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Home My WebLink AboutCOM 0651.002 2010-2012INNOVATIONS DEVELOPMENT GROUP Comm. No. Ref. To: P Ref. Date M....2U Issues & Questions for Consideration of the County Council of Hawaii Island I. Under the County General Plan, what are our County's needs for firm power? 2. Has the County considered the need for firm power to safeguard and expand agricultural needs for food security for Hawaii & the State. Hawaii island is the food basket for the entire State, Puna & Hamakua are the agricultural areas for our island. 3. Does the County have geothermal lands? Could the County be involved in a State/ Private sector energy development under the State Public Land Development Corporation (PLDC)? 4. What kind of benefits does the County want to see for itself, its ratepayers & our local communities from geothermal development. 5. Is the County Council supporting the mega development of geothermal energy in Puna by Ormat/PGV, an Israeli foreign company? Is the County Council supporting the mega development proposal of Mayor Kenoi for 500 to 700 MW with Leyte Geothermal Technology Development Coorporation? 6. Is there a need for the County to formulate a resolution on an energy policy for the County for our future? 7. What are the County Councils energy development priorities? Development of energy resources for Hawaii Island; for an inter - island cable; for hydrogen battery export to China? 8. How can IDG follow up with the County Council to get these questions answered and expand this dialogue? 2990 PAciFic HEIGHT RD. HON, HI 96813 OFFICE: 808 5360434) FAx: 808 536 02741 1DGHAWAiI C'Om Name (optional) Are you a Hawaii Island Resident? (circle one) Yes No If yes, What district do you live in? (Puna, Hilo, etc) How long have you lived on Hawaii Island? (year/months) Are you a "Native Hawaiian"? (Indigenous Kanaka Mach) Yes No Age: Sex: (circle one) Male Female Power Usage: (circle all that apply) Residential Commercial Agriculture Who Should Benefit? please mark appropriate box Hawaii's Geothermal energy should be developed for the benefit of Hawaii Island Residents. Hawaii's Geothermal energy should be developed for the benefit of Oahu Residents. Hawaii's Geothermatenergy should be developed FIRST for Hawaii Island and if feasible, SECOND for Oahu & Neighbor Islands Geothermal nergy should not be develo ped What kind of benefits should flow from geothermal development? Lower Costs to ratepayers for electricity. No Agree Disagree Opon Royalties to the County and State (including Office of Hawaiian Affairs - OHA)? Maximized profits for the developer, (PGV/Ormat)? Maximized profits for the transmission, (HECO/HELCO)? Revenues for "community projects" in the district? Revenues for "community projects" Islandwide? Ownership in the development for the Public / County A Community Trust should be created for community needs? Scholarships for Academic Education, Adult Training, Gifted & Talented? Should Geothermal Development be developed as a Public Utility? Criteria/Restrictions on Geothermal Development Geothermal Development should use clean techn Geothermal Development should use proven technology that is appropriate to the resource gY Geothermal energy should be developed to meet Hawaii Islands current & future planned growth needs Geothermal energy should be developed to the maximum potential as an economic "energy engine" for new growth N Agree Disagree Opinio on Geothermal Development should acknowledge and respect cultural practices ONGOING -AWAI 'BLAND COMMUNIIY SURVEY RESULTS DG has presented its mode for geothermal development at several community workshops on I awali Island and nave ound: • 97% Support in Puna (April 9, 201 I; • 95% Support in HiIo(May3/,20//) • 100% Suppor_ in Waimea (Sep 28, 201 I) 100% Suppor_ in Kona (Sep 29, 2011; 100% 'n Suppo: from Hawaii Island Labor Groups - via Labor Alliance Name (opt enap Are you a Hawaii Island Resident? (circle one) Yes No If yes, What dietritl do you live in? (Puna. Hilo <to( Hcw long nave you lived en Hawaii Island? (yeartmomhst Are you a "Native Hawaiian "? (Indigenous Kanaka Mao?) Yes No Age' Sex: (circle one) Male Female Power Usage: (Boole all that apply) Residential Commercial Agriculture Who Should Benefit? Hawaii s r'eotermn energy shnuM M; devsMped ;m ;ea Weld a Halvah UI0P'esivaris. .�■ `? Haerai s Gmihe a or meld ire deecUee Pair 7haxnegl r eh K(e.is. ■ ■ a a Hawaii's l snPnn erare elleAt 1,e leveloped Hltitr Haw Island and nf site WAD kr 0:,:le .. ":e.p s,- ule!u1 Crth Y,: g) 01.0000 h ;ee dree,rie What kind of benefits should flow from geothermal development? Inwtli!..is°So:a : epayNr5';.