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HomeMy WebLinkAboutCOM 0421.116 2012-2014 Page 1 of 3 Murashige, Laura From: Ed Wagner[ed.j.wagner @gmail.com] Sent: Thursday, September 26, 2013 12:28 PM To: counciltestimony @co.hawaii.hi.us ``' Cc: drquirk @openmindedmd.com; johncarro001@hawaiisr.com `-± -- Subject: Testimony OPPOSED To Bill 129 Attachments: HEI Complaint, Summons.pdf; ATT00035.htm Aloha, = Regarding fracking, you should realize that there is a great misconception about geothermal fracl ig in= this state. It has never been used in Hawaii nor will it ever be used in Hawaii to drill new bore holes to further our development of geothermal energy. I toured Iceland recently, including one of its geothermal power plants. Here are 2 message I emailed to Senator Mike Gabbard, Senator Solomon, and others from Iceland. I highlighted the question I asked about fracking. Iceland is much like Hawaii, but cold. It has majestic mountains, snow covered peaks, volcanoes, geothermal energy, and lots and lots of basalt black sand beaches, rivers, and fields. Iceland would probably be happy to sell Hawaii some black sand to replenish or expand Big Island beaches, unless of course such an effort would be unacceptable to Madam Pele. Some of the sand is much finer than what I remember on the Big Island. It resembles flour in its fineness, but does vary in coarseness from one location to another. Iceland only has 320,000 residents with 2/3 of that living in Reykjavik, but the country is very self- sufficient with all of its power generated by hydro and geothermal for more than 50 years. Before that, coal was used, and oil is only used for transportation. The geothermal and hydroelectric plants are publicly / government owned utilities, much like what we need in Hawaii to end the Wolf( Fox ) Electric Industries monopoly. Any "profits" go back to the government to pay for the power plant construction, maintenance, and back to the people for other services or further power plant development if needed. I purchased a book about the geothermal energy plant we visited and obtained brochures for the energy companies that work with other countries as well as the company that built the most recent geothermal power plant. It put its 7th generator online in 2011. The current capacity is 330 MW. The geothermal plants use far more advanced flash technology, not the old binary technology used by HECO's monopoly partner, PGV. The plant was quite impressive, modern, and spotlessly clean. One specific question I asked was about "fracking" which seems to concern some Hawaii residents, including Senator Ruderman. The answer- no fracking in geothermal bore hole drilling! It is used for extracting oil and gas from rock or shale. One interesting comment by the guide, however, is that earthquakes are a form of fracking. Iceland grows all of its vegetables and some fruits such as strawberries in greenhouses, all heated by geothermal energy. Residents only pay $80 a month for hot and cold water, electricity, and geothermal hot water heat. 10/14/2013 f D,;;; UCT 13- Page 2 of 3 Electricity cost .08 cents /kWh but used to be .05 cents. Hawaii could learn much from this small country. Malama Pono, Aloha, My tour guide provided me with updated information about Iceland power costs after I sent my first message. Residents currently pay .05 cents /kWh, not .08. However, industry pays less that a penny or .0083 cents. 80% of power production is for industry while 20% is for residential use. Much of the energy development in Iceland over the years has come from 3 aluminum processing plants. The first aluminum plant opened in 1966. The newest one in 2007. European loans were made to build the geothermal and hydro plants so the fees charged for electricity goes to repayment of the loans. The farmers who grow food in greenhouses pay .02-.03 cents /kWh but want to pay the same rate as industry because they need to make a profit too. In Hawaii, farmers can't survive because of high electric rates too , so let's stop talking about coops or state owed utilities for each island and just do it! It is time for the legislature to develop coop plans for passage in the 2014 session. Malama Pono, Furthermore, a similar bill introduced by Senator Russell Ruderman in the 2013 session of the state Legislature was rejected for the same reason. The class action lawsuit filed yesterday by Honolulu attorney, John Carroll, will change the paradigm. On Wednesday afternoon, September 25, Honolulu attorney, John Carroll, filed a lawsuit in the Circuit Court of the First Circuit, State of Hawaii, charging the State of Hawaii with breach of the public trust for its failure to address the State's energy crisis to the satisfaction of its residents. The defendants in the case are the State of Hawaii and Neil S. Abercrombie, sued in his capacity as the Governor of the State, responsible for the faithful execution of State law. For further information please contact: JOHN S. CARROLL, 0649-0 Clifford Center, Suite 810 810 Richards Street Honolulu, Hawaii 96813 10/14/2013 Page 3 of 3 Phone: [808] 526-9111 Email: johncarro001 a,,hawaii.rr.com Submitted by Ed Wagner of Mililani, Oahu, State of Hawaii, a long time resident and energy advocate with one of the most energy and water efficient homes in the state. 