The 2000 Legislature and the Environment: Missed Opportunities

posted in: July 2000 | 0

Lobbying the Hawai`i State legislature is a lot like playing chess. The difference, however, is that your pieces all have their own distinct personalities and you never know when they’re going to switch sides. And when you are lobbying on environmental issues, you’re playing without pawns and or a queen.

The 2000 session involved a lot of this game-playing, and unfortunately, the real pro-environment agenda – clean energy, open space funding, and fixing the automatic approval statute – failed to advance. While some positive measures passed, and all attempts to weaken Hawaii’s environmental protections were thwarted, a mere “stalemate” won’t sustain Hawaii’s unique environment; a long-term vision is needed.

Clean Energy

A defining environmental measure of the 2000 session was a mandate for set percentages of clean, local energy to be purchased by state electric utilities. Unfortunately, this “renewable portfolio standards” bill died in the final week of session in the hands of Rep. Ron Menor (D-Mililani), but its journey through the session provides a glimpse of how good policy fails in the Legislature. The renewable portfolio standards concept was hailed by the Department of Business, Economic Development, and Tourism (DBEDT) as the single most important step in attaining the state’s energy objectives and preventing the current “business-as-usual” plan: construction of new polluting power plants on all four major islands in the next 15 years.

Rep. Hermina Morita (D-North Kaua`i, East Maui) was the strongest advocate for the measure. As part of the House majority package, the initiative enjoyed support early in the session. At a key hearing March 2 in Menor’s Consumer Protection Committee, testimony in support was received from various environmental organizations, DBEDT, the federal Department of Energy’s National Renewable Energy Laboratory, University of Hawai`i professors, a Maui County Council representative, the Union of Concerned Scientists, energy industry groups, and an assortment of citizens.

Opposing the measure were Kauai Electric, Hawaiian Electric Company (HECO) and its subsidiaries, and the Office of the Consumer Advocate (CA). The utilities’ testimony, which was troublingly echoed by the consumer advocate, Mike Wilson (former chairman of the Board of Land and Natural Resources and more recently appointed to the state Circuit Court), focused on the cost of renewables, as well as perceived difficulties in siting, permitting, and power quality.

Although each of these issues was addressed by DBEDT and explained through examples of renewable energy standards around the country (ten states have implemented the standards), the turning point in the hearing came when it was discovered that HECO was presenting vastly inflated costs of renewable energy projects in the state. Testifiers pointed out that the actual cost for current power purchase agreements for wind and biomass were nearly half that given in HECO’s testimony. Moreover, the estimates were based on an average price of $20 per barrel of oil, when at the time barrel was nearly $32 per barrel. After some embarrassing head nodding, the utility’s defense was that the numbers may have been be outdated. This didn’t satisfy Reps. Jim Rath (R-North Kona) and Paul Whalen (R-South Kona), who attacked HECO vice president Tom Joaquin as if they had to settle a festering score with the utility.

An amended bill passed out of committee and crossed to the Senate, although it was likely that Rep. Menor’s support was won through a vote trade. An identical Senate measure was defeated immediately after crossover when Rep. Menor refused to hold a hearing on it. (Crossover occurs in the middle of the session, when each chamber of the Legislature starts deliberating on bills that have been approved by the other.)

In the Senate, support was not so forthcoming, as demonstrated by a narrow 7-5 vote in Ways and Means to pass the measure. Sen. Sam Slom (R-`Aina Haina), a strong free-market proponent, opposed the mandate despite the de facto open market that the bill would create. Also opposed were Sen. Norman Sakamoto (D-Salt Lake), who fulminated against the notion of climate change in a speech given on the Senate floor, and Sens. Marshall Ige (D-Kaneohe) and Jan Yagi Buen (D-North Maui, Moloka`i, Lana`i), who curiously voted against most environmental legislation as a pair this session.[DOES “who” refer to both Ige and Yagi Buen, or just Yagi Buen?]

