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The Honolulu Advertiser

Posted on: Sunday, August 10, 2003

COMMENTARY
Electric power critical to our growth

By Mike Fitzgerald

HECO's Kahe Point power generator, shown above, plays a critical role in providing electricity to O'ahu customers. Reliable energy is a must for building first-class infrastructures.

Advertiser library photo

When you ask business people outside Hawai'i what factors they would consider in deciding to locate all or part of their companies in Honolulu, one quality they always mention early on is connectivity — an advanced telecommunications infrastructure.

Good-paying jobs and careers for the people of Hawai'i will come from a number of emerging business sectors based upon the state's significant and unique assets. Most are technology based, such as biotech, information technology, film and digital media, alternative energy and others.

Our island status is no longer a barrier in the arena of global competition to attract technology and knowledge-based jobs. Hawai'i's unique telecommunications infrastructure, combined with significant assets like the Maui supercomputer, provides enormous bandwidth capacity to export knowledge and data products created by companies with high-wage, knowledgeable employees in real time, 24/7.

An advanced telecommunications infrastructure requires reliable electric power.

Up till now, O'ahu has had a dependable electric supplier, Hawaiian Electric Co., which has a history of proven reliability. Its biggest customer on this island is the U.S. Department of Defense, which has no margin for error.

HECO is a recognized national leader in curbing growth in demand through energy efficiency. The company's conservation initiatives have placed Hawai'i among the top 10 states for energy efficiency.

HECO's operations have been reliable, with a low number and short duration of power failures per customer. HECO compares favorably to national and international standards. Their record is good.

However, it is imperative to deal with parts of O'ahu's electrical system that are not up to national standards and that present a real danger of an outage that could impact half of the island's power usage — including Waikiki, the University of Hawai'i area and downtown.

The negative, costly and possibly life-threatening results of such an outage are unacceptable.

For businesses, the immediate impact would go much further than elevators stopped mid-floor and offices without air conditioning. For businesses heavily dependent on computing power, an outage could mean real economic loss through data errors, equipment failure, memory loss, software corruption and lost productivity.

Critical connections could be lost because of our inability to communicate with customers, vendors, bankers and brokers around the world. Vital experiments and projects could be jeopardized, along with the safety and health of patients in healthcare facilities.

Even the perception of damage could be a long-lasting negative factor for new investment and job creation. Consider the impact on our reputation from an outage that lasts hours or even days, jeopardizes people's lives and costs businesses millions of dollars.

HECO has put out three alternatives for better reliability — all underground — for public discussion. The trade-offs between the costs, construction times and relative effectiveness of these options are, or should be, a matter of serious public attention and discussion.

The prices of the proposed alternatives have to be considered carefully. The costs of living and doing business in Hawai'i are undeniable obstacles to some companies locating here. As a small, remote marketplace, Honolulu already has higher electricity costs than many locations (though California has been plagued by escalating prices and blackouts during its experiment with deregulation).

On balance, the additional costs and short-term disruptions for construction to resolve our electricity situation are a reasonable price to pay for increased reliability and the assurance that the chance of massive energy disruptions will be reduced.

In order to diversify Honolulu's economy — and create good-paying and meaningful jobs here for children and ourselves — we need to support and expand current business, support entrepreneurs to create new business and attract new business investors. To do so, we must ensure that we have the 21st century infrastructure to support our job creation efforts.

O'ahu and all of Hawai'i have the natural assets and the talented people to create self-directed, self-determined economic diversification to build a 21st-century knowledge- and technology-based economy that aspires for the triple bottom line of economic prosperity, cultural integrity and environmental preservation.

Finding and creating this balance won't be easy. Without first-class infrastructures, including safe, reliable energy, the dream isn't possible. The proposed underground electric transmission system is a critical factor to help build our capacity for future success.

Mike Fitzgerald is president & CEO of Enterprise Honolulu, a nonprofit economic development organization. Hawaiian Electric Co., through the HEI Charitable Foundation, is a founder and supporter of Enterprise Honolulu.