Ormat Technologies Inc., the Nevada-based owner of the Big Island’s geothermal power plant, is trying to fend off a whistleblower lawsuit that could cost the company hundreds of millions of dollars in penalties.
The lawsuit, filed under seal in 2013, alleges that Ormat and its subsidiaries — including Puna Geothermal Ventures, which operates the Big Island plant — lied to the U.S. Department of Treasury to secure about $136 million in federal grants.
Unsealed in 2014, the case has been making its way slowly through the courts without much public scrutiny. In March, Ormat’s attempt to have the case tossed on technical grounds was rebuffed by a federal judge in Nevada, and it now has until April 28 to respond to the allegations.
The case focuses on federal assistance that Ormat received through the U.S. Treasury Department’s 1603 grant program, an initiative created under the so-called federal stimulus package, the American Recovery and Reinvestment Act of 2009, that provides cash payments to qualifying renewable energy projects.
Two former Ormat employees who brought the lawsuit allege that the company “knowingly and purposefully exploited” the program to “perpetuate and sustain a financial fraud of unprecedented proportions.”
“Ormat carried out this scheme by … submitting false or fraudulent grant applications, certifications of compliance, reports and claims to the federal government under 1603, thereby obtaining hundreds of millions of dollars in payments to which it was never entitled,” the plaintiffs’ complaint states.
Last year, Tesla Motors, the maker of all-electric luxury sedans, revealed its plan to open a $5 billion battery factory, the world’s largest. The idea is to mass-produce the lithium-ion batteries it needs to reach its goal of making 500,000 electric cars a year by 2020.
To make it work, the company has to find enough lithium, the lightest of all metals found on earth and the hidden power behind modern gadgets, like cellphones, laptops and a new generation of electric cars.
The trouble is, there’s nowhere near enough battery-grade lithium currently being mined to meet the sudden demand, and it’s spurring a race to find new sources in the remotest corners of the world, from the wilds of northern Tibet to distant salt plains in South America.
But the solution could come from an unlikely source: geothermal power plants, including the one operating on the Big Island.
An emerging technology is making it possible to extract lithium from the hot, mineral-rich brine that geothermal power plants pump out of the ground to generate energy. And the technology is not limited to extracting lithium — it can also recover a variety of other rare earth elements and valuable metals out of what is now being treated as wastewater.
In the parlance of geothermal engineering, this is called “solution mining by nature,” and the potential profits to be made from it are immense — so much so that it
Hawaii residents are spending more than three times as much on imported fuel than they were a decade ago, state data shows.
But total fossil fuel use and emissions have come down during that same period.
That’s just some of the info you can quickly glean from a new online dashboard that Gov. David Ige’s administration was touting Monday.
You can also see that Hawaii is on track to reduce total fossil fuel use to below the 2008 level and increase total clean energy to 70 percent by 2030.
Ige, the four county mayors, the Office of Hawaiian Affairs, University of Hawaii and Hawaii Green Growth launched the Aloha+ Challenge dashboard last week. It features indicators for two of six targets — clean energy and solid waste reduction — that were set, according to a release from the governor’s office Monday.
Indicators for the four remaining Aloha+ Challenge targets — local food, natural resource management, smart sustainable communities, and green workforce and education — are expected to be complete by 2017.
“As a new initiative, we are spearheading a statewide Sustainable Transportation Committee to form partnerships and fund projects in support of clean energy and sustainable communities,” Ige said in the release.
“I will continue to work closely with the mayors, OHA, state legislature, UH and other partners to make progress on the Aloha+ Challenge in the next
One of the top clean-energy nonprofits in Hawaii sharply criticized the state Public Utilities Commission on Wednesday over its much anticipated order on decoupling, which separates Hawaiian Electric’s revenues from its sales.
Blue Planet Foundation, headed by Jeff Mikulina, said the commission failed to adopt proposals to tie the utility’s revenues to clean energy performance.
The nonprofit also faulted the PUC’s rationale for not doing so, noting how the regulators’ decision says performance-based utility regulations are “impractical” at this time because the utility lacks a clear strategic plan and because the pending sale of Hawaiian Electric to NextEra Energy could have a major impact on the operation of the Hawaiian Electric companies.
“The tail is wagging the dog here,” Mikulina said in a release. “We shouldn’t use the lack of a utility strategic vision as a reason to protect the status quo. It should be the other way around.”
