Musings: Gold Diggers Part II

In a hellish scenario, an intense wildfire is approaching 30,000 55-gallon drums of plutonium-contaminated waste stored in fabric tents at the Los Alamos Nuclear Weapons Lab.

Meanwhile, Japan reveals that 15 metric tons of radioactive water leaked into the ground outside its crippled plant, even as it prepares to issue dosimeters to thousands of children after abnormally high radiation readings were taken in Fukushima City.

Against that backdrop of nuclear power and weaponry gone horribly awry, we return to KIUC’s decision to pursue “clean, green” hydro energy via Free Flow Power and the Federal Energy Regulatory Commission.

In yesterday’s post, I expressed some of my concerns about Free Flow’s business practices and the company’s alliance with our cooperative. Today I’m going to look at some other issues, including the FERC process, consultation and cost.

KIUC officials continually tell us that we’re not “locked into FERC” with these preliminary permits. Yet after looking at the permits already granted for the Makaweli River, the Hanalei River and the Wailua River projects, it’s quite clear that the entire preliminary permit process is geared toward seeking a FERC license.

The three permits all contain the same language in the terms and conditions section:

The purpose of the permit is to maintain priority of application for a license during the term of the permit while the permittee conducts investigations and secures data necessary to determine the feasibility of the proposed project and, if the project is found to be feasible, prepares an acceptable application for license.

If the goal is not to pursue a FERC license, why even start the process? Indeed, FERC expects its applicants to move toward a license, as outlined in the Wailua River permit:

10. During the course of the permit, the Commission expects that the permittee will carry out prefiling consultation and study development leading to the possible development of a license application. The prefiling process begins with preparation of a Notice of Intent (NOI) and Pre-Application Document (PAD) pursuant to sections 5.5 and 5.6 of the Commission’s regulations.9 The permittee must use the Integrated Licensing Process unless the Commission grants a request to use an alternative process (Alternative or Traditional Licensing Process).

Interestingly, even though KIUC has promoted FERC and FFP as the quickest way to get hydro, FFP itself contended in an April 29, 2011 letter to FERC that “the pre-filing requirements of FERC's Integrated Licensing Process take more time to complete than the three years of an initial preliminary permit.”

And given that FFP has dozens, if not hundreds, of permits and applications in the works, how much time will it be able to devote to its client across the Pacific?

In granting the three Kauai permits, FERC acknowledged the public concerns associated with the various proposed projects — concerns that were raised, in some cases, more than six months ago, which certainly should have alerted KIUC Board members to the critical need for a community outreach effort. Yet as FERC noted:

The issues raised in the comments are premature at the permit stage, but can properly be addressed in the licensing process.

In other words, so far as FERC is concerned, the public participation part doesn’t begin in earnest until the licensing process is under way.

The Hanalei permit notes that “cultural and socioeconomic issues can be addressed in the licensing process” before going on to state:

Potential development applicants are required to consult with appropriate state and federal resource agencies and affected Indian tribes, conduct all reasonable studies requested by the agencies, and solicit comments on the applications before they are filed.

Sounds good, but to those of us who followed the debacle of the Brescia burial treatment plan, which ultimately was approved by a state agency even though it was rejected by the Kauai-Niihau Island Burial Council, it’s clear that people have very different ideas about just what the word “consult” means.

It’s also unclear, despite KIUC’s assurances to the contrary, if FFP is truly motivated to consult with the community. In reviewing the boilerplate language in its Hanalei River and Makaweli River project permit applications, “informal stakeholder consultation discussions” are not scheduled until at least the second year of the three-year permit term — after the hydrologic and geologic studies, information review, preliminary engineering and design and feasibility analysis are pau.

The applications raise other red flags. I mean, just how akamai can these supposedly crackerjack consultants be if they failed to note that Hanalei is a federally designated heritage river? Or listed LaFrance Arbodela-Kapaka, who has been dead for years, as the chair of the Burial Council, when a simple web search would shown otherwise?

And finally, there’s the issue of cost. In its permitted applications, FFP states, “The studies will be financed by the applicant.” No mention is made of KIUC. For each project, FFP estimates the cost of doing all the first-year studies — the feasibility stuff — at $100,000. The rest of the work — consultations, developing a notice of intent and pre-application document, and beginning scoping activities — is estimated to “not exceed $500,000."

So even if FFP were to take all six projects all the way up to the license application, it would cost no more than $3.6 million. KIUC won’t tell us exactly what we’re paying, but KIUC attorney David Proudfoot told us at the June 4 community meeting that FFP will be paid “several million dollars if none go past the first stage.”

Several is defined as “more than two or three but not many.” So it sounds like we’re paying close to, if not more than, the full estimated price for bringing all six projects through the first stage, even though KIUC CEO David Bissell and some Board members have acknowledged that some of the projects will never get off the ground.

On top of that, FFP will get an incentive for delivering completed projects.