Tuesday, March 31, 2020
Hawai'i Free Press

Current Articles | Archives

Sunday, January 07, 2018
GEMS Takes One on the Chin from the PUC
By Tom Yamachika @ 4:00 AM :: 4402 Views :: Energy, Tax Credits, Taxes

GEMS Takes One on the Chin from the PUC

by Tom Yamachika, President, Tax Foundation Hawaii

Off and on, we have been discussing the Green Energy Market Securitization or GEMS program. GEMS is a financing program that was supposed to provide loans at a low interest rate to finance alternative energy systems and other clean energy improvements for those, such as nonprofits and individuals with lower credit scores, who might not be able to get other kinds of financing. Governor Abercrombie signed the program into law, after which a 2014 bond issue raised $150 million for the program.

Recently, in Order No. 34930, the Hawaii Public Utilities Commission (PUC) focused on how the GEMS program was coexisting with another ratepayer-funded program, which you may know as Hawaii Energy. That’s the same Hawaii Energy that sends you a little chart every month showing how your energy use compares against that of (1) your neighbors, and (2) your energy efficient neighbors.

Back in 2014, the PUC was asked to, and did, approve a Green Infrastructure Fee that went on everyone’s utility bill. For residents, it started at about $1.50 per month and is now down to $1.18 after periodic readjustments. The $150 million, after all, needs to be paid back with interest. The PUC noted that ratepayers were also paying a Public Benefits Fee of about $5 a month to fund Hawaii Energy and it didn’t want to whammy ratepayers again, so it directed that the PBF be reduced by the GIF…temporarily. The PUC made it clear that it wanted the shortfall in the PBF to be paid back. Quickly. So as not to disrupt the energy efficiency programs that Hawaii Energy was carrying out.

GEMS, however, wasn’t accomplishing the lofty goals that were set for it. Of the $150 million borrowed on the bond market, a measly 3%, or $5 million, had been loaned out as of July 31, 2017. The 2017 legislature made GEMS loan $46.4 million to the Department of Education to cool the schools, but that wasn’t helpful to GEMS because it also provided that the loan was to be at zero interest. Since its inception, GEMS administrative and program costs were nearly $2.8 million, against revenues just shy of $1 million. “If HGIA [the Hawaii Green Infrastructure Authority, which administers GEMS] does not collect loan repayments, with interest,” the PUC said, it “in the long term, will be unable to support itself.”

The PUC noted that Hawaii Energy claimed to have saved consumers over $1 billion in energy bill savings to date, with every dollar of investment generating $9 in benefits.

The PUC concluded that “HGIA has not demonstrated the ability to replenish the PBF,” and that the prospects for GEMS repaying the revenue that it borrowed from the PBF are dim unless the PUC acts now. Therefore, it said, the dollars that GEMS gets from its loan repayments and such will be used to repay the PBF, starting now. And, these payments will be made before funding GEMS program administrative costs. Apparently, the GEMS staff had better get those green infrastructure loans deployed and get that interest coming in if they want to get paid.

What does this mean?

If you are a legislator, this is not just a wake-up call. The GEMS program has been a disaster from its inception, and the PUC has basically said that it expects the program to crash and burn. The program does not simply need polishing; it needs radical surgery if it is to survive. And, given the other pressing needs that our government faces, it may be that the correct decision is to cut our losses and scrap the program before the fallout from its death throes takes out other programs and agencies.

If you’re not a legislator but you’re a taxpayer and utility customer, remember that this is about your money. Please consider letting your legislator know about these issues and your thoughts on them.


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

808 State Update AM940


ACA Signups Hawaii



Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii



Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust 

Build More Hawaiian Homes Working Group

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute


Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

CSIS Pacific Forum

DAR Hawaii


DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii


Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute


Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube


Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes


Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group


Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii



National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii


OHA Lies

Opt Out Today


Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii



Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii


SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu


West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii