Maui Burns: The Fire from HELco

Why the charming historic town of Lahaina burned to the ground

The stories are now starting to pop up that claim the fires of Maui — particularly Lahaina — are just another proof of human-caused global warming. Not a chance. Lahaina is always hot. Always has been through its hundreds of years of history.

During my five years of living in Hawaii, Lahaina became my favorite small town for all of its historic charm and its personal friendliness and tasty touristy restaurants without a lot of big touristy hotels … and in spite of the fact that it always felt like a furnace.

While little Hawi on the green northern tip of the Big Island held my heart for its friendliness, Lahaina was always more fun and more of a real town and generally friendly, too. Hawi wasn’t even a postal stop. You had to go up the road for that, where your mailbox, for those like me who lived in Hawi, was just your name followed by “General Delivery, Kapa’au, HI.” And the postal clerk saw you walk in the door, smiled and said, “Got jus’ bills fo’ ya today, David. Jus’ bills. Let me know when da big money come in.”

Lahaina, where the corporate headquarters of the resort-management company I worked for was located, became a place I looked forward to visit on business meetings and later a place I would go to as tourist destination after I moved from Hawaii back to the state of my origins.

It was not without well-founded meaning that the little town was far back in history named “The cruel sun.” The hills were as brown as dust whenever I visited Lahaina. There must have been some time of year they were green because they had dry grass on them, but I never saw it, and I was always glad I was only there on business and didn’t have to labor under the sun;s unyielding rays. You could break a sweat on any given day just by stepping outside.

It was also never without well-founded meaning, in my opinion when I was living there, that one of the subsidiaries of Hawaii’s biggest power companies is named HELco (emphasis mine), which stands for Hawaiian Electric Light Company. (The parent company is HECO, which stands for Hawaiian Electric Company.) Essentially one utility has about a 95% monopoly on power generation in the state of Hawaii, and it formed subsidiary corporations for the different islands it operates on. (On Maui it is called Maui Electric — MECO.) It seems especially well-named now that it is being blamed for America’s most hellacious and deadly fire in a century in a town that always felt as hot as hell. (You can read the stories below to find out why.)

I always thought HELCO, though — the subsidiary on the island of Hawaii — was the most appropriately named. The whole company, as far as I was concerned, was not only the worst-run company in the state (my opinion) but it exemplified the worst aspects of Hawaiian culture. It seemed to me to be a classic case of good-ol’-boy rule where having the right inroads with the right native Hawaiians guarantees your competition gets shut out and leads to sloppiness and neglect in services due to lack of driving competition and too many government people looking out for you. Shortly after Hawaii’s King Kalakaua first met with Thomas Edison at Edison’s home to examine the electric lightbulb, the enlighten king granted essentially royal charter to the creation of Hawaiian Electric, Inc.

HEI, also HECO because you need a lot of names to camouflage your monopoly, may like to think of themselves as a “unique story of innovation, connectivity and progressive thinking that continues today,” but they always struck me as a backwater utility, miserly milking its infrastructure for every penny they could get out of it with as little investment or creativity back into it as possible.

If they were truly innovative, as they claim, they would have been generating 100% of Hawaii’s power from ecologically pristine and permanently sustainable geothermal power for the past fifty years as Iceland is largely doing. They would not still be relying predominantly on fossil fuels that pollute the islands, put them at risk of oil spills, and that are completely unsustainable since Hawaii has zero fossil fuels, so it must ship all that oil in. They are as backward as a murky slough when the tide is seeping in. To the extent, they’ve progressed, it has been under government mandates.

They like to brag about solar and wind that cover the landscape with ugliness, but I found they were even highly resistant to private solar projects when I tried to cover an acre of flat carport roofs in the resort property I managed on the dessert side of the Big Island with panels that could not be seen. This was in an area that saw total cloud cover fewer than ten days out of the year. So, it was perfect for solar generation. In spite of the government pressing HECO to go green by working with such private projects, HECO seemed more interested in throwing up road blocks as if they wanted to make sure they kept their armlock on all power generation. Even the solar company I was contracting with said it would be hard to get approval. (As I returned to my home state before the project went past initial planning, I don’t know how they fared in getting through the approval process. I was just warned by the solar company about the road blocks we’d likely face.)

