Utility costs, bad for business

The Grand Hyatt Kauai Resort & Spa is breathing a sigh of relief.

With the price of oil rising steadily, and along with it the cost of electricity, the resort can rest easy knowing it’s done what it can to reduce monthly utility bills.

Since opening in the 1990s, the hotel has cut its annual energy usage by 1.5 million kilowatt hours through both conservation and technology. Hyatt spokeswoman Diann Hartman says the biggest motivation to change was not corporate policy or a government mandate, but rather a voluntary move to save money.

“I’d like to think that it’s altruistic, but a lot of it does become more compelling and convincing when it affects the bottom line,” Hartman said. “When you start to see the cost-effectiveness down the line, it makes a lot more sense to make the initial investment.”

Thanks to its foresight, the Hyatt has led the charge in commercial energy conservation on Kaua‘i and industrywide. But, Hartman cautions, the efforts to date are “still just a baby step.”

There may be talk of oil prices receding by the end of the year, but few would argue that continued dependence on fossil fuels makes good business sense.

As recently as Friday, oil traded at record highs above $147 a barrel, though it closed yesterday down $10.58 a barrel after a two-day slide. While this week has seen a dramatic turnaround in crude prices, they are still about 80 percent above where they were a year ago and up about 40 percent from the start of the year, the Associated Press reports.

Each incremental bump on Wall Street has trickled down to the Kaua‘i Island Utility Cooperative and its members.

KIUC is paying 72 percent more this month for diesel than it was in August of last year — $179 per barrel compared to $104. The co-op is also paying more for naphtha, up almost 68 percent to $134 a barrel. Both represent the co-op’s highest energy costs to date.

As for customers, the effective residential rate per kilowatt hour was just shy of 33 cents in July 2007. One year later, it’s up 42 percent to 47 cents. Commercial rates have seen similar increases.

Taking matters into their own hands

On Kaua‘i, individuals, businesses and government are feeling the crunch, and many have taken matters into their own hands — either reducing consumption or installing more efficient technologies.

For its part, the Hyatt has been pursuing “green” practices since it opened on Kaua‘i.

The Po‘ipu resort harnesses heat from air conditioning systems to warm water for laundry and swimming pools, saving about 205,000 kilowatt hours per year. In 1995, the facility was retrofitted with fluorescent bulbs, saving 800,000 kilowatt hours annually. An air conditioning energy management system keeps rooms minimally cooled until occupied by guests. Kitchen exhaust fans and water feature pumps are both controlled with timers, saving up to 250,000 kilowatt hours. And roughly 70 percent of guests opt not to have linens and towels replaced every day, which cuts down on water usage and conserves electricity.

The resort’s biggest investment, however, is an 18,500-square-foot, 280-kilowatt photovoltaic system currently going up over the employee parking lot. Once completed in August, the system is expected to supply 15 to 20 percent of the resort’s energy needs on-site.

Costco, Island Soap and Candle Works’ warehouse, Otsuka’s Kapa‘a location, Paradise Beverages, Unlimited Construction, as well as county and state buildings have also turned to photovoltaics — by far the most popular renewable technology among commercial entities here.

One of KIUC’s largest customers with consumption of about 14,000 megawatts annually, the Pacific Missile Range Facility, has also jumped on the bandwagon.

“We use KIUC power on the island much like everyone does,” said Capt. Aaron Cudnohufsky, PMRF’s commanding officer. “(High prices) affect us just like everyone else.”

In 2007, President Bush issued an executive order requiring federal agencies, including the military, to improve energy efficiency and reduce greenhouse gas emissions by cutting energy consumption 3 percent annually through the end of fiscal year 2015.

Helping to accomplish those goals, PMRF takes advantage of Mana’s year-round sun to power solar projects, including street lamps and 215 taxi lights on the runway, with more to be installed next month.

PMRF is also exploring new generation technologies such as molten carbonate fuel cells, clean burning of oil waste to heat, and a partnership with Kaua‘i County to harness methane gas from the Kekaha Landfill.

