Q: Why are our rates so high? A: There are several reasons. Almost all of our power is generated from imported petroleum fuel. The price of oil is volatile, as high as $147 per barrel. Transportation costs for the oil to get to Kauai are expensive. Coal and natural gas are not burned on Kauai. We have a small population among whom we can share power generation, transmission and distribution costs as well as maintenance, repair and upgrades.
Q: What can be done to stabilize rates? A: Our members already are doing a great deal to conserve and a free KIUC energy audit can help any household be more efficient. While it is unlikely renewable energy will dramatically reduce utility bills, KIUC’s goal is to stabilize prices, be competitive with Hawaii’s other islands and disconnect electricity cost from volatile oil prices.
Q: What renewable power currently exists on Kauai?
A: About 15percent of KIUC’s electricity comes from hydropower and solar resources. The other 85 percent comes from the burning of imported fossil fuels.
Another 12 percent of renewable power will be coming on line through two KIUC-owned solar farms, through customer PV and with Green Energy Team's biomass plant.
Q: How much does KIUC spend annually on fossil fuel? A: KIUC has paid more than $60 million and as high as $100 million in recent years for petroleum fuel – resources that could stay on Kauai.
Q: How will KIUC get to its goal of 50 percent renewables by 2023 or sooner? A: KIUC has nearly a dozen hydropower and solar projects under consideration that, if built, could generate more than 60 percent of the electricity consumed on Kauai.
Q: What about wind? A: Although wind is very cost effective and would work well on Kauai, wind generation is not a viable option at this time. Endangered species such as Newell’s shearwater can inadvertently be injured or killed by wind turbines. Neither KIUC nor independent developers are willing to take the risk of incidental violations of endangered species regulations.
Q: Why can’t we go all solar? A: While we are likely to have the world’s highest concentration of solar in the next year or so, it only provides intermittent power and only during the day. Solar/PV systems are subject to output variability due to factors such as clouds passing over an installation, resulting in voltage instability that can cause momentary flickers, or even isolated outages. So, the amount of solar/PV on the system is limited by reliability concerns.
Q: Can energy storage help with solar installations? A: KIUC uess battery energy storage systems at the Koloa substation and at Port Allen to help stabilize the intermittent energy generated by solar projects. As additional solar projects are built, KIUC has an option to install additional battery storage capacity, but solar/PV is still a limited resource even with battery storage backup.
Q: Why is hydropower a priority? A: There already are eight hydroelectric generating stations operating on Kauai, a valuable legacy of the infrastructure relied upon by the sugar plantation operators since the early 20th century.
While it is capital intensive, it is the lowest cost of power – 25 percent cheaper than solar/PV and about 30 percent cheaper all in than the cost of fossil fuel generation today. KIUC considers hydroelectric power a legacy project for Kauai as when it is paid for over the next 30 years, its cost of power will be about 90 percent below the cost of fossil fuel – protecting members’ rates from oil prices and inflation.
Q: Then why hasn’t more hydropower been developed? A: There have been several attempts by private parties over the years, but it is necessarily a difficult and expensive process because of the need to balance the island’s sense of urgency to reduce its reliance on fossil fuel-based power with cultural, diversified agricultural, fishing, hunting, recreational, and tourism interests.
Q: What is an electric cooperative? A: An electric cooperative is a not-for-profit utility that is owned by the members it serves. Cooperatives provide all of the same essential services as any other electric utility.
Q: What are the differences between cooperatives and other utilities? A: Most Americans get their energy from investor-owned utilities, sometimes called IOUs. IOUs are for-profit private corporations owned by investors and typically operate in densely populated areas. Cooperatives were first established by the U.S. Congress and President Roosevelt in the 1930s. The Rural Electrification Act helped bring electricity to rural parts of the country not served by IOUs. Cooperatives serve approximately 80 percent of America’s land mass, and 12 percent of its population.
Q: What is the significance of being not-for-profit? A: Electric cooperatives developed because many citizens who did not have access to electricity in the 1930s decided to band together and form their own companies to acquire power. Investor-owned power companies said they couldn’t make a profit in areas with a small number of consumers per mile of expensive power line. The cooperative business structure already was a well-established part of the American free enterprise system for providing services that were too big for individuals to do alone. Not-for-profit cooperatives were a natural solution for delivering electricity in areas where making a profit would be difficult.
Q: What is patronage capital? A: Patronage capital, also known as capital credits, comes from the money a cooperative has left after paying all of its expenses in a given year. At the end of the year, that money is credited to each member’s patronage capital account according to the amount paid for energy used. Those credits may be paid out to members at a later date based on a retirement schedule adopted by the board of directors.
KIUC has paid more than $17 million to members in capital credit refunds since its founding in 2002. The current policy is to return all margins earned over a target financial performance ratio.
Q: Are consumer-owned cooperatives run by or owned by the government? A: No. Cooperatives are owned by the consumers (members) they serve. Cooperatives are run by policies established by a member-elected board of directors, who in turn hire a manager and chief executive officer to hire additional staff to run the organization.
Q: What is Touchstone Energy and how does it affect KIUC’s member control? A: The Touchstone Energy® brand designates electric cooperatives that meet industry best practices standards as administered by the electric cooperative industry’s non-profit trade association. The Touchstone Energy® program has no direct employees, no control or ownership in any cooperative, and costs KIUC about $25,000 per year to participate.