•PIPCps ":y' h�ryaniau 10 the r o"Joty and Sale hncluding Qlhee el vokin Alfa:ra' OM)? Ma,i ..ei Drefits hn lb n unva wc+. IPCWOnr:zijl MaumIx ed ladph En II: uans :HELM 4 ■ RRera .: ft! S tmm l[y pr N!C"8 nP'e Rnw.rxstr vamm ty yi y'x ' lei mw 'de? Owneuhip In da. d reIepner; Nrthe Ft h ic.:AUrh A C y'a $t slpuh be c:tyate0 for xvamurder needs? Sdwlmal polurkr domicEducahon, AufuilTree* ;."il4hiF, ?awmsd? Stmldd C. et CPVelo;0000t _neelnped asa?7dpa Utility? Oter Pal Criteria /Restrictions on Geothermal Development LxPet ha:xa' Pere Blmdd 18e Clef+. tanl'nchi y 0000,0Im0l C ^eaPIOP/O +'i slu!d!se mew tectrzkge that: ie apprepeet£ 1e lhf reseome Geatformel energy seceid be develn7sl to m:,et taw ai ',lands rerrent n future planned grew h needs :wmlherrt <l �v staid be deoeiaed to U' maximum tO MI asap0C' . "C9G'gp engine' 10P eeri rot) icmUarinal Duca:A%i,snt x1p;�ld ac' }mMmdge and mspe!':; u'urc Pa0AC.;s *Note: Blank surveys were not counted in total Hawaii county to adopt Leyte province's geothermal technology 1 Sun.Star Ft 13146-€ h}artcLi Fiav 51-4k- 3/30/12 2:34 PM N s - Ph /1.1010 a ;v + s /2e : Ke 1.)44' 1-r2-4.0 OFFICIALS of Hawaii county of Hawaii, USA are strengthening their sisterhood ties with Ormoc City in its effort to maximize their island's geothermal energy •otential, ado tin the technolo'ies in Le te. In a visit this week, Hawaii county Mayor William Kenoi said the development in Leyte is also possible in their county as they move to use a 100- percent renewable energy. Have something to report? Tell us in text, photos or videos. "We recognize the growing uncertainty surrounding our energy needs in both our countries. We have come to learn from the Philippines how to develop, expand, rely on our own natural assets and energy resources such as geothermal," Kenoi told reporters. The official said he was impressed with the facilities straddling the 107,625 hectares Leyte Geothermal Production Field in Ormoc City that even a third of its current capacity can supply the demand of their county's entire island. "We have about 30 megawatts (MW) of geothermal power and we are leading in Hawaii in that amount of energy. We have come to Ormoc and see 700 MW with our very own eyes. We saw one power plant producing more than 200 MW and that will bring power to the entire island of Hawaii," Kenoi said. "We know it is possible and once we know it's possible and the potential exist and then the reality and implementation of that possibility is right around the corner for us," he added. Randy Kurohara, director of Hawaii county research and development, said they are very concerned about their energy security with the rising cost of fuel and their location "miles away" from mainland. He said power produced from renewable energy accounts only 35 percent of the total demand and they are mainly dependent on fossil fuel. The demand of the entire island is 200 MW and they only have 30 MW coming from geothermal. Other sources are wind, solar, and hydro. "We really believe that we have so much geothermal in our island and we should develop that further. We are optimistic that the reality will be brought forth in a very near future," Kurohara added. A report estimated that Hawaii Island's geothermal resources have the capacity to produce between 500 MW and 700 MW of electrical power. Imported oil has been the primary fuel not only for transportation but also for generating electricity in the Hawaiian Islands. The Hawaiian delegation was composed of city officials and energy experts tasked to coordinate with the Energy_ Development Corporation on the project. Ormoc City Councilor Jose Alfaro Jr., chair of the committee on energy and sisterhood, said top Ormoc officials also visited Hawaii last year to forge sisterhood agreements. "Aside from energy, the sisterhood is also centered on exchange of ideas on education and cultural practices," Alfaro said. Sister city relationships are agreements that bind regions together in cultural and economic cooperation. The cities often have similar histories and similar economic drivers. Hawaii county is a county located in the US state of Hawaii in the Hawaiian Island. The county's land area comprises 62.7 percent of the state's land area. It is the highest percentage by any county in the United States. Leyte http : / /www.sunstar.com.ph /tacloban /local- news / 2012 /03/30 /hawaii- county- adopt- leyte- geothermal - technology - 213973 #.T3XXOCzpezA.facebook Page 2 of 6 TSUTSUI mw�mERCADOwm VICE PRESK>EN'r IRS7 DISTRIo a...ALA/0A SOLOMON ec7.)°nomrnor HIRD DISTRICT JOSH GREEN. IV 0 OURTHwSTRICT FrHo:S`niCT rmDISTRICT .,.ALAN, ENGLISH EVewn+o:Srxmr GHTHmomCT ,SAM S,OM NTH DIST Pc, wn nw,pm, VENTH rmC:T CAROL FUNLINAGA mTEENTHnISTRICr wRTEEwmnsm"o resmn,nSrpiCr TEENTH QISTRIo DISTRICT DISTRICT ETEENTH DISTRICT GABBARD swtETHmSTRICT EN EY-FIRST oISTnICT NTY-SECOND DISTRICT :Nr,T*Rvum/xICr :NTY-FOORTHc/xTR"CT NTV-FIFTH D.ISTRICT , RYAN :F. CLERK �f�� « ��v^��+ L / �L��'� neum �ep�. �u..�w /*^ues15a1-'ld /*L^ ' . ./ /_ (Al) ��°�«`� � ��w�i ~/a��^'f'~' / / aute �� nm^�c� STATE CAPITOL HONOLULU. HAWAII 96813 March 11, 2011 David M. Louie, Attorney General Department of the Attorney Genera) 425 Queen Street Honolulu, Hi968I3 Aloha, In Lieu of a Senate Concurrent Resolution the Senate Committee on Water, Land and Housing, is requesting you, as Attorney General State of Hawaii to investigate the contract between the Puna Geothermal Venture and Hawaiian 'Electric Light Company, including rate charges and ongoing operations. The Committee acknowledges, that the geothermal resources are "minerals" pursuant to Hawaii law, and are an asset of the ceded lands trust belonging to the public and Native Hawaiians. Therefore, the residents of the Island of Hawaii, who are