Recently, in Order No. 34930, the Hawaii Public Utilities Commission (PUC) focused on how the GEMS program was coexisting with another ratepayer-funded program, which you may know as Hawaii Energy. That’s the same Hawaii Energy that sends you a little chart every month showing how your energy use compares against that of (1) your neighbors, and (2) your energy efficient neighbors.
Back in 2014, the PUC was asked to, and did, approve a Green Infrastructure Fee that went on everyone’s utility bill. For residents, it started at about $1.50 per month and is now down to $1.18 after periodic readjustments. The $150 million, after all, needs to be paid back with interest. The PUC noted that ratepayers were also paying a Public Benefits Fee of about $5 a month to fund Hawaii Energy and it didn’t want to whammy ratepayers again, so it directed that the PBF be reduced by the GIF…temporarily. The PUC made it clear that it wanted the shortfall in the PBF to be paid back. Quickly. So as not to disrupt the energy efficiency programs that Hawaii Energy was carrying out.
GEMS, however, wasn’t accomplishing the lofty goals that were set for it. Of the $150 million borrowed on the bond market, a measly 3%, or $5 million, had been loaned out as of July 31, 2017. The 2017 legislature made GEMS loan $46.4 million to the Department of Education to cool the schools, but that wasn’t helpful to GEMS because it also provided that the loan was to be at zero interest. Since its inception, GEMS administrative and program costs were nearly $2.8 million, against revenues just shy of $1 million. “If HGIA [the Hawaii Green Infrastructure Authority, which administers GEMS] does not collect loan repayments, with interest,” the PUC said, it “in the long term, will be unable to support itself.”
The PUC noted that Hawaii Energy claimed to have saved consumers over $1 billion in energy bill savings to date, with every dollar of investment generating $9 in benefits.
The PUC concluded that “HGIA has not demonstrated the ability to replenish the PBF,” and that the prospects for GEMS repaying the revenue that it borrowed from the PBF are dim unless the PUC acts now. Therefore, it said, the dollars that GEMS gets from its loan repayments and such will be used to repay the PBF, starting now. And, these payments will be made before funding GEMS program administrative costs. Apparently, the GEMS staff had better get those green infrastructure loans deployed and get that interest coming in if they want to get paid.
What does this mean?
If you are a legislator, this is not just a wake-up call. The GEMS program has been a disaster from its inception, and the PUC has basically said that it expects the program to crash and burn. The program does not simply need polishing; it needs radical surgery if it is to survive. And, given the other pressing needs that our government faces, it may be that the correct decision is to cut our losses and scrap the program before the fallout from its death throes takes out other programs and agencies.
If you’re not a legislator but you’re a taxpayer and utility customer, remember that this is about your money. Please consider letting your legislator know about these issues and your thoughts on them.