HAMAKUA, BIG ISLAND — Lush green fields rise and dip through the rolling hills that stretch down to the deep blue of the Pacific Ocean. The verdant surroundings and tropical air suggest this farm could be one of countless others. So does the water that flows past leafy, green taro fields, stalks of corn that sway in the breeze and the sweet potato patch.

But the subtle, steady swooshing of the water signals how this farm is different. The water has been diverted from a mountain stream, down a 150-foot slope and into a small, blue shed where it sends blades spinning to generate electricity.

Yes, Hamakua Springs Country Farms has its own hydroelectric plant.

Farmer Richard Ha borrowed money to install the plant as part of a 19th-century solution to a very 21st century problem: sky-high energy rates.

It is a challenge that farmers around the islands are very familiar with. The dramatic rise in electricity costs in Hawaii has been cutting into their profits — or adding to their losses — and increasing local food prices. This makes it difficult for them to compete with large, mainland and foreign farm operations.

Increasingly, Hawaii farmers are turning toward alternative sources of energy, including hydro, wind, solar and biomass. Ha is at the forefront of such efforts. His new hydroelectric plant will, he estimates, cut his electricity bill nearly in half over the next twenty years. That is the duration of the loan that he took out to pay for his own personal power plant.

Here is the math that convinced him: The monthly electric bill for his farm was between $10,000 and $11,000 per month. To pay off his loan, he will pay $6,000 per month. The $4,000 to $5,000 monthly savings would add up, over the course of the 20-year loan, to more than $1 million. (Ha notes that the savings will rise dramatically once his loan is paid off; the only cost for his electricity will be hydroelectric plant upkeep.)

Sophie Cocke/ Civil Beat

If a hydroelectric power plant on a farm sounds complicated and futuristic, it is worth noting that Ha was inspired by the past and some remarkably simple technology. Chinese sugarcane planters used a similar version more than a century ago — until cheap and abundant oil lured them away from what would have been a more sustainable solution.

“When oil got cheap, it was cheaper to drill a well and pump,” Ha explains.

“Now, all of a sudden, we are all like, holy smokes, it’s expensive. We cannot afford to pump. And we are going back to what they did in the old days.”

Since 2002, average electricity prices have doubled on the neighbor islands and nearly tripled on Oahu. Hawaii farmers are now paying three to four times more than their mainland competitors to refrigerate fruits and vegetables and pump water to irrigate their crops.

Unlike the mainland, which shifted to coal, nuclear and natural gas for electricity after the 1973 Arab oil embargo caused prices to soar, Hawaii continues to rely on oil for the vast majority of its electricity needs. The Big Island, by contrast, gets more than 40 percent of its electricity from renewable sources such as geothermal and wind. Despite that, electricity prices have remained some of the highest in the state, in part because the utility signed long-term agreements with renewable energy producers that link the cost of their energy to the price of oil. So when oil prices rise, the costs of geothermal and wind do, too. (The practice of linking oil and renewable energy prices in new contracts was banned in Hawaii several years ago, but it will be many years before some of the old agreements expire.)

Hawaiian Electric Co., which serves Oahu, the Big Island and Maui County, has said in recent weeks that it is working to rein in prices and switch to cheaper alternatives, but recent energy plan forecasts suggest that there won’t be relief any time soon. In the meantime, farmers say they’re struggling.

“Energy costs cut into the margins big time,” said Alec Sou, owner of Aloun Farms on Oahu’s leeward side.

He hopes to one day power the land that he harvests with solar energy. Sou spends nearly one of every seven dollars on his farm to pay his energy bill. Given that his farm’s profit margin is between 8 and 10 percent, Sou notes, “You are talking a big cut into the bottom line.”

Hawaii’s Department of Agriculture lacks statistics detailing the overall toll of electricity prices on the state’s 7,500 farms. (The state cut the department’s research staff following the nation’s 2008 financial crisis.) But Dean Okimoto, owner of Nalo Farms and president of the Hawaii Farm Bureau, estimates that farming costs have risen by 40 percent to 50 percent in the last few years, in large part due to escalating energy costs. Oil prices, which spiked to $150 a barrel in 2008, have remained near record highs in Hawaii, affecting not only electricity prices, but transportation and shipping costs, and the price of petrochemicals that go into farm supplies.

“We are working on razor thin margins right now,” said Okimoto.

The situation is only expected to get worse. New federal safety regulations, expected to take effect in the coming months, increase refrigeration requirements for fruits and vegetables. The new regulations are important for warding off or limiting bacteria that can make people sick, said Okimoto, but he says the costs of chill boxes is “exorbitant.”

There is an exemption for small farmers in the Food Safety and Modernization Act that affects those who sell less than a half a million dollars worth of produce per year. The bulk of Hawaii farmers fall into that category, according to Scott Enright, deputy director for the state agriculture department. But Hawaii’s small farmers will still be required to comply with new food safety rules if they want to attract customers for their produce. If someone gets sick, the liability is transferred to the restaurant, farmers market or grocery store buying from the farm, said Enright, and they’re not going to want to buy food that isn’t federally certified.

Alternatives

On Kauai, small farmers will likely turn to post-harvest co-ops to share storage costs, said Jerry Ornellas, president of the Kauai Farm Bureau.

In addition to hydroelectric plants, farmers are also looking to biomass. Burning agricultural waste to turn a turbine and produce electricity was also common in the days before modern oil-powered electricity plants.

The agriculture department has been working with Big Island Dairy Group, which took over a bankrupt dairy farm to build a bio-digester, said Enright. The ultimate goal is to expand biodigester technology throughout the state — and to papaya farmers in particular — to create large amounts of waste that can be turned into energy. The technology will cover the energy needs of the dairy farm. Enright said he’s been working with state regulators to establish a fixed price for excess energy that will be sold back to the utility. This could provide farmers with an extra revenue stream.

Farmers are also looking to wind and solar. In North Kohala, farmers have installed a wind turbine and solar panels to power their water-pumping and irrigation systems.

While the alternative energy sources can lower farmers’ electricity bills, they also provide price stability. That could be a saving grace for many farmers who must navigate the unstable costs of energy.

“In the face of not knowing where oil prices are, you never know,” said Ha, as he stood next to his hydroelectric plant. “You (can now) make long term decisions, so this is a huge deal.”


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