10/14/2013 FIR61 CIRCUIT COUti- !AI i i?F ii', vt ii JOHN S. CARROLL, 0649-0 r it_ Clifford Center, Suite 810 2013 SEP 25 PH 3: 1 ) 810 Richards Street Honolulu, Hawaii 96813 Phone: [808] 526-9111 F. O TA it E Cl_ERK� Attorney for Plaintiffs IN THE CIRCUIT COURT OF THE FIRST CIRCUIT STATE OF HAWAI'I EDWARD WAGNER, ALFREDO ) CIVIL NO. 1 3 - 1 - 2 5 9 8 - 0 9 K K S BOWMAN. MAYA DOLENA, ALLEN ) FRENZEL,KENNETH LOVE, DANIEL ) LOVEJOY,Individually and as ) COMPLAINT; SUMMONS representatives of a class of similarly ) situated persons, ) ) Plaintiffs, ) ) ) vs. ) ) STATE OF HAWAII,NEIL S. ) ABERCROMBIE in his capacity as Governor ) of the State of Hawaii,and DOES 1-100 ) inclusive, ) ) Defendants. ) ) ) COMPLAINT Come now Plaintiffs EDWARD WAGNER,ALFREDO BOWMAN. MAYA DOLENA, ALLEN FRENZEL, KENNETH LOVE, DANIEL LOVEJOY, Individually and as representatives of a class of similarly situated persons, (hereinafter"the Class"), by and through their undersigned counsel, and for causes of action against Defendant STATE OF HAWAII, NEIL S. ABERCROMBIE in his capacity as Governor of the State of Hawaii, and I do hereby certify that this is a full,1 ue,and correct copy of the original on fi,� Is ofOce. GClerk Circuit Court,First Circuit • DOES 1 through 100 inclusive, allege and aver as follows: 1. The Class brings this action on behalf of themselves individually and behalf of a Plaintiff Class consisting of all persons and entities in the United States, and its territories and possessions, who have any personal,professional, or commercial relationship with the State of Hawai'i such that they are materially and adversely affected by the"Energy Agreement Among the State of Hawaii,Division of Consumer Advocacy of the Department of Commerce & Consumer Affairs, and Hawaiian Electric Companies" [hereafter"October 2008 Agreement"j, and are ratepayers of the Hawaiian Electric Company, Inc. [hereafter`.`HEI"j and its subsidiaries. 2, Plaintiff EDWARD WAGNER(hereinafter"Mr. Wagner")is a resident of the State of Hawaii and is an HEI ratepayer. During the class period,Mr. Wagner was a ratepayer subject to frequent extended power outages, including eight separate power failures in 2013 alone. The HEI design plan to upgrade his local power grid was to be completed on July 14, yet has been pushed back to 2014. These power failures coupled with the delays in repair and upgrade are indicative of HEI's commitment to its outdated and archaic grid structure, and non-commitment to fostering new and innovative technology. Mr. Wagner has been subject to these power failures and exorbitant electricity costs as a result of Defendant State of Hawaii's lack of development and utilization of the natural resources of the State in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State, and has suffered the damage contained herein. 3. Plaintiff ALFREDO BOWMAN(hereinafter"Mr.Bowman") is a resident of the State of Hawaii and is an HEI ratepayer. During the class period,Mr. Bowman was a ratepayer subject to excessive electricity fees, including a one-time fee of$1,600 as well as monthly fees of$450 2 as a result of both others stealing electricity and HEI subsidiary HELCO's installation of a digital meter that itself consumes ratepayer electricity. These costs and charges are indicative of HEI's commitment to its outdated and archaic grid structure, and non-commitment to fostering new and imlovative technology. Mr. Bowman has been subject to these exorbitant electricity costs as a result of Defendant State of Hawaii's lack of development and utilization of the natural resources of the State in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State, and has suffered the damage contained herein. 