S.C.R. NO.














requesting the state auditor to conduct a program, performance, and financial audit of the natural energy laboratory of hawaii authority.



WHEREAS, the Natural Energy Laboratory of Hawaii Authority was established to facilitate research, development, and commercialization of natural energy resources and ocean‑related research, technology, and industry in Hawaii; and


WHEREAS, the function of the Authority is to facilitate retail, commercial, and tourism activities that will financially support the research, development, and commercialization at a research and technology park in Hawaii county; and


WHEREAS, the research and technology park, known as the Gateway Energy Center, is located on more than eight hundred acres of public land at Keahole Point; and


WHEREAS, when it opened in October 2004, the Gateway Energy Center was lauded for its environmentally conscientious construction and awarded platinum certification under Leadership in Energy and Environmental Design standards set by the United States Green Building Council; and


WHEREAS, among the Center's energy‑efficient design features are photovoltaic panels that were installed to meet the energy needs of the three-building complex; and


WHEREAS, the Gateway Energy Center was created, not only to showcase energy‑efficient technologies, but to offer space for laboratories to research emerging energy‑efficient and renewable energy technologies; and


WHEREAS, given its design and purpose, it is startling to learn that, despite being nearly vacant, the Gateway Energy Center consumes approximately thirty‑nine thousand kilowatt hours of energy each month, which is three times the predicted rate, and pays an estimated $1,500 each month to the Hawaii Electric Light Company for electricity costs; and


WHEREAS, the Center's photovoltaic panels allegedly generate energy in excess of the complex's demands, however, Hawaii Electric Light Company owns the panels and charges the Authority for every kilowatt hour used; and


WHEREAS, under the terms of the installation contract, Hawaii Electric Light Company pays no rent for the placement of the panels and the Authority receives no discount; and


WHEREAS, it is unclear how such a disadvantageous arrangement was made; and


WHEREAS, in addition, the Authority has been criticized for failing to comply with the Public Agency Meetings and Records Law codified under chapter 92, Hawaii Revised Statutes, on numerous occasions; and


WHEREAS, according to Environment Hawaii, one of the questionable meetings involved an executive session that was held to allegedly deliberate the terms of a contract with Hawaii Electric Light Company; and


WHEREAS, questions are also being raised regarding a lease agreement that the Authority approved for a proposed high‑tech computing facility and whether the meeting to approve the lease complied with public notice requirements and whether the authority exercised diligence to determine if the project is indeed bona fide; and


WHEREAS, concerns are being raised regarding the high energy consumption needed to pump water from the ocean floor and process the seawater used by seawater bottling tenants at the research and technology park; and


WHEREAS, as of fiscal year 2007, the Authority no longer receives general fund support from the State, but received over $1,500,000 in appropriations for capital improvement projects during the 2006 Regular Session; and


WHEREAS, it is critical that the Authority improve its fiscal viability and public accountability; now, therefore,


BE IT RESOLVED by the Senate of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2008, the House of Representatives concurring, that the Auditor is requested to conduct a program, performance, and financial audit of the Natural Energy Laboratory of Hawaii Authority; and


BE IT FURTHER RESOLVED that in conducting the audit, the Auditor is requested to include:


(1) The general operations of the Natural Energy Laboratory of Hawaii Authority, including its compliance with chapter 92, Hawaii Revised Statutes;


(2) The development and implementation of comprehensive plans to secure funding from federal, as well as, private sources, to sustain fiscal viability; and


(3) Internal budgeting and fiscal controls to ensure effective and appropriate expenditures, including expenditure of legislative appropriations and federal funds; and


BE IT FURTHER RESOLVED that the Auditor is requested to submit a report of findings and recommendations to the Legislature no later than twenty days prior to the convening of the Regular Session of 2009; and


BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor; the Director of Business, Economic Development, and Tourism; and the Chair of the Board of the Natural Energy Laboratory of Hawaii Authority.









Report Title:

Auditor; Natural Energy Laboratory of Hawaii Authority