State Auditor’s report blasts energy office

The Hawaii State Energy Office awarded a contract for more than $250,000 to plan a “state-of-the-art” energy innovation center last year, and then seven months later commissioned another consultant to assess whether that center is actually needed, according to an audit of the office.

That seemingly confused sequence of events was detailed in a critical report on the Energy Office released by the Hawaii State Auditor on Wednesday. The state has set a goal of having 100 percent of its electricity generated from renewable sources by 2045, and the Energy Office is supposed to lead that shift toward energy independence.

The auditor also found that while the Energy Office’s strategic plan includes ambitious goals and benchmarks designed to make the state energy efficient and energy independent, the office “could not provide us with evidence of the office’s progress toward or achievement of them.”

“The former Energy Office administrator admitted to us that some of those goals and targets were unrealistic and impossible to achieve,” according to the report.

The audit also cited portions of an unflattering report commissioned by the Energy Office itself that found entrepreneurs and clean energy businesses operating in Hawaii were generally unfamiliar with the office, and did not generally see it as “highly relevant.”

The Energy Office’s own study also involved interviews of “state government and affiliates” who described the Energy Office as a “somewhat deskbound institution that does not interface with other players in the field,” according to the audit.

The proposed energy innovation center is one of the Energy Office’s top priorities, and is supposed to showcase clean energy innovations and help develop energy-saving policy and initiatives.

According to the audit, the Energy Office hired an international architectural firm called Perkins + Will in January 2016 to provide conceptual plans and cost estimates for the project that are supposed to be used when the agency requests construction funding for the project.

The auditor found that the Energy Office then contracted with Cascadia Consulting Group for $149,100 to help develop a five-year Clean Energy Innovation Strategic Plan, a project that included assessing the need for an energy innovation center.

The Perkins + Will contract was later put on hold until Cascadia completes the strategic plan, but “it was not clear what will happen if Cascadia’s assessment finds no clear need for a new energy innovation center,” the auditor wrote.

The auditor also found that the Energy Office rapidly expanded its staff from 20 employees in 2009 to 35 in 2012 with the help of millions of dollars in federal grant funding that later expired, and personnel costs now account for more than 90 percent of the expenses of the office.

The “vast majority” of Energy Office funding is now provided by the Energy Security Special Fund, which is financed with revenue from the state’s barrel tax on oil. However, the auditor found the Energy Office is now on track to “substantially deplete” that special fund during the fiscal year that begins July 1, and recommended the office cut its costs.

In a reply to the audit, the state Department of Business, Economic Development and Tourism said it has taken steps to cut costs in the Energy Office that include delaying hiring, closing out contracts, and limiting travel and training.

DBEDT Deputy Director Mary Alice Evans disagreed that the office is depleting the Energy Security Special Fund, and also took issue with other findings in the audit.

She disagreed that the Energy Office has failed to document the contributions it made in helping to meet the state’s energy goals. The office provided that documentation, but the auditor didn’t acknowledge it, Evans wrote.

That included records detailing assistance that the agency provided to the state Department of Transportation and the Honolulu Board of Water Supply as they established performance contracts to reduce energy use, and work that was done by the office to help amend the requirements for energy conservation in new construction in Hawaii.

18-01AuditorSummary by Honolulu Star-Advertiser on Scribd

18-01 Auditor Report on Energy Office by Honolulu Star-Advertiser on Scribd