4. Plaintiff MAYA DOLENA(hereinafter"Ms. Dolena") is a resident of the State of Hawaii and is an HEI ratepayer. During the class period, Ms. Dolena was a ratepayer subject to frequent power outages at her small aquaculture farm on the Big Island which have and continue to result in tremendous difficulties in restarting and operating the pump systems upon which she relies, as well as excessive electricity costs. These costs and charges are indicative of HEI's commitment to its outdated and archaic grid structure, and non-commitment to fostering new and innovative technology. Ms. Dolena has been subject to these exorbitant electricity costs as a result of Defendant State of Hawaii's lack of development and utilization of the natural resources of the State in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State, and has suffered the damage contained herein. 5. Plaintiff ALLEN FRENZEL(hereinafter"Mr. Frenzel") is a resident of the State of Hawaii and is an HEI ratepayer. During the class period, Mr. Frenzel was a ratepayer subject to numerous disruptions in power and power surges caused by the frequent failing and toppling of termite ridden power line poles on the Leeward Coast of Oahu. These power surges have ruined various household appliances belonging to Mr. Frenzel. Despite these frequent outages and surges caused by extensive termite damage,HEI remains committed to the above ground 3 lines currently in place rather than switching to more reliable below ground lines. Due to the frequent power outages and lack of reliable electricity during storms and floods,Mr. Frenzel has had no choice but to install a 22 kW standby generator and LP fuel tank at significant expense. These costs and charges are indicative of HEI's commitment to its outdated and archaic grid structure,and non-commitment to fostering new and innovative technology. Mr. Frenzel has been subject to these power surges and failures and exorbitant electricity costs as a result of Defendant State of Hawaii's lack of development and utilization of the natural resources of the State in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State, and has suffered the damage contained herein. 6. Plaintiff KENNETH LOVE (hereinafter"Mr. Love") is a resident of the State of Hawaii and a HEI ratepayer. During the class period, Mr. Love was a ratepayer subject to high electricity rates at his small family farm as a result of HEI subsidiary HELCO's insistence on connecting his farm to the existing grid from a distance three times the necessary length. Mr. Love has also been harmed by the noxious exhaust spewed forth from the HELCO facility at Keahole Kona Airport. These harms are indicative of HEI's commitment to its outdated and archaic grid structure, and non-commitment to fostering new and innovative technology. Mr. Love has been subject to these harms and exorbitant electricity costs as a result of Defendant State of Hawaii's lack of development and utilization of the natural resources of the State in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State, and has suffered the damage contained herein. 7. Plaintiff DANIEL LOVEJOY (hereinafter"Mr. Lovejoy")is a resident of the State of Hawaii and is an HEI ratepayer. During the class period, Mr. Lovejoy was a ratepayer subject to a power surge caused by iron roofing falling across power lines during a windstorm, which 4 HEI refused to rectify, citing"Act of God". After complaining to HEI about rolling blackouts and high costs, Mr. Lovejoy was told by HEI that his home power connection which had been in place prior to his moving in was illegal and charged him to replace it. This power surge and these power failures coupled with HEI's callous treatment of Mr. Lovejoy are indicative of HEI's commitment to its outdated and archaic grid structure, and non-commitment to fostering new and innovative technology. Mr. Lovejoy has been subject to these power failures and exorbitant electricity costs as a result of Defendant State of Hawaii's lack of development and utilization of the natural resources of the State in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State, and has suffered the damage contained herein. 8. Defendant STATE OF HAWAII is a sovereign state,which has consented to be sued. Jurisdiction is proper pursuant to Haw. Const. art. XI § 1. "The public trust . . . is a state constitutional doctrine . . . the ultimate authority to interpret and defend the public trust in Hawaii rests with the courts of this state," In re Water Use Permit Applications, 96 Haw. 97, 143, 9 P.3d 409,455 (2000). 9. Defendant NEIL S. ABERCROMBIE is the Governor of the State of Hawaii and is sued in that capacity. As Governor, he is the chief executive of the state and is responsible for the faithful execution of the laws of the State. Haw. Const. art. V §§ 1, 5. At all times relevant NEIL S. ABERCROMBIE has resided in the State of Hawaii. 