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Hawaii residents slammed with rate hike, call Navy-wide billing system 'unfair'

Dec. 19, 2013 - 06:00AM   |  
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RECP rollout

The Navy kicked off the Resident Energy Conservation Program in Hawaii in 2011, and 18,000 homes nationwide are now a part of the billing system. By summer 2014, that total will increase to 33,000 residences under Navy housing.
January 2011
Pearl Harbor, Hawaii
April 2013
Charleston, S.C.*
Fort Worth, Texas
Gulfport, Miss.
Jacksonville, Fla.*
Key West, Fla.*
Kings Bay, Ga.*
Mayport, Fla.*
Meridian, Miss.
Panama City, Fla.
Pensacola, Fla.*
Naval Air Station Whiting Field, Fla.
July 2013
New Orleans*
August 2013
Naval Base Kitsap, Wash.
Everett, Wash.
Whidbey Island, Wash.*
Naval Station Great Lakes, Ill.
October 2013
NAS North Island, Calif. (except on-base units)
Naval Base Point Loma, Calif. (except Admiral Hartman, Chesterton and on-base units)
San Diego (except Murphy Canyon and on-base units)
January 2014
Annapolis, Md.
Dahlgren, Va.
Patuxent River, Md.
Indian Head, Md.
Sugar Grove, W.Va.
Mechanicsburg, Pa.
Norfolk, Va.
Oceana, Va.
Northwest Annex, Va.
Portsmouth, Va.
Yorktown, Va.
Joint Expeditionary Base Little Creek-Fort Story, Va.
Mitchel, N.Y.
Lakehurst, N.J.*
Newport, R.I.*
New London, Conn.*
Saratoga Springs, N.Y.
Portsmouth Naval Shipyard, Maine*
February 2014
Marine Corps Air Station Miramar, Calif.
NAS North Island, Calif. (on-base units)
Point Loma, Calif. (Admiral Hartman, Chesterton and on-base units)
San Diego (Murphy Canyon and on-base units)
April 2014
El Centro, Calif.
Point Mugu, Calif.
Port Hueneme, Calif. (on-base and Catalina Heights)
Seal Beach, Calif.
June 2014
Millington, Tenn.
China Lake, Calif.
Lemoore, Calif.
Aug. 2014
Naval Support Activity Washington, D.C.
Joint Base Anacostia-Bolling, D.C.
Bethesda, Md.
Thurmont, Md.
To be determined
Naval Weapons Station Earle, N.J.
Fallon, Nev.
* Not all homes are participating in RECP. Residents can contact their local housing officials for more information.

Electric bills are rolling out to public-private venture housing at all stateside bases, and officials promise a 'fair and transparent' policy.

Electric bills are rolling out to public-private venture housing at all stateside bases, and officials promise a 'fair and transparent' policy.

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Electric bills are rolling out to public-private venture housing at all stateside bases, and officials promise a “fair and transparent” policy.

If you’re an average energy user compared with similar households in your neighborhood, you won’t have to pay at all. If your electric use is above average in a given month, you get a bill. If you’re below average, congratulations — you just earned a rebate check.

While residents may prefer free electricity for everyone all the time, leaders remain confident in this system, dubbed the Resident Energy Conservation Program. Early survey results from residents have been largely positive, officials said. And no red flags have been raised at Navy Installations Command, which is managing the program.

At least until now.

Dozens of residents in Hawaii have written Navy Times arguing the system is“unfair” and pits neighbors against each other. Nobody wants to get stuck on the high end of energy use because, in Hawaii at least, a monthly bill could mean hundreds of dollars.

Residents living in Navy privatized housing around Pearl Harbor, one of the first places to institute RECP, are taking drastic measures to cut energy costs, Navy Times learned from interviewing a number of spouses and service members feeling the pinch. Some Navy families are living in the dark, unplugging everything in the house, throwing their breakers — one has even boiled water to do the dishes.

Many said they are skipping Christmas lights this season to ensure they’re below their neighbors’ energy consumption.

“I believe this is creating a feeling of competition and even animosity between residents,” said a cryptologic technician (interpretative) second class who requested anonymity to speak out against the Navy program.

To be clear: Hawaii residents find themselves in a worst-case scenario that’s feeding this conservation frenzy. Nobody wants to get stuck with a bill because the electricity rate in Hawaii has skyrocketed 123 percent and isn’t expected to decrease until next year.

The reason for the rate hike is mind-boggling to residents. Over the past six years, Naval Facilities Engineering Command Hawaii vastly underestimated the cost of electricity, incurring operating losses to the tune of $200 million. It was determined by Navy higher-ups in Washington that Hawaii absolutely had to recoup those losses in a single year, fiscal 2014, and Defense Department policy offers the Navy no alternative to a rate increase.

It sounds like local officials’ hands are tied, but try to explain that to someone who just moved to Hawaii and got stuck with an exorbitant electric bill.

“Why are we bailing you out for your mistake?” asked Beverly Moore, the wife of a senior chief petty officer based in Hawaii. “I didn’t make this mistake. This E-1 who lives down the street from me didn’t make this mistake.”

