[Senate Hearing 111-831]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 111-831 
 
 AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009: INVESTMENT IN HAWAII 

=======================================================================

                                HEARING

                               before the

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            SPECIAL HEARING

                       JULY 7, 2010--HONOLULU, HI

                               __________

         Printed for the use of the Committee on Appropriations




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                      COMMITTEE ON APPROPRIATIONS

                   DANIEL K. INOUYE, Hawaii, Chairman
ROBERT C. BYRD, West Virginia        THAD COCHRAN, Mississippi
PATRICK J. LEAHY, Vermont            CHRISTOPHER S. BOND, Missouri
TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
HERB KOHL, Wisconsin                 JUDD GREGG, New Hampshire
PATTY MURRAY, Washington             ROBERT F. BENNETT, Utah
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
DIANNE FEINSTEIN, California         SAM BROWNBACK, Kansas
RICHARD J. DURBIN, Illinois          LAMAR ALEXANDER, Tennessee
TIM JOHNSON, South Dakota            SUSAN COLLINS, Maine
MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
FRANK R. LAUTENBERG, New Jersey
BEN NELSON, Nebraska
MARK PRYOR, Arkansas
JON TESTER, Montana
ARLEN SPECTER, Pennsylvania

                    Charles J. Houy, Staff Director
                  Bruce Evans, Minority Staff Director
                            C O N T E N T S

                              ----------                              
                                                                   Page

Opening Statement of Chairman Daniel K. Inouye...................     1
Statement of Senator Daniel K. Akaka.............................     2
Statement of Brigadier General Darrell K. Williams, Director, 
  Logistics, Engineering and Security Assistance J4, U.S. Pacific 
  Command, Department of Defense.................................     2
ARRA Funds.......................................................     3
Prepared Statement of Brigadier General Darrell K. Williams......     4
Department of the Navy...........................................     5
Department of the Army...........................................     5
ARRA Civil Works Projects in Hawaii..............................     5
Department of the Air Force......................................     5
Department of Defense (except military departments)..............     5
Statement of Brennon T. Morioka, Director, Department of 
  Transportation, State of Hawaii................................     6
    Prepared Statement of........................................     9
Statement of William J. Guerin, Recovery Executive, National 
  Recovery Program Management Office, Public Buildings Service, 
  General Services Administration................................    14
    Prepared Statement of........................................    16
Statement of William F. Broglie, Chief Administrative Officer, 
  National Oceanic and Atmospheric Administration, Department of 
  Commerce.......................................................    19
    Prepared Statement of........................................    21
Report by Quarters...............................................    23
Oversight........................................................    24
Project Status...................................................    26
Kona Project.....................................................    27
Child Development Center on Marine Corps Base....................    28
Reporting Process................................................    29
Statement of Steve Robertson, Executive Vice President and Chief 
  Information officer, Hawaii Health Information Exchange........    30
    Prepared Statement of........................................    32
Hawai`i HIE Board Members........................................    33
Statement of Dr. Karen Pellegrin, Ph.D., M.B.A., Director, 
  Continuing/Distance Education and Strategic Planning, College 
  of Pharmacy, University of Hawaii at Hilo......................    34
    Prepared Statement of........................................    35
Statement of Clyde S. Sonobe, Administrator, Cable Television 
  Division, Department of Commerce and Consumer Affairs, State of 
  Hawaii.........................................................    39
    Prepared Statement of........................................    40
Statement of Dr. David Lassner, Vice President for Information 
  Technology and Chief Information Officer, University of Hawaii.    41
    Prepared Statement of........................................    43
Statement of Su Shin, Vice President, Gold Ivory, LLC............    46
    Prepared Statement of........................................    48
Statement of John Komeiji, Senior Vice President and General 
  Counsel, Hawaiian Telcom.......................................    50
    Prepared Statement of........................................    51
Project Summary..................................................    51
Need for BTOP and BIP Projects...................................    52
Benefits to Big Island Residents and Businesses..................    52
Why Hawaiian Telcom's Applications Should be Funded..............    52
Statement of Maria Tome, Renewable Energy Program Manager, State 
  Energy Office, Hawaii Department of Business, Economic 
  Development & Tourism..........................................    58
    Prepared Statement of........................................    60
Hawaii's Total Energy Formula Funding Under ARRA.................    60
Strategic Approach for Building the Expenditure Plan.............    62
Formula Funding Project Expenditure Plan and Status..............    62
USDOE Recovery Act Projects......................................    70
Statement of Leon Roose, Manager, Systems Integration, Hawaiian 
  Electric Company...............................................    71
    Prepared Statement of........................................    73
Statement of Jim Rekoske, Vice President and General Manager, 
  Renewable Energy and Chemicals, Honeywell UOP..................    75
    Prepared Statement of........................................    77
Statement of Michael V. Yamane, P.E., Manager, Engineering, Kauai 
  Island Utility Cooperative.....................................    78
    Prepared Statement of........................................    78
Statement of Jane Sawyer, District Director, Hawaii District 
  Office, Small Business Administration..........................    81
    Prepared Statement of........................................    83
Statement of Shelley Wilson, President, Wilson Homecare..........    84
    Prepared Statement of........................................    85
Statement of Brad Albert, Owner, Rising Sun, LLC.................    86
    Prepared Statement of........................................    88
Economic Impact of Treasury Grant Program Extension in Hawaii....    89
Extend the Treasury Grant Program................................    91
The Solar Manufacturing Jobs Creation Act........................    92
About the Solar Energy Industries Association....................    94
Prepared Statement of Abraham Y. Wong, Administrator, Hawaii 
  Division, Federal Highway Administration, Department of 
  Transportation.................................................    97
Recovery Act Impact in Hawaii....................................    97
Transparency, Accountability, and Risk Management................    99
Prepared Statement of Laura M. Dierenfield, Chair, Safe Routes to 
  School National Partnership, Hawaii State Network..............    99
The Need for Bicycle and Pedestrian Investments in Hawaii........    99
Bicycling and Walking Belong in Hawaii's Clean Energy Future.....   100
Prepared Statement of Susan Miller...............................   101
  AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009: INVESTMENT IN HAWAII