10. Defendant STATE OF HAWAII's act of entering into and continuing to enforce and uphold the provisions of the October 2008 Agreement,having set aside the provisions of the Public Utility Regulatory Policies Act of 1978 [hereafter"PURPA"] and substituting a state- sanctioned unreasonable and excessively burdensome competitive bidding framework,results 5 in unconscionable, inequitable harm and inflated electricity rates to the residents and businesses of the State of Hawai'i to such an extent that its application is an unlawful breach of the public trust,as defined in Article XI of the Hawaii Constitution. For the benefit of present and future generations,the State and its political subdivisions shall conserve and protect Hawaii's natural beauty and all natural resources,including land,water,air,minerals and energy sources,and shall promote the development and utilization of these resources in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State. All public natural resources are held in trust by the State for the benefit of the people. Haw. Const. art. XI § 1. 11. The above actions of Defendant STATE OF HAWAII have resulted in economic loss and financial loss. Through its action,Defendant STATE OF HAWAII has created a monopsony in the state to the detriment of all HEI ratepayers and electric energy consumers who are not HEI shareholders. 12, The acts and events which give rise to the instant lawsuit occurred in the State of Hawaii. 13. Plaintiffs bring this action on behalf of themselves and as a class action under the provisions of Rule 23(a) and(b)(2)and (b)(3) of the Hawaii Rules of Civil Procedure on behalf of the following Class: All persons and entities in the United States,and its territories and possessions, who have any personal,professional, or commercial relationship with the State of Hawaii such that they are materially and adversely affected by"Energy Agreement Among the State of Hawaii, Division of Consumer Advocacy of the Department of Commerce & Consumer Affairs, and Hawaiian Electric Companies", and are ratepayers of the Hawaiian Electric Company,Inc, and its subsidiaries. 14. Plaintiffs believe that there are thousands of Class members as above described,the exact number and their identities being known by Defendant. 6 15. The Class is so numerous and geographically dispersed that joinder of all members is impracticable. 16. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. This Class is readily definable and is one for which records should exist in the files of the Defendants and its agents. Prosecution as a class action will eliminate the possibility of repetitious litigation. Treatment as a class action will permit a large number of similarly situated persons to adjudicate their common claims in a single forum simultaneously, efficiently, and without duplication of effort and expense that numerous individual actions would engender. Class treatment will also permit the adjudication of relatively small claims by many Class members who otherwise could not afford to litigate a claim of constitutional violation such as is asserted in this Complaint. The class action presents no difficulties of management that would preclude its maintenance. 17. There are questions of law and fact common to the Class, which questions relate to the existence of the damages alleged, and the type of injury sustained as a result thereof, including, but not limited to: a. Whether the Class has been denied access to potentially less expensive alternative energy sources, b. Whether the Class has been subjected to inflated rates for consumption of electricity. c. Whether the conduct of Defendant and its agents,as alleged in this Complaint, caused injury to the business and property of plaintiffs and other members of the Class. d. Whether the effect of Defendant's participation in the October 2008 7 Agreement has caused a detrimental impact on electricity rates during the Class Period; c. The appropriate measure of damages sustained by Plaintiffs and other members of the Class. 18. Plaintiffs are members of the Class. Plaintiffs' claims are typical of the claims of Class members and Plaintiffs will fairly and adequately protect the interests of the members of the Class. Plaintiffs are HEI ratepayers who have been adversely affected by the State of Hawaii's adherence to the October 2008 Agreement. Plaintiffs' interests are consistent with and not antagonistic to those of the other members of the Class. In addition,Plaintiffs are represented by Counsel who is competent and experienced in the prosecution of constitutional law and class action litigation. 19. The passage of PURPA in 1978 by the United States Congress imposed an obligation on electric utilities to purchase electric energy from qualifying facilities. 