Moore said junior sailors are getting stuck with bills total hundreds of dollars. “They can’t afford that,” she said. “How is an E-1, E-2, E-3 supposed to provide for their family?”

Bill Pearson, the director of housing at installations command, is sympathetic to Navy families and acknowledges the rate increase has “exacerbated issues” with RECP. But while residents in Hawaii say the system is flawed, Pearson maintains that “overall the program is working well.”

“From our perspective,” Pearson said, “the vast majority of people don’t mind.”

Painful rate hike

Pearson described Hawaii’s bill increase as a “hundred-year storm”: a painful experience, but also an anomaly.

NAVFAC Hawaii’s commanding officer, Capt. Michael Williamson, spoke to Navy Times via phone to explain the reason behind the huge rate hike.

The Navy buys power from the Hawaiian Electric Co., which operates its power plants using oil. The cost of electricity is directly related to the cost of oil, purchased through the Asia market.

The Navy projects electricity costs and adjusts its rate structure every two years. From 2007 to 2012, the Navy underestimated that rate. Gas prices spiked in 2007-08, then went down briefly before spiking again, making planning difficult, Williamson said.

China’s increased demand drove up prices, as did the earthquake and tsunami that hit Japan in 2011. NAVFAC Hawaii found itself with a huge loss to recoup, which triggered the rate increase to Navy PPV housing.

One resident said that despite her best efforts to conserve, she’s still getting bills between $150 and $400.

“I feel like we are drowning here in Hawaii and cannot wait to be able to leave this place,” she said in an email to Navy Times.

While the majority of residents are Navy, there are also Marines, soldiers and airmen living in Navy housing. They, too, are victims of the rate hike.

“Big Navy gave us all a big ‘Screw you!’ for Christmas this year,” said Kerry Roberts, the wife of a staff sergeant in the Air Force.

Williamson said his office tried to avoid the 123 percent rate hike, in which electricity went from 26.3 cents per kilowatt hour to 58.7 cents. Instead of a rate hike, Williamson said his office proposed a potential buy-down in which the Navy could use extra operating and maintenance funds from the year to reduce the rate. Sequestration made that difficult, and officials in Washington quashed the idea.

Officials at the D.C.-based installations command at least tried to avoid the rate increase, anticipating blowback. They wanted to stretch the increase over two years or more to lessen the pain felt by residents. This idea was rejected, as well.

Williamson said suggestions to soften the big rate hike were pushed to NAVFAC’s headquarters and the Navy’s top budget crunchers in the Office of the Chief of Naval Operations. They were rejected. NAVFAC Hawaii and CNIC did not know who made the final decision.

The Navy should recoup its losses this fiscal year, Williamson said, and the electric rate is expected to drop in fiscal 2015.

There’s still hope the rate could drop before then, however. On Dec. 12, one day after Navy Times shared residents’ concerns with housing officials, Navy Region Hawaii issued a statement indicating a potential shift.

“Navy leadership, both in Hawaii and D.C., are taking a hard look at this issue and understand the effect it is having on our sailors and their families,” said Agnes Tauyan, the region’sdirector of public affairs. “We will pursue fair and equitable alternatives to this substantial rate increase that addresses the financial concerns of our personnel, while still complying with energy regulations and fiscal requirements.”

Resident complaints

Hawaii isn’t the only base to put RECP in effect. Families on bases in Florida have been receiving bills since April, bases in the Pacific Northwest since August, and sailors in San Diego since October. About 18,000 homes are part of RECP, and that is expected to grow to 33,000 by August.

No residents on other bases using RECP have written Navy Times to complain about the program. Before the rate hike, the average bill residents received in Hawaii was about $60 — now, it’s about $135. The rate increase in Hawaii has led residents there to closely scrutinize RECP, probably more so than any other region, and they believe they’ve found flaws in the system.

Before the new rate took effect Oct. 1, NAVFAC Hawaii aggressively tried to educate residents through town halls, base newspaper articles and social media. The rate increase affects nearly 4,300 homes that are part of Navy Housing Hawaii, which is managed by Forest City Military Communities Hawaii.

Forest City has attempted to assist residents in a number of ways, including providing energy audits of homes in which experts walk through a residence and make suggestions for saving energy.

Perhaps the awareness campaign was too successful. RECP was designed assuming a reasonable range of energy consumption. But in some Hawaii neighborhoods, residents are conserving so much that they’re driving down the averages. So even if you are conserving, perhaps your neighbor is willing to go to extremes, and you get stuck with a bill.

“This has irritated my wife and I to the point that ... we must unplug everything in our house and sit in the dark and the heat all day and all night,” said Operations Specialist 2nd Class (SW) Robert Pusateri. “I have tried to understand how to keep our electricity usage down, but I feel like every time we start to do the right thing, our bill just gets higher, which forces us to take more drastic measures.”

Roberts, the airman’s wife, said she and her husband are “are living in the dark and the heat” and still owe.

“We wash dishes by hand, had our A/C fixed so it runs efficiently, we clean out the dryer vent, change our A/C filter, use cold water when possible, and do laundry during the day. Yet we are still going over the average usage, according to the unfair standards that are in place,” she said. “We have gone so far as to turn everything off and leave the house altogether during the hottest part of the day to avoid sweating in our home for hours. To what extremes do we have to go to avoid yet another bill?”

