Sunday, June 23, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, August 21, 2016
GEMS as a Target for Raiding?
By Tom Yamachika @ 5:01 AM :: 6793 Views :: Energy, Ethics, Taxes

GEMS as a Target for Raiding?

by Tom Yamachika, President, Tax Foundation Hawaii

With all of the financing challenges facing our state government, it is very tempting when lawmakers find a large cache of unused money. As the old expression goes, in the spring a young (man’s) lawmaker’s fancy lightly turns to thoughts of (love) raiding.

Such is how it has been with the Green Energy Market Securitization, or GEMS, program. GEMS, as we discussed before, is a financing program that is supposed to provide loans at a low interest rate to finance alternative energy systems and other clean energy improvements for those who might not be able to get financing by other means. A 2014 bond issue raised $150 million for the program and most of that $150 million is still there. Is it an attractive target for raiding? Governor Ige sought to use the funds to cool the schools, but lawmakers thought better of that idea and provided a general fund appropriation. Other lawmakers thought about establishing a grant or rebate program and funding it out of the GEMS fund, but even the Green Infrastructure Authority, who runs the fund, couldn’t stomach that idea because the GEMS funds were supposed to be loaned, not handed out for free.

What has the GEMS program actually accomplished? As stated in the Green Infrastructure Authority’s quarterly report for the quarter ended June 30, 2016 (which can be found in Public Utilities Commission Docket 2014-0135):

· The program has made 12 loans, all of them on residential photovoltaic system projects.

· The total amount loaned was $388,800.68 since program launch.

· The total administrative costs of the program were $1,710,088.49 since program launch.

· The current interest rate on the loans made by the program is 6.5% to 9.875%, depending on the borrower’s FICO score. The Authority itself commented that this rate structure “in some cases results in the underserved being charged rates that are not market-competitive.” In other words, the loan rates were higher than market. What happened to the intent of the program to make low-cost loans?

· Nonprofits made 43 applications for loans. All of them were declined. (According to PUC Decision and Order 32318, the intent of the program was to benefit underserved customers, which include nonprofits.)

· There was one application for a commercial photovoltaic application. It was declined.

· There were 190 residential photovoltaic applications received, of which 23 were approved. As mentioned above, only 12 of these were actually funded.

· As of June 30, 2016, the GEMS program had total assets in excess of $144 million.

· Expenditures for the quarter ending June 30, 2016 were $361,653.69. (Which is almost as much as the total amount loaned out since inception.)

Statistics like these make one wonder why the State got into the business of lending money in the first place. The GEMS program should be evaluated to determine whether there is a realistic need for this program, and if not figure out how to shut it down, return the remaining money in the fund back to the bondholders, stop the bleeding, and take away the potential for raiding.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii