Who’s Ready For Cheaper Electricity?
Whenever the Legislature is in session and its dealing with controversial issues, it becomes a topic of conversation everywhere you go.
Let’s talk about two subjects generating quite a bit of discussion: the proposed merger of Hawaiian Electric with Florida-based NextEra, and the City and County of Honolulu’s request to extend the half-percent general excise tax surcharge beyond its 2022 expiration.
Both issues have passionate advocates and opponents. I’ve always subscribed to the notion that every crisis presents an opportunity to make things better and improve the status quo.
So what’s at stake here? A chance to make a real difference with two issues that have plagued Hawaii for decades: the highest electricity prices and one of the worst traffic congestion problems in the nation.
With respect to the scrutiny the Legislature and especially Public Utilities Commission (PUC) will conduct on behalf of the public, I believe the focus should be on electricity prices, renewable resources and competition.
In that regard:
• NextEra should be required to formally indicate a price reduction target for 2020. Oil prices have fallen dramatically and renewables are coming on strong. How big of a cost savings can we expect?
• How much of Hawaii’s electricity production in 2020 will come from solar, wind, geothermal, liquified natural gas (LNG) and other fossil fuels? We need to make a decisive shift to a clean and sustainable energy future.
• The grid must be open to all energy producers if we are to have a competitive energy market, limiting the power of a vertically integrated monopoly to charge excessive prices.
It also is evident that we need to significantly strengthen the state’s capability to exercise its oversight responsibility. We immediately should fortify PUC with some long-overdue improvements and changes. PUC cannot continue to be part of the “Rodney Dangerfield” group of state agencies. I applaud new PUC head Randall Iwase’s desire to conduct public hearings in the community so as to maximize input. We also need to instill a more creative and engaged focus on the energy mission within the Department of Business, Economic Development and Tourism. It may be premature to begin the discussion of a separate department of energy, but given where the world and our nation are headed on a more sustainable future, this is the direction Hawaii also should be heading.
Without these kinds of improvements, we will be fighting a losing battle against a large Mainland company with more than Hawaii on its corporate agenda and with considerable political muscle.
And what about rail?
It’s a project that every mayor of Honolulu since Neal Blaisdell, save one, has attempted. More importantly, we finally are bringing this idea of a multimodal, integrated transportation system to fruition, where people will actually have choices of driving, riding TheBus or their bikes, walking, being transported by rail or engaging in a combination of these alternatives.
The current request to extend the tax sunset deadline, coupled with the chronic complaint of a lack of transparency and detailed answers to fundamental questions, are starting to frustrate and agitate even the staunchest of rail supporters. A quick, common-sense rebuttal to the standard HART assertion that the project has run out of money is to build what we can afford and cut costs, such as the “nice to have” components either being worked on or in the pipeline. That’s what businesses or families do when they are in a similar quandary.
I remember a conversation I had back in 2008 with a Hawaii reporter, who was in Denver the same time I was there for a conference, in which he relayed to me the findings of a rail question he was asking Colorado residents regarding their RTD Light Rail system. When he asked them how they felt about their experience with rail, the answers were unanimously positive. RTD Light Rail was the perfect antidote to their traffic problems. But when he pushed them further if they always felt this way, almost to a person they admitted “no.”
At the outset, they complained that they didn’t like their taxes being raised, couldn’t afford to pay for such a system, had major concerns with the noise and technology, or the fact that it was coming to their neighborhood or that it was not being connected to where they lived, and so on.
I continue to maintain that the sooner HART can complete the first segment of rail from West Oahu to Aloha Stadium, the better off the project will be. The public needs to actually see it, ride it and experience it. It would be the visible and tangible evidence “the train is happening” that is conspicuously missing. Every effort should be expended to ensure this before the 2018 targeted opening date. It would be a defining experience and game changer that would give tremendous momentum to the project’s extension and completion.
My sense is that the public would react in two ways by posing a couple of questions right up front: What’s it going to take to build rail quicker, and how soon can rail be extended to where I live?
The difference with this scenario is that it would be the public who would clamor for government funding support, i.e., extending the tax surcharge, instead of HART and city government officials.
Keep in mind that there were a lot of folks who opposed H-3 freeway, once billed as the “highway to nowhere.” It easily was one of the costliest highway systems ever built in the United States, five times more than the original estimate, and it set a record for the longest time it took to be completed in 1997 — 37 years after it was first conceived.
However, once it was finished and people experienced it, the moans and groans were replaced by oohs and aahs, accompanied by great satisfaction and excitement about having another option for motorists to travel from Windward to Central and Leeward Oahu, and vice versa.
Other factors that HART should consider emphasizing:
• As I have stated repeatedly, focus on working with the state administration to investigate and confirm whether the Department of Taxation is accurately collecting and transferring to the city every tax dollar earmarked for rail, and make a more persistent and stronger case that the ongoing skimming of rail funds for state general fund use has nothing to do with transportation (at last look, it was nearly $150 million) and, therefore, not right and inappropriate.
• Be more vocal in making the case for transit-oriented development (TOD) as part of the overall benefit of having a rail system. The positives of TOD are immense: Affordable housing, open space, parks and bike lanes, and commercial and retail opportunities are win-win objectives that would create terrific synergism for the state and county to work together on.
• Shore up HART’s staffing with more experienced personnel who have a strong background in project management and supervising construction projects. They also should have an understanding of the reality that resisting unnecessary changes keeps the project within the original cost estimates. The public needs to be assured that there will be a better handle on construction issues and financial challenges going forward.
Another way to assuage this concern is to appoint to the HART Board individuals who possess these types of skills and expertise.
In some people’s minds, the rail project still can be stopped or defunded because there are other pressing state priorities, such as a state pension fund that is woefully underfunded.
Rather than get into the pros and cons of such an argument, which would entail our local government having to reimburse the federal government for funds we already have used for rail, the best thing for HART to do is a better job of executing its mission with the monies it already has in place.
Show some early success in building rail efficiently and constructing it the right way as an indication that it is fully capable of accomplishing much more.