20. On January 28,2008, the State of Hawaii and the United States Department of Energy entered into a Memorandum of Understanding [hereafter"2008 MOU"], of which its stated goals include: « To demonstrate and foster innovation in the use of clean energy technologies, financing methodologies and enabling policies designed to accelerate social, economic, and political acceptance of a clean energy dominated economy ® To create opportunity at all levels of society that ensures wide-spread distribution of the benefits resulting from the transition to a clean, sustainable energy State[.] 21. In the subsequently executed October 2008 Agreement,Defendant STATE OF HAWAII and HEI agreed to support the exemption of Hawaii from PURPA, in favor of the State's own competitive bidding framework, 8 22. The October 2008 Agreement has had a multifaceted deleterious effect on the energy landscape of the state, including hindering the development of Hawaii's abundant natural and renewable energy resources. 23. The enactment of the October 2008 Agreement has resulted in an increase in Hawaii's energy instability by moving Hawaii from a firm power system to a distributed intermittent powered system. 24. The October 2008 Agreement required that the State accept as its own the increasing operating risks of the Hawaiian Electric Companies. 25. As a result of the provisions of the October 2008 Agreement, all costs incurred by HEI are transferred to ratepayers while HEI is allowed to raise funds from the private sector through the issuance of hybrid stock. 26. The October 2008 Agreement competitive bidding framework, developed by the State of Hawaii Public Utilities Commission [hereafter"PUC"], is implemented and put into action under the power of HEI as the monopoly energy distributor. Contracts between HEI and potential Independent Power Providers [hereafter"IPPs") are submitted for approval to the PUC. Any Request For Proposals for independent energy sources submitted to the PUC will have an Independent Observer appointed by the PUC to oversee the process. 27. This competitive bidding framework,as overseen by HEI and the PUC,is often subverted entirely through a"waiver and exemption"process which is under the power and control of HEI and the PUC. HEI submits the petitions for waived or exempted projects to the PUC, however no Independent Observer is appointed during the waiver process. 9 28. HEI is currently in the process of finalizing a Request for Proposals for a Renewable Geothermal Dispatchable Energy and Firm Capacity Resources, subject to the established competitive bidding framework, which in its current iteration is nearly 600 pages long. 29. The PUC has criticized a similar Request for Proposals as being"overly complex", and involving"greater elements of uncertainty." PUC Order No, 31354, Docket No. 2011-0225. 30. A similar Request for Proposals for Renewable Energy Resources or Renewable Energy Certificates issued by Public Services Company of New Mexico, a public utility of comparable size, financial holdings,and power capacity in the state of New Mexico is 23 pages long. 31. Projects granted waivers or exemptions from HEI's overly complex bidding process are either projects run by HET themselves or by closely related companies. 32. In its Annual Report for fiscal year 2012 to the Securities and Exchange Commission, HEI reported that"Increasing competition and technological advances could cause HEI [Hawaiian Electricj's businesses to lose customers or render their operations obsolete . . . the result of competitive bidding, competition from IPPs [independent power producers], customer self-generation and the rate at which technological developments facilitating non-utility generation of electricity occur may adversely affect the utilities and the results of their operations." 33. Outside competition has been completely eliminated as a result of the October 2008 Agreement. Any outside competition has the potential to adversely affect HEI's finances; the direct result of which is the overly complex and excessively cumbersome competitive bidding process. 34. The October 2008 Agreement conditioned Hawaii's energy future on HEI's ability to preserve and expand their exclusive monopsony of a statewide grid,while committing the state 10 to preserving HEI's energy transmission monopsony, financial status, and shareholders'profit margin. 35. Defendant STATE OF HAWAII has allowed HEI to subvert the competitive bidding process, resulting in HEI having exclusive domain over the energy resources of the state for its own commercial gain. "[T]he public trust has never been understood to safeguard rights of exclusive use for private commercial gain. Such an interpretation, indeed, eviscerates the trust's basic purpose of reserving the resource for use and access by the general public without preference or restriction." In re Water Use Permit Applications, 94 Haw, at 138, 9 P.3d at 450. Under Haw. Const. art. XI, § 1,Defendant STATE OF HAWAII has a dual duty of protection and facilitation of maximum reasonable and beneficial use of the State's energy sources. Defendant STATE OF HAWAII is currently in breach of these duties. Causes of Action 36. Plaintiff incorporates and re-alleges each allegation set forth in the preceding paragraphs of this Complaint. 