Kaua`i Island Utilities “Co-Op” Is Not a Cooperative

It gets harder and harder each year to get excited– make that “involved”, since we left “excited” behind years ago– in the election of board members of Kaua`i Island Utilities “Co-op” (KIUC).

Note the word co-op in quotes.

Every year it’s the same thing. First a short list of “good” candidates is circulated, promises are made to shake things up, and then those that do manage to get elected do absolutely nothing. Not only do they do nothing but they magically seem to get KIUC-style religion and suddenly start toeing the “company” line.

Note the word company in quotes.

When asked “what the heck happened,” they claim that they “can’t do anything without a majority” on the board. But of course there is one thing they could do– speak out, or at least stop parroting whatever the “official policy” happens to be. And when asked again “why the heck?”,they pull a “Board Rule” out, claiming that it prevents them from even speaking unless they speak for the whole board.

That of course is utter bullshi*t. We’d love to see what would happen if those who say this would actually get together and put out a press release- or even verbally inform people who ask- stating that they disagree with the direction of the co-op and espouse their supposed “real thoughts.” If the rest of the board tried to remove or otherwise discipline them we’d expect to see a public battle and a public relations nightmare for KIUC that would make the FERC debacle look like the annual picnic.

We’ve yet to hear the real issues with KIUC addressed by any candidates, even Pat Gegen and Ken Stokes, two on the slate of hopefuls upon whom many are placing their hopes.

We’d support them if we weren’t symbolically boycotting the “Soviet-style” election where voters and candidates are limited to “party” members– we say “symbolically” because we don’t get a vote in the first place.

But our message to them, should they be elected, is: if you are going to run as “dissidents” and talk about change, act like dissidents and demand change.

So rather than tell you why to vote and who to vote for we’ll go over what we’d do if we ran the zoo.

First of all, let’s get one thing straight– KIUC is not a cooperative. In a cooperative, according to all definitions of consumer co-ops, members make all major decisions leaving a board of directors to oversee daily operational matters

As we wrote last month,

KIUC is what’s called a “Consumers’ Cooperative” in which,according… to Wikipedia, “(m)embers vote on major decisions and elect the board of directors from amongst their own number.”

With the lack of democracy has come a corporate mindset where the idea of “serving and facilitating members’ electricity needs” is an alien concept and, just like an investor-owned electric utility “selling electricity to customers” is the way KIUC operates. In order to become a co-op, KIUC must change its business plan.

Yet no one running has pledged to do this in the materials we’ve seen and heard.

And that brings up the matter of who is a member. The current set up is one of divide and conquer. Only those whose names appear on the bill has a vote. No account? No accountability. The fact is that there is no one on this island who is not a consumer of electricity in one way or another.

All adult residents must be allowed to become members and be entitled to a vote in order for KIUC to function as a true cooperative.

Yet no one running has pledged to change this.

Many do not know that when KIUC was first forming there was a competing plan to set up a municipal electric utility. As a matter of fact a structural format for doing so was voted upon by the electorate and passed and is now enshrined in our county charter.

It was done by the county council so as to leverage certain accountability standards from the formative board. It was a serious competitor at the time especially because, as would be prescient, many did not trust the co-op to be operated as an open and transparent entity.

Promises were made at the time– alas not in writing– to make sure that the initial by-laws would, to a large degree, reflect the state’s open meetings and record law. But when the dust settled nothing of the sort was so enshrined.

KIUC must start to operate, not just as a co-op, not just with an expanded membership, but under, if not the letter, at least the spirit of the state’s Sunshine and Freedom of Information laws.

Now let’s get to the real heart of the problem with the resultant corporate– as opposed to the co-op– concept.

Much of it is explained in excellent fashion in three of recent posts by Life of the Land’s Executive Director Henry Curtis, who has been a public interest watchdog of the electricity industry and the Public Utilities Commission (PUC) for many years:

We urge you to read them. But in a nutshell here’s why your rates are sky high and why they will never come down under the current way business is done–even though the use of renewable, non-carbon electricity generation should be ultra-cheap compared with the use of fossil fuel.

Theoretically, through things like solar and wind power (although many say that with current technology wind on Kaua`i may be impossible due to the danger to endangered bird species), we should be able to cut our bills by as much as 75%–some say by even more.

Solar however is “intermittent”–it doesn’t generate anything when the sun doesn’t shine. So theoretically there is a limit as to how much we can depend on it for our electricity needs

Without storage– not just batteries but other technologies like thermal storage– for now, there’s a limited amount of solar that the whole “grid” can use. As time goes by, and newer and better storage mediums come on-line, that amount will rise significantly.