ratepayers and equitable owners of geothermal resources, are entitled to receive a direct benefit from the development of their energy trust assets in the form of affordable rates for electricity produced from geothermal resources. To the Committee's knowledge, Puna Geothermal Venture, which is owned by Qrmat Technologies (PGWORMAT), and the Hawaiian Electric Light Company (HELCO) entered into a private contract for the development of publicly owned geothermal resources for the production of thirty megawatts of electricity for the Island of Hawaii commencing in 1993, for a term of more than thirty years. The terms of the PGV/ORMAT and HELCO contract were never pubticiy disclosed, nor were the negotiations transparent. Hawaii Business Magazine reported in its November 2, 2010 edition that the charges and rates assessed to the Island of Hawaii's ratepayers under the initial contract were based on the price of oil, and not on the actuat costs of production and distribution ofelectricity incurred by PGV/ORMAT and HELCO. These charges and rates assessed to the Island of Hawaii's ratepayers should have been based on the actual value of geothermal electricity. Although PGWORMAT acknowledges that they used an avoided cost formula under the United States Public Utility Regulatory Policies Act (PURPA), which they interpreted as allowing them to charge consumers at rates based on the price of oil. The Committee concluded all profits resulting from the lower costs of generating electricity by geothermal energy were retained by 9GV/URk4Al[ 71 .�� For seventeen years, ratepayers of the Island of Hawaii have been assessed charges of seventeen to twenty percent of their electricity consumption based on oil consumption, rather than the actual costs of electricity generated from their own publically owned geothermal resources. It is apparent, under the terms of the initial PGV /ORMAT — HELCO contract, cost savings from the generation of electricity from geothermal resources have not been passed on to consumers, but have been retained by the PGV /ORMAT and HELCO. The Committee agrees with native Hawaiian advocate, Mililani Trask, this practice is inherently unfair. HELCO and PGV / ORMAT have agreed to implement a more equitable formula for sharing avoided cost savings with the Island of Hawaii's ratepayers for electricity costs incurred from twenty -five to thirty megawatts and from thirty to thirty -eight megawatts. However, they continue to charge the Island of Hawaii's ratepayers costs based on oil for twenty -five megawatts of electricity, resulting in a huge windfall of profits for PGV /ORMAT and HELCO under the remaining fifteen years of the original contract. The recent negotiations between HELCO and PGV /ORMAT for a more equitable formula for assessing electricity rates from twenty -five to thirty -eight megawatts, demonstrate that the contracting parties are capable of re- negotiating their original contract to decrease rate charges for twenty -five megawatts under their original contract. In conclusion, the Senate Committee on Water, Land and Housing concur that the Attorney General is requested tc conduct an investigation and audit of: (1) The initial contract and Power Purchase Agreement between PGV /ORMAT and HELCO, including the terms, agreement, and formulas utilized by the contracting parties under which they determined the value of the profits generated through avoided costs that PGV /ORMAT and HELCO retained for themselves. (2) The profits and benefits that accrued to PGV /ORMAT and HELCO from their development of state owned geothermal resources, as well as the amount or revenues each received over and above the actual costs of generation and transmission of electricity generated from geothermal resources. (3) The annual and total amount of revenues paid by the Island of Hawaii's ratepayers to PGV / ORMAT and HELCO for oil generated electricity that they did not consume but were billed for from 1993 to 2011. (4) The current actual cost of PGV /ORMAT for generating one megawatt of electricity from the PGV /ORMAT Plant (reportedly 8 cents per megawatt) and the price at which they sell each megawatt to HELCO (reportedly 16 cents per megawatt), as well as the actual cost to HELCO for transmission of geothermal electricity to the Island of Hawaii's ratepayers who are charged 39 cents per megawatt by HELCO; and whether this agreement has resulted in significant profits to PGV /ORMAT and HELCO at the expense of ratepayers. Page 3 Vou are requested to assess the impact of any other federa laws relating to the fixing of rates for consumers of geothermal electricity, including laws prohibiting price fixing. You are requested to report your findings and recommendations to the Senate Committee on Water, Land and Housi no later than twenty cfays prior to the convening ofthe Regular Session of 2012. The report should indude: (1) Recommendations for further investigation or actions, includi if indicated, legal action to recoup revenues paid by the public, Native Hawaiians, and state and county ratepayers for oil generated &ectricity rather than electricity generated geothermal resources. (2) Recommendations to ensure that negotiations and agreements relating