U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

95–298 2016

S. HRG. 114–308 

ISLANDED ENERGY SYSTEMS: ENERGY AND INFRASTRUCTURE CHALLENGES AND OPPORTUNITIES 

IN ALASKA, HAWAII, AND THE U.S. TERRITORIES 

HEARING 

BEFORE THE 

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

ON 

ISLANDED ENERGY SYSTEMS: ENERGY AND INFRASTRUCTURE CHALLENGES AND OPPORTUNITIES IN ALASKA, HAWAII, AND THE U.S. 

TERRITORIES 

TUESDAY, JULY 14, 2015 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 

(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

LISA MURKOWSKI, Alaska, Chairman 

JOHN BARRASSO, Wyoming 

JAMES E. RISCH, Idaho 

MIKE LEE, Utah 

JEFF FLAKE, Arizona 

STEVE DAINES, Montana 

BILL CASSIDY, Louisiana 

CORY GARDNER, Colorado 

ROB PORTMAN, Ohio 

JOHN HOEVEN, North Dakota 

LAMAR ALEXANDER, Tennessee 

SHELLEY MOORE CAPITO, West Virginia 

MARIA CANTWELL, Washington 

RON WYDEN, Oregon 

BERNARD SANDERS, Vermont 

DEBBIE STABENOW, Michigan 

AL FRANKEN, Minnesota 

JOE MANCHIN III, West Virginia 

MARTIN HEINRICH, New Mexico 

MAZIE K. HIRONO, Hawaii 

ANGUS S. KING, JR., Maine 

ELIZABETH WARREN, Massachusetts 

KAREN K. BILLUPS, Staff Director 

PATRICK J. MCCORMICK III, Chief Counsel 

ISAAC EDWARDS, Senior Counsel 

ANGELA BECKER-DIPPMANN, Democratic Staff Director 

SAM E. FOWLER, Democratic Chief Counsel 

ALLEN STAYMAN, Democratic Senior Professional Staff Member 

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Murkowski, Hon. Lisa, Chairman, and a U.S. Senator from Alaska .................. 1 

Cantwell, Hon. Maria, Ranking Member, and a U.S. Senator from Washington .................................................................................................................... 3 

Hirono, Hon. Mazie K., a U.S. Senator from Hawaii ............................................ 4 

WITNESSES 

Kia’aina, Hon. Esther, Assistant Secretary for Insular Areas, U.S. Department of the Interior ............................................................................................. 6 

Underwood, Hon. Robert, President, University of Guam, and former Guam 

Delegate, U.S. House of Representatives ........................................................... 20 

Glick, Mark, State Energy Administrator, Department of Business, 

Economnic Development, and Tourism, State of Hawaii .................................. 25 

Hodge, Jr., Hugo, Executive Director/CEO, Virgin Islands Water and Power 

Authority ............................................................................................................... 33 

Kohler, Meera, President and CEO, Alaska Village Electric Cooperative, Inc. . 41 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED 

American Public Power Association: 

Statement for the Record ................................................................................. 83 

Cantwell, Hon. Maria: 

Opening Statement ........................................................................................... 3 

Glick, Mark: 

Opening Statement ........................................................................................... 25 

Written Testimony ............................................................................................ 27 

Responses to Questions for the Record ........................................................... 67 

Hirono, Hon. Mazie K.: 

Opening Statement ........................................................................................... 4 

Hodge, Jr., Hugo: 

Opening Statement ........................................................................................... 33 

Written Testimony ............................................................................................ 35 

Responses to Questions for the Record ........................................................... 75 

Kia’aina, Hon. Esther: 

Opening Statement ........................................................................................... 6 

Written Testimony ............................................................................................ 8 

Responses to Questions for the Record ........................................................... 64 

Kohler, Meera: 

Opening Statement ........................................................................................... 41 

Written Testimony ............................................................................................ 43 

Responses to Questions for the Record ........................................................... 80 

Murkowski, Hon. Lisa: 

Opening Statement ........................................................................................... 1 

Underwood, Hon. Robert: 

Opening Statement ........................................................................................... 20 

Written Testimony ............................................................................................ 22 

Responses to Questions for the Record ........................................................... 66 

Wittrig, PhD, T. Stephen: 

Statement for the Record ................................................................................. 85 

(1) 

ISLANDED ENERGY SYSTEMS: ENERGY AND 

INFRASTRUCTURE CHALLENGES AND OPPORTUNITIES IN ALASKA, HAWAII, AND THE 

U.S. TERRITORIES 

TUESDAY, JULY 14, 2015 

U.S. SENATE

COMMITTEE ON ENERGY AND NATURAL RESOURCES

Washington, DC. 

The Committee met, pursuant to notice, at 10:06 a.m. in Room 

SD–366, Dirksen Senate Office Building, Hon. Lisa Murkowski, 

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. LISA MURKOWSKI, 

U.S. SENATOR FROM ALASKA 

The CHAIRMAN. Welcome, and good morning. We are at order 

today in the committee. We are looking at the unique energy challenges that face those who live in the remote and isolated areas 

that are not connected to our national grid. Alaska, Hawaii, and 

our territories—these areas are largely dependent on imported diesel fuel for their energy needs. The cost of importing that fuel adds 

significantly to the overall cost of electricity, and in the case of 

Alaska, it also adds to the cost of space heat. 

Most remote locations pay at least twice the national average for 

electricity. In parts of my state we see rates that can reach 10 

times the national average as a result of the need to import fuel, 

so when we talk about energy challenges, for us this is every bit 

as important as anything else that we face. Alaska, of course, is not 

alone in this. In our isolated areas, in our islands that are reliant 

on imported energy, this is probably the most debilitating aspect of 

their ability to have an economy at all. 

While the nation’s regional grids have a diverse set of energy 

sources to draw from, most isolated areas simply do not have that 

luxury. Instead their energy costs are directly tied to the price of 

oil. Lower prices are providing some relief right now, but energy 

source diversity is the best and most stable option over the long 

term. In many parts of our state, the fuel barge comes in once a 

year, twice a year maybe. Sometimes it does not come when you 

expect it because you cannot get the barges up the river, but effectively what happens is the communities are locked into the price 

of fuel at the time that it was contracted. So if you contract for the 

fuel in July and the prices are reasonable, you enjoy those reasonable prices until the next shipment comes, which may be a year 

later. 

2 

I asked this morning to see what the people in Bethel paid for 

their energy costs. In the summer of ’13, heating fuel was going for 

$6.09, diesel was going for $6.51 and gas was at $6.85. In October 

of ’14 we were looking at heating oil at $6.20, diesel at $6.82 and 

gas at $6.79. We see the low prices around the country. Everyone 

was benefiting from the low prices, but not so much for those of 

us in Alaska. We are still seeing price comparisons that simply do 

not add up. 

It is important that we look at remote and isolated energy systems in a holistic manner, not just from a cents per kilowatt hour 

perspective. In all but a few of the communities served by remote 

energy systems, economies of scale are simply not a reality. Further, the isolated nature of these energy systems means that they 

must bear the entire burden of ensuring reliability within the community. The ability to support these energy systems directly depends on the underlying economy, and at the same time, the cost 

of energy drives that economy. 

I was in Pelican over the 4th of July break. Pelican, Alaska is 

down in the southeastern part of the state, a very small community, with 100 or so people. It is only accessible by boat or by float 

plane. It was founded as a commercial fish processing site back in 

the mid-1930’s. It processed one million pounds of fish back in 

1942, but over the years they have languished as the fish went 

elsewhere, and they went elsewhere for some pretty simple reasons: ice. If you do not have ice to keep your fish chilled after you 

have harvested them, you do not have a product. 

Making ice takes energy, and without competitive energy, the 

community could not provide the ice necessary to support qualitybased fisheries. The good news for Pelican is that they have a 

small hydro project that has put Pelican back on the map processing small bits of fish that are coming in, and the fish are no 

longer going by this community. It is in part due to the fact that 

they have energy to the school, to the water plant, and now to the 

fish processors there. 

Pelican, in my mind, is an example of how we need to think 

about energy in these systems. We need to focus on solutions to the 

problems at hand where energy sources match what the community 

needs and what the community can sustain, and not simply what 

is desired for them. From a Federal perspective, we must ensure 

that our programs do not leave these areas on the sidelines. 

I note that the DOE’s definition of a microgrid requires the 

microgrid to be able to disconnect and connect to a larger grid. 

Well, that is just not possible for those of us in the non-contiguous 

parts of the United States. We have legislation before the committee, S. 1227, to ensure that the development of microgrid technology includes isolated communities, and hopefully that will become part of our larger energy package. 

Finally, I would note that this hearing occurs at the time the Pacific Power Association, which is the umbrella organization for the 

power companies in the Pacific Islands, including those in the U.S. 

territories and freely associated states, is holding its 24th annual 

conference in the Marshall Islands. That is a coincidence, not a 

matter of coordination, but it is good to know that the issue of reVerDate Nov 24 2008 11:32 Jul 29, 2016 Jkt 095298 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\95298\95298.TXT 95298
3 

mote and isolated energy systems will be highlighted across the 

globe this week. 

The issues associated with islanded energy systems deserve our 

attention. Energy can be a staggering cost and a staggering burden 

for the people who live in these areas, so I am pleased that we 

have set aside time this morning to explore what can be done at 

the Federal level to help find lower cost solutions to them. 

Senator Cantwell, I am going to now turn to you for your comments, but I also want to recognize our colleague, Senator Hirono, 

a fellow offshore senator. We have had an opportunity in the past 

to discuss the challenges that are unique to your smaller state and 

my larger state. While we are at least connected to the mainland, 

we are clearly islanded in the sense that we are disconnected from 

the rest of America. I do appreciate working together with you, so 

if you would also like to make a comment after Senator Cantwell, 

we would be certainly happy to hear from you as well. 