He pointed at the fact that the decoupling review began long before Florida-based NextEra and Hawaiian Electric Industries announced their $4.3 billion merger deal and before Hawaiian Electric’s power supply improvement plans were released.
Blue Planet also highlighted how the incentives currently in place within the decoupling mechanism haven’t yielded utility performance that customers demand.
“The Commission had a perfect opportunity to shape the structure under which customers should expect the ‘new’ NextEra-owned utility to perform,” Mikulina said.
“Instead, customers will be asked to accept a new utility operating under the old incentive system,” he said, noting the status-quo strategy of fossil fuels,
Hawaiian Electric Industries CEO Connie Lau made it clear during her closing speech Thursday at the Maui Energy Conference that the company will continue to pursue liquefied natural gas as a “bridge fuel.”
Moments earlier she highlighted how “amazingly aligned” virtually everyone seems to be in terms of the end goal of getting off imported oil and transforming the energy landscape.
Lau acknowledged that people may disagree over how Hawaii gets there — and the pace. A temporary shift to LNG is definitely one of the areas in which there’s disagreement, particularly over the necessary infrastructure costs and concerns over the “fracking” process that is used to produce some natural gas.
Her remarks closed the conference with the same tone and focus that HECO President Alan Oshima and NextEra Energy Hawaii President Eric Gleason had opened it with the previous day. It was a message of hope, of improving customer relationship and assuaging fears over NextEra’s purchase of HECO.
When she and NextEra CEO Jim Robo jointly announced their $4.3 billion deal in December, the expectation was that it would close within a year. But the new head of the Public Utilities Commission, Randy Iwase, has since said that the regulatory process will likely take 18 months.
A critical player in that review is the state Division of Consumer Advocate, headed by Jeff Ono,
The Hawaii Tribune-Herald has this item on big geothermal plans on the Big Island. Excerpt:
The search for geothermal energy under the dormant Hualalai volcano is moving forward.
A University of Hawaii researcher has asked the state Board of Land and Natural Resources for a geothermal exploration permit to conduct a noninvasive geophysical study of the west rift zone of Hualalai, just north of Kailua-Kona.
The project is funded by the U.S. Department of Energy and the state Department of Land and Natural Resources, researcher Nicole Lautze, with the Hawaii Institute of Geophysics and Planetology, said in her application. She did not return a phone message left at her office by press time Monday.
The Land board is scheduled to consider the application Friday. The meeting is held in Honolulu and begins at 9 a.m. …
Hawaii, as you may be aware, is overly dependent on imported fossil fuels for its energy needs.
NextEra Energy and the three utilities that fall under Hawaiian Electric — Hawaiian Electric Company, Hawaii Electric Light Company and Maui Electric Company — have announced a series of 13 open house informational meetings across the state next month.
“To introduce residents to NextEra Energy and the benefits of the companies’ pending merger as well as to provide members of the public with the opportunity to provide input directly to company officials,” according to a press release.
The NextEra-HEI deal is a big deal, one that is pending before the Public Utilities Commission and one that has attracted lots of concerns.
The companies are spinning the positive. (Indeed, their website is www.forhawaiisfuture.com.)
“NextEra Energy shares Hawaiian Electric’s vision of increasing renewable energy, modernizing its grid, reducing Hawaii’s dependence on imported oil, integrating more rooftop solar energy and, importantly, lowering customer bills,” Eric Gleason, president of NextEra Energy Hawaii, said in a press release. “We recognize that addressing Hawaii’s energy challenges requires Hawaii-specific energy solutions, and that is why we look forward to meeting with and listening to residents across Hawaii.”
Each meeting will be held from 5 p.m. to 8 p.m., where representatives from NextEra Energy and HEI will share their thoughts and listen to yours. The dates and locations are as follows:
Central Maui: Maui Electric Auditorium
South Maui: Kihei Community Center
West Maui: Lahaina Civic Center
Lanai: Lanai Community Center
Molokai: Kaunakakai Elementary School
When the Hawaii Legislature passed Senate Bill 1087 in 2013, the bill was hailed as a way to democratize access to energy-saving technology, such as rooftop photovoltaic installations. Nearly two years later, as the program anticipated in the legislation is beginning to take shape, its scope is far more modest and bears little resemblance to the hype.
“It is in the public interest to make cost-effective green infrastructure equipment options accessible and affordable to customers in an equitable way,” the bill stated.