to the development of public trust resources, induding energy resources, are subject to transparency and disclosure iri the interest of the public trust, Respectfully, SenahorK4akyma olomon, Vice Chair Water, Land and Housing Cc: HennmaMorita � ��o �� Senator Donovan DeIa �man Water, Land and Housirig ��, Hawai: Business j Geothermars Second Chance Page 1 01 Send to printer Close window d-eotherrnal's Second Chance Lessons from a turbulent past could help expand this renewable energy's future SHARA ENAY When geothermal steam was first harnessed to generate electricity on the Big Island almost three decades ago, the project left many residents with a bitter taste. The technology was substandard, the community wasn't consulted and environmental protestors became fixtures outside the plant Some residents still see the Island's volcanoes as a sacred power that should never be commercialized. But today, the high price and environmental damage of oil has helped persuade many others - including some former opponents - to re-evaluate geothermal's potential to generate more renewable energy and stimulate a struggling Hawaii Island economy. "l think most people here see geothermal as a positive thing," Big Island Mayor Billy Kenai says. "But it has to be done right this time. We're not going to 'Superferry' any more major community projects. The lesson here is: Talking Puna Geothermal Ventures site. lids trust. You cannot rush.... The more time and effort you put in on the Photo: Courtesy of Puna Geothermal Ventures t end, the easier it is, the more collaborative and cooperative it is on the back end." Right now, geothermal supplies 20 percent of the Island's electricity, but Kenoi hopes it will soon help Hawaii Island become the state's first county to get half of its energy from renewable sources. Tumultuous past The first geothermal well in Hawaii was drilled by the state in 1976 and began producing electricity in 1982. Originally designed as a two-year project to prove geothermal energy production was possible, the plant operated for seven years. "People criticized it for being unsafe and irresponsible," says Mike Kaleikini, plant manager for Puna Geothermal Ventures, Hawaii's only remaining geothermal power site. "From the very beginning, geothermal faced tremendous struggles - and rightfully so." Soon after the pilot program, a project on Campbell Estate land almost turned Puna into a battleground. More than 1,000 protestors assembled near the entrance of True-Geothermal's drilling facility on March 26, 1990, claiming the development hurt nearby Wao Kele o Puna, the state's largest remaining lowland 't forest and a sacred place for Native Hawaiians. More than 130 Joie were arrested that day. Eventually, after years of opposition and litigation, the Wao Kele o Puna geothermal project was abandoned. An://www.hawaiibusiness.com/core/naactools.nhOna2eid=81 1 6&ur1=%2FHawai i-Riicinecco/0 rt■invp-iri /1 1 11 /11 1 Hav.ai' Business Geothermal's Second Chance (vVao Kele o Puna) was put together for private benefit with no consideration for the impact it woud have on the community or the 'vironment," says attorney and Native Hawanari advocate Mililani sk, who was at the protest two decades ago "The previous model had no ideas for benefit sharing and the technology was poor. The goal was for the company to get rich and nobody else. It was a mismatch of science, technology, the resource and management" Page 2 of Milifani Trask, attorney and Native Hawaiian advocate says she supports responsible geothermal development. "It's crucial that the community has a say in what goes on to prevent the same mistakes from happening." Photo: Rae Huo Today, Trask says there have been significant advances in technology and Hawaii has more nat nal and global experience from which to draw. "We can't go backwards in time," she says, "This time around; I am in favor of responsible use and development of the resource' Around the same time, in 1993. Puna Geothermal Ventures began its commercial operation with a power-purchase agreement with the Hawaii Electric Light Co.mpnovide30megavatta.PGV.whiuhisownodbyOnna Technologies, based in Reno, Nev., sits on the lower East Rift Zone of Kilauea volcano, adjacent to Wao Kele o Puna. "We had protestors in the beginning when we first opened," Kaleikini recalls, 'but, thankfully, nothing like what happened with other orojecte.~ He says PGV performs regular community outreach so Puna residents understand what's happening in their backyard and have a chance to discuss it. Guy Toyama, chair of the Hawaii County Mayor's Energy Advisory Commission, describes geothermal's initial appearances in Hawaii as a 'There was no input from the public and it was an open system, so the hydrogen sulfide was let go into the atmosphere,' he recalls, 'When PGV came along, considering the history of geothermal, they came across many Toyama says PGV's closed-loop, zero-emission system is much safer and cleaner than previous technologies. -'- ---` -- Over 1,00() march agains °Lac.