With that, let us go to Senator Cantwell. 

STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM 

WASHINGTON 

Senator CANTWELL. Thank you, Chairwoman Murkowski, for 

holding this important oversight hearing, and I welcome the witnesses, including our former colleague, Congressman Underwood. 

Thank you so much for being here. And the Assistant Secretary, 

thank you for being here. I look forward to hearing everyone’s testimony about the challenges of reliable and affordable energy in remote communities in rural Alaska, islands such as Hawaii, and a 

number of our U.S. territories. 

To me this is very important because energy is the lifeblood of 

any economy. Alaska and Hawaii have challenges as it relates to 

reliable energy sources, and coming from a state where we have 

seen cheap hydro build an economy over and over again, I just 

think this is such an incredibly important issue to how your economies grow in the future. 

This committee has jurisdiction over relations between U.S. and 

the communities of our fellow citizens and nationals who live in the 

territories. Part of our responsibility is ensuring that these communities have viable economies and that means a need for reliable 

and affordable energy. We need to look no further than Puerto Rico 

where electricity costs are over twice the national average, and the 

public utility is carrying a debt of about $9 billion, to see the consequences of high dependence on costly energy and old equipment. 

In other territories or in isolated communities in Alaska, electricity costs are typically three to five times the average of the 

lower 48 states, and this constitutes a significant challenge to economic development. Two summers ago, Chairman Murkowski and 

I traveled to remote areas of Alaska, and I saw firsthand the challenges that they face in getting an energy supply and building an 

economy with these energy challenges, particularly in the winter 

months. It is a very, very challenging situation. 

These communities export cash to operate and maintain their oilbased electric and transportation equipment. Newer, lower-cost 

electricity generation and transportation technologies are increasingly available, but there are typically two barriers to deployment: 

4 

a lack of technical expertise to operate and maintain these new 

technologies, and these are typically lower income communities 

which often lack the capital resources needed to finance the transition to less expensive fuel and equipment. 

So, partnering with the Federal Government offers ways to overcome these challenges. First, making sure that we tap into technical expertise at the Department of Energy and its laboratories. 

And second, assuring that these communities can leverage the 

grant programs administered by the Interior Department’s Office of 

Insular Areas, such as the Empowering Insular Communities Program and Maintenance Assistance Programs. Similarly, the Office 

helped establish the Pacific Power Association to help island utility 

officials to learn more and to share their best practices in meeting 

the challenges of reliable and affordable electricity in these remote 

communities. 

I am glad to have this important hearing today, and thank you 

again for having this and affording our colleague, Senator Hirono, 

a few minutes for her comments. 

STATEMENT OF HON. MAZIE HIRONO, U.S. SENATOR FROM 

HAWAII 

Senator HIRONO. Thank you, Senator Cantwell. Thank you, 

Chair Murkowski. I am glad that, Senator Cantwell, you mentioned the high energy costs in Puerto Rico are twice what the national average is. In Hawaii it is three times higher as Alaska is 

well aware. Senator Murkowski, our two states could become test 

beds for how we can provide affordable and, in our case, renewable 

energy to remote areas, something that you and I are very familiar 

with. 

Aloha to my friend, Bob Underwood, President of the University 

of Guam and former delegate to the U.S. House of Representatives. 

And, of course, I am really pleased to welcome Mark Glick, the Administrator of the Hawaii State Energy Office, as one of our witnesses today. I am also pleased to see our Assistant Secretary, Esther Kia’aina, another friend who served as first deputy for Hawaii’s Department of Land and Natural Resources among positions 

of public service to the State of Hawaii. 

It is incredibly important that we are holding this hearing on 

islanded energy systems. The people of Hawaii understand the 

unique challenges that come with living on our islands, but our energy challenges loom especially large. Families and businesses in 

Hawaii are well aware that they face the most expensive energy 

costs in the country. 

With oil accounting for 80 percent of the energy needs of our 

state, the people of Hawaii are acutely aware that there be must 

new alternatives to the volatile prices and vulnerable supply of the 

global oil trade. We can address our energy needs in ways that are 

much cleaner using Hawaii’s own renewable resources. 

In 2008, with the advice and support of the Department of Energy, our state established the Hawaii Clean Energy Initiative, a 

groundbreaking State/Federal partnership. We set a goal for 40 

percent of our energy to come from renewables by 2030, and in 

June of this year the Governor of Hawaii signed into law an expansion of that goal to—listen to this—100 percent renewable elecVerDate Nov 24 2008 11:32 Jul 29, 2016 Jkt 095298 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\95298\95298.TXT 95298
5 

tricity by 2045. This is the most ambitious plan and goal in the 

country. Can we get there? Mr. Glick is here to tell us how we are 

going to do that. [Laughter.] 

Hawaii has already more than doubled its use of renewable electricity in 6 years to 21 percent. Hawaii also set a goal requiring 

a 30 percent improvement in energy efficiency by 2030. According 

to the Hawaii State Energy Office, the standard has resulted in the 

equivalent of $405 million in energy savings for Hawaii’s homes, 

farms, and businesses. Hawaii has also established an on-bill financing program to help consumers cut their energy costs by investing in clean energy. 

Hawaii has benefited from the partnership of the state, the utilities, and the military in finding solutions for an affordable lower 

carbon energy future. It will help keep at home more than the $5 

billion per year that we currently spend on importing energy. So 

not paying for importing oil and becoming more energy self-sufficient will, of course, mean more money; that $5 billion is circulating in our own economy, creating jobs, raising wages, and helping families make ends meet. 

It is great that we are focusing today on how Hawaii and other 

islanded areas deal with a high dependence on oil, high energy 

prices, and the reduced reliability of energy supply that comes from 

not being able to connect our electrical grids and pipelines with 

neighboring states. At the same time, Hawaii is on the forefront of 

addressing questions that will need answers all across the state 

and territories of the U.S.: how to use energy more efficiently in 

our homes, vehicles, and businesses; how to get affordable energy 

from increasingly renewable sources; and how to integrate new resources of energy in the energy infrastructure that supports our 

daily lives. 

Thank you, and I look forward to the testimony of our witnesses. 

Thank you, Madam Chair. 

The CHAIRMAN. Thank you, Senator Hirono. 

We will now turn to our panel this morning, and welcome to each 

of you. I will do quick introductions and then we will hear testimony. I would ask that you try to keep your comments limited to 

5 minutes. Your full statement will be included as part of the 

record, and then we will have an opportunity for questions after 

that. 

We will begin the panel this morning with the Honorable Esther 

Kia’aina, who is the Assistant Secretary for Insular Affairs. As 

head of the Office of Insular Affairs, Ms. Kia’aina oversees the 

United States Government’s relationship with American Samoa, 

the Northern Mariana Islands, Guam, and the U.S. Virgin Islands, 

as well as financial assistance to Palau, the Marshall Islands, and 

the Federated States of Micronesia through our Compacts of Free 

Association. Welcome. 

We next have the Honorable Robert Underwood. Mr. Underwood 

currently serves as the President of the University of Guam, but, 

as has been noted, is a former colleague here. He was the Delegate 

from Guam to the U.S. House of Representatives. 

We are also joined by Mr. Mark Glick, who is the Administrator 

for Hawaii’s State Energy Office, tasked with growing Hawaii’s 

clean energy sector. Mr. Glick has been there since 2011. 

6 

We also have Mr. Hugo Hodge. Mr. Hodge is the Executive Director for the Virgin Islands Water and Power Authority, the public 

power utility for the U.S. Virgin Islands. He is also on the Board 

of Directors of the American Public Power Association; the Co-Director of the Energy Development in Island Nations, a U.S. Virgin 

Islands (USVI) Initiative; and, the Chairman of the Caribbean 

Electric Utility Service Corporation. Welcome to you. 

Finally, we have Ms. Meera Kohler. Meera and I were on the 

plane yesterday coming from Alaska, so I know that she also is 

clearheaded and not foggy this morning from jet lag. Ms. Kohler 

has come before this committee several times. She has been the 

President and CEO of the Alaska Village Electric Cooperative 

(AVEC) since 2000 and has 36 years in the electric utility business. 

AVEC serves a population of about 30,000 people across 56 communities with 49 power plants. She is a great friend and one who 

clearly understands the challenges that we face in Alaska. So 

thank you for making the long haul. 

To each of you this morning, welcome, and let us begin with the 

Honorable Esther Kia’aina. Welcome. 

STATEMENT OF HON. ESTHER KIA’AINA, ASSISTANT SECRETARY FOR INSULAR AREAS, U.S. DEPARTMENT OF THE INTERIOR 

Ms. KIA’AINA. Thank you so much. Chairwoman Murkowski and 

members of the Committee, I thank you for the opportunity to testify on the energy efforts of the Department of the Interior’s Office 

of Insular Affairs (OIA) in the U.S. territories. 

The U.S. territories face higher energy costs than the rest of the 

nation, about three times higher than the U.S. national average. 

The territories are also nearly 100 percent dependent on imported 

fossil fuels for electricity generation. To combat these high cost of 

electricity, the Office of Insular Affairs entered into an interagency 

agreement with the U.S. Department of Energy’s National Renewable Energy Laboratory, or NREL, in 2010 to help the territories 

of American Samoa, Guam, and the Northern Mariana Islands: (1) 

establish baseline energy system data; (2) form energy task forces; 

(3) develop long-term strategic energy plans; and (4) formulate energy action plans. I am pleased to say that all of these objectives 

have been completed, and we are in the implementation stages of 

the energy action plans which are living documents that are updated regularly as circumstances change. 

On a slightly different track, the U.S. Virgin Islands was selected 

as the pilot project for the Energy Development in Island Nations, 

or EDIN, an initiative of the Department of Energy. Interior and 

the Department of Energy provided technical assistance to the 

USVI throughout the initiative, and in September 2011, NREL 

published the U.S. Virgin Islands Energy Road Map which outlines 

a path for achieving the territory’s goal of reducing its dependence 

on fossil fuel by 60 percent by 2025. As of December 2013, the territory has already achieved a 20 percent reduction in fossil fuel energy consumption, a third of its goal. 