                              ----------                              


                        WEDNESDAY, JULY 7, 2010

                                       U.S. Senate,
                               Committee on Appropriations,
                                                      Honolulu, HI.
    The committee met at 9:35 a.m., in room 325, Hawaii State 
Capitol Building, Honolulu, Hawaii, Hon. Daniel K. Inouye 
(chairman) presiding.
    Present: Senator Inouye.
    Also present: Senator Akaka.


             opening statement of chairman daniel k. inouye


    Chairman Inouye. The committee will come to order. Aloha.
    Audience. Aloha.
    Chairman Inouye. Almost 1 year ago, we convened in this 
room to discuss the impact of the stimulus bill, the so-called 
American Recovery and Reinvestment Act of 2009 (ARRA). At that 
time, I promised to conduct a follow-up hearing to learn about 
the progress that was made in Hawaii by the investment that 
comes from this act.
    I'm happy to report that this act continues to create and 
protect jobs and make investments in America's future. To date, 
more than $1.8 billion has been awarded to projects in Hawaii, 
and this act is also delivering transparency, accountability to 
guarantee that all taxpayer money is invested wisely.
    When the Congress passed this act, we recognized that 
recovery from the economic crisis we inherited would not happen 
overnight, and that the Recovery Act was just the beginning. 
And since that time, Congress has pursued additional measures 
to build upon this act and creates jobs, as this Nation 
continues to recover from the worse financial crisis since the 
Great Depression.
    Today, I'm here to learn about how funds awarded to Hawaii 
have been spent. How many jobs have been created, or retained, 
and the successes and challenges along the way.
    And we'll hear from five panels. The first panel will focus 
on investments on transportation, infrastructure, and Federal 
facilities. The second panel will discuss investments to 
improve delivery of health. The focus of the third will be the 
importance of investments in broadband infrastructure. The 
fourth will review investments in energy programs, and finally, 
investments in small businesses will be the topic of the fifth 
panel.
    And I wish to thank all of the witnesses for taking time to 
share their progress and experiences with the committee, and 
without objection, your full statements will be made part of 
the record.
    Before I call upon the panel, may I call upon my colleague, 
Senator Akaka, for his words of wisdom?


