2013-01-10 Windward Transcript PD Rule 12

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the fund. But you already have a lot of that authority under the Geothermal Resources Permit authority that you had when you issued it. The disconnect I had in all of this is that we had $50,000 coming in -. Because it was only set up for like the direct claims and because of the process and people could not prove that what they were, what they believe was a detrimental impact, they could not provide proof that in fact this was because of PGV. You couldn’t come in with a doctor’s report saying I’m suffering from this because of PGV, because there wasn’t the basis. So what happened is nobody, you know, virtually nobody was applying for any of the asset fund money; and which is why at the rate of $50,000 a year we’re at $2.1 million. And the last time we expended any money, I think, was the Commission approved back in the, maybe 2007, I’m not sure, there was a Mr. Malasek that put in a claim that, you know, he did relocation and as a result of the relocation he had lost revenues from the crops that he would have had on his property. And so he was given some Asset Fund money to mitigate the lost revenue from his orchard. But it has been very small amounts. And, in fact, almost all of the relocation has been done under the Royalty Fund; and that’s because there’s no requirement under the Royalty Fund that you show you have been impacted by geothermal. All you need to do is express a desire to be relocated, and then we have a Department rule on that. And we just set up a preference that it had to be a pre-1989 structural permit and that there’s a preference for those that were located within one mile of PGV. But you don’t have to provide any proof that you’ve actually detrimentally impacted by PGV, just a desire to be relocated under that. So it’s much easier to go under that Fund. And it was designed to make it easier for people to use that money when those rules were adopted apparently, because they have no proof requirement. Whereas, the Asset Fund has a proof requirement, which is why you have nobody asking, or virtually anyone asking, for relocation under the Asset Fund. AU: Okay. So under the Asset Fund we have $2,000,000? LEITHEAD TODD: The last time we looked at it we have approximately $2.1 million and the fund grows at the rate of $50,000 per year, because that’s the requirement that PGV has to pay into it. AU: Okay. And where are we at, at the Royalty Fund? We also over see that fund? LEITHEAD TODD: Not really. The Royalty Fund is administered under the Department, under the Department’s rules. That is money that comes in from, because the State considers geothermal heat a part of their mineral rights, under the lease agreements for harvesting the mineral rights, PGV has to pay a percentage of their profits to the State of Hawai‘i. The State then gives us a percentage of that money. And basically the way it works is that we get, 20 percent of the funds go to OHA, I believe 30 percent of the funds come to the County of Hawai‘i at which we put into the Royalty Fund, and the remaining 50 percent stays with the State of Hawai‘i. And OHA is able to spend their money however they want to. We have specific restrictions that the Royalty Fund has to be spent in specific, originally it was just relocation. And so under our Department rules, it was primarily the1989 and the one-mile radius. Subsequently the County Council amended it, and part of that was that there was a significant period of time when there were no claims being made against the Royalty Fund for relocation. So the Fund was growing, because we were getting from a low of maybe, you know, $100,000 to a high of $700,000 in a year, was coming in under Royalty. So the County Council amended it to create a community benefits fund so that some of the money could be spend for community benefits. And under that 10 EXHIBIT D