OIA’s current priority is assisting the territorial governments 

with the implementation of their energy plans through our Empowering Insular Communities Grant Program at about $3 million anVerDate Nov 24 2008 11:32 Jul 29, 2016 Jkt 095298 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\95298\95298.TXT 95298
7 

nually. Some project highlights include funding support for geothermal exploration drilling programs in American Samoa and the 

Northern Marianas, a wind pilot project in Guam, solar panel systems for the hospitals on Guam and Northern Marianas, and the 

integration of a hybrid renewable energy system in American 

Samoa to bring the Manu’a Islands close to 100 percent renewable 

by 2016. 

The greatest challenge we face is the lack of funding for high priority projects identified in the energy plans. Some of the projects 

must be supplemented with funding from our OIA’s Capital Improvement Project, Technical Assistance Program, as well as our 

Maintenance Assistance Program, all which are already stretched 

thin. Another challenge is funding for Puerto Rico. Public Law 

113–235 included a provision for energy planning in Puerto Rico 

that would be funded by the Office of Insular Affairs. NREL’s cost 

estimate for including Puerto Rico is $331,000 for planning purposes. With no appropriation for this effort, OIA’s Energy Grant 

Program would likely suffer for the other territories. 

Although the challenges are many, we feel there are still significant opportunities for the territories to reduce the cost of electricity, diversify their supply of energy, and become less dependent 

on imported diesel fuel. The President’s 2016 budget includes $4.4 

million for pursuing sustainable energy strategies already identified in the territories’ strategic energy plans. Solutions to energy 

issues are always pressing with significance for the environment, 

financing of territorial governments, and the well-being of island 

societies as a whole. 

Thank you so much for the opportunity to testify on our energy 

initiatives in the U.S. territories. With me to help in the answering 

of any technical aspects of my testimony is Scott Haase, who is the 

NREL liaison to the Department of the Interior. Thank you very 

much. 

[The prepared statement of Ms. Kia’aina follows:] 

8 


Insert offset folio 1 here 95298.001
9 


Insert offset folio 2 here 95298.002
10 


Insert offset folio 3 here 95298.003
11 


Insert offset folio 4 here 95298.004
12 


Insert offset folio 5 here 95298.005
13 


Insert offset folio 6 here 95298.006
14 


Insert offset folio 7 here 95298.007
15 


Insert offset folio 8 here 95298.008
16 


Insert offset folio 9 here 95298.009
17 


Insert offset folio 10 here 95298.010
18 


Insert offset folio 11 here 95298.011
19 


Insert offset folio 12 here 95298.012
20 

The CHAIRMAN. Mr. Underwood, welcome. 

STATEMENT OF HON. ROBERT UNDERWOOD, PRESIDENT, UNIVERSITY OF GUAM, AND FORMER GUAM DELEGATE, U.S. 

HOUSE OF REPRESENTATIVES 

Congressman UNDERWOOD. Thank you. Hafa adai. Good morning, Senator Murkowski, Madam Chair, and members of the committee. It is an honor to be asked to share some ideas and perspectives on energy issues in remote areas, especially island communities. I am President of the University of Guam since 2008 and 

former Congressional Delegate, as has been mentioned. Part of the 

initiative as President is to establish the Center for Island Sustainability to kind of function as an honest broker on issues related to 

the sustainability of the islands in what we consider our greatest 

challenge, which is to try to figure out how to sustain our economy, 

our way of life, and our environmental resources at the same time. 

Our greatest export from Guam is money. As soon as we get it, 

we export it, and $300 million a year, which is roughly seven and 

a half to 8 percent of our total, what we call our gross island product, goes to fossil fuel. As you have pointed out, Madam Chair as 

well as Senator Hirono, if we were able to capture portions of that 

export through efficiencies and through the establishment of renewables, we could keep the money circulating in the Guam economy, generate jobs, improve the quality of our lives, and make significant strides toward energy independence. And that is the holistic approach that we think is necessary for people to understand. 

Power generation on Guam is provided by local companies which 

face significant challenges to keep power constant and consistent 

due to infrastructure issues, and the fact that we are disconnected 

from a greater grid, a national grid, a continental grid. They also 

must try to maintain policies which are able to pay back their longterm indebtedness. 

In most instances, the power companies are the drivers of energy 

policy rather than the entire society, and this is because they exist 

in a power vacuum. I hate to use that term, but that is exactly 

what happens in many of the islands. Consequently, strategic planning which engages energy issues as a long-term social and economic issue as well as dealing with technological innovations is incoherent and is really driven by occasional Federal initiatives. 

Some of the initiatives outlined by the Assistant Secretary have 

been very helpful, and there are others by the U.S. Department of 

Energy, and sometimes by the U.S. EPA. But looking at it from an 

island perspective, what happens is that you see various initiatives 

coming back and forth, and you are not sure which ones are really 

indicative of the entire Federal policy toward energy in the insular 

areas. 

Financing innovative technologies is complicated by, of course, 

capital shortages and the notion, very common, that innovative 

technologies is a Federal or external responsibility. Island power 

systems effectively must, of course, function as micro or minigrids. 

While our solutions to this are simple—well, they are simple to say, 

not simple to carry out—we need strategic planning which is holistically based and focuses on greater energy independence and the 

21 

positive consequences which include economic growth and sustainability. 

We need to understand the concept of ‘‘indigenous energy,’’ bringing back using technology to help build independence. In the experiences of the islands, the introduction of technology usually means 

greater dependence on the outside world. Energy technology, renewables, actually reverses that trajectory. 

We need to adopt strong, but achievable, goals which reward innovation and spur participation rather than skepticism and opposition. This means we need renewable energy portfolio standards 

which are realistically arrived at but which have rewards and consequences. We need capacity building which is based on people, not 

just on infrastructure, and education for the work force and community outreach which enhances energy literacy, which goes further than just computing the dollars and cents computation of kWs, 

as you mentioned in your opening statement, Senator Murkowski. 

Federal policy initiative and activities must be coherent and consistent. A multiplicity of funding sources and regulators and technical assistance possibilities do not facilitate coherence in small 

communities, but rather the creation of silos within those small 

communities. There is very little followup on the ground by any 

Federal agency relating to energy in spite of its importance, which 

means the deploying of individuals from agencies to help us and to 

help those islands. The Federal Government should provide not 

only seed funding and technical assistance for some innovative 

projects but also the establishment of green funds themselves 

which are sustainable. 

Last, we want to call for development of not just an all-island, 

but an all-islands, solution and network. Individual communities 

must develop their own coherent policies and initiatives for individual sustainability; however, we must join all-islands networks to 

share best practices and to avoid redoing what has been done before. We have done this through the establishment of the Center 

for Island Sustainability and our annual conferences. We have also 

reached out to remote communities in Alaska through our relationship with the center at the University of Alaska-Fairbanks, which 

I visited last year. 

The committee’s efforts and the efforts of our partners, particularly under the leadership of the Office of Insular Affairs and other 

Federal agencies, will be greatly enhanced by adopting policies 

which reward demonstrated collaboration, successful projects, and 

which build that human capacity. A key factor in this is to not just 

look at territories as political jurisdictions, but to adopt an all-islands approach through the participation of islands, whether they 

are in the Pacific, the Caribbean, off the coast of Alaska, or the 

New England coastline. 

I will be happy to answer any questions. Thank you very much. 

[The prepared statement of Congressman Underwood follows:] 

22 


Insert offset folio 13 here 95298.013
23 


Insert offset folio 14 here 95298.014
24 


Insert offset folio 15 here 95298.015
25 

The CHAIRMAN. Thank you, Congressman Underwood. 

Mr. Glick, welcome. 

STATEMENT OF MARK GLICK, STATE ENERGY ADMINISTRATOR, DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT, AND TOURISM, STATE OF HAWAII 

Mr. GLICK. Thank you. Good morning, Chair Murkowski and 

members of the committee. Thank you for inviting me to testify before you today about Hawaii’s energy ecosystem and the challenges 

and opportunities faced in operating islanded energy systems in 

the Hawaiian archipelago. First, the state views our annual expenditure of about $5 billion 

a year on imported oil as a tax on growth in Hawaii that imposes 

a significant burden on our residents and businesses. Economics 

and energy security have driven our push for clean energy with 

substantial progress for energy transformation finally taking root, 

once a bipartisan collage of policymakers in Hawaii’s congressional 

delegation and our Statehouse decided to take bold action. This 

was embodied in the 2008 Memorandum of Agreement between the 

U.S. Department of Energy and Hawaii and the subsequent passage in 2009 of the nation’s strong renewable portfolio and energy 

efficiency portfolio standards, something we call the Hawaii Clean 

Energy Initiative, as Senator Hirono mentioned in her remarks. 

In 2013, the Governor established energy policy directives to 

offer guidance and clarity for actions necessary to fulfill Hawaii’s 

energy transformation. I would like to emphasize directives calling 

for a diversified energy portfolio and relying on clean energy solutions in which the market decides winners and losers, and the results have been strong. The renewable portfolio topped 21 percent 

at the end of last year, well ahead of the 2015 interim target of 15 

percent, and the state has reduced electricity demand by more than 

15,000 gigawatt hours. To do this, we used the winning strategy of 

paying off infrastructure costs through energy savings, and Hawaii 

has led the nation for three consecutive years in the per capita 

value of energy savings performance contracts. 