Those days of pretend innovation may come to an end or, at least, finally get serious examination now that many citizens of Lahaina are already blaming HECO (the parent company) for the severity of the fires and suing them in what is shaping up in today’s news to be a class-action law suit. With that being some of the big news of the day, I want to share a little of my personal observations about Hawaiian Electric Co. during the years I lived there.

Let me start by saying it does my heart good to see HECO’s stock plummet in today’s news by a billion dollars (no chump change for a utility that small). It would be a blessing for all of Hawaii if they were driven into bankruptcy and some truly innovative entity seized the company for ten cents on the dollar because it would cost them the other ninety cents just to bring the company up to normal mainland standards.

One of the properties I managed on O’ahu was right next-door to HECO’s oldest power generation plant on the island — the Nanakuli Power Plant. We had a lot of people from the mainland stay on the property who had needed electrical skills that were in short supply in the islands. So, they would be given free flight and lodging and good pay to come and do essential surgery on the power plant.

One electrical worker who came about once a year from Louisiana told me he had never seen such a spaghetti mess of wiring as he had to work with at Nanakuli. He said he spent his time putting bandaids on top of patches on top of patches that had been put in place for years to keep the old plant running, rather than spend money on serious electrical upgrades. While I have never been in the plant so can’t vouch for that, according to him — a guy who travelled to plants all over the US — Nanakuli was the worst of all the electrical plants he had seen in the nation.

On a somewhat windy evening I was working late in my office and I noticed one of the pool pumps in the room next-door to the office was surging. It would wind up faster and faster than slow way down. I figured it must have a bearing that was going out, so I went around the building to the pool-equipment room, and began throwing pump switches off to see which pump what the problem so I could shut it down until I could have a repairman come in the next day to fix it. The room smelled of electrical smoke, and it didn’t matter which switch I threw, the sound of a pump running faster and faster to a screaming speed then slower and slower to a dull crawl continued.

Suddenly, I realized the seemingly impossible was happening. It wasn’t one pump that was speeding way up then slowing way down. It was all the pumps! They couldn’t possibly all have bearings going out at the same time; so, I shut them all down, and the screaming ended. With the pumps off, I now I could now hear what sounded like massive bursts of steam in the far distance.

It sounded like it was coming from the Nanakuli power plant. So, I started walking through the resort toward the plant. As I went, I noticed that each air conditioner I walked past was running faster and faster, then the big burst of steam would hit in the distance, and the A/Cs would all run slower again. Clearly their surges had something to do with the huge burst of steam, which as I got closer was becoming a deafening roar about every fifteen seconds like standing beside a huge waterfall.

I realized I hadn’t noticed the power surge inside the office because fluorescent lights and computers, unlike motors, tend to be all or nothing. They don’t get brighter and dimmer. It dawned on me that the problem was not going to be an electrical failure inside the resort, but something going on at Nanakuli.

When I got to the plant (about a quarter mile down the highway) it towered over me in the dark in a way that actually felt quite ominous. I could hear the turbines inside run faster and faster and then hear and see a massive blast of steam from the main pressure-relief valve on the plant. It was such a loud roar that I decided to walk away from the spectacle, afraid something inside the plant would blow up and come flying through the wall at me.

Back home, I turned on my car radio and learned that, because the APEC conference with Obama and many Pacific kings and dignitaries was in process in Honolulu and all power had gone out across the island, except at Nanakuli, all efforts were being deployed to keep Nanakuli running at literally full “blast.” Because no one wanted APEC go without power, HECO was running far more of Honolulu off of just Nanakuli than Nanakuli could bear, so they were overheating it to keep the generators at their maximum. They should have shut off enough of the city to keep the plant within its limits, but they didn’t.

At first the concern, since Obama and many dignitaries were on the island, was that a terrorist organization had knocked out power islandwide and somehow missed killing Nanakuli. It turned out to be more mundane, however. A branch had fallen across a high-tension power line in a windstorm. That knocked out one power line breaker, pushing more demand over to other power plants. That, in tern caused another generation plant to go offline from overload. That cascaded through all the other generation plants on Oahu, and the only plant left was Nanakuli.

