Thursday, March 5, 2009

Update on SB989 and HB1171...and more

Last reported here, SB989 to extend the sunset date of Act 2 by a year was to be heard by the Hawaii Senate ENE and TIA committees. That was done on Feb. 19, 2009, and the measure was deferred (not acted upon). Believe written testimony helped on that. On Feb. 25th, the measure was re-referred to a combined Senate committee of ENE/TIA/JGO, meaning on a tight schedule nothing was happening on SB989 in the Senate.

Later that same day, Feb. 25th, the companion bill HB1171, was pulled out of the House TRN/EEP, FIN committees (by Speaker Say who has a close connection to HSF) that it had been referred to from the beginning of the session and re-referred the bill to only the FIN committee. TRN/EEP have chairs unsympathetic to the bill.

The hearings on HB1171 were held in the FIN committee on March 3rd and a committee decision was deferred and voted on March 4th, actually the morning of March 5th. The FIN hearing started at 10:00 am on the 4th and lasted until at least 5:00 am on Mar. 5th. The committee had to deal with a lot of bills, this one actually being one of the lesser important ones. After a long night the exhausted Reps passed HB1171 unanimously. There was good written testimony submitted for both the March 3rd and 4th/5th hearings.

Larry Geller has a good report on this all-nighter FIN committee hearing. Makes me think of the image of a sausage factory...sausage factory of laws. Also reminded me of college students cramming overnight because they got behind on their studies in hopes that they will actually retain something good out of the incident. It is amazing that Legislators actually make laws on extreme sleep deprivation. I got nothing against sleep deprivation, but making laws with it?

Anyway, apparently HB1171 can now go to the House floor for a vote and then pass over to the Senate for further consideration. My two letters of testimony on HB1171 are below.

One of the guys on Maui asked for some feedback on an article he is writing. Here was my feedback and it applies to Act 2, SB989, and HB1171, and the arbitrary standard of a "large capacity ferry vessel":

A couple of things I'll point out. After reading a proforma income statement that Dick did on public information from HSF, in the Fall of 2007, I looked at that same information and did some sensitivity analysis varying the number of people, and cars, and fuel price. The results of that were in a series of posts I did on HSF's expected Break Even Analysis. The most significant thing I found is that mainly depending upon the fuel price, HSF's breakeven point is at about half their capacity (for people and vehicles) or higher. But, and this is the key point, HSF needs to be running at half capacity every day, and if they are a true viable going concern, they cannot afford to be down for any more than about 2 weeks a year, if even that. So far they have not been able to do that. If they continue as they have been, they will always be an annual money loser, in the summer only have they made money. Even if they add a second vessel, they will still be a money loser based on the average of less than half capacity and too many down days. This assumes no government service contracts.

The second point is that the reason for the above is HSF's powerplant of 4 diesel engines onboard powering the 4 waterjets. The fuel that these 4 diesel engines burn are the key variable that give HSF less operational/financial flexibility (higher loads needed) to cover their daily costs. When I did the survey of all ferries in the United States that meet the "large capacity ferry vessel" definition, the vast majority of ferries in the U.S. utilize half the engine power or less of HSF. Half the engine power would also mean half the fuel, half the greenhouse gas emissions, slower speed and greater financial flexibility for a commercial ferry. As it stands, per passenger HSF at a minimum burns twice the fuel and puts out twice the emissions of an interisland passenger jet (per passenger). The difference is because of the excessive engine power.

One last point. Invariably HSF will continue to be unviable as I believe in the end even the state and federal government won't be able to pay indefinitely for it's discretionary services. If there is to be a viable interisland ferry service in Hawaii, it would have to be utilizing at least half the engine power of the Alakai, probably not carrying personal use cars, operate at slower speeds, and people would have to be satisfied with a 4+ hour ride rather than a 3 hour ride interisland. There is a reason statewide interisland ferries have been attempted and failed in Hawaii many times in the past (as with Seaflight,

Believe the above is too much to properly evaluate for a lawmaker fighting back exhaustion and sleep deprivation, but here were my two letters on HB1171.

Testimony for FIN 3/4/2009 4:15:00 PM HB1171:

Honorable Committee Members:

"Sometimes ya just gotta know when to cut your losses."

Respectfully request no referral for HB 1171 out of committee, no arbitrary extension of Act 2, and no further action on HB 1171.

Do any of you really believe HSF is a viable interisland going concern? Just check out the average loads it's had for the past 6 months. They have been pathetic. At the same time Hawaiian, Go!, and Young Brothers have been doing good steady business over the past 6 months and beyond.

There will be other opportunities for viable interisland ferry service here in Hawaii, but HSF and Act 2 will not be what fosters it.

Respectfully request no referral, no vote out of committee for HB 1171.

Testimony for FIN 3/3/2009 6:00:00 PM HB1171:

Honorable Committee Members:

This proposal to extend the sunset date of Act 2 by a year is not entirely unexpected as it was mentioned in the final report of the Lingle-DOT controlled Oversight Taskforce Committee. But, why are not any of the other recommendations of the OTF Final Report included in this bill for which the Lingle Administration is again lobbying the Legislature?

Consistent with the 'closed class of one' nature of Act 2 and DOT's exclusive operating agreement with HSF, this measure changes the playing field in mid-course to benefit one company to the detriment of any other potential 'large capacity ferry vessel' company, just so DOT can have the convenience of more time to finish the Act 2 'EIS.' Contrary to DOT's testimony, this bill does NOT add to the public's time to comment on the Act 2 'EIS.'

The saga and tangled web that they weave continues to develop. Meanwhile the unfunded expenses of this total project are quickly approaching $10 million dollars overbudget, at the same time that Hawaii schoolkids are asked to do with less in the schools. By the way, where are the rest of the Lingle Administration's budget cut proposals that the Legislature asked of her more than a month ago?

HSF has actually already proven itself unviable and will continue to be so because the vessel's operational design is not properly matched to the distances and conditions between the Hawaiian Islands.

Enough is enough. The Legislature should stop assisting the Lingle Administration with this private concession boondoggle. The Lingle Administration has already been given everything they need for this project to succeed or not on it's own.

We call upon the Representatives to make a statement of righteousness and reject this unnecessary bill HB 1171. We respectfully request that you take no further action on HB 1171.

Aloha, Brad

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