^°^~°~'--m 'I'm sure that's one of the reasons the public is more accepting of PGV's operation," he says. "This time around, the feeling in the community is different." aii Business I Geothermal's Second Chance Page 3 of Geothermal today h its natural resources, the Big Island could be a huge power supplier for the rest of the state. Already, about 30 percent of the Island's Aricity comes from renewable resources and there is the potential for much more. Richard Ha, president of Hamakua Springs Country Farm, sees geothermal as an economic engine that could not only create cheaper energy, but also cheaper production, manufacturing. agriculture and transportation. "Geothermal could create a new industry for Hawa Island rather than just creating jobs through resort development and luxury subdivisions," he says Kalakininotes that, every year, PGV spends millions of dollars on labor, taxes, maintenance and community contributions. POV's energy also replaces about 150,000 barrels of imported oil that would otherwise be needed to generate electricity. PGV is negotiating with HELCO for an 8-megawatt expansion (about a 25 percent increase) and both parties expec an agreement by the end of the year. HELCO Presiden Jay Ignacio says PGV's latest technology will allow the utility to control how much energy goes into the grid, which will improve its total system management Currently, there is no on/off switch, so 100 percent of PGV's power goes directly into the grid. 'thermal is considere a firm renewable sourc of rgy, as opposed to wind and solar, which are intermittent sources. But th'e wells are difficult to sustain. Last year, production at PGV declined by 30 to 40 percent because of a few clogged wells, Toyama says, which leaves fossil fuel-burning plants as still the most reliable source of power. "It's important for us to build our clea energy portfolio o spread ou the risk, Toyama says. 'When it comes to geothermal, it's not a resource problem, it's a technological and investment problem that we face.' 1." Mike Kaleikini, plant manager for Puna Geothermal Ventures says the company is doing all that it can to be a good neighbor and support the Puna community. Photo: Josh Fletcher PGV's current contract with HELCO is based on the price of oil — the price HELCO pays goes up or down as oil prices do But future contracts will not be tied to cU prices. So, if oil prices go up and stay at a high level, eothermal becomes more attractive and would stabilize the price of electricity," Ignacio says. Show me the money Unlike the open ocean, where catching fish is a free-for-all, geotherma steam is considered a mineral owned bythemtate That means PGV pays the Kapoho d Partnership to lease 'its land and also pays the state royaltes based on "..nua| sales. Ke/eikini says PGVtypically pays about $2 million to $3 million a year in royalties — about 10 percent of the company's revenue. Of that, the ^� ~r� hawaiihusne&m.corn/cwrc7nmemtooly'nbo?nageid=81 1 i/l /7AlI Hwaii Business Geothermal's Second Chance Page 4 of state takes 50 percent, Hawaii County gets 30 percent and 20 percent goes to the Office of Hawaiian Affairs. Over the years, questions have been raised -hout how the royalties are spent. Click to enlarge the image According to Russell Tsuji, deputy director of the Department of Land and Natural Resources, revenue from geothermal is not spent on any specific programs. Instead, the money goes to the Special Land and Development Fund and helps pay expenses for the Land Division, which administers leases and manages all state-owned lands. The revenue also funds other DLNR divisions. For the past couple of years, state royalty revenue from PGV has declined, Tsuji says. It was up to $1 million a year when the price of oil peaked. OHA CEO Clyde Namuo says PGV royalties help pay for CHA grants, services and projects in the community, as well as OHA's operating costs. Trask says more of PGV's royalties should be used to directly benefit Puna residents, who have accommodated geothermal for years. Only the county's share of the royalties goes exclusively for public-benefit projects in Puna. County Councilwoman Emily Naeo le-Beason, who represents the area, has shepherded royalty funds to upgrade the Pahoa garbage transfer station. install streetlights, pave roads, purchase two public transit buses for the area and repair the community swimming pool. "Whatever the county gets from royalties. we put it back into Puna," Kenoi says. PGV also contributes $50,000 a year to a fund that compensates Puna residents adversely affected by geothermal development. Kaleikini says the fund has accumulated about $2 million and, to date, paid only a few claims and a few thousand dollars to relocate neighbors of the plant, ary year, PGV also donates scholarships for graduating seniors from Pahoa High School and offers a summer-hire program Robbie Cabral, founder and chairperson of Innovations Development Group - a local company that says it tries to protect indigenous communities from exploitative developments that violate human rights - says implementing a few programs and contributing a couple of million dollars into a fund isn't enough. Others, such as Ha, Toyama and Kenoi, see it differently. They believe PGV has been a good neighbor, given back to the community and communicated well with residents. For PGV's first 10 years, while oil prices were lower