Monday, June 9, 2014

Are community values important to the Public Utilities Commission?

By Henry Curtis

The Public Utilities Commission regulates public utilities.

Public utilities does not mean that the utility is public but rather that the utility provides a public good such as water, electricity and privately-owned public transportation.

The Department of Health regulates emissions and pollution from point sources (pipes, chimneys) and non-point sources (runoff).

But there is a category of pollution that largely escapes both agencies.

In English it is covered by the phrase, “You pay for my mess.” In economics it is called externalities.

Externalities refer to costs and impacts not reflected in the price of products.

Externalities include the choice of which community should bear the scars for the production and distribution of electricity.

Externalities refer to both positive and negative impacts. The January and February 1969 Santa Barbara, California oil spill led to the first Earth Day in 1970.

Should Waianae be the home for numerous large-scale ground-based solar facilities?

Since Kahuku accepted a wind farm, should they be saddled with a second and third wind farm?

Was it wise to build a wind facility towering over sacred Waimea Valley on O`ahu’s North Shore?

Should Puna be converted into a geothermal industrial zone to power the state?

Should a residential community in Pepe`ekeo get a biomass facility?

Should Maui triple the number of wind turbines it has in order to export energy to O`ahu?

In general, most state agencies do not consider externalities. There have been exceptions.

HECO’s proposed the Kamoku-Pukele (Wa`ahila Ridge) high voltage transmission line.

The line would have gone through the conservation district and therefore HECO had to file a Conservation District Use Application (CDUA) with the Board of Land and Natural Resources (BLNR).

The laws required that the line have a “public benefit,” which the BLNR interpreted as a “net public benefit” when measured against other alternatives. 

The BLNR reasoned that all new lines add redundancy and therefore all new lines have a public benefit. 

When measured against non-conservation district options, the proposed line that was not the optimal choice. The BLNR rejected the proposal.

Aina Koa Pono (AKP) proposed using non-commercialized experimental microwave technology to convert biomass into biofuel near South Point on the Big Island, and to ship the fuel along narrow roads to west Hawai`i.

The Public Utilities Commission specifically admitted Life of the Land into the regulatory proceeding to provide testimony and exhibits on the externalities associated with that project. The agency twice rejected the proposal.

There are a few other times when regulators have welcomed discussions on externalities.

But for the most part, agencies oppose broadening proceedings to include impacts to people and ecosystems.

Agencies have rejected motions to intervene in proceedings when would-be intervenors have broached the externality issue.

The Public Utilities Commission has existed for 101 years. Few people know much about it.

The Public Utilities Commission budget is financed by utilities. The size of the budget has been minuscule when compared to the overall state budget.

Suddenly the rooftop solar crisis has raised the profile of the agency. A series of PUC rulings challenging the HECO companies has shaken up the status quo.

At the same time there are an increasing number of local, county and state non-governmental organizations and community groups that are actively engaging in energy policy. Their in-house expertise is rapidly rising.

The externality issue of where to put "green" systems is heating up.

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1 comment:

  1. Henry: you missed one other good question to illustrate the issue of externality considerations: Should the PUC have issued a waiver from competitive bidding for the Murdock/Lingle Big Wind project on Lāna‛i and Moloka'i? Where was the consideration of community in that decision?