But let’s assume for now that there is a limit to the amount of solar.

Even with that assumption, rather than be a facilitator for individuals to generate their own electricity through on-bill payment of zero-percent loans for photovoltaic systems (and maybe even storage), KIUC is selling off whatever solar capacity the island has for use in solar “farms” where they can buy the electricity and sell it to the consumers.

The problem is that the amount of electricity from solar farms built and owned by our “co-op” is minimal as compared to the amount we contract for with investor-owned and operated farms

That’s bad enough. But according to Curtis it is federally mandated that electric companies- and co-ops- buy all the electricity produced from investor-owned farms at the same rate that it would cost to generate the same amount of kilowatts of electricity with fossil fuel.

That’s a vast simplification and Curtis goes into detail–but you get the idea.

Certainly if all this were to be opposed by KIUC and the PUC, the county and state might put limits on, possibly even ban, investor-owned solar through land-use laws.

But in our name KIUC has gone before the county council and state legislature and asked for- and received- laws that will insure automatic approval with no permits necessary.

And that’s where the capacity for solar is going- not onto your roof where you could take advantage of the savings but to investors who will charge the same arm and a leg as we are paying for fossil-fuel-generated electricity.

KIUC should be making sure that as many users as possible are able to self-generate their electricity with photovoltaic systems, and either help provide storage on site or via central storage facilities. And they should be taking all that “investor-owned solar-farm” capacity to expand “net metering”- selling and buying back the electricity at the same rate.

But instead KIUC is not just using up all the capacity the grid can handle for intermittent energy to build vast facilities which are mandated to be bought by us at close to the cost of fossil fuels, but they are discouraging home generation by denying any more net metering and charging high buy-back rates.

And– believe it or not– they are charging huge up-front payments– sometimes up to tens of thousands of dollars– for “studies” to show the grid can handle each user, one at a time.

In a nutshell the reason your rates are so high is because KIUC is doing everything they can to put money into the pockets of investors- those who buy the land and build the facilities and then sell the electricity to our “co-op” at multiples of the price people would pay for those same types of facilities on their roofs or in their back yards.

Some have pointed out many technical issues as well as some issues of fairness with the facilitation of net-metering photovoltaics for individual homeowners. But those are solvable problems and certainly there are even more “issues,” as we’ve raised here, with the “we sell you electricity” model that KIUC insists on using despite the opportunity that being a unique type of co-op presents.

KIUC is apparently the only electric co-op in the country to both generate and distribute electricity. Others do one or the other. KIUC has said that this is problematic. But with a different type of business plan this could actually help provide the savings that home generation facilities provide.

Additionally if we’re going to “farm” things like hydro, geothermal and wave generation, they should be done internally by the co-op and owned by “us” rather than allowing others to sell us electricity at exorbitant rates.

We certainly haven’t heard this discussion from any candidates.

There are other things we’d like to hear from candidates and, when and if they are elected, board members.

Why in the world we are paying millions every year for public relations, advertising, community activities, scholarships and all the rest of that crap is beyond comprehension. It is a remnant of the investor-owned utility that were designed to “give back to the community”- something a co-op doesn’t need to do by definition, especially if they, as we said, allowed every adult user of electricity on the island to be members.

(Actually there is one candidate who talks about this but she is a right-wing nut that perennially comes out at election time- one who wants us to use nuclear energy.)

Also because KIUC operates with a corporate mind-set there’s a tendency to “cheat” on “renewables” targets as mandated by law. Rather than defining renewables as being “carbon-free” we include things like bio-diesel and ethanol as well as bio-mass and even garbage-to-energy in meeting those “goals.”

Finally the ultimate goal of any strategic plan- which of course should be done through membership participation and be membership-approved instead of written in some back room and approved by the board only- should have a target of, not reducing but, eventually eliminating fossil fuel from our generation mix. It may be a long range target and one that will be very difficult to achieve but there’s no good reason not to put the goalposts where they belong.

There are others- if we listed everything and fully discussed each issue we’d be here until after the election is over. But the bottom line is that if any of the “good” candidates get elected this time, unless we hear from them throughout their terms and they don’t just sit down and shut up like they’re told, then this election, like those in the past, will have been another exercise in futility.


Journalist Andy Parx has covered Kaua`i government and politics for over 30 years in print and on local TV. He currently writes a daily on-line news, commentary and analysis column at "got windmills?- The Daily Tilt."

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