Hawaii also leads the nation in solar capacity per capita, even 

though our isolated grid cannot absorb the percentage of intermittent renewables through the interconnection with the regional grid 

as is done on the mainland. So to address these technical challenges and costs associated with incorporating this increasingly 

large percentage of renewables, our electric utilities are working 

with the host partners to test and work on specifications of fast 

trip, inverter functionality to avoid transient over voltage events, 

Midwich distribution circuit to determine proactively the amount of 

distributed energy resources that can be hosted on each circuit, and 

work with inverter manufacturers to bring to market advanced inverter functionality to manage voltage levels to customers. 

Now, to support these solutions, our office, the Hawaii State Energy Office, focuses more these days on utility resource planning, 

rate design, and price signals to inform energy stakeholders on the 

optimal configuration to achieve a growing portfolio of renewable 

resources. One example I would like to cite is our modeling of load 

balancing and storage resources from higher penetrations of electric vehicles. 

26 

If we assume 120,000 electric vehicles are operating when we 

achieve a 70 percent renewable portfolio, peak energy demand, 

electric demand, would increase by as much as 20 percent, resulting in a 10 percent increase and our need for energy storage. However, if those 120,000 electric vehicles are supported by smart 

charging and advanced systems to be connected to the grid, energy 

storage requirements might actually be decreased by 10 percent. 

Now, the fact that we are the most isolated population concentration in the world makes energy resiliency and disaster recovery an 

even greater concern. Renewable energy and distributed energy offers great energy resilience, and we have also taken concrete steps 

to ensure that Hawaii’s clean energy transformation is realized by 

all demographics and communities throughout the state. That is 

why our new securitized rate reduction bond and On Bill Repayment Green Financing Program targeting the undeserved residential customers, renters and non-profits, is so important. 

So in conclusion, Hawaii has been able to leverage our isolation 

and the challenges faced in the arena of clean energy to great advantage. Hawaii has been able to attract international investment 

from governments and corporations who see Hawaii as a bellwether 

for renewable energy solutions before rolling out to international 

markets, and this success has prompted the state to rethink the potential of Hawaii’s clean energy transformation. 

The offshoot was the passage of the bill that Senator Hirono had 

mentioned signed by Governor Ige in June of this year calling for 

Hawaii’s electric utilities to accelerate the 2020 interim RPS target 

or renewables from 25 percent to 30 percent, and, of course, go to 

100 percent renewable energy by 2045. Our continued refinements 

of these targets assist in resource optimization and prevents costly 

overbuilds, and sets a clear, unambiguous goal of generating 100 

percent electricity from its renewable sources. Our approach in setting targets for utilities is a practical approach to furthering the 

state’s energy policies. 

So thank you for this opportunity to highlight Hawaii’s clean energy leadership and to share some of the lessons we have learned 

in pursuing our clean energy transformation. 

[The prepared statement of Mr. Glick follows:] 

27 


Insert offset folio 16 here 95298.016
28 


Insert offset folio 17 here 95298.017
29 


Insert offset folio 18 here 95298.018
30 


Insert offset folio 19 here 95298.019
31 


Insert offset folio 20 here 95298.020
32 


Insert offset folio 21 here 95298.021
33 

The CHAIRMAN. Mr. Hodge, welcome. 

STATEMENT OF HUGO HODGE, JR., EXECUTIVE DIRECTOR/ 

CEO, VIRGIN ISLANDS WATER AND POWER AUTHORITY 

Mr. HODGE. Good morning, Honorable Chairwoman Lisa Murkowski and other honorable members of the Committee on Energy 

and Natural Resources. My name is Hugo V. Hodge Jr., and I am 

the Executive Director/Chief Executive Officer of the Virgin Islands 

Water and Power Authority (VIWAPA). On behalf of the Governor 

of the Virgin Islands, the Honorable Kenneth E. Mapp, the Virgin 

Islands Delegate to Congress, the Honorable Stacey Plaskett, and 

the members of the 31st Legislature of the Virgin Islands, and the 

Governing Board of the VIWAPA, we thank you for this invitation. 

To say that volatile oil prices have placed an undue burden on 

the businesses and residents of the U.S. Virgin Islands and the 

overall economy of the territory is an understatement. Since approximately 2003 when fuel oil prices began an unprecedented 

climb, electric customers have struggled to pay for electric services, 

spending approximately 9 percent of their income on these services 

versus the 2-percent paid by their mainland counterparts. 

At one point in time, the average price of energy paid by the U.S. Virgin Islands consumer climbed to a high of $0.51 per kilowatt 

hour, five times the U.S. average. While the territory has received 

some relief in recent months due to the recent decline in oil prices 

which has reduced the current electric rate to $0.32 per kilowatt 

hour for residential customers and $0.35 per kilowatt hour for commercial customers, analysts are divided on how long this respite 

from high fuel prices will last. One thing is certain, however. Prices 

will elevate again, so the urgency remains the same. 

Like most other Caribbean islands, the USVI has no conventional energy resources to meet its energy needs. While U.S. mainland utilities can connect to grids to purchase power from other 

utilities in the continental United States, island utilities are small, 

isolated, and are not interconnected to a grid comprised of other 

utilities. This is primarily due to their separation by water and the 

depth of the ocean floor, which makes interconnection via underwater electric cables technologically and economically unfeasible. 

As a result, island utilities have historically purchased small simple cycle generating units that are oil-fueled. 

From the mid-1980’s to approximately September 2003, the inflation-adjusted price of a barrel of crude oil on the NYMEX was generally under $25 a barrel. The attraction of low cost fuel, combined 

with the economies of scale, provided the framework for island utilities to purchase these small generating system. In many islands 

that are comprised of several small islands separated by water, duplicate generating systems and increased reserves are required to 

meet the need for electrical services. VIWAPA, for example, has 

two separate generating systems—one to serve the islands of St. 

Thomas, St. John, Water Island, and Hassel Island, and another 

separate system serves the island of St. Croix. 

During 2003, oil prices globally began to steadily rise. The price 

per barrel paid for by the Authority was approximately $22 a barrel. At its highest, we have paid $141 per barrel. The result of 

these massive spikes caused operating cash shortfalls, flat to deVerDate Nov 24 2008 11:32 Jul 29, 2016 Jkt 095298 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\95298\95298.TXT 95298
34 

clining sales in electricity, and larger outstanding receivables, resulting in deferred maintenance on our generating equipment. I 

provide a table showing the rise of fuel prices. 

So what we have done since that point is we have pursued every 

available option to reduce the cost of electric services to our customers and jump start the economy. We have pursued alternative 

and renewable sources tirelessly for almost 10 years now, and tangible relief is finally on the horizon. VIWAPA could not, however, 

have made the advances it has without a number of public and private partnerships. 

Chief among our supporters have been the Department of Interior, the Department of Energy through its National Renewable 

Energy Laboratory, the Federal Emergency Management Agency, 

and the U.S. Department of Agriculture, and RUS, which have provided the following assistance. DOE through NREL helped to identify the territory’s baseline energy use and how the USVI could 

best meet its goal to cut fossil fuels by 60 percent by 2025. 

VIWAPA, as an EDIN partner, has been able to tap into a broad 

spectrum of technical assistance and project development support 

from DOE and NREL. DOI provided a $500,000 grant for VIWAPA 

to prepare an Integrated Resource Plan that will provide the roadmap for responding to future generation needs. FEMA has provided 

funding for hazard mitigation projects that have assisted VIWAPA 

with burying power lines that serve areas critical to the territory’s 

infrastructure. RUS has approved a loan that will allow VIWAPA 

to implement Distributed Automation Technology, a smart grid 

capital improvement project, and AMI, Advanced Metering Infrastructure. The closing on this loan has, however, been delayed. Any 

assistance the committee can provide to close the loan would be appreciated. 

Throughout the rest of the testimony I highlight some of the 

things we have implemented. We were 100 percent dependent on 

fuel oil. Now we have about 8.2 megawatts of grid type solar and 

about 15 megawatts of net metering, bringing our renewable portfolio to just about 22, 23 percent currently. We also have another 

six megawatts of solar power we have contracted for to be built on 

the island of St. Croix. We have a seven-megawatt biofuel project 

on St. Croix contracted to be built by the end of 2016, and we are 

currently doing a massive undertaking of converting all of our 

power generation to use of LPG, or propane. The conversions of the 

units allow for both LNG and LPG, and we expect to see a significant reduction in costs as a result. 

The Island of St. Croix will be benefiting from that project as 

early as next month. We plan to introduce propane to the storage 

facilities the end of July and produce energy in August. I am 

pleased to report that. The St. Thomas project is behind waiting for 

the issuance of an Army Corps of Engineer’s permit, and we know 

they are doing their utmost to produce the permit. However, the 

permitting staff for the region, which reviews the permits, is inundated with other requests. 

I would like to thank you for the opportunity to appear before 

the committee, and I am here to answer any questions you may 

have. 

[The prepared statement of Mr. Hodge follows:] 

35 


Insert offset folio 22 here 95298.022
36 


Insert offset folio 23 here 95298.023
37 


Insert offset folio 24 here 95298.024
38 


Insert offset folio 25 here 95298.025
39 


Insert offset folio 26 here 95298.026
40 


Insert offset folio 27 here 95298.027
41 

The CHAIRMAN. Thank you, Mr. Hodge. 

Welcome, Ms. Kohler. 

STATEMENT OF MEERA KOHLER, PRESIDENT AND CEO, 

ALASKA VILLAGE ELECTRIC COOPERATIVE, INC. 

Ms. KOHLER. Thank you. Good morning. My appreciation to 

Chairwoman Murkowski for inviting me here today and to all the 

members of the Committee for tolerating hearing a little bit about 

Alaska. 

You have already had a brief introduction to AVEC, the Alaska 

Village Electric Coop. We are a non-profit electric utility that 

serves 56 communities, and we do so by operating 49 independent 

power plants. The reason we have to do that is because none of our 

communities are connected to each other, or very few of them are, 

although we have been on a mission for the last several years to 

try and interconnect our communities because that is how we can 

achieve economies of scale as well as allow us to integrate some 

wind power. 

