The website of the Hawaii State Energy Office describes a government office “leading the charge” to enable the state to reach its ambitious plan of producing 100 percent of its electricity from renewable resources by 2045.

But according to a new report by the Hawaii State Auditor, it’s not clear what if anything the office is actually doing to help Hawaii reach its goals.

“The Energy Office could not provide us with documentation that clearly articulates its projects’ expected contributions to these goals, let alone the data that supports such accomplishments,” State Auditor Les Kondo wrote in his summary of the audit. “We also found that the Energy Office’s strategic plan includes goals and targets that are unrealistic and may be impossible to achieve.”

In conclusion, the auditor found, “the Energy Office is not doing its job.”

Ethics Commission Executive Director Les Kondo. 22 july 2015. photograph by Cory Lum/Civil Beat

State Auditor Les Kondo wrote in his report summary that the Hawaii State Energy Office could run out of money by next year.

Cory Lum/Civil Beat

The energy office referred calls Wednesday to Christine Hirasa, a spokeswoman for the Hawaii Department of Business, Economic Development and Tourism, which oversees the office. She declined to discuss the report.

DBEDT’s director, Luis Salaveria, issued a written statement saying the office already has “taken action related to the audit’s recommendations.”

Salaveria wrote that DBEDT “believes in the hard work being performed by the Hawaii State Energy Office (HSEO) in coordinating Hawaii’s energy community to implement the state’s clean energy future.”

As for the auditor’s overarching finding, that the energy office cannot articulate how it has contributed to the state reaching its energy goals, Hirasa pointed to DBEDT’s written response published in the audit.

In that response, Salaveria accused Kondo of not acknowledging contributions the energy office has made to help the state reach its goals and said the audit report ignored some documents that the office provided.

Salaveria also said it submits regular reports to the U.S. Department of Energy, which has “expressed complete satisfaction with HSEO’s reporting.”

Still, the audit was replete with examples of the office not clearly reporting how its activities have contributed to the state reaching its goal of producing all its electricity with renewables in the next quarter-century.

Luis Salaveria, director of the Department of Business, Economic Development and Tourism, took issue with much of the audit.

Nathan Eagle/Civil Beat

A case in point is a discussion of the office’s $500,000 contract to support activities of the Elemental Excelerator, a nonprofit that works with startup companies to develop renewable energy technologies in Hawaii. The contract included items like $90,000 to send the Elemental Excelerator’s staff to Silicon Valley to meet with potential partners and investors and $96,000 for a mentor program.

According to the audit, the contract called for the nonprofit to provide agendas from conferences attended and final summary reports. But none of this showed clearly that the contract pushed the state toward its goal, the audit reported.

“We could not find any evidence of a correlation or connection between the $500,000 contract and the advancement to the State’s renewable energy goal in the report and, more importantly, in the contract 
itself,” the audit report said.

Lauren Tonokawa, a spokeswoman for the Elemental Excelerator, said, “Our experiences with the Hawaii State Energy Office have overall been collaborative and positive. They are an important partner for Elemental Excelerator, and we believe they are moving our state forward in a positive direction.”

Although Tonokawa could not pinpoint connections between the contract and any investments in energy ventures forged in California to help Hawaii, she said the Elemental Excelerator has clearly established ties to Silicon Valley and the Bay Area due to reaching out there.

It has small startup ventures with companies like Oakland-based TerViva, which is partnering with Alexander & Baldwin in a venture to use old sugar land to grow pongamia, a shrubby tree with seed pods that are rich in oil for biofuel.  And it is working with San Francisco-based Stem Inc., which is rolling out “smart battery” systems in Hawaii, which utility executives say are the sorts of things the state will need to develop to reach its goals.

Involvement With PUC Criticized

The audit also contained a lengthy finding criticizing the energy office for participating as a party in cases before the Hawaii Public Utilities Commission. From 2011 to 2016, the report said the office has been involved in 10 regulatory matters, known as dockets, before the PUC. And the office spent some $1.1 million in legal fees to supplement its expertise, the auditor reported.

The auditor called the office’s participation in PUC dockets duplicative and “questionable,” and supported the finding with comments of the Consumer Advocate, a public official charged with representing the interests of consumers before the PUC.

According to the audit, the Consumer Advocate said there were instances in which the energy office appeared to be focused on promoting the state’s clean energy goals even when the impact on utility rates was unclear. That may have created additional work for both sides, the audit found.

Although the energy office has said it will cease participating in PUC dockets based on the audit’s criticism, at least one observer said the auditor’s finding was off base.

“I don’t think that’s fair at all,” said Colin Yost, chief operating officer of RevoluSun, a solar energy company. “In fact, it’s kind of absurd.”

Yost said the energy office’s work on a docket related to a proposed merger of Hawaiian Electric Co. Inc. and NextEra energy was particularly helpful. “It wasn’t duplicative of the Consumer Advocate’s work,” he said.

Yost said it may be useful to have multiple executive offices working to help implement the state’s energy statute.

“That’s what the executive branch does, by the way,” he said.

The audit also questioned whether the energy office will have enough money to keep operating even in the near future. The office staff grew by 75 percent from 2009 and 2012, from 20 to 35 employees, thanks to federal stimulus money. But the office is now spending more money than it’s receiving through tax revenue, and its cash reserves will soon run out, the audit said.

Salaveria disputed the finding, but the auditor bluntly rebutted Salaveria’s response.

“At its current rate of spending,’ the audit reported, “the office will be unable to pay its bills by 2019.”

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