State should consider Kauai’s example of how to own, manage power utility

The announcement last week by the Kauai Island Utility Cooperative and a partner, SolarCity, that they will build the nation’s first utility-scale solar generating station capable of storing electricity in batteries during the day to distribute during evening hours underscores stark contrasts in how Hawaii’s people get their power.

The announcement was remarkable not only because introduction of this technology is something of a game-changer for the utility industry. It was perhaps more significant because of the stark contrast between operations of Kauai’s electric co-op and the troubled merger proposal of NextEra Energy and Hawaiian Electric Industries.

HEI has been beset by consumer service complaints, infrastructure weakness and rates — controversies with a familiar ring on Kauai, since the island faced a stark choice 12 years ago when the corporate parent of the former Kauai Electric Company announced it would divest its electric utility business.

The existing grid, which had been heavily damaged by Hurricane Iniki in 1992, was in sorry shape and there were no plans to move to a sensible mix of renewables.

In 2002, however, local leaders engineered the purchase of the electric company and creation of the co-op, in which all residents of the island share ownership.

It has not always been smooth sailing, especially when KIUC botched the roll-out of smart meters (something HEI has yet to undertake meaningfully), and because the co-op’s rate structure still makes electricity on Kauai extremely expensive.

There is, obviously, no grid for KIUC to fall back on, so there are occasional outages — including some that are islandwide. Fortunately, those seldom last more than a few minutes.

But in the last six years, KIUC has embraced alternative fuels like an evangelical. Its fuel mix has transitioned from 91 percent oil and 9 percent hydroelectric to today’s 17 percent solar, 9 percent hydro, 12 percent biomass and 62 percent oil.

KIUC is moving ahead with plans for a so-called pumped storage generation plant, in which cheap solar power will be used to pump water to a reservoir in the mountains during the day and then be run down a pipe at night to run a hydroelectric turbine.

It is in customer-owned solar generation, however, that KIUC stands most starkly in contrast with HEI, which has lagged in embracing customer rooftop solar. KIUC has welcomed it, though the capacity of its mini-grid to absorb so much power during the day is sometimes taxed.

KIUC has searched valiantly for work-arounds, despite the fact that its legacy oil generating technology is, by any standard, antique.

So, shift across the Kauai Channel to Oahu and beyond. There, Next-Era has been attempting to present a sow’s ear as a silk purse as it desperately seeks to overcome opposition to its proposed takeover of HEI.

Both the Hawaii Consumer Advocate’s Office and Gov. David Ige have come out against it.

NextEra boasts that its existing operations make it "North America’s largest producer of renewable energy from the wind and the sun." Its news release announcing the merger bragged that HEI has integrated rooftop solar from 11 percent of its customers and that the company aspires to reach 20 percent renewable uses in the next few years.

By contrast, KIUC anticipates that, within just a couple of years, its daytime generating needs will be more than half met by solar. It also has a new biomass plant that will burn locally produced wood chips instead of oil.

In other words, resident-owned KIUC has opened a perhaps insurmountable lead over HEI with none of the baggage that encumbers the romance of NextEra and HEI.

Perhaps the rest of the state should look to the Garden Island for leadership.

KIUC’s history — warts and all — is one of steadily improving service, making its grid more robust and introducing renewable fuel sources at a rate higher than nearly any other utility in the country.