We actually are leaders in the development of wind power in 

Alaska. We own 34 wind turbines that serve 15 communities. We 

are able to achieve capacity reduction or diesel reduction of up to 

30 percent in some of those communities, which is technologically 

a very challenging feat. Nonetheless, it is a mission that we do 

have to reduce our diesel consumption substantially. 

I think, as was pointed out, the export of Alaskan dollars for fossil fuels is considerable. A very brief study that we did a few years 

ago shows that we are exporting $3 billion a year in fossil fuels 

used to power electricity and heat in our communities. We are, of 

course, an Arctic state, and as a result, heat is a very critical factor 

that has to be provided. 

What we will find in Village Alaska and some of our smallest 

rural communities, over 20 percent of the population spends literally 50 percent or more of their disposal income on energy, and 

that is just electricity and heat. That is not supportable. You cannot have any type of economic development when you have energy 

that is crippling the economy. 

Across the State of Alaska we have electric rates ranging from 

$0.10 a kilowatt hour in southeast Alaska where they have renewable hydro electricity up to over $1 a kilowatt hour in many of our 

communities where fuel has to be flown in. As Senator Murkowski 

mentioned, our river systems are changing. They are becoming 

shallower, and more and more communities are unable to be 

reached by barge traffic during the very brief summer season when 

we are ice free. So as a result, our challenges in Alaska truly are 

formidable. 

These small local facilities do not have economies of scale because you are serving populations of just a few hundred. Our average village community in AVEC is 450, but if you look across the 

state where we have more than 200 microgrids as it were that are 

completely islanded, the average population in those villages really 

is more like 200. So when you are trying to develop a reliable energy system to serve such a small population, you actually wind up 

with a huge amount of redundancy. 

42 

We have typically three to four diesel generators in a village. 

They are sized such that they can pick up the loads during any one 

part of the season of the year. You have to be able to count upon 

having one generator down for planned maintenance and having 

another one break down unexpectedly, so you have to have at least 

triple redundancy in each of these communities. 

As a result, our actual installed cost per service in our villages 

is five times or more that of the lower 48. So typically over here, 

the lower 48, you see a capital cost of about $2,500 per service. In 

our villages, it is more than $17,000 per village—per service. Those 

disparities result in very high non-fuel costs of power as well, so 

typically in one of our villages we are looking at over $0.60 per kilowatt hour for the first thousand kilowatt hours, as it were. 

We must have affordable energy if we are going to have economic 

development. We must have jobs. We must be able to provide essential services. The State of Alaska has been a significant player. 

They have funded several programs to improve the cost of electricity. They have a renewable fund that has been in operation 

since 2008 and has plugged almost $300 million into developing renewable energy systems. They have innovative financing options 

for large-scale construction, they have a revolving Power Project 

Fund, and they have the power cost equalization to reduce the cost 

of residential electricity for the first 500 kilowatt hours, but Federal help is desperately needed in Alaska. We do not have a transmission grid. We would love to have a grid to be able to connect 

and disconnect to, so that is something that certainly should be on 

the plate in the future. The Energy Independence and Security Act 

has got the potential to be a huge player in Alaska, so we urge you 

to consider funding elements of that act so that we can have the 

Federal support that we need across Alaska. 

With that, I stand ready to answer questions, and yield the floor 

back to Chairman Murkowski. 

[The prepared statement of Ms. Kohler follows:] 

43 


Insert offset folio 28 here 95298.028
44 


Insert offset folio 29 here 95298.029
45 


Insert offset folio 30 here 95298.030
46 


Insert offset folio 31 here 95298.031
47 


Insert offset folio 32 here 95298.032
48 


Insert offset folio 33 here 95298.033
49 


Insert offset folio 34 here 95298.034
50 

The CHAIRMAN. Thank you, Meera. I appreciate you being here 

and for your testimony this morning. 

I have several questions this morning. Let me start with you 

first, Assistant Secretary. Under the Omnibus Appropriations bill 

from 2015, the Secretary of the Interior was directed to establish 

energy action plans for the territories which you mentioned in your 

comments. It also included Puerto Rico, but Puerto Rico is not yet 

included in the process. Where are we with Puerto Rico’s inclusion? 

Obviously Puerto Rico is clearly and keenly in the news right 

now. We are all very engaged in these issues that are very, very 

difficult for Puerto Rico. I have noted that as difficult as the economy is right now, unless we can deliver and work with the people 

of Puerto Rico on some energy solutions, it is going to continue to 

be a tough set of facts there. So where are we on the energy action 

plan for Puerto Rico? 

Ms. KIA’AINA. Thank you, Chairwoman, for that question. When 

the law was passed, our Fiscal Year 2015 budget did not take into 

account Puerto Rico, so the $3 million that we received went to 

other areas in the other territories. As I stated in my testimony, 

the plan estimated by NREL will cost $330,000. We believe that if 

we received our full funding for Fiscal Year 2016, which is $4.4 

million, we would be able to accommodate Puerto Rico in the upcoming Fiscal Year. 

The CHAIRMAN. So to this point in time, there has been nothing 

done to pursue an energy action plan for Puerto Rico. Is that correct? 

Ms. KIA’AINA. That is correct; however, there is NREL and there 

is the U.S. Department of Energy. I have been in contact with the 

U.S. Department of Energy, and they actually have told me that 

a plan may not be necessary because they have already done a lot 

of work in Puerto Rico. So I commit to you after this hearing—well, 

first, let me just say for Fiscal Year 2016, we can fund it if we get 

an increase in appropriation. 

With regard to what can DOI and U.S. DOE do now, I need to 

followup with my colleague at the Department of Energy, who is 

already active in Hawaii and the Virgin Islands and has said that 

a lot of ground work has been made in Puerto Rico. And so, they 

may have the discretionary authority to do that plan. That is something I will followup with your staff as well as with the Department of Energy. 

The CHAIRMAN. I would appreciate you doing that. We had invited representatives from NREL or DOE to attend this morning 

to speak to some of these issues, so hopefully they are on alert that 

these are questions that we would like to have addressed. I am 

sure that the people of Puerto Rico would like to know that there 

is a plan that is out there. 

Nobody has really talked this morning about storage capacity, 

and I know that for the areas that you all represent and are engaged in, the ability to store energy from these intermittent sources 

is really going to be the future here. What level of engagement 

have you had with the Department of Energy on these microgrid 

technologies that you are working on to improve storage capacity? 

Has there been much work either in Alaska, Hawaii, or the territories? Mr. Glick? 

51 

Mr. GLICK. Chairman Murkowski, the Department of Energy has 

provided a great deal of technical assistance through some of the 

analyses that we talked about. The Oahu wind integration study, 

as well as the solar integration study did talk about amounts of 

storage that would be necessary to smooth out frequency disruptions and other technical problems created through intermittent 

power. So there have been RFPs that have been put together by 

the utility to solicit that amount of storage for our systems, but we 

also believe that it is important to do grid modernization, which 

will relieve a lot of demand for storage through these trip inverters 

and other technologies I discussed, which are a lot less expensive. 

So we have to do both. 

The CHAIRMAN. Mr. Hodge? 

Mr. HODGE. Yes, good morning again. We have been talking to 

the Department of Energy about a microgrid system for the island 

of St. John. It is an isolated part of our grid, it is served by underwater submarine cables, it is about eight megawatts in total, and 

we believe that the island is ideal for a microgrid system with distributed generation and storage. We have asked for their assistance, and I believe we are just about close to getting some technical 

assistance in studying how we can do our microgrid system for that 

island. 

We also look at other mechanisms for our utilities scale. Solar, 

we use some of the European standards, the low voltage ride 

through, the frequency support, and some of the other technologies 

that are in the inverters that are not predominant in the U.S. markets, but that are more prevalent in the other countries that utilize 

the renewables. 

The CHAIRMAN. Let us go to Senator Cantwell. 

Senator CANTWELL. Thank you, Madam Chair. The Napaskiak. 

Is that where we—— 

The CHAIRMAN. That is where we were. 

Senator CANTWELL. So Senator Murkowski and I were at 

Napaskiak two summers ago. Ms. Kohler, one of the things that 

you said that struck me is this nexus between economic development—energy costs and economic development. You are not going 

to grow an economy if you do not have basic energy costs that are 

competitive for people to establish businesses there. So this is, to 

me, a very critical issue. One of the things I mentioned in my 

statement was about the two challenges that we have, both the 

technical barriers on the ground and in the workforce and then the 

financial investments or the structure to deploy that. 

Of the programs that we currently operate at the Federal level, 

what are the holes? Why does this not work to try to test or deploy 

other technologies, or maybe you think they are working fine? 

Ms. KOHLER. Well, I would like to say they are working fine, but 

the reality of the matter is that when you are looking at—you mentioned Napaskiak, and that is a standalone community that operates their own electric system. When you are that small you do not 

have access to technical resources that you can afford, and so you 

rely upon other entities, such as the State of Alaska through the 

Alaska Energy Authority, for assistance. 

Now, on the other hand, in our communities, the AVEC communities, because we are headquartered in a single location, we have 

52 

the technical staff and the engineering resources and so forth to 

provide the support services we need for our own communities. You 

still have a real issue with local capacity. When we install wind 

turbines, for example, in our communities, we actually send individuals that are residents in those communities, typically one or 

two people, to extensive wind training so that they actually become 

wind smiths, as it were. They are supported by journeymen level 

staff out of our own office, but it makes for very expensive alternatives. 

U.S. DOE has not really played a major part, but the Denali 

Commission has been a very strong supporter and has provided 

funding for renewables and for training as part of the operation of 

those renewables. I know that very recently the Alaska Center for 

Energy and Power is working with U.S. DOE to put together a 

modest innovative program to develop storage alternatives. 