It also came out in the news the next day that it was essential to keep Nanakuli going because Nanakuli was needed to start up all the other plants that had gone down. If the oldest plant of them all went down — the mothership — it could take as much as five days to start everything back up from scratch with old Nanakuli needing to be restarted first. (You don’t just turn the key in the ignition on these big boys to fire them back up after they’ve cooled down.)

All the other plants, according to the news, needed a power boost through their generators to get them started turning once they fired back up. But HECO lost the battle at Nanakuli because they were overtaxing it (and probably because the whole thing was “spaghetti wiring” with “patches on top of patches,” and so the great giant also went down during the night. The island was without power, as I recall, for a 2-3 days before they got everything up and running again. Only in Hawaii, I thought.

A year earlier, something similar happened. I was living on the flank of Diamond Head at the time, managing another property, and I was awakened by a small tremor. I’ve experienced many earthquakes in my lifetime because I’ve always lived near volcanoes, so in areas of serious plate tectonics or hot spots. Hawaii is all volcanoes, so tremors are not that unusual, and this one didn’t seem particularly bad.

The power went out. Odd, I thought. Why would a little rattle like that knock our power off? It didn’t even shake anything off the shelves. Must have shaken a local power line loose or whipped it across another line.

I turned on the news. Soon I heard that the quake had shaken a generator at one of the power plants, and a tremble switch for the generator’s safety (because quakes are common in the islands) had shut down a generator. The rest of the generators at the plant were not up to the load. So, they all went down. That forced all power demand over to other nearby plants, which could not handle the load. So they went down. The entire island shut down under the cascade, and because some undersea lines carry power to another nearby island (I don’t recall which one), one or two other islands went down, too. Most of the state was without power within a minute of the earthquake.

That time the power did stay down about five days. I remember thinking the problem was almost certainly due to cheep HECO milking its system for every penny it could without putting money into it. Fortunately, the neighboring restaurant used a gas-fired grill. We joined the long lines that dined there for about five days.

A full-scale investigation was launched because others, like I, found it hard to understand why such a minor temblor would shut down a large generator and cause this nearly state-wide cascaded on islands that didn’t even noticeably shake. It turned out to be something on the order of someone — to save money — bought a tremble switch from someplace like Radio Shack, made, if I recall, to trigger a car alarm — and we all know how a mere bus rumbling by can activate one of those — in order to save money over the much more expensive tremble switch specified for major power generation equipment.

Only the company from HELco could manage that one!

There is a lesson on economics here. It’s why monopolies or near monopolies and good-ol’-boy systems that guarantee their power lock are bad for the people. Without competition forcing companies to be innovative and to up their game, they get lazy and sloppy. And, in a place like Hawaii, where the surf is always beckoning, the work ethic is not always so great to begin with. Few people are in Hawaii because they want to work hard. There is a price to pay for not paying attention to business. Now it looks like HECO is paying it in stock crash and may be paying a lot more in litigation.

There is also a lot of news today about the further crashing of the Chinese yuan and the Russian ruble, as I’ve been predicting all year. Things are getting serious to the point where China’s economic news, which is getting worse by the day, keeps impacting the US stock market (as well it should). China’s problems are now extending to major financial institutions that look like they could roll over. The economic failure is forcing The People’s Bank of China to cut interest rates in order to stimulate its economy, which President Xi killed with his ridiculous Covid lockdowns. The plans of global central planners, not just Chinese central planners, destroyed economies all over the world because that it was elitists do when they think they know more than everyone else on earth and dictate global solutions.

The cost of stimulus is that China’s yuan, which it hoped to make a global currency, is being devalued even further today.

I will be covering all of those headlines (highlighted below in boldface along with those that support this editorial) in this week’s “Deeper Dive” for paid subscribers as there is a lot to talk about in order to understand what this means for the US economy and US stocks. In spite of the fact that one story wrongly claims today we are seeing better signs of a soft landing with no recession, that is far from accurate as they don’t understand where the recession will be coming from.