Keeping Hawaiʻi’s lights on: What we learned along the way
By Kirsten Kagimoto, Chapter Strategic Communications Manager
COVID-19 has illuminated cracks in the foundations of our government's ability to meet our needs, the pukas in our social safety nets, and the fragility of many other systems that underlie our society—our electric utility included. Since May, the Sierra Club team has been working hard to advocate for an extension on the utility shutoff moratorium issued by the Public Utilities Commission. We succeeded in securing an extension through December 2020, with the help of members and supporters like you. And we are still working on urging Hawaiian Electric to implement actual bill forgiveness for our friends, family and neighbors that are unemployed due to the pandemic. Along the way we are learning a lot about our electric utility, issues that have deepened because of COVID-19, and the extent of fundamental changes needed to make our transition to 100% clean energy full and equitable.
Who has the power: Utilities are better suited to weather uncertainties like COVID-19
Regulated utilities, like Hawaiian Electric, face less financial risk from the COVID-19 crisis because utilities benefit from protections unavailable to other industries (e.g., protection against sales reductions and fuel price volatility, lower risk profile amidst declining interest rates, etc) while providing our communities with an essential service.
Hawaiian Electric reported that its earnings April through June 2020 were upwards of $48.9 million. Despite a global pandemic and economic downturn, Hawaiian Electric earned more money in 2020 than it did in the same quarter of 2019—demonstrating how much better suited Hawaiian Electric is to bear this financial burden than Hawaiʻi’s families. While much of Hawaiʻi was struggling, Hawaiian Electric profits increased.
Energy injustice: COVID revealed long-standing inequities in energy burden among Hawaiʻi residents
Electricity is typically the largest utility cost on a household. But when you add in that Hawaiʻi has the highest electricity rates and one of the highest costs of living in the nation—it becomes clear that high energy burdens (the percentage of household income that goes toward energy costs) are widespread in our community. This injustice existed long before COVID-19. Our electricity rates are sky high for several reasons, the most of which is because Hawaiian Electric remains dependent on oil as its main source of energy (and might I remind you that this oil is imported on ships fueled by more fossil fuels). Our electricity rates are also high because our utility is managed by a for-profit corporate monopoly. Hawaiian Electric supplies electricity to 95% of Hawaiʻi's population and controls every aspect of the grid—from the importing and burning of fuel to the distribution of electricity to ratepayers. It is common in other places to have the different parts of the grid, including generation, transmission and distribution owned and maintained by separate entities. But not in Hawaiʻi—Hawaiian Electric owns and profits off of the entire grid that provides an essential service. This is a privilege and Hawaiian Electric is abusing it.
Harder than it looks: We don't quite know our grid like we need to
A couple things came to light regarding our energy supply and usage that surprised us. Because there is less demand for petroleum (less driving, flying, and boating) during the Stay at Home orders and travel limitations, PAR Hawaiʻi (Hawaiʻi's only oil refinery) is now facing huge financial losses. To address its shortfalls, the refinery sought to either renegotiate its contract with Hawaiian Electric so that it can charge higher rates for locally refined oil (at least for Oʻahu's ratepayers), or shutdown operations altogether. If PAR Hawaiʻi could no longer process unrefined oil for the islands, then more expensive refined oil would need to be shipped in, which would also raise electricity prices for Oʻahu ratepayers. While exploring the options, it was discovered that importing refined oil may not even be an option for us because it appears that Hawaiʻi does not have the infrastructure necessary to transport many different types of fuel that are currently refined locally for different uses—planes, boats, and automobiles. Oh my! So, it is not simply a matter of just closing old infrastructure.
We also learned that energy consumption data by district or area is not currently available to the public. The Public Utilities Commission did order Hawaiian Electric to share this information with the newly restructured State Energy Office, but the details of that are still in the works and it is not clear that this data will be made public. It is absolutely crucial for ratepayers, advocates, and decision makers to know energy consumption data on a localized level—how much electricity each district or geographic area uses daily on average. We also want to know the actual energy consumption of commercial structures. Think of the consumer power in being able to compare apartments for rent in terms of energy costs, something that is typically passed on to renters without any information about how much it would likely cost. It appears that this kind of this localized data may only be known by the utility itself. This information is crucial if Hawaiʻi is going to move away from its one-size-fits-all energy grid to smaller scale projects that directly serve the needs of communities.
Energy systems are complicated. There is no doubt about that and we are not here to say that the solution is simple or to direct our utility to operate one way or another. But as we push forward to 100% renewable energy by 2045, there will be challenges that cannot be overcome without shifting the way our current utility operates.
What we need over the long term is accessible equitable clean energy. This may come in a variety of shapes and sizes but one thing for sure is that it isn't likely to come from the top-down utility we have now. Our communities also deserve a seat at the table in the selection of energy projects in their neighborhoods and more transparency in current and future energy systems. There are countless large and small-scale options for accessible clean energy—community solar, energy co-ops, rooftop solar, microgrids, just to name a few—that with a creative view and less bureaucracy we just might be able to use to power our homes, save the world and take back our power.
In this moment right now, though, Hawaiʻi ratepayers need bill forgiveness for unpaid bills during the COVID-19 crisis. The options Hawaiian Electric currently offers its customers, such as bill deferment (e.g. opting to not pay now on the promise to pay all that is due later), does not go far enough to help our neighbors who need it the most. Hawaiian Electric should use its economic standing and utility security to offer actual bill forgiveness to those who can demonstrate loss of income due to COVID-19—whether it be part of their $48.9 million earnings, federal aid that is offered directly to its customers, or some other creative solution.