Residents on Molokai may follow in the footsteps of Kauai and buy their island’s electric utility, including its power grid, which could be entirely powered by alternative energy sources.

The push for energy autonomy is an outgrowth of frustration with Hawaiian Electric Co. that was repeatedly on display during protests against the Big Wind project over the last four years. It also highlights a deep independent streak on Molokai.

I Aloha Molokai, a community group that sprang up in opposition to the large wind farm, has met with officials from Maui Electric Co., HECO’s subsidiary that operates the power grid on Molokai. The group has also conferred with the Maui mayor’s office and federal officials who administer a rural utility loan program to look into the plan’s feasibility.

“My concern is that we pay exorbitant rates and I don’t trust HECO and MECO,” said Teri Waros, a member of I Aloha Molokai. “As an alternative to MECO, a co-op looks attractive.”
If Molokai takes this route it would join Kauai, which is the only island not served by Hawaiian Electric Co.

Molokai, which is home to about 7,500 residents, pays some of the highest electricity rates in the state. Residents are currently paying 46 cents a kilowatt hour, which is four times the national average and nearly 40 percent more than customers pay on Oahu. Molokai residents say such exorbitant rates hurt them and weaken small businesses.

MECO spokeswoman Kaui Awai-Dickson refused a phone interview with Civil Beat, saying that she would only respond to e-mailed questions. In a written message, she responded to some of them, explaining that the utility is open to offers.

“With regards to discussions of a co-op, Hawaiian Electric/Maui Electric have always said we will consider formal defined proposals that are in the best interest of our customers and community,” she wrote.

Many questions remain about the idea of Molokai taking control of its destiny on the energy front. Among the most relevant are whether creation of a power co-op would reduce rates and whether the island has the expertise to run and manage a utility.

A formal offer would entail extensive paperwork, including filing an actual bid for the utility.

Meanwhile, Molokai Ranch and Calif.-based Princeton Energy Group are in discussions with members of the local community about a major project that would power the island solely with renewable energy.

“It sounds good thinking about community control and what not, but in the end we don’t want to get into something where (the island) will be worse off than the status quo,” said Kanohowailuku Helm, president of I Aloha Molokai. He noted that the group was moving forward cautiously and any formal move would require widespread community acceptance on the island.

Community involvement in charting the island’s energy future comes after the intense battle over a wind farm that would have dotted the island with about 70 big wind turbines supplying electricity to Oahu residents, while doing nothing to power Molokai.

That project, championed by HECO, fell apart earlier this year when Molokai Ranch chose not to renew a land lease with the wind developer amid stiff community opposition to the project.

Molokai Ranch, which owns 40 percent of the land on the island, subsequently paired up with Princeton Energy Group for the latest renewable energy project.

The proposed project includes a solar farm paired with a pumped storage hydro-electric system that would provide power when the sun is not out. It would also include biomass as a backup energy supply for the island’s generators.

Steve Taber, CEO of Princeton Energy, told Civil Beat he hopes to break ground in a year and a half. But questions remain about how the project will move forward so fast without a competitive bidding process, which is a state requirement for large renewable energy projects.

Awai-Dickson wrote in her email that it is simply too early to say whether MECO will put out a request for proposals for renewable energy projects on Molokai, nor would she say whether the utility would ask state regulators to waive the competitive bidding requirement associated with it.

“As noted, discussions with Princeton are very preliminary and it is too early to discuss or speculate what might happen,” she wrote by email.

Plans to create a Molokai co-op may also have to wait until the project is finished — provided that it actually moves forward.

Taber wouldn’t disclose pricing information for the project or the rate at which the company hopes to sell electricity to the utility.

But in a letter from Mayor Alan Arakawa to Taber, the mayor suggests that costs for the project exceed $100 million and that the company is seeking to sell the energy for 20 cents per kilowatt hour.

Doug McLeod, Maui County’s energy commissioner said Princeton hopes to reduce Molokai’s electricity rates by 7 cents to 8 cents a kilowatt hour, or 15 to 17 percent.

If Molokai residents do form a nonprofit to buy out the utility, it may be a lengthy, drawn-out process.

If the solar project moves forward, the energy commissioner said, it would likely take years before the co-op takes over Molokai’s power grid.

Arakawa wrote to Taber to say that he will offer his support, as long as the company allows a Molokai co-op to purchase the project.

Helm said the community would need to form a nonprofit and take out a loan from the U.S Department of Agriculture, which has provided low-interest financing to rural utility co-ops since the 1930s.

Tim O’Connell, assistant to the state director at the USDA’s Hawaii office, said it is an expensive process.

“They have to develop the capacity and the commitment, in addition to developing the loan request,” he said, noting that such a process alone could take two years.

“Organizing and getting people to work together is always challenging,” he added

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