A former University of Hawaiʻi professor claims that a landmark state report may have overestimated the potential cost savings of swapping liquefied natural gas for oil by more than a billion dollars.
Matthias Fripp is the director of global policy research at Energy Innovation, a nonpartisan energy and climate policy think tank. Before that role, he taught electrical engineering at UH for a decade.
He independently reviewed the Hawaiʻi State Energy Office’s Alternative Fuels, Repowering and Energy Transition Study, which suggests that Hawaiʻi customers could save on energy costs if the state used liquefied natural gas instead of oil to power the grid.
Fripp told lawmakers in an informational briefing on Thursday that he found "various mistakes" in the study that inflated the benefits of importing liquefied natural gas.
"Some of them are spreadsheet errors, and some of them are more sort of judgment errors, but collectively, they raise the apparent benefits of switching from fuel oil to LNG by about $1.2 billion," Fripp said.
When those errors are corrected, the costs of transitioning to LNG outweigh savings by about $300 million, according to Fripp.
He pointed to a specific spreadsheet formula that he said leaves out the cost of natural gas purchases when calculating fuel cost savings.
Fripp said this omission raises the apparent savings of importing LNG instead of oil by $886 million. When LNG costs are added back into the formula, those savings "vanish," according to Fripp.
Chief Energy Officer Mark Glick and the Hawaiʻi State Energy Office's Monique Zanfes, who led the work on the Alternative Fuels study, were also present at the hearing.
Fripp told lawmakers he reached out to the energy office via email three weeks ago about the possible errors in the study. During the hearing, Zanfes acknowledged that she received the email but did not respond.
On Thursday evening, the office released a statement refuting Fripp's findings.
"HSEO unequivocally stands by its work on the study," read the statement.
The state agency further stated it had "verified that the cost of natural gas was fully incorporated in our analyses" and suggested that Fripp may have misunderstood their methodology.
Reps. Nicole Lowen and Amy Perruso presided over Thursday's hearing. Both lawmakers told HPR that they would like to see further independent analyses of the Hawaiʻi State Energy Office's fuel study.
This is a developing story.