Buen, who is director of “Special Projects” for Maui Electric, defied what appeared to be majority support from Maui constituents with her opposition. During a floor vote Senate President Norman Miziguchi (D-`Aiea) determined that her employment with MECO didn’t constitute a conflict of interest. Ironically, while Buen was distributing an op-ed piece to fellow senators entitled “Renewable energy bill is not in the best interest of utility’s customers,” the owners of the just-approved Zond windfarm, to be built in West Maui, were negogiating a contract to sell power to MECO for a record low 3.8 cents per kilowatt hour at off-peak times.

The amended bill that did pass out of the senate called for 7.5 percent renewable standard by 2002 (Hawai’i currently utilizes 7 percent renewable), 9.5 percent by 2010, and a 0.5 percent per year increase thereafter. The stage was then set for a contentious conference committee hearing, with the debate occurring not between House and Senate negotiators, as is usual, but between two House committee chairs, Morita and Menor.

In the interim, Dr. Donald Aitken, senior consulting scientist with the Union of Concerned Scientists, addressed business leaders and legislators with sound evidence of exactly what renewable portfolio standards could do for the state’s economy. Grassroots groups flooded committee members and house leadership with phone calls and postcards and held an Earth Day rally. Simultaneously, HECO’s constant presence was felt at the Legislature, both through their aggressive lobbying by company executives and through internship program, where HECO employees are loaned to legislators to serve as legislative aides and staffers-free of charge. [EXAMPLES???]

During the first conference hearing, language to specify that the renewable mandate would only hold if the energy were the lowest cost available was inserted into the bill to assuage the consumer advocate’s concerns. Menor still found this unacceptable, and in the final days of the session a proposal for the consumer advocate to study the issue — when more than a hundred related studies had already been performed — was proffered by Menor. Recognizing this as a classic delay tactic, Morita withheld her support and the measure died.

Unfortunately, by killing clean energy legislation this session, policymakers failed to recognize the connection between renewable energy and the state’s “new economy.” Clearly HECO is afraid of losing control over the market. But if the utility is unwilling to make strategic changes in energy production, the state must enact bold policy to reduce Hawaii’s 94 percent dependency on out-of-state oil and the resulting economic drain on the state. The debate over renewable energy standards highlighted how a single company can derail state policy by obfuscating distinctions between shareholder interests and citizen interests.

Fortunately, some clean energy initiatives were passed: windfarms are now eligible for enterprise zone status, tax credits are available for ethanol production facilities based on volume, and the reduction of greenhouse gas emissions was added to the state’s energy objectives (although HECO was nervous that this might lead to actual goal-setting).

Environmental Review Exemptions

In an effort to circumvent a lawsuit filed by the Sierra Club, Reps. Jerry Chang (D-South Hilo) and Romy Cachola (D-Palama) and later Rep. Bob Herkes (D-Ka`u) introduced bills to exempt the Hawai`i Tourism Authority from the state’s environmental review law, Chapter 343 of Hawai`i Revised Statutes. The Sierra Club’s legal challenge contends that an environmental assessment is triggered because of the state’s expenditure of $114 million in public funds over 3 years for marketing the tourism industry.

One of the bills specifically called for carving out an exemption for HTA’s marketing program. Another would have redefined the definition of “project” in Chapter 343 to exclude marketing and promotional programs by all agencies. Representatives from the visitor and construction industries testified in support, claiming that the environmental review law was only meant to apply to physical projects and that the Tourism Authority shouldn’t be held responsible for visitor impacts that may result from the agency’s marketing and promotional activities. Environmentalists and community members countered, testifying that much of the visitor infrastructure, including many hotels and attractions, required no environmental disclosure and a that carrying capacity study is long overdue to determine how and if the visitor industry can expand. Opponents to the exemption bills also stated that in the environmental review law’s 30-year history, no agency had been exempted. To carve out an exemption now, they said, would set a dangerous precedent.

