountability of private companies winning using public resources is as essential as the transparency we expect from elected officials. Public inquiry is fair when there is public funds involved. Citizens rely on the independent journalists to cover these stories. ‘Pot-shots,’ I think, only come from corporate publishers with pie on their faces.
In an other recent energy-related transaction, the issuance of $140 million in general use bonds to Dante Carpenter’s companies went flying through without so much as a sniff from the media.
This shows that avarice controls our so-called public service government. You could have helped by exposing this.
The Truth is the media and other watchdogs cannot watch these avarice and shibai 24/7.
I did the best I could:
http://atomicmonkey.wordpress.com/2011/06/14/dantes-divine-comedy/
I just left the following comment over at Keith’s Atomic Monkey site, referring to his post about revenue bonds authorized for two companies linked to Democratic Party chair and former State Senator, Dante Carpenter.
To be clear–this does not mean that the companies are getting $140 million in public money.
The revenue bond bills mean that the companies can, if they choose, borrow up to that amount via issuance of tax exempt special revenue bonds. They will have to pay the borrowing costs and pay back the principal over time. As I understand the process, no public money involved.
But states have a certain allocation of revenue bonds they are allowed to issue, so there is competition for them. This despite the fact that often standard financing proves more attractive and the bond allocations go unused.
The bonds between HECO and state government are incredibly tight. Until around 2006 when Disappeared News pounded relentlessly on the “embedded lobbyists”, that is, company executives working as “interns” right in legislative offices, HECO had a presence in several key offices. Although at the time I used the example of an HMSA Foundation executive administrator working in Rep. Herkes’ office, I was interested even more in whether HECO could be eradicated.
They may not be our “one” utility, but they are a powerful player in our politics and economy. And with their feet planted firmly in a profitable puddle of oil, it is hard to know whether they truly favor wind or they are just putting their fingers up to see which direction it’s blowing.
Wow, Skeptical OA takes a big old leap from someone supporting the local utility to Islamic fundamentalism. Whew.
But, I comment on his (or her) note, because I think he (she) really cares.
He says: “What is interesting is that half way through the interview Fontaine states that we all need to support HEI because it is the only utility in Hawaii…That seems to be the only real rationale that the politician gives in the interview for supporting the Hawaii Clean Energy Initiative.”
Perhaps Rep. Fontaine supports HCEI because it is a good, no necessary, idea. As he is a Maui Republican, it would not be surprising that he supports the effort another Maui Republican (Gov. Lingle) may consider her biggest accomplishment. While there is considerable debate about if and how we will reach our mandated renewable levels, and targets beyond what the law requires, very few reasonable people seem to think HCEI goals are a really bad idea, per se.
He says “The politicians are rallying around HEI because it is big, and HEI is rallying around the Big Wind primarily because it’s a big project.”
Well, not so much. Politicians are interested in the future of the electric utility because they are responsible for and create the policies that control the Public Utilities Commission that regulates the electric companies which are, wait for it – public utilities.
What most politicians (and many people) realize is that without a public utility in reasonably good financial condition, everything about getting off oil and on to clean energy will be more difficult.
Whatever one’s clean energy vision, it will require upgrading the electric grids on each island – new wires, new meters, new computerized systems. There is no reasonably practical alternative that does not require us to convert FROM a system with electricity from a few large generation stations moving in one direction to customers TO a system with energy coming from and going to many generators and/or users of various sizes, technologies and energy needs. That represents quite a change, one for which the present grid was not built.
A financially weak utility will be challenged to borrow the money and hire the people to carry out changes while maintaining reliability. Even if one foresees a day when the utility will fade away because everyone is making electricity on their roofs (which I do not, see below), a financially strong utility will be needed up to that day.
The utility is pursuing Big Wind not for “bigness” but because it’s just one of many big and small renewables we need to get to or beyond 40 percent renewable electricity by 2030. Wind, solar, geothermal, biofuels, waste-to-energy, wave and ocean thermal energy conversion, biofuels, seawater air-conditioning, EVs — the utility literally has to pursue all because all will be achieved, or will not be achieved to the levels needed.
He says: “Auto production is shifting almost entirely to electric vehicles. So perhaps Hawaii needs bio-fuels the way a fish needs a bicycle.”
Well, not so much. There were 255 MILLION passenger cars in the U.S. in 2006. As of May 31, 2011 Chevy had delivered 2,510 Volts nationwide and Nissan delivered 2,186 Leafs. Even though many automakers have at least one electric vehicle on their drawing boards, it will take decades before EVs are a significant part of the U.S. passenger fleet, never mind commercial and industrial vehicles. If it happens. It has, you know, been tried before.
He says” “Perhaps inevitably, Hawaii will start using more natural gas and coal.”
Another coal plant will not be permitted in this state, I will bet on that. Nor nuclear energy. Natural gas (not the syngas made locally from oil for cooking and water heating) requires a tremendous infrastructure to move and store. It would likely dwarf the cost of Big Wind, and be more environmentally intrusive. Our goal of getting off imported oil is getting off oil and importing for 90 percent of our energyy. Just give up now and start down the road of importing coal or gas? I don’t think so.
He says: “Home-generated solar will eventually become the norm, with radical changes in consumption patterns.”
We can and will have a lot more customer-sited and utility-scale solar power on the grids, it is a vital part of the portfolio that can be added more quickly than many other renewable projects. For now let’s not discuss the big problem with solar, known as NIGHT. Today and for the foreseeable future, energy storage remains more expensive than the PV panels that make the electricity. Let’s hope that will change.
But ask yourself, do most people (or businesses) want to be forced to make their own electricity? The fun is using electricity, not making it. People working one or two jobs by and large want to come home, switch on the lights and TV, take a hot shower and drink a cold beer. (And log on their computers to read ilind.net, of course.) I certainly do. We want good service at the lowest price possible, and we are in favor of someone doing something to get us off oil, as long as it does not inconvenience us too much. That’s about it. Look at Kanu’s relatively modest energy efficiency goals and how hard they are working to get even these to happen.
Some minority of people want to make their own electricity for a variety of reasons. For the rest of us (and we are a majority by far), we want renewable energy for sure, but we want it made somewhere else, by someone else, and delivered to the outlets in our home, with as little muss, fuss and participation by us as possible.
Many thanks, Ian. I hope you’ll stick with it: outlining and detailing the associations that make up power–electrical, political, and financial–in Hawaii. Perhaps Civil Beat could work with you on this and augment your efforts.
Bob Clarke? Some people must have short memories that don’t go back as far as 1991.
“what’s the reason for the pot shot at a women who’s clearly trying to make some good things happen”
dayum. her work progress. she has got alotta people hoodwinked, eh. and those that think things are clear. huhuuuh!
Skeptical….
I have two grants and a couple of other projects due over the next three weeks so I cannot take the time to respond in great detail to your championing coal & natural gas; however, if we were to adopt your position. how are you planning to transport these two fossil fuels across the continental US and the Pacific Ocean without using other fossil fuels which will pour GHGs into the atmosphere.
And who will pay for the transportation costs?
How are you planning to control the horrendous human and environmental impacts processing these two fossil fuels in states like West Virginia and Pennsylvania and Montana and Arkansas?
Fossil fuels are the enemy – and perhaps we in Hawai`i may not consume diectly a lot of them, still we will be contributing to the decimation of life on earth.