Lawmakers rebuke state energy office over $1 billion error

State lawmakers bluntly rebuked the Hawaiʻi State Energy Office after the agency admitted a $1 billion calculation error in a study promoting liquefied natural gas imports.

The House Committee on Energy and Environmental Protection challenged the reliability of the agency’s alternative fuels study. For more than a year, energy officials used the report to claim importing the fuel would save money.

The Hawaiʻi Natural Energy Institute concluded that “the spreadsheet errors identified during the March 12 briefing are confirmed to exist” and found that these errors render key results “incorrect” and insufficient to determine whether LNG would provide meaningful savings to Hawaiʻi ratepayers. 

The University of Hawaiʻi Economic Research Organization also confirmed that LNG fuel costs were omitted from key calculations, effectively treating LNG fuel as free in the savings estimates and inflating the projected benefits significantly.

The $1 billion mistake erased the promised savings. The hidden costs meant Hawaiʻi residents would pay higher monthly electricity bills.

Agency representatives unequivocally stood by their analysis and told lawmakers no errors existed during a March 12 briefing. A week later, officials acknowledged the missing fuel costs in a March 19 letter to the committee.

“The Legislature, and the people of Hawai‘i, rely on the State Energy Office to provide accurate, competent, and objective analysis to inform policy directions and decisions,” Committee Chair Nicole Lowen said. “They’ve failed in their mission here.”

The agency plans to reissue the report and completely remove the flawed scenario. Officials now promote a different pathway to justify importing the fuel.

The energy office previously rejected this specific alternative because it requires excess amounts of liquefied natural gas and displaces lower-cost renewable energy development.

Relying heavily on imported fossil fuels leaves island residents vulnerable to global market spikes instead of stabilizing bills through local solar and wind projects.

University researchers noted the new scenario relies on unrealistic and unsupported assumptions. They told the committee the current study does not provide a reliable basis for decision-making.

“The Energy Office appears to be pivoting to scenarios it previously deemed not viable or cost-effective, including pathways that undermine Hawaiʻi’s renewable energy goals and lead to higher costs,” Lowen said. “It is beginning to seem like the only thing that the Energy Office is worried about getting right with this report is the conclusion.”

Committee Vice Chair Amy Perruso said: “The Energy Office has a legal responsibility to lead Hawaiʻi’s transition to a more affordable, independent, and secure clean energy future . . . Instead, we have seen HSEO focus all their attention and effort on clearing a pathway for one favored fossil fuel company, free from competition.”

Perruso did not identify the “one favored fossil fuel company.” Maui Now reached out to her via email to request clarification.

Separately, but still on the topic of liquefied natural gas, Gov. Josh Green last week promoted a strategic partnering agreement signed in October with JERA Co. Inc. That company is Japan’s largest power provider with expertise in LNG-fired power generation. It disclosed plans to invest $2 billion in Hawaiʻi for a natural gas-powered plant and offshore LNG important infrastructure.