Ka`u News Briefs May 16, 2013

An energy consultant hired by the state Consumer Advocate cites benefits to be derived from `Aina Koa Pono's plan to grow feedstock in Ka`u and use it to make biofuel at a refinery above Pahala. Photo from ainakoapono.com

THE SENATE JUDICIARY COMMITTEE has adopted an amendment by Sen. Mazie Hirono that could make it easier for Hong Kong tourists to visit Hawai`i. The amendment allows Hong Kong to be considered for the Visa Waiver Program.
      “This small change to the visa waiver system could have a big impact on Hawai`i’s economy,” said Hirono. “Right now, people in Hong Kong can visit more than 140 countries and territories without visas, but these potential Hawai`i tourists must still endure a time-consuming visa approval process in order to come to the United States. By fixing the visa waiver process for visitors from Hong Kong, we can make it easier for thousands of tourists from this region to come to Hawai`i.”



Sen. Mazie Hirono

      This measure adopted by the committee fixes a technical problem that prevents Hong Kong from joining the Visa Waiver Program. Under current law, only “countries” are eligible for the program. Hong Kong is not a sovereign country but is a self-governing region of China, so a special provision needs to be added to the law to make Hong Kong eligible.


      Lisa Simon, of the National Tour Association, said Hirono’s legislation would increase tourism from Hong Kong, both in Hawai`i and across the country.

 “We applaud Sen. Hirono’s leadership in presenting this legislation that would open the way for increased visitors from Hong Kong to the United States. NTA supports this bill and any other endeavors that serve to increase international visitation, particularly from sizeable Asia markets. We anticipate this legislation would have an immediate and profound impact on increased travel from Hong Kong, which would have a positive impact on our economy and jobs creation.”


      According to the Hawai`i Tourism Authority, Hong Kong visitors spent on average $230 for each day they stayed in Hawai`i, almost 20 percent more than the average visitor. Visitors from Hong Kong also tend to stay in Hawai`i longer than the average visitor.
      Hawai`i’s visitor industry has a long history of benefiting from more streamlined visa laws with Asian countries, according to a statement from Hirono’s office. Last October, Taiwan was added to the Visa Waiver Program. A few months later, Hawaiian Airlines announced plans for direct flights from Taipei to Honolulu in part because of the projected increase in demand from Taiwan’s participation in the waiver program.


      The legislation has received support from U.S. Chamber of Commerce, U.S. Travel Association, American Hotel and Lodging Association, National Association of Counties, National Retail Federation, International Franchise Association and National Tour Association.

THE PUBLIC UTILITIES COMMISSION has received responses to questions posed by Hawai`i County to the state Consumer Advocate regarding testimony on the proposed contract for `Aina Koa Pono to sell biofuel refined above Pahala from biomass grown in Ka`u to Hawai`i Electric Light Co.
      Hawai`i County asked the Consumer Advocate to explain why the proposed AKP price is not linked to fossil fuel prices, “when all justification given to this price in prior and current testimony compares the AKP price to current and forecast prices of petroleum and petroleum- derived diesel.”
      The Consumer Advocate replied that the AKP price is not tied to fossil fuels “in compliance with state policy to reduce dependence on fossil fuels, including its exposure to variations in fossil fuel prices. Mr. Hornby (an energy consultant hired by the Consumer Advocate) provided comparisons to fossil fuel prices to illustrate how the AKP project would help meet this state policy. The AKP contract represents a known future price path for fuel at the Keahole plant. This price will not change with changes in oil prices.

The Consumer Advocate hired James Richard Hornby as a consultant.

      “Mr. Hornby states that in exchange for higher fuel costs relative to Reference Case forecasts, the utility companies and their customers will derive certain benefits, including reduced dependence on fossil fuels, reduced exposure to higher electricity prices when petroleum prices are higher than AKP prices, reduced exposure to petroleum price volatility, reduced air emissions, contribution to Renewable Portfolio Standards requirements, and diversification of resources to meet RPS requirements.
      Hawai`i County asked, “If reduced exposure to higher electricity prices when petroleum exceeds AKP prices is a consumer benefit as stated, then — by the same logic — is it not also the case that utility companies and their customers will suffer a penalty when petroleum prices are lower than AKP prices?”
      “Yes,” the Consumer Advocate replied. “Among its other benefits the AKP contract provides a hedge against diesel price risk. Like any hedge, in any given year the price of AKP biodiesel may be higher than the spot price of diesel or lower than the spot price of diesel. As a hedge, the AKP supply contributes to price stability and mitigates the financial risk associated with low probability, high price fluctuations in oil markets.”
      Hawai`i County asked, “If high, fixed long-term costs benefit consumers by avoiding price volatility, then why shouldn’t we extend this logic to all commodities considered vital to consumers and uniformly eliminate price volatility by fixing their prices at the highest possible levels conceivable under forecast conditions?”
      The Consumer Advocate responded, “First, the market for electricity is not competitive, whereas the market for food is competitive. Second, it should be noted that the proposed policy is not to set “high, fixed” prices.
      AKP was selected through a competitive bidding process to procure a source of biofuel for the Keahole units at a fixed price. Third, the companies are entering the AKP contract to comply with the state’s RPS. Fourth, the AKP project provides numerous benefits. Its value as a hedge is only one of those benefits. Finally, the electricity from the AKP biofuel would represent only 19 percent of HELCO’s annual requirements.”
      More testimony will be covered in future Ka`u News Briefs. All testimony is available at puc.hawaii.gov.

THE USDA NATIONAL AGRICULTURAL STATISTICS SERVICE is currently conducting the 2012 Census of Agriculture. All agricultural operations should have received their census forms in the mail by now. “It is very important that all operations be counted and their voices heard,” said research statistician Cheresa Coles. “Furthermore, this is a wonderful opportunity to capture Hawai`i County’s specific farm data. This will be the only time that county-level data will be published for the next five years for the state of Hawai`i.”
      Hawai`i farm policies are implemented from data collected in the Agricultural Census. The census can be completed by telephone, mail, online or a personal interview. The deadline is May 31, 2013.
      For more information or to get a form, contact Coles at 961-9496 or cheresa.coles@nass.usda.gov.