Neither Pearson at installations command nor Williamson at NAVFAC Hawaii said they have heard of residents going to extreme measures to save energy.

Pusateri, who said he’s scrutinizing his energy use nearly every day, said he and his wife are even more concerned with a baby on the way.

“We feel it will be extremely hard for us to keep a newborn comfortable at home and maintain a reasonable electricity bill at the same time,” he said.

Under RECP, electric-use averages are based on like-type homes. Housing officials take the following factors into consideration: home size (as a rule of thumb, square footage of like-type homes fall within a 5 percent variance), age of the home and also its amenities, such as the type of air conditioning system.

Residents question whether these comparisons are fair. For example, one spouse said her family lives in a gulley and is unable to take advantage of the trade winds. While her neighbors can open their windows, she gets no wind and has to keep her air conditioning on.

Officials say the system is set up to address these issues. If you live in a home that you believe is an exception to your neighbors’ homes, you can contact your property manager.

There are a small number of homes in Hawaii, for example, that aren’t in any group, said Gregory Raap, regional vice president for Forest City. Some are experimental energy-saving homes and others are historic homes that don’t fit within their neighborhoods. Rather than be compared neighbors, residents of these homes set their own “average” and therefore never get a bill.

A few other spouses said they keep their windows shut for fear of break-ins. That includes Heidi Krukowski, the spouse of an electrician’s mate second class.

“I am OK with leaving my windows open while I am sitting downstairs, but cannot leave them all open when I go upstairs for fear of somebody breaking and entering, robbing me, or hurting me,” she said. “The crimes here are crimes of convenience, and my windows being open make theft very convenient. Therefore, I must have my air conditioning on.”

Officials say they realize not every house is exactly alike. To account for variance, there is a 10 percent buffer around the average: As long as your energy use is within that buffer, you won’t get a bill. The RECP buffer used to be 20 percent in its early stages, but the Navy tightened the standard, which means more people get billed (and rebates). Darryl Nii, the director of public-private venture programs in Navy Region Hawaii, said perhaps expanding the buffer warrants further consideration.

Residents also complain some neighbors are leaving for extended periods and powering completely down. When that happens, those residents collect a fat rebate for the month while driving down the average for everyone else. Pusateri knows this firsthand: He powered down for a two-week vacation and earned $200 back that month.

RECP factors in situations like this for some but not all homes in the program.

If you live in a neighborhood with 20-plus homes in your peer group, the averaging excludes those oddball homes that produce either extremely high or low energy use. There is no such safety mechanism if you have fewer than 20 homes, however, so empty homes could be forcing residents above the buffer and getting them a bill. Installations command said private housing companies have the power to implement local measures to ensure fairness in RECP, to include accounting for extended vacations in averaging energy use.

Not all bad

Officials point out that while sailors are getting bills, they are in the minority. About two-thirds of sailors in Hawaii each month are either getting no bill or a rebate.

Bills may average $135, but some sailors are getting rebates for that amount, Navy officials said.RECP is not designed to make money. Instead, it encourages conservation, which drives down energy costs for the housing company. Ideally, that means more money to boost services, and not pay back losses.

Boatswain’s Mate 1st Class (SW/AW) Omar Navarro is married with three teenage sons. Navarro has accepted the Navy’s new policy and said he is making the best of it. He turned off his water heater, using solar panels instead. He’s using energy-efficient laundry soap that doesn’t require warm water and he’s barely using his air conditioner. If his sons get hot, he tells them to take a cold shower.

“What I do to protect myself is I monitor my usage,” he said. “I don’t have to pay this kind of bill. I just take measures to make myself and my family comfortable.”

One spouse, who asked to remain anonymous, first wrote Navy Times complaining about her inexplicably high rates. She later wrote back, recanting some of the outrage. She received an in-depth audit through Forest City and found her water heater wasn’t working correctly, a ceiling light flickered and her A/C needed a new filter. Her usage has decreased since.

Susan Ridgeway, director of operations with Forest City Residential Management encouraged residents to request a thorough maintenance audit if they suspect their equipment is malfunctioning.

Not every audit is equal, however. Some residents said they received subpar and unrealistic advice from their auditors.

“When I talked to Forest City about our bill, they told me I should only do laundry once a week and I shouldn’t use my dishwasher or the A/C,” said Skyye Smith, a Navy spouse. “So from what I gather we should live like hot, sweaty, dirty cavemen.”

Pearson said the complaints in Hawaii have not generated any shift in RECP’s rollout plans, but officials will continue to review issues as they crop up. In the meantime, if you are a resident with concerns, contact your property manager and the Navy’s housing services manager in the area.

“Our RECP program is designed to help sailors use energy wisely,” he said. “It’s not designed to punish them. We make it as fair and balanced and transparent as we can. Perhaps Hawaii is a unique situation this year. I can sympathize with a family who is cutting down, cutting down and then all of a sudden their bill doubles from nothing that they’ve done.”

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