than today, the company was in the red, Kaleikini contends. "It wasn't until recently that we've been doing well enough to help out more in the community," he says. Cabral isn't buying it: "What they're telling you is the tip of the surface and unless you're familiar with their financial model, which speaks to actual costs to run this whole thing, you will see that within the net present value of this transaction. there is enough room to give the community a piece of the action. ... They're holding out!" A new model Cabral and Trask, who is also an advisor for IDG, say they've engineered a better business model for geothermal development that encourages community partnerships and benefit sharing. IDG says it has worked with the Maori in New Zealand to structure similar agreements. Native-to-Native Trade model goes beyond looking at who is the shareholder and who is the stakeholder, Trask says. "It alsOasks, uvho is the right holder?' " :tp://www.hawaiibusiness.corn/core/pagetools,php?pagcjd=8j 1 68c url—%2F1-1awaii-Business%2FNovem 1/1 1 Hawaii Business Geothermal's Second Chance Pale 5 ot n HaWa, geotherma belongs to the state and the people. she continues, We have never seen a cleveiopment model that respected that and provided for a fair sharing of beneflts' aral says what's needed is equitylike compensaton, or returns, to the community, which is benefit shanng through a percentage of the cash flow after all costs and risks are assessed. She also suggests that developers set up a community trust that would be governed by indigenous people. "They would also be able to make recommendations - not direct policies - to the cerporation on all issues." N2N's advocates say it also provides for the protection of cultural heritage, prudent management of the resource and responsible stewardship of the tand. Additionatly, developers woulcJ piedge from the start x» give part of their pmfitydirectly to the community. 'They should be saying, 'You help us and allow us to do this, and we'll give you a share of the business,- Cabral says. `Without community oupport'youhave1DUpecoen1ofnothing./f|weie|hacommuni\y.|wouldbexuying.'Hmy.w/hat'oin/thnruo?VVhywouldwewant to take the risks knowing what this industry could do to our aina unless we are a part of the decision-making in some capacity or we are a part of the profitability?' " Geothermal expansion Last legislative session, Senate Concurrent Resotution 99 caUed for the creation of a geothermal working group to evakiate the potential for new geothermal development and to research the viability that geothermal could serve as the pnmary energy source for electricity in Hawaii County. The 10-member group, made up of Big Island leaders - from cultural groups, business, HELCO' government and others - wiV .provide an interim repori to the Legistature by the end of the year and a full report next year. Ha, who co-chairs the geotherma worksng group, says he looks forward to tearning more about the N2N mode Trask says the group is a step in the right direction. "For the first time, I see that there is a place for us." `world's richest geothermal areas include Iceland, New Zealand, California, Portugal andMexico - basically.anyplace with a volcano potentiat. Atthough PGV likely could generate enough geothermal e{ectricity to power the entire Big Istand - about 200 rnegawatts at peak - it would be more efficient to develop a second plant in Kona, near much of the island's development and population. It sounds good to us, but you need the market before you can expand," Kaleikini says. Over the past several years, energy consumption has declined as the price of oil and power has increased and people have conserved more. Another challenge is that geothermal needs lots of capital investment up front; Kaleikini says an oil plant can be built for 20 percent less than a geothermal facility that generates the same power HELC[yuIgnacio says the utility or a single devetoper alone will not make geotherma expansion happen. '1 think it's going to be a partnership between the utility, government, developer and being sure that we involve the community," he says. its probably going to have to be some kind of shared-risk structure." The same would likely apply to a related project that's been discussed for decades- an undersea cable that would transport geothermal energy between islands_ The state is currently studying the feasibility of an undersea cable that would connect Oahu - the state's largest consumer of energy - to wind farms on Molokai and Lanai. The next phase of the study is to look at the viability af adding Maui and then the Big tsland to that network. Ha says the sticking point is the cable's cost. That tab, probably in the billions of dollars, would likely be split among state taxpayers, utility customers and whatever federa assistance Hawaii could get. Kaleikini understands that he and PGV are uader the microscope because of the faited geothermal developmerits that started it all. But, he s, he is committed to using geothermal safely and responsibly for the benefit of the people of Hawaii "It's very importan for us to do things right," Kateikini says. "We think that means outreach, engaging the community, engaging