Even simple measures such as replacing traditional light bulbs with compact fluorescents haven’t been overlooked. Doing just that at certain buildings, including Shenanigans Bar & Grill, has saved an estimated $33,000 a year. “The little things add up,” said public works officer Lt. Cmdr. Don George, who oversees the base’s energy projects.

Simple, inexpensive solutions remain popular with homeowners as well.

Ray Mierta, KIUC energy services supervisor, says interest in the co-op’s energy saving programs is on the rise.

So far this year KIUC has issued 48 solar water heater rebates, compared to 30 by mid-year 2007. KIUC has also handed out 45 percent more rebates this year for purchases of energy-efficient refrigerators than last year, and 32 percent more rebates for efficient clothes washers in 2008.

In addition, KIUC staff have made 131 home energy consultations so far this year, compared to 107 during all of 2007.

While more new technology can go a long way, Mierta says consumers should think “of electricity like you do water.

“You wouldn’t leave a hose on for hours while you’re gone,” he said.

KIUC: No single technology the answer

As businesses and individuals re-evaluate energy costs and sources, KIUC is doing the same.

Last year the island’s utility committed to generate at least 50 percent of its electricity without burning fossil fuels by 2023.

Last year about 6 percent of generation came from renewable sources, primarily hydroelectric power from plantation-era infrastructure with some biomass from Gay & Robinson Inc. and about 1 megawatt of photovoltaics. That figure was slightly lower than 2006 levels (8.3 percent) due to drier weather conditions.

Randy Hee, KIUC president and chief executive, says there’s no one technology that can take oil’s place, nor does the utility want to be entirely dependent on a single energy source in the future.

“It’s clear to us that it will take a lot of technologies, if not all of them, to meet our goals,” Hee said.

The next renewable project to come online will be Green Energy LLC’s biomass plant in 2010. Hee said KIUC is also in talks with Gay & Robinson to expand its biomass generation.

Looking forward, KIUC is very interested in solar photovoltaic and solar thermal, as well as wind generation, biomass, biofuels, more hydro, and “any other magic bullet that comes along,” Hee said.

Nothing has been ruled out, but each possibility has presented its challenges. Solar requires storage capabilities to smooth out the generation swings; potential sites for wind farms have crossed endangered seabird flight paths; and biofuels don’t store well and if grown on-island would produce far less energy per acre than, say, photovoltaics.

In addition, KIUC will need cooperation from landowners to develop new projects, all of which have to go through permitting processes and meet local, state and federal regulations.

“The whole thing is there’s no one solution,” said Steve Rymsha, staff engineer. “It’s a new frontier for the world everyone’s learning from each other.”

The state’s energy goals — Gov. Linda Lingle this year signed the Hawai‘i Clean Energy Initiative with the U.S. Department of Energy to supply 70 percent of energy needs from renewable sources by 2030 — have complemented KIUC’s.

“The state initiative coincides with our goals quite nicely and increases our resources in trying to figure this out,” Hee said.

Laws passed in 2006 require all the state’s utilities to achieve 10 percent renewable energy generation by 2010, 15 percent by 2015 and 20 percent by 2020.

Hee and KIUC board of directors Chair Dennis Esaki said its target of 50 percent by 2023 will ensure the co-op stays on track with state mandates.

“But we’re not going to stop there,” Esaki added.

For now, though, conservation seems to be the most immediate and effective way to reduce electric bills.

“Use less (energy) if you can,” Hee said.

• Blake Jones, business writer/assistant editor, can be reached at 245-3681 (ext. 251) or bjones@kauaipubco.com

Editor’s Note: This is the third of four articles examining how rising oil prices are affecting life on Kaua‘i, appearing in the Thursday edition throughout July. The fourth article will explore oil’s impact on the tourism industry. To see parts one and two, go to kauaiworld.com

Ways to save

Kaua‘i Island Utility Cooperative offers information and consultations on how to reduce energy use for members. For more information, call staff at one of the numbers below.

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