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The Honolulu Advertiser
Posted on: Sunday, November 16, 2008

COMMENTARY
Clean Energy

By Robbie Alm

Hawaii news photo - The Honolulu Advertiser
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The recent Clean Energy Agreement signed by Gov. Linda Lingle, the state Consumer Advocate, the Department of Business, Economic Development and Tourism and the Hawaiian Electric companies represents a fundamental and truly historic change in the way that energy issues are addressed in Hawai'i.

Jeff Mikulina of the Blue Planet Foundation has called it "transformative change," and U.S. Department of Energy leaders have said there is nothing to equal it anywhere in the country.

It is critical that we understand what this agreement represents and what we must do as a community to take advantage of this great opportunity.

LEARNING FROM THE PAST

In these past several months, we have faced the consequences of more than $140 for a barrel of oil. As each of us can attest from our gasoline bills, our electric bills and others, it has been a very difficult period. Oil prices are down now, but nearly every analyst tells us that high oil prices will be back at probably much higher levels.

The helplessness Hawai'i felt in the face of these costs is a sobering reminder of a place to which we don't want to return. Perhaps each of us should take a gasoline bill or an electric bill from this period and keep it on our refrigerator to remind us and to keep our sense of purpose strong.

As U.S. Sen. Daniel Inouye reminded us all at the signing of the agreement, we have been here before. In the '70s, we went through this and moved aggressively toward renewable energy. Then oil prices fell and our nation abandoned its drive to renewable energy.

Many wars and economic challenges later, we are here again. This time, let us not abandon the journey we need to make.

A VISION

Clean energy is the vision of homegrown energy. It is the vision of adding more than 1,000 megawatts of renewable energy. And it is the vision of Hawai'i taking care of its own needs, less and less dependent on others.

In this vision, there are no new coal plants, no new fossil fuel plants of any type. And as we add renewable generation, we will retire older fossil fuel units.

Hawai'i, the second state in the nation to adopt the Kyoto Protocol and its mandate to reduce greenhouse gases, will be well on a path to achieving those goals as well.

A NEW ECONOMY

Hawai'i takes $7 billion (that's right, billion) from our economy for fuel alone and sends it overseas. It was reported recently that tourism spending has brought in almost $9 billion this year. We basically take a huge chunk of that income and give it away.

Imagine what changing our fuel equation by 10 percent would mean; $700 million stays home. Try 20 percent and $1.4 billion stays home. We have little in our economic development plans that would have such an immediate and positive benefit to our economy. And we can make it happen.

Renewable energy, bought through long-term fixed price contracts, will allow us to hedge oil costs. The more renewable energy we use, the less imported fuel we burn.

An economy not at the mercy of long shipping lanes that can be cut, and not at the mercy of world oil prices, is a much stronger economy.

We are, as a state, in this together. We need to think like it and to live like it. One issue that needs to be addressed is the issue of a single statewide (except for Kaua'i) rate structure. That is a debate we must open soon. If we are truly in this together, then our costs and programs should be shared just as our renewable energy and greenhouse gas goals are shared. And if O'ahu will be significantly powered by our Neighbor Islands, then a single rate structure seems the most fair.

AN INVESTMENT

Renewable energy in Hawai'i will not simply appear magically from our good will and intentions. New contracts with renewable developers, new renewable generation facilities, new transmission and distribution lines, new meters, an interisland cable system all must be built.

This will not be cheap. But the work needs to begin now, during an economic slowdown in Hawai'i, right when we can probably least afford it. Yet like most investments, that is exactly when it needs to begin. It will help our economy and improve conditions in the long term. We must have the strength and discipline to stay the course.

A NEW UTILITY AND A NEW CUSTOMER RELATIONSHIP

The agreement can fundamentally alter the relationship between the utility and the customer. Hawaiian Electric becomes the facilitator of massive amounts of renewable energy and of customer choice.

A smart grid, advanced meters in every home and business, substantial encouragement of energy efficiency and load management and smaller power units spread across the systems it's a very different mix of resources.

The way Hawaiian Electric is paid would also change. Up until now, the utility is paid through the volume of sales to our customers. That means that the utility is best off when everyone uses more electricity. Clearly that model is no longer the proper goal. Changing to a cost-based system with independent measures such as the consumer price index will remove that conflict.

In the process, customers gain more control of their energy use and therefore of their bills. Rewards based on when power is used, incentives to use less power, more power resources on customer property, electric cars to cut gasoline use these are both new responsibilities and new opportunities.

AN ACT OF FAITH

Hawai'i can become the world leader in moving to clean energy.

Hawai'i can turn clean energy into an economic pillar for our community.

Hawai'i can transform a fragile dependent economy into a strong independent society.

It will take time. It will take investment. It will require that we lay aside historic disagreements. It will require that we take on different roles and responsibilities. It will require that we do all of these without immediate reward.

It is an act of faith. It is imperative that we act in faith of our future.

And we must act now.

Robbie Alm is executive vice president of the Hawaiian Electric Co. He wrote this commentary for The Advertiser.