37. Defendant's unlawful conduct has resulted in artificially inflated prices and a de facto monopsony operated by HEI and its subsidiaries, which is dedicated not to demonstrating and fostering innovation in the use of clean energy technologies, financing methodologies and enabling policies designed to accelerate social, economic, and political acceptance of a clean energy dominated economy, but to its own fiscal bottom line. 38. As a direct and proximate result of Defendant's actions, Plaintiffs and the members of the Class have been injured and financially damaged in their respective businesses and property,in amounts which are presently undetermined. 11 39. Defendant STATE OF HAWAII is liable for breach of the public trust, and all damages flowing therefrom including but not limited to economic loss and such fiirther and other damages as shall be shown at the time of trial. WHEREFORE, Plaintiff prays as follows: A. That the Court determine this action be maintained as a class action under Rule 23 of the Hawaii Rules of Civil Procedure. B. That judgment be entered for Plaintiffs and members of the Class against Defendant for the amount of damages sustained by Plaintiffs and the Class as allowed by law, together with the costs of this action, including reasonable attorneys'fees as may be proved at trial. C. That Defendant STATE OF HAWAII, its affiliates,successors,transferees, assignees, and the officers, directors,partners, agents, and employees thereof, and all other persons acting or claiming to act on its behalf, be permanently enjoined and restrained from, in any manner enforcing the October 2008 Agreement. D. That Defendant STATE OF HAWAII, its affiliates, successors, transferees, assignees, and the officers, directors,partners,agents, and employees thereof, and all other persons acting or claiming to act on its behalf, take control over upgrading the failing and outdated energy infrastructure of the State in a manner protecting and facilitating maximum reasonable and beneficial use of the State's energy sources. E. That Plaintiffs and members of the Class have such other, further and different relief as the case may require and the Court may deem just and proper under the circumstances and as shall be proved at trial of this case. 12 DATED: Honolulu, Hawaii . JOHN S. CARROLL A torney for Plaintiffs 13 JOHN S. CARROLL 40649 Clifford Center 810 Richards St., Suite 810 Honolulu,HAWAI'I 96813 Telephone: (808) 526-9111 Facsimile: (808)545-3800 Attorney for Plaintiff GREGORY MARTIN IN THE CIRCUIT COURT OF THE FIRST CIRCUIT STATE OF HAWAI'I EDWARD WAGNER, ALFREDO ) CIVIL NO. BOWMAN. MAYA DOLENA,ALLEN ) FRENZEL,KENNETH LOVE, DANIEL ) SUMMONS LOVEJOY, Individually and as ) representatives of a class of similarly ) situated persons, ) ) Plaintiffs, ) ) ) vs. ) ) STATE OF HAWAII,NEIL S. ) ABERCROMBIE in his capacity as ) Governor of the State of Hawaii, and ) DOES 1-100 inclusive, ) ) Defendants. ) ) SUMMONS STATE OF HAWAII To the above-named Defendants: You are hereby summoned and required to file with the court and serve upon JOHN S. CARROLL,Plaintiff's attorney, whose address is 810 Richards Street, Suite 810, Honolulu, Hawai'I, an answer to the Complaint which is herewith served upon you, within twenty(20) days after service of this Summons upon you, exclusive of the day of service. If you fail to do so,judgment by default will be taken against you for the relief demanded in the Complaint. 'I'his summons shall not be personally delivered between 10:00 p.m. and 6:00 p.m. on premises not open to the general public, unless a judge of the above-entitled court permits, in writing on this summons, personal delivery during those hours. A failure to obey this summons may result in an entry of default and default judgement r ' against the disobeying person or party. SEP252013 DATED: Honolulu,Hawai'i, sicurr 00 o` 9 F. OTAKE S Clerk of the li'ove- retitled Court In accordance with the Americans with Disabilities Act, and other applicable state and federal laws, if you require a reasonable accommodation for a disability,please contact the ADA Coordinator at the First Circuit Court Administration Office at PHONE NO. 539-4333, FAX 539-4322, or TTY 539-4853, at least ten(10) working days prior to your hearing or appointment date.