The storage that we use to operate our wind turbines really is 

a diversion off that excess electricity into heat sources. We actually 

use the electricity as heat to supplant diesel in public projects, 

water treatment plants and so forth. So we do effectively use it, although the best value for that electricity would be as electricity. 

But until storage becomes more of a mainstream event, as it were, 

we cannot afford to invest in it. 

Senator CANTWELL. So financing really is an issue. 

Ms. KOHLER. Financing is the hugest issue of all, yes. 

Senator CANTWELL. And that seems to me to be the crux of 

this—I am not saying the complexity of Alaska and its temperature 

is not a very challenging issue, but it does not seem to me that 

these problems are about getting a national lab to tell us what we 

need to do here. It is more about whether the tools are there for 

the communities to build capacity that they do not have to begin 

with because of remoteness or the lack of a business interest. It 

seems to me that the financial tools that we are making available 

seems to be a very critical issue. You are nodding your head. You 

agree? 

Ms. KOHLER. I am agreeing with you 100 percent. 

Senator CANTWELL. Okay. Mr. Underwood, Mr. Glick, or Mr. 

Hodge? 

Congressman UNDERWOOD. Yes, that is exactly it. I think the 

main issue we are—and certainly in small island societies, you are 

waiting for some technological innovation to come along to solve 

your problem instead of—and what happens is that the shifting of 

the responsibility of, well, how do you finance some of these things, 

and how do you finance innovations and adopt them into your island society that has shifted. It shifted to other places, and you are 

just kind of waiting for something to happen. I would argue that 

and I would urge that Federal agencies spend as much time giving 

some island communities as much technical assistance on how to 

finance things as much as technological advice or advice on new 

techniques. 

Also, just to speak briefly to the point about storage. That is also 

a very critical issue, and I am eager to hear what the others have 

done with this issue because the inability to store from solar panels 

is one of the biggest reasons why some people argue you should not 

adopt solar panels now until you get that level of technology. I 

53 

just—I do not accept that. I think there must be ways of managing 

that grid and power consumption throughout the day in order to 

manage that, so that storage issue. 

But just to speak briefly again to the issue of technical assistance, and financing, and developing models for that is really as 

much a key as is advice on new technologies. 

Senator CANTWELL. Well, I am a big—oh, Mr. Hodge, did you 

want to say something? 

Mr. HODGE. Yes. I would like to say that having the utility be 

a part of the plan is critical because how we have tackled the 

issues of financing is by using the PPA model. So where the utility 

or the government could not outright finance the project or do the 

borrowing for the project, our utility can use a mechanism called 

a power purchase agreement to pledge the repayment over a period 

of time via the rates for that reduction in cost. 

For our LPG conversion, we had a worldwide company, VITOL, put up all of the upfront costs, the $150 million, the conversion, of 

all of our units, all the facility, build all the infrastructure. And 

then over a period of just 10 years, we can repay this debt via a 

small add-on to our cost of buying the propane from the Gulf, so 

it is U.S. fuel. And the PPA model we have used for our solar 

projects with 25-year PPAs. We have got $0.13, $0.14 for solar energy on a utility scale. We have utilized it for our bio fuel project. 

We do not have the capital to go out and do large purchases or 

utility-owned systems, but by using the PPA model, which does require that you maintain investment-grade, which is a challenge for 

some utilities but that is the way we handle that issue. 

Senator CANTWELL. Well, I was going to say I am a big fan of 

public power in general, and we had one utility in our area, Parkland, which is in Pierce County, that basically put all its utilities 

underground. So here is a little utility that decided what was in 

the best interest of those rate payers was an investment in securing their delivery system because of our winds and storms. They 

decided to finance that and move ahead. 

So I like having the public models in the marketplace, because 

I think that they keep a keen eye on the interest of cost-based 

power in delivering the resource to the community that allows the 

community to grow. While I am a very big supporter of Power Africa in the context of the United States doing all it can to take U.S. 

technology and promote it in other areas, it is an embarrassment 

that we are not spending more time and energy in the United 

States of America and our territories providing real solutions to the 

people that live within our boundaries. We have got to do this. 

Madam Chair, I am all ears about the solutions that we can seek 

to do this. This is something that we should do, and it should be 

a commitment by this government to get it done. Thank you. 

The CHAIRMAN. Well, you are singing to the choir here. [Laughter.] Let us have Senator Hirono join. 

Senator HIRONO. Thank you very much, Madam Chair, and I 

echo those sentiments about singing to the choir. 

I am a proponent of the setting of national renewable energy and 

efficiency standards to encourage the private sector to step forward 

with R&D. Mr. Glick, I note in your testimony that you say that 

Hawaii has been able to attract international investment from govVerDate Nov 24 2008 11:32 Jul 29, 2016 Jkt 095298 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\95298\95298.TXT 95298
54 

ernments and corporations. They see Hawaii as a bellwether for renewable energy. So I wanted to have you talk a little bit more 

about how Hawaii has spurred this kind of activity on the part of 

the private sector. 

Mr. GLICK. For us, clean energy, as you know, Senator Hirono, 

has been all about rebuilding our economy and creating this new 

clean energy sector. Part of it is attracting innovation. With us in 

Hawaii as being an emerging test bed, companies like Hitachi with 

support from the Ministry of Economy and Trade and Industry in 

Japan have been funneling dollars. About $40 million came to 

Maui for the smart grid project called Great Maui that is building 

a microgrid and a smart grid network—also developing bigger networks of electric vehicles and fast charging networks. A very important project which we expect will expand. 

Through the Hawaii-Okinawa Agreement which was just signed 

last week, we are hoping to identify additional projects that could 

be brought to Hawaii and also shared resources, some that would 

be developed in Japan as well. I think that is the kind of model 

that we see in the future continuing to find collaborative projects 

to test the boundaries of how we integrate more renewables, how 

do we build smarter clean transportation systems using clean energy, and trying to track those dollars on very large-scale real 

world demonstrations. 

Senator HIRONO. We have heard from some of the other witnesses how expensive energy is in their localities. So, again, Mr. 

Glick, Hawaii created the Green Energy Market Securitization Program, or GEMS, to help more people invest in renewable energy. 

This is particularly important to people who do not have the money 

up front to buy solar panels, for example, but who are interested 

in saving money in the long term by generating their own power. 

Can you elaborate on how the GEMS Program works in engaging 

with the public and providing financing options to people, including 

renters and non-profit organizations, and do you think this approach could be used in other territories and other states? 

Mr. GLICK. Thank you, Senator Hirono. Certainly the GEMS approach, we use rate reduction bonds that are securitized. They are 

backed in our case by security from the Public Benefits Fund, 

which comes from everybody’s electricity bill, a small surcharge. 

We are able to utilize some of that back, repay the loans. We are 

able to get triple A financing, so very, very low cost of money. 

We then build loan programs around it. It is hard getting small 

commercial non-profit organizations and also the residential market. Those loan products have just been rolled out this summer, 

and we expect a lot of people to take advantage of that. Very low 

interest rates on the low side, five to six percent, on the high side, 

nine percent. But compared to other programs, particularly for 

those who have had difficulty getting financing for solar projects, 

it is really the only way that they have been able to get financing. 

And then, of course, tying it to your electricity bill repayment 

really reduces the risk of default, so I think that is another thing 

that can be incorporated. I know many states have had difficulty 

getting on bill programs instituted, and that is done pretty much 

on state-by-state level so far. But on bill does reduce risk of repayment, so we see that as an important model. 

55 

As far as the overall capitalization and how bond programs like 

GEMS could be expanded, we know that the State Energy Program 

through states and the state energy offices have managed $2.1 billion in loans. Perhaps the State Energy Program through some 

kind of mechanism like GEMS could funnel additional dollars. In 

Hawaii, we think our clean energy installations will exceed $20 billion in capitalization, so we need to find more means of financing 

to make it more affordable. 

Senator HIRONO. Madam Chair, it seems as though my time is 

up, although it did not feel like five minutes. Is this right? Do you 

mind if I just ask Ms. Kia’aina whether a GEMS kind of a model 

could work in the other areas, territories? 

Ms. KIA’AINA. I think some of my other colleagues in the territories might be better able to answer that question, but just let me 

say in general our energy program is so small, $3 million. So I 

would promote greater dialog with the private sector, and I took 

notice of Hitachi, Mr. Glick, because in the Pacific territories, 

Japan is a close neighbor. They have committed $450 million just 

recently for climate change and other types of funding specifically 

for independent Pacific Island nations, including Micronesia. And 

so, my head was thinking here with regard to some Kokua we 

could use for our energy initiatives. 

That is something we will contemplate, but, again, I defer to my 

other colleagues directly from the territories because they are on 

the front lines, and they are probably already working with the private sector. 

Senator HIRONO. If it is all right with the chair, if anybody else 

wants to chime in. 

Congressman UNDERWOOD. Yes, I think that is a—that is a possibility, and it goes back to the whole point about how to finance 

these things in the small island territories. I think there is kind 

of a common perception that OIA is going to fund some of this, or 

that they are going to create some kind of financing mechanism. 

But it is not there, and we recognize that. At least I recognize that. 

I am not sure that everyone does. 

But this is the kind of promising thing that I think could come 

from an all-islands approach where we are constantly having these 

dialogs. I should not have to go to Washington, DC. to hear about 

it when I can just go to Honolulu. [Laughter.] 

Senator HIRANO. Mr. Hodge. 

Mr. HODGE. Yes, we have used on bill financing for our solar 

water heater program, so I am sure somewhat the model can work. 

I am not familiar with the GEMS Program and what the surcharge 

is on a per kilowatt hour basis that is used to backstop the financing or the debt, and I guess it would be also dependent on the scale 

and size of the billing. So if you have two million customers, a 

small surcharge would be much different with 50,000 customers to 

backstop that kind of an endeavor. But I will do some more research to see if it is applicable for our small territory. 