“A green infrastructure financing program administered by the state that capitalizes on existing ratepayer contributions for green infrastructure equipment can serve a critical role in ensuring all Hawaii electricity ratepayers receive the greatest opportunity for affordable and clean energy,” the legislators went on to say.
Solar systems for low-income residents and renters were envisioned in the GEMS program through on-bill financing.
The bill sailed through to passage, becoming Act 211 of the 2013 session. Testimony at the several committee hearings it received was almost universally laudatory. The only discouraging word came from Aaron S. Fujioka, then the administrator of the State Procurement Office. Every time the bill came up for a hearing, Fujioka urged legislators to delete the exemption from the state public procurement code that was carved out for the agency that is to administer the loan program at the heart of the system established by Act 211. (He was ignored.)
Since then, the Department of Business, Economic Development and Tourism has received approval from the
About 200,000 solar panels may soon cover about 160 open acres of land laced with kiawe trees and brush that stretch from the edges of Kamaile Academy to the base of the Waianae Mountains.
The 27.6-megawatt project is one of eight large solar farms planned for Oahu that are expected to break ground by the end of the year in order to take advantage of lucrative federal tax credits. Hawaiian Electric Co. announced that it had signed agreements to purchase the energy by December and the applications are currently awaiting approval by the Public Utilities Commission.
The PUC is expected to rule on each project separately.
If the projects move forward, their total area will span a total of about 1,400 acres, the size of 25 Ala Moana shopping centers, according to a review of applications filed with the PUC. The bulk of the solar panels will dot agricultural fields throughout central Oahu and along the North Shore, in addition to two projects planned for Waianae.
At peak production, during the middle of the day when the sun is strongest, the panels are expected to supply more than one-eighth of Oahu’s electricity needs, according to HECO.
Some Community Opposition
While the projects will help the state meet its goals of developing more sources of local renewable energy and weaning Hawaii of of its dependence on foreign oil,
Big Island business and community leaders have formed a nonprofit coop called the Hawaii Island Energy Cooperative to explore taking over Hawaii Electric Light Co., a subsidiary of Hawaiian Electric Co.
The co-op would be owned by ratepayers, similar to the Kauai Island Utility Cooperative. However, the co-op is interested all of the island’s energy sectors not just the electric grid.
The co-op association emerged in recent weeks with the announcement that Florida-based NextEra Energy has entered into an agreement to purchase HECO — a deal that is expected to close by the end of the year. Last week, the Hawaii Island Energy Cooperative submitted an application to Hawaii’s Public Utilities Commission, which must approve the sale, to intervene in the review of the merger.
The Big Island co-op, in seeking to intervene in proceedings, is not taking a position for or against the sale, according to a press release issued by the co-op on Tuesday
“We seek to participate in the discussion of the unique perspective of the residents of our island, and if appropriate, explore an option that would make for a fundamental change in the landscape of energy production and consumption on Hawaii Island,” HIEC director Marco Mangelsdorf said in the press release. “Being able to have more direct control over Hawaii Island’s present and future energy profile would provide us with an extraordinary opportunity to showcase what can be done on our island on many different and innovative levels.”
Mangelsdorf is also the president of
Some pills are easier to swallow with a spoonful of euphemistic language.
Such is the case in the proposed sale of Hawaiian Electric Industries to Florida-based NextEra Energy.
Company officials have carefully crafted their public messages to make the $4.3 billion deal go down easier in Hawaii, where residents can be quite sensitive to losing control of anything to the mainland, a lingering hangover from the United States overthrowing the kingdom in 1893.
They are framing the transaction as a “partnership” between the two companies that will benefit everyone — shareholders, ratepayers, even the environment.
That may all hold true, considering the vast resources NextEra brings to the table. But the parties are not exactly being forthright by calling the deal a “partnership” or “combination” as they have in full-page newspaper ads, press conferences and letters to hundreds of thousands of customers.
After all, when a sale is completed, the buyer is the owner.
During a press conference announcing the deal Dec. 3, HEI President and CEO Connie Lau and NextEra Chairman and CEO Jim Robo were asked how the media should describe the transaction.
Lau likened it to a “marriage and dating.” Robo called it “a combination of Hawaiian Electric with NextEra.”
Electricity rates have been rising in Hawaii over the last five years, adding to the high cost of living.
Technological advances could spur more people in Hawaii to abandon HECO.
The PUC takes actions that could dramatically change how HECO moves forward with renewable energy plans.
Utility says it’s discussion needed on boosting costs for homeowners and businesses with solar panels.