the peopte H.z-waii Business I Geothermal's Second Chance Page 6 of . - who have concerns with the development of the geothermal resource and giving everybody the opportunity to talk about it. It doesn't matter if it's us or another developer, if we screw up, its going to be tough for someone else to try to come in because people will remember all fke negatives. We know this is our shot to prove to everybody that geothermal is the key to our clean energy future." Alternate uses of geothermal Geothermal expansion in Hawaii can't happen unless some-one's willing to buy the power, and, as it is. HELCO doesn't need any more power. PGV is only generating half of its permitted 60 megawatts of energy. But that opens up the possibility of using geothermal to create fertilizer and transportation fuel, says Guy Toyama, chair of the Hawaii County Mayor's Energy Advisory Commission. Geothermal energy can also create hydrogen, which can be stored in tanks like propane, and shipped to Oahu for fuel In the N2N model, the native resource owners are not only partners with the developer, they have rights to the byproducts — steam and fluid — for ancillary development. "In New Zealand, were looking at capturing steam for hot-house agriculture, using the fluid for the health and wellness industry, which is booming for spas, and using geothermal for tourism-related purposes," Mililani Trask says. These ancillary uses allow businesses to grow around geothermal.' This benefit, she says, would apply to everyone in the community, "Ancillary development in Puna wasn't considered and, as a result, we see energy from Puna go into the grid, but we haven't seen a benefit to small-business development there,' Trask says ttn://www.hawaiibusiness.com/core/naRetools.pho?DaReid=8116&ur1=%2FHawaii-Busi ness%21-Novern '/1 1 /7111 1 J Yoshimoto Chair Pete Hoffmann Vice-Chair HAWAII COUNTY COUNCIL COMMITTEE ON AGRICULTURE, WATER & ENERGY SUSTAINABILITY 5th Session DATE: April 3, 2012 (Tuesday) PLACE: Council Chambers Hawai`i County Building 25 Aupuni Street Hilo, Hawai`i Fred Blas, .Member Brenda Ford, Member Donald Ikeda, Member Dennis "Fresh" Onishi, Member K. Angel Pilago, _Member Brittany Smart, Member Dominic Yagong, .Member TIME: 10:15 am. (Note: Please turn cell phones, pagers and other mobile communication devices on silent mode.) CALL TO ORDER STATEMENTS FROM THE PUBLIC ON ITEM(S) ON THE AGENDA REFERRAL(S) Comm. 646: POWERPOINT PRESENTATION BY MR. JAY IGNACIO, PRESIDENT, HAWAII ELECTRIC LIGHT COMPANY (HELCO) From Council Member J Yoshimoto, dated March 16, 2012, stating that a presentation will be made by Mr. Ignacio regarding recent stories covered by the media relating to photovoltaic systems, energy pricing_ and geothermal. Comm. 651: PRESENTATION BY MS. PATRICIA K. BRANDT, CEO, INNOVATIONS DEVELOPMENT GROUP, INC. From Chairperson Dominic Yagong, dated March 23, 2012, stating that a presentation will be made by Ms. Brandt regarding renewable energy resources of indigenous people. ADJOURNMENT The meeting place is accessible for persons with disabilities. Persons who need special accommodations for this meeting should call 961 -8245 by March 29, 2012. Relay users please call 711 -961 -8245 to contact our office. Serving the Interests of the People of Our Island Hawai 'i County is an Equal Opportunity Provider and Employer Hills full of sheep Day before start of exploratory drilling program for Taheke - Contact Geothermal Development - August 30, 2010 The easy way to remember our model for geothermal development in Hawaii is to remember it is PONO. Policy Changes: help formulate a new and comprehensive energy policy to replace the current totally private sector /closed energy initiative Open and Transparent Process No violation of cultural beliefs /sensitivities or damage to the environment Opportunities for the community to participate and benefit for generations to come. Learn more about IDG by visitingidghawaii.com and liking us on facebook.com /idghawaii EVELOPMENT GROUP 2990 Pacific Heights Road • Honolulu, HI 96813 OFFICE PHONE: (808) 536- 0434.OFFICE FAX: (808) 536 -0274 OFFICE EMAIL: info o idghawaii.com INNOVATIONS DEVELOPMENT GROUP IDG:The Future of Renewable Energy IDG's mission is to develop community -based partnerships specializing in working with Indigenous Peoples. We deliver socially responsible, environmentally sustainable, culturally appropriate and economically sound projects. IDG envisions a world where Indigenous peoples achieve economic self- sufficiency by taking a leadership role in the development of their land and natural resources. Established in 1998, we're a strategic planning and development company specializing in creating sustainable systems for renewable energy generation. �i RAPPRIA In Hawaiian, "pono" means righteous, correct, responsible — or simply put — "doing the right thing." The IDG approach to energy development is sustainable, integrated, systemic, and, above all: PONO. We advocate for new Policies, use an Open and transparent process, insist on No violations or damage to host cultures or the environment and ensure Opportunities for the community to participate and benefit. Our approach is unique: culturally appropriate, socially