Although the exemption bills received little opposition from traditionally “green” representatives in the House, in the Senate, Bob Nakata (D-Kahalu`u) recognized the danger in the precedent-setting exemption and refused to hear the bills. His opposition was rooted, he said, in his experience fighting the H-3 highway between Kane’ohe and Halawa, built after Congress exempted the project from federal environmental review requirements. The senator also expressed his concerns that the Legislature would be overstepping the state Supreme Court’s deliberations on the pending case.

In the House, Herkes then made another attempt to pass the exemption by amending an unrelated bill. The stratagem failed when Nakata requested to be a chair on the conference committee and defeated the measure.

Cultural Impacts and Shark Finning

While attempts to weaken the state’s environmental review law failed, a bill to expand its scope passed. Impacts on culture and traditional rights will now need to be disclosed as part of the environmental review process. All public agencies are already obligated to protect customary and traditional rights to the extent feasible under the Hawai’i Constitution, thus the lack of substantial opposition to this bill in hearings. Still, few assessments currently examine cultural impacts in depth. This law codifies that cultural impacts will be a standard component of future assessments, which will produce a more comprehensive of picture of a project’s impacts and gather important historical information that might otherwise be lost.

In another nod to cultural preservation, legislators approved a ban on the wasteful practice of shark finning. The bill requires that for each set of shark fins landed, the shark carcass from which they were taken is also brought to port. This is a powerful disincentive to the practice of finning, as it would mean the longline vessels that catch the sharks would have to use valuable space in their holds to carry the whole carcasses of which, the blue shark, has little or no market value. The effort was spearheaded by Rep. Brian Schatz (D-Makiki) and supported by the Department of Land and Natural Resources (DLNR), the National Marine Fisheries Service of the U.S. Department of Commerce, and environmental and native Hawaiian groups. Opposing the measure were the Western Pacific Regional Fishery Management Council, various catering services, Japan Airlines, and some vessel owners.

Former Sen. Tony Chang, representing the Chinese Chamber of Commerce, took his opposition so far as to liken the restriction of shark finning to the interment of Japanese during World War II, saying that a ban unfairly targets a single ethnicity. Legislators weren’t swayed by such obtuse analogies (importing prepared shark fin isn’t banned by the bill) and remained focused on the legal aspects of restricting the practice. The explosive growth in finning over the past decade-currently estimated at 60,000 sharks annually-made this move by the legislature a significant victory among marine conservationists.

Environmental Funding

Failure to adequately fund environmental programs is an ongoing crisis in Hawai`i. Efforts were made to increase funding for both the Department of Health (DOH) environmental health branch and the Department of Land and Natural Resources, but nothing succeeded. Money was found in the budget for the continued efforts to eradicate ecosystem-ravaging miconia ($500,000) but not for the establishment of an alien aquatic species coordinator.

In an effort to increase funds for its federally mandated environmental protection programs, the DOH sought to increase to 25 cents from 5 cents the tax on each barrel of oil imported into the state. This would have provided a welcome $10 million annually for the oil spill response revolving fund. The bill also called for expanding the fund to be used for other environmental programs such as runoff, clean drinking water, and climate change programs. When Chevron and HECO testifiers complained that a tax on oil should only be used for spill response, DOH described the “polluter pays” principle and explained the rational nexus between the sale of oil and environmental impacts in the state. The fund also receives fines from environmental violations, so expanding its use for proactive programs made sense. With the price of oil reaching the decade record, legislators lacked the political will to impose the additional tax, but use of the fund for other environmental programs was approved.

The only “new” money bill for the environment that passed was a $1 tax added to each new tire imported into the state. The tax will be used for county tire collection and disposal programs.

With increased development pressure on the state’s undeveloped open space and coastline, conservationists are looking for ways for the state to fund land acquisition. The state DLNR has a “fund for the environment” that can be used for land acquisition, but it historically has been unfunded. A bill was introduced that would have redirected half of the tourism special fund money-roughly $30 million annually that is derived from the transient accommodations tax-to coastal and open space acquisition.