Senator HIRONO. Thank you. Did you want to add something? 

Ms. KOHLER. If I could just add, there really is not a lot of private party interest in providing or looking for solutions for our 

small villages because the economies of scale again are so poor. The 

average village sells, you know, 1.3 million kilowatt hours. There 

56 

is just not enough to be able to amortize an investment of any size, 

so I do not really see that it would have a lot of potential application for our villages. 

Senator HIRONO. I think you definitely have a very unique situation, and that is why you have a wonderful senator who is going 

to address some of those needs. Thank you very much, Madam 

Chair. 

The CHAIRMAN. Thank you. I think it is valuable when we have 

hearings such as this for us not only to hear the different projects 

and proposals that are underway and the challenges, but how you 

are facing those, and to share a little bit of best practices. I would 

agree with you, Mr. Underwood. You should not have to come all 

the way to Washington, DC. to find these, but hopefully we gain 

from one another as we try to find these solutions that are oftentimes very unique. 

But then you think not necessarily so. Just because it is perhaps 

colder and darker in Alaska when you are trying to make application to an area that is so isolated, and remote, and small, there are 

applications not only with our territories, but I think about the 

value of what we are doing in Alaska and sharing it with other 

Arctic nations who are also dealing with cold, and remote, and 

small populations. Again, sharing some of these best practices that 

are innovative to where we are. 

You mentioned, Ms. Kohler, the triple redundancy that we face 

in Alaska and the need to have the backup generating capacity because if you are not part of anybody’s else’s grid when power goes 

out, power goes out. If you are in a cold place, if it goes out for a 

period of time, not only do you face the loss of your infrastructure 

through broken pipes and damage, but you could face loss of life. 

So for us, it is pretty critical. 

I am just curious with the other systems that we are talking 

about whether it is in Guam or in our Caribbean islands, are you 

also in a situation where it is effectively triple redundancy for your 

backup generation capacity? 

Mr. HODGE. Yes, ma’am, it is, and—— 

The CHAIRMAN. Tell me how that adds then to the cost to your 

rate payers. 

Mr. HODGE. We have to have that redundancy in our generation. 

We use the N-minus-one criteria, so we have to be able to serve all 

of our load if our two largest units are offline, and you have to have 

that kind of criteria given that you have no interconnection with 

the grid. 

We are doing a conversion right now to LPG, and we are converting units one at a time. Because there is no grid, we are doing 

that while we are still trying to meet the N-minus-one criteria, 

which is even that much more challenging to make change and to 

affect change. We have not even discussed the water side of it, because there are some synergies between water and electricity that 

I know that everyone kind of gets into on a regular basis. 

But definitely there are reliability requirements on an island 

grid, and we do collaborate. I think there is an island and a grid 

in Alaska called Kodiak, Alaska that I have spent some time 

speaking with their wind—that they have put out a grid through 

DOE and NREL. They put us together since we have some similar 

57 

characteristics, so there are some synergies between the territories 

and the State of Alaska as well. 

The CHAIRMAN. Mr. Underwood? 

Congressman UNDERWOOD. Yes. I cannot say that I do not know 

whether we have double or triple redundancy, but we do have redundancy because the—and we also have issues with resiliency in 

connection with our natural disasters. That really leaves a great 

deal of challenges to the power companies. 

But part of that is, again, an issue of energy literacy, people understanding that and then people changing their habits on how the 

use power throughout the day so that you do not need that level 

of redundancy. So, you know, we have a smart grid, you also need 

smart people in order to use those grids, and that speaks to the 

issue of capacity building and energy literacy, which, of course, 

speaking as an educator, I am really trying to present to all the 

authorities and policymakers on that. 

The CHAIRMAN. Senator Cantwell? 

Senator CANTWELL. Thank you, Madam Chair. Ms. Kia’aina, this 

issue of financing or just where we are with current programs and 

gaps, you obviously see this issue from the perspective of the assistance provider, and you see what these individuals are requesting. You know what we can and cannot do. Do you have specific 

ideas about what you think we should do to improve that? 

Ms. KIA’AINA. Well, the easiest answer, of course, is for our energy program of $3 million, it would be nice to see an increase not 

only just to help in the implementation of all of the energy plans, 

but to take into account Puerto Rico. 

Apart from our direct funding for energy initiatives, we actually 

tap from our other programs right now maintenance assistance, 

which is only a $1 million program. We provide technical expertise, 

apprenticeship programs and staff training. We also take money 

from our general technical assistance program, as well as our capital improvement projects. So what we are doing is pulling from 

other areas that are already stretched thin. 

I would also say that with regard to the Department of Energy’s 

involvement, whether it be the energy as a whole or NREL, if there 

is increased funding to that Department, I ask that it specifically 

by designated for the U.S. territories and Puerto Rico because very 

often other agencies put it in the national pot, and the territories 

are unable to compete. The Office of Insular Affairs is one of the 

only unique programs in the Federal Executive Branch that actually has the territories competing for a set pot of funding. 

So absolutely increased funding would help. I believe that our energy program is the best return on investment for our entire program, and helping the islands will not just help in energy, but the 

totality of their economy. 

Senator CANTWELL. On this point about empowering them to 

help secure financing, do you see solutions in these individual territories or states that you think are just a matter of whether they 

can be deployed? 

Ms. KIA’AINA. You know, that is a very difficult question to answer because our mission is the overall Federal relationship with 

the territories. So while we are talking about energy, I believe that 

our government’s failure to help in the overall economic conditions 

58 

of each of the insular areas would be hurtful to energy initiatives 

because they are all intertwined. For example, if a government 

does not have enough revenues to fund its portion of energy initiatives, then the burden will transfer to the Federal Government. So 

for my role, I have a dual purpose. I not only help on energy initiatives, but I help on the overall front on a multitude: health, education. 

Senator CANTWELL. Which I think to your point then, says you 

are uniquely qualified. I do not know if you have quantified that 

in a study, the analysis of the lack of investment in energy, then 

the consequences, cost, and expense to the U.S. Government because we do not. 

Ms. KIA’AINA. That is correct. 

Senator CANTWELL. So if you have any data on that, we would 

love to see it. 

Ms. KIA’AINA. Thank you so much. We will followup with that, 

Senator. 

Senator CANTWELL. I did not mean to cut you off, but I had forgotten that your position was so broad. You were covering the consequences of lack of investment as well, so, if there was anything 

you wanted to add about how we should look at financing? 

Ms. KIA’AINA. Financing for me is making the territorial governments efficient so that they could derive enough revenues to help 

with funding their local government. It is promoting economic opportunity so that their private sector could also help. Part of our 

mission is also quality of life issues to ensure that the health, education, and natural resources are protected. 

Our mission at OIA is formidable. We work across the Executive 

Branch with other agencies, but part of the challenge, quite frankly, is that we always get the answer from every agency that if we 

do not provide funding, whether it be for travel, or for detailees, 

or for money to do studies, for example, GDP. We have to give the 

Department of Commerce money to do GDP. 

So in short, the OIA is being used as a funding source for what 

the Federal Government in its totality should be doing. I myself believe it is unfair. Some of it is statutory in nature. It is only inclusive of the 50 states, and sometimes it is not. It is the agencies that 

are telling us they will not do this until we give them money. The 

GDP numbers, for example, in the totality of the economy is nearly 

$1 million, and that pot is taken out of our $50 million Technical 

Assistance Program, and that is money that could be used for energy initiatives. 

Senator CANTWELL. Thank you for that illumination. I am not 

sure I wanted to hear that, but nevertheless, I am glad to understand it. Just mark me down as somebody who believes in flat organizational structures. I think that an information age is about 

empowering people at the lowest level, not a hierarchy bureaucracy 

all the way from Washington, DC. trying to tell somebody how to 

implement solutions. That is not going to work. I think we see that 

in Puerto Rico at the moment, and it is not going to be successful. 

So I think we need to rethink some of these issues. Thank you. 

Ms. KIA’AINA. Thank you. 

The CHAIRMAN. Senator Hirono? 

59 

Senator HIRONO. Thank you, Madam Chair. Ms. Kia’aina, I am 

glad that you mentioned our country’s responsibility to do more to 

invest in the territories and to help create more economic opportunities there, because it is all interconnected. I know that your mission also incorporates the concerns under the compact of free association. Since that has been brought up, I did want to make the 

point that I do not think that our country is meeting its obligations 

under our compacts, and that this is something that the State of 

Hawaii as well as Guam and other impacted states because of 

these compacts, that we need to do a lot more to provide resources 

to states such as Hawaii, and places such as Guam, Arkansas probably. 

The impact of compact migrants in our states is large, and we 

do not provide enough resources to help a state like Hawaii, as I 

mentioned, to meet our country’s obligations toward our compact 

migrants. So I did want to take the time to mention that. 

While I have you, Ms. Kia’aina, has the Department of Interior 

applied any of the lessons that were learned from DOE’s planning 

and technical assistance in developing the Hawaii Clean Energy 

Initiative in Interior’s efforts to assist the U.S. territories in their 

energy planning efforts? Perhaps you could talk a little bit about 

those lessons learned that enabled you to work with the territories? 

Ms. KIA’AINA. Sure. If you do not mind, I would like to defer that 

question to our NREL liaison. NREL falls under the Department 

of Energy, and so our whole direction for our energy planning process is provided by NREL. Recently we have reached out directly to 

the U.S. Department of Energy because they also have their own 

resources. They have an Office of Energy Efficiency, and that was 

the division that I spoke to with regard to the chairwoman. There 

seems to be a disconnect right now with regard to what the Department has done for Puerto Rico, and we will followup on that. 

Scott, could you please answer that question? 

Mr. HAASE: Thank you. Scott Haase. I am a senior program manager with the National Renewable Energy Laboratory, and I manage our relationship with the Department of the Interior. 