responsible, environmentally sustainable and economically equitable. Our team and partners are leading -edge financial, technical and cultural experts. We have deep roots in our communities, and a proven track record of building profitable and sustainable energy projects internationally. IDG's goal: implement our Native -to- Native model of alternative energy development in the Pacific region and beyond, for the benefit of ALL stakeholders AND future generations. CD CC Our Native -to- Native model means our projects are ALWAYS culturally appropriate, socially responsible, environmentally sustainable and economically equitable. Learn more about IDG b visitin and liking us at 2990 Pacific Heights Road • Honolulu, HI 96813 OFFICE PHONE: (808) 536- 0434.OFFICE FAX: (808) 536 -0274 OFFICE EMAIL: info@idghawaii.com INNOVATIONS DEVELOPMENT GROUP New Zealand Projects IDG is a new kind of international energy development company. Our collaborative projects in New Zealand beautifully demonstrate how the Native -to- Native model creates sustainable, equitable energy solutions for all. IDG's partnerships with Maori Trusts are based on strong relationships between the Hawaiian and Maori peoples and our deeply shared cultural values. In New Zealand (Aotearoa), IDG is involved in three energy development projects, with several more in the planning, consultation or pre - development phase. Each project exemplifies the power of the IDG approach: shared profits, low environmental impact, cultural protections and long -term benefits to the host communities. Taheke 8C Geothermal is a landmark energy IDG's services included scientific and development endeavor, the first ever using IDG's engineering reviews, the development of N2N equity participation model to ensure Maori financial scenarios, extraction valuation analysis ownership and benefits. and structuring final contractual obligations. As a development and investment advisor, IDG led the negotiations that resulted in an agreement between the Maori proprietors of Taheke and New Zealand's largest privately owned geothermal power generation company. Current Projects in New Zealand Taheke 8C & Adjoining Blocks, Inc. Rotorua (Geothermal Development Consultancy) A8D Ahu Whenua Trust Kawerau (Geothermal Development - Developer of Record) Te Ahi 0 Maui Wakapuaka 1B Block, Inc. Nelson (Wind Farm Exploration) Learn more about IDG b visitin r andlikin us at 2990 Pacific Heights Road • Honolulu, HI 96813 OFFICE PHONE: (808) 536-0434 OFFICE FAX: (808) 536 -0274 OFFICE EMAIL: info@idghawaii.com INNOVATIONS DEVELOPMENT GROUP Geothermal in Hawaii Today, geothermal is an absolutely critical component of Hawai `i's sustainable energy future. IDG brings access to cleaner technologies, enhanced environmental awareness, a commitment to sustainable energy and community participation. C/) ■ Ls • wesouwcE nN ens E * Hi Gs N-uTLM:eaA.=E KAUAI SOurwEsT RIFT ZONE HUALANI Geotl2,ern a1 d-totspots in d-fawai `i RIFT ZONER EAST M nu Nn Ken MAUNA Lon SOUTHWEST RIFT ZONE ILAUEA EAST RIFT ZONE KILAUEA SOUTHWEST RIFT ZONE Hawai'i is the most oil dependent and energy insecure state in the union. We rely on imported fossil fuels for over 90% of our energy needs and we pay the highest electricity rates in the USA. In fact, over $8 billion in energy costs leave Hawai'i every year. Alternative resources will keep more of that money here in our communities. Hawai'i is also rich in alternative energy resources: wind, solar, ocean thermal conversion, biofuels and above all, geothermal. GEOTHERMAL - clean, reliable, affordable, firm base -load energy - is key to Hawai'i's sustainable energy mix. IDG believes we need a whole new collaborative approach to energy independence: meaningful policy changes, committed long -term investors, real cultural protections and equitably shared benefits. Past problems... , » No community consultation. » No consideration of conservation options. » Failure to address exploratory problems. » Negative impact on native religious beliefs. » No benefits for local hosts or consumers. Doing it right... » New standards for Native Hawaiian rights. » Surface estate can be preserved. » EIS now includes cultural impacts. » Community input precedes permitting. » N2N= equitable, affordable, sustainable. W CC LL o$ 0 2990 Pacific Heights Road • Honolulu, HI 96813 OFFICE PHONE: (808) 536-0434 OFFICE FAX: (808) 536 -0274 OFFICE EMAIL: info @idghawaii.com INNOVATIONS DEVELOPMENT GROUP Management Team IDG's management team represents a diversity of backgrounds, training and professional accomplishments. We share a commitment to excellence, sensitivity to the needs of indigenous peoples and a readiness to lend our expertise to the economic advancement of the communities we serve. Patricia K. Brandt Chief Executive Officer, Director Mililani Trask, Esq Indigenous and Community Advisor Keli'i Erwin Financial Advisor, Renewable Energy Investments Robbie Le'a Kapi'olani Cabral Senior Advisor, Director Cy Bridges Cultural Advisor Sadiq Zarrouk, Ph.D Geothermal Science, Engineering and Technical Advisor Lee Erwin, CPA Financial Advisor Patricia Medina Talbert, Esq: IDG Corporate Counsel Peter Britos, Ph.D Communications Advisor, Director