Environmentalists testified that because visitors often cite undeveloped coastlines as a major reason for visiting the state, the connection between using a portion of their nightly room tax to fund preservation was logical. Although Hawai`i takes pride in its wild coastlines, the state has no dedicated source of funding for land acquisition, while other states are aggressively implementing land conservation programs. New Jersey, for example, is setting aside up to $98 million a year in sales tax revenue to finance up to $1 billion in open space acquisition bonds that will be used to protect half the state’s remaining undeveloped land over the next decade. The “dollar-for-dollar” land acquisition bill never emerged from committee level after an initial hearing of the joint House Tourism and House Energy and Environmental Protection committees.

Another bill would have allowed the Hawai`i Tourism Authority, the recipient of $60 million annually from the transient accommodations tax, to “support, through grants and project funding, programs of DLNR which protect, preserve, and promote Hawaii’s natural resources.” It was rumored that the HTA originally supported the measure, but withdrew it just before the first hearing of the bill. At that hearing, the tourism agency’s chief executive officer, Robert Fishman, testified that his authority is charged with marketing and promotion, not environmental protection. A frustrated Janet Kawelo, deputy director at DLNR, was forced to maintain harmony within the administration and defer her testimony to the HTA.

The bill died.

The tourism industry’s lobbying paid off this session: not only did the industry escape having to help financially with programs to improve Hawai`i’s environment, it now can expect subsidies for new hotel construction. A series of measures were proposed to offer tax credits for hotel renovation and construction. The Sierra Club testified against these bills, citing the HTA’s own survey that revealed 72 percent of residents want no new hotels built. During a House Finance Committee hearing, Bruce Coppa, director of Pacific Resource Partnership, a group that advocates for unionized construction workers, asked members to make a “bold commitment” and pass a 30 percent tax credit for all new construction. Fortunately, legislators didn’t agree to such excessive corporate welfare, but two measures did pass, one creating a progressive tax credit of up to 20 percent for qualified resort facilities. Governor Cayetano has threatened to veto the tax credits.

Appointments

In another move that angered environmentalists, two questionable nominees for powerful land regulatory boards were confirmed by the Senate. Construction industry advocate Bruce Coppa was appointed to the Land Use Commission. In confirming Coppa, senators seemed unconcerned by the fact that he strenuously advocated for eliminating the LUC as a member of the Economic Revitalization Task Force a few years earlier. In recent memory, the LUC has never denied a petition to urbanize land, making the addition of another pro-development advocate extremely discouraging.

The environmental community was also dismayed that the Senate supported the re-nomination of Kaua`i’s Lynn McCrory to the Board of Land and Natural Resources. After four years of poor environmental decisions on the BLNR, including support for the construction of a radio tower on Ha`upu Ridge on Kaua`i and a beach-destroying seawall at the Wailua golf course, most believed her understanding of natural resource protection would be called into question. But most senators praised her management skills and only Sen. Nakata voted against her confirmation.

Environmentalists’ calls for creating balance on these two boards were drowned out by testimony in favor of both nominees from unions, developers and the business community at the confirmation hearing. With the little gain and many missed opportunities of the 2000 legislative session, environmentalists are left looking for ways to position environmental protection up front for the 2000 election and the 2001 session. Great potential exists for tying the clean energy agenda to the new “high tech” economy — a union that the utility would be challenged to overcome. Opportunities exist to educate legislators and the public about the massive funding disparity between tourism promotion and natural resource protection. Of course, this November the citizens of Hawai`i have an opportunity to replace many of their chess pieces with others who know how to keep anti-environmental legislation in check while providing a workable strategy for the islands’ long-term sustainability.

— Jeff Mikulina

Jeffrey Mikulina is director of the Sierra Club, Hawai’i Chapter. He may be reached by email [email]mikulina@lava.net[/email]

Volume 11, Number 1 July 2000

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