So the team that worked on the HCI, EDIN, and the territorial 

work, we all work together. It is many of the same people that 

have been working across these island communities. So there have 

been significant lessons learned that have carried forward throughout from technical assistance, the planning side, looking at financing options and mechanisms. So, yes, there has been a great deal 

of cross-fertilization. 

Senator HIRONO. Well, Mr. Hodge, I note that the Virgin Islands 

have been able to meet its energy reduction goals much more 

quickly than anticipated. In 2011 you had a goal of 60 percent reduction of fossil fuel, and by 2013 you had already reached a 20 

percent reduction. How did you do that? 

Mr. HODGE. We aggressively sought for diversification of our resources. We issued some RFPs for renewable energy, and the first 

one was a broad RFP for any kind of technology. That one was 

failed, so we found that more concentrated requests would be better served for our needs. So we did one for solar, and we received 

some really good bids. We had assistance from NREL and DOE in 

the evaluation of such, and we received eight megawatts of gridVerDate Nov 24 2008 11:32 Jul 29, 2016 Jkt 095298 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 C:\TARSHA\HEARINGS\95298\95298.TXT 95298
60 

tied solar on the grid right now from that process, and six more 

soon to come. 

We also had an aggressive net metering program. I cannot say 

that I think all aspects of the program are in the best interest of 

all rate payers, but it has served the purpose of jump starting the 

program. And we do have about 50 megawatts of net metering on 

the grid right now, so between both of them we are 23 percent of 

our peak demand. So those two have done that, but we also have, 

like I said, six megawatts of solar in the wings that have already 

been signed, PPAs, and seven megawatts of biofuel that have been 

signed, as well as we are negotiating about seven to ten megawatts 

of wind. So we are pretty much on the right path of getting to our 

goals. 

Part of the 60 percent is energy efficiency, and we have done 

some advances in that arena as well. We definitely—you know, I 

guess being that I sit on some positions in the region in the Caribbean and whatnot, I see a lot of studies and a lot of examinations 

of what can be done. To finally have somewhere and it be ours that 

have the actual projects built, shoveling dirt, construction on the 

way, and almost complete is something that we need to see more 

of rather than just the studies of what we can do, and spend a lot 

of money for those studies. 

Senator HIRONO. Yes, hear, hear. Thank you, Madam Chair. 

The CHAIRMAN. Ms. Kohler, we talk a lot about the price of energy, and we talk about per kilowatt hour, but we also have the 

issue of heating. Can you speak to what you see as perhaps some 

of the more innovative approaches to how we can deal with space 

heat and the ways that the cost of space heating can be brought 

down in some of the villages that are part of your oversight with 

AVEC? 

Ms. KOHLER. Thank you, Chairwoman Murkowski. Space heat is 

the primary consumer of BTUs at this particular point in time and 

typically represents about three-quarters of the energy consumption in a home or a business. So obviously it is a very critical need 

to reduce that reliance. 

In terms of alternatives to diesel fuel, we do not have a lot of biomass in the State of Alaska. In parts of Alaska, of course, is that 

you have got these beautiful forested sections that must yield a lot 

of biomass, but that is not true in Village Alaska. If there is any 

wood in the region at all, it is typically just driftwood that is floating down the rivers from more biomass intense communities. So 

that does not become a very major alternative. 

What we have seen happen is very high efficiency heating systems going on where typically you may get something in the order 

of 92 to 95 percent efficiency from a Toyostove, laser electric stove. 

Extensive efforts at weatherization of homes and businesses. We 

have actually partnered, we were able to get a very modest 

$200,000 from USDA for Rural Business Enterprise grants, and we 

have actually put together a commercial energy audit program because we believe that there are efficiencies of 30-plus percent to be 

gained in terms of the BTU content of space heating. That has 

moved ahead, and we have got some really good results from that 

that tell you what can be done to conserve heat. We believe that 

61 

heat consumption can be reduced by a third or better just through 

energy efficiency and conservation measures. 

We also utilize waste heat, so we recover heat from our diesel 

gensets. It is a very high priority for us to recover that heat and 

to distribute it to typically public buildings that are nearby the 

power plant. We are looking right now at what we can do to recover wasted heat from exhaust systems. That is 30 percent of the 

heat utilization of a genset. It comes out of the exhaust system or 

is just wasted up there. So we are looking to recover that as well, 

the objective being to drive down the overall consumption of diesel 

in a specific community. 

There are some biomass combined heat and power projects that 

are very much experimental, emerging technology. We do have 

some of those installed across rural Alaska, and we are hopeful 

that they are going to yield some good results. 

We are also looking at heat pumps. That typically, though, is 

really more viable in the more temperate parts of Alaska, so in 

south central. I am sure you are aware of the seawater heat pump 

system that they have in Seward. That is a technology that is potentially transferable. I believe that heat pump technology is progressing rapidly. I think we are going to see more air-to-air heat 

conversion where you can utilize recycled heat within a building. 

But those are all the emerging technologies, and those emerging 

technologies have to be carefully fostered for them to develop into 

something that is commercially viable across a broad scale. Once 

they are commercially viable, the cost becomes much more affordable, and then they can be deployed much more ubiquitously. 

The CHAIRMAN. Yes. I was out in Kwigillingok and was able to 

celebrate with the community there. I think it was either their first 

or their second day of being completely diesel free. They had three 

wind turbines, and the wind was kicking up. They had a little battery storage unit that was not much to speak of in terms of size, 

and then they had—I believe there were 25 different clay heating 

stoves within the homes, and you go inside roasty toasty. 

But you think about just this little microcosm out there in an 

area where your costs up to this point are almost prohibitive for 

sustainability of a village, and you see what they are doing. I was 

in Egegik last week where they are putting in a run of river 

hydrokinetic turbine. It is going to be in the river. It should be in 

right now. It was in last year for a brief moment in time. 

Again, a private entity is making this investment and realized 

that they needed to reconfigure. They went out and adjusted it. It 

is going to be back in the water and plugged into Egegik by the 

15th, so that is just in a few days. You combine that with the five 

wind turbines that they have, the solar panels that they have, and, 

again, a sustainable community where they have struggled for so 

many years. 

Mr. Hodge, you mentioned Kodiak. Kodiak is an amazing example of how you can utilize all of your renewable assets, whether it 

is the wind, the hydro. They are blessed with great hydro out 

there, but this is a major seaport, a major fishing community. To 

know that they, too, can be off diesel is a future for them that is 

really quite vibrant. 

62 

I think about all the technologies that we have being considered 

in laboratories, and how you work to get them to commercialization. And I say, okay, that is nice. We are actually making things 

happen on the ground. I think that some of our laboratories should 

be looking to what we are pioneering because we have to, because 

the alternatives are just not working for us. You cannot be a sustainable community if folks cannot afford the heat or the electricity, so you figure it out. 

Sometimes it takes a little bit of duct tape. Sometimes it takes 

begging for dollars from the state, and the tribes, and the feds. But 

you piece it together with some really, really bright innovative people and through your universities. We are blessed with the University of Alaska, and I am sure we are where you are, Dr. Underwood, in Guam. But we are really pioneering this whole concept of 

microgrid, and Senator Cantwell and I were just talking back here 

about we have got this very generous eye to the rest of the world 

in how we can help facilitate energy solutions in Africa and elsewhere. 

Again, I think to a certain extent charity begins at home, and I 

recognize that we definitely have energy needs that are not being 

met yet, but with a little bit of assistance, and I think looking to 

the experts, looking to the innovators, this is where it is really happening. And so, I commend you all. 

Mr. Glick, you have got a high standard up there to reach Hawaii’s renewable energy goals, how you are going to be dealing with 

the distributed generation aspect of it and the integration of all of 

your renewables. Many in the country are looking to you for the 

example and the leadership. You are kind of pioneering here, so we 

wish you well in that and are eager to know how we can be helpful 

and be off assistance. 

Meera, you mentioned resourcing and some of the programs that 

are out there, and we have had a little bit of conversation about 

that today. We have a Renewable Energy Deployment Fund, a fund 

that I established through legislation some years ago. It is a nice 

idea, but you have got to have the dollars that are in it so that we 

can help our states, we can help our territories, so we can help 

make a difference and making sure that there is a level of sustainability that our economies can thrive. 

I appreciate the leadership from each of you and the opportunity 

for you to share a little bit of the best practices and some of the 

challenges. Hopefully you inspire not only others, but you have 

learned from one another and you are going to take some good 

ideas back to Guam, the Caribbean, Alaska, Hawaii, and throughout all of our areas here. 

With that, I thank you all, and we stand adjourned. 

[Whereupon, at 11:44 a.m., the hearing was adjourned.] 

(63) 

APPENDIX MATERIAL SUBMITTED 

64 


Insert offset folio 35 here 95298.035
65 


Insert offset folio 36 here 95298.036
66 


Insert offset folio 37 here 95298.037
67 


Insert offset folio 38 here 95298.038
68 


Insert offset folio 39 here 95298.039
69 


Insert offset folio 40 here 95298.040
70 


Insert offset folio 41 here 95298.041
71 


Insert offset folio 42 here 95298.042
72 


Insert offset folio 43 here 95298.043
73 


Insert offset folio 44 here 95298.044
74 


Insert offset folio 45 here 95298.045
75 


Insert offset folio 46 here 95298.046
76 


Insert offset folio 47 here 95298.047
77 


Insert offset folio 48 here 95298.048
78 


Insert offset folio 49 here 95298.049
79 


Insert offset folio 50 here 95298.050
80 


Insert offset folio 51 here 95298.051
81 


Insert offset folio 52 here 95298.052
82 


Insert offset folio 53 here 95298.053
83 


Insert offset folio 54 here 95298.054
84 


Insert offset folio 55 here 95298.055
85 


Insert offset folio 56 here 95298.056
86 


Insert offset folio 57 here 95298.057
87 


Insert offset folio 58 here 95298.058