                  statement of senator daniel k. akaka


    Senator Akaka. Thank you very much, Mr. Chairman. I 
appreciate your conducting the hearing today and all of your 
extraordinary efforts to improve the lives of our constituents, 
and really the lives of all Americans.
    While States' residents have suffered due to the difficult 
economic conditions, too many families have had their hours and 
pay reduced, suffered from a layoff, bankruptcy, and inability 
to obtain affordable credit, or the elimination of State 
funding for an important social service program.
    The American Recovery and Reinvestment Act is helping to 
considerably improve the lives of working families in Hawaii. 
The stimulus has created jobs, strengthened infrastructure, 
encouraged innovation in the development of alternative energy 
resources and bolstered education, social services and 
healthcare programs.
    This hearing will help provide a better understanding of 
how stimulus resources are being utilized in Hawaii and 
demonstrate the impact that these resources have had in our 
communities.
    I welcome all of our witnesses and look forward to hearing 
your testimony.
    Thank you, again, Mr. Chairman.
    Chairman Inouye. I thank you very much.
    Our first panel consists of Brigadier General Darrell 
Williams of the United States Army. Welcome, sir. Mr. Brennon 
Morioka of the Hawaii Department of Transportation; Mr. William 
Guerin--is that correct pronunciation?
    Mr. Guerin. Yes.
    Chairman Inouye. Executive, Recovery Program Management 
Office, General Services Administration; and Mr. William 
Broglie, Chief Administrative Officer, National Oceanic and 
Atmospheric Administration.
    And may I call upon General Williams.
STATEMENT OF BRIGADIER GENERAL DARRELL K. WILLIAMS, 
            DIRECTOR, LOGISTICS, ENGINEERING AND 
            SECURITY ASSISTANCE J4, U.S. PACIFIC 
            COMMAND, DEPARTMENT OF DEFENSE
    General Williams. Mr. Chairman, Senator Akaka. On behalf of 
United States Pacific Command, I am pleased to appear before 
you today to provide an overview of the Department of Defense 
support to the American Reinvestment and Recovery Act of 2009 
in Hawaii.
    The Department of Defense (DOD) received approximately $208 
million in ARRA funds for 112 projects in the State of Hawaii. 
All DOD projects have been awarded and 42 projects are 
completed. DOD has also received more than $110 million to 
award for four non-DOD project. Three projects have been 
awarded, with one project completed. The last project will be 
awarded by September 2010.
    Overall, the Department of Defense will award more than 
$318 million in ARRA funds in the State of Hawaii. As a result 
of the AARA funds, contractors have identified more than 400 
recovery-funded jobs, according to the most recent reporting 
period, ending March 31, 2010.
    I will now provide a summary of the ARRA program, based 
upon funds received by each service, to include the non-
Department of Defense contracts being executed by the Navy and 
the Army.
    Now, on the Department of the Navy. The Department received 
approximately $77 million of the $208 million of ARRA funds for 
five projects on Oahu and two projects on Kauai. All seven 
projects have been awarded. Projects included $22 million to 
repair wharfs at Joint Base Pearl Harbor Hickam, $20.7 million 
to repair the runway at Pacific Missile Range Facility in 
Kauai, $21.9 million to install photovoltaic, or solar energy 
systems in Oahu and Kauai, and a new $9.6 million child 
development center at Marine Corps Base Hawaii.
    Naval Facilities Engineering Command, Pacific, or NAVFAC 
also administers non-Department of Defense projects located on 
Navy property. The Department awarded a $6.2 million visitor 
parking center at the Arizona Memorial for the Department of 
the Interior. No later than September 2010 NAVFAC Pacific is 
projecting to award a research lab and regional headquarters 
for the National Oceanic and Atmospheric Administration (NOAA), 
which is part of the Department of Commerce. That project is 
over $100 million, and my colleague from NOAA will discuss that 
project, in detail.
    Overall, the Navy awarded $83.1 million in projects, which 
account for 128 recovery-funded jobs to date, and all but one 
project was awarded to companies headquartered in Hawaii.


                               arra funds


    For the Department of the Army. The Army Corps of 
Engineers, Honolulu District received approximately $36.6 
million of the $208 million of ARRA funds for 24 facilities 
sustainment, restoration and modernization projects. All 24 
projects have been awarded. Army projects include $9.9 million 
for projects to install photovoltaic cells and $2.9 million to 
repair various bridges. All of the projects were awarded to 
small businesses.
    The Director of Public Works, U.S. Army Garrison Hawaii 
received approximately $34.6 million of the $208 million for 35 
projects. All 35 projects have been awarded.
    Projects include $10.4 million for road repairs, $3.4 
million for roof repairs on six buildings, and $6.7 million for 
runway and apron repair. These Army projects accounted for 164 
recovery jobs to date, and all but four projects were awarded 
to Hawaii-based companies.
    Under the category of ARRA civil works projects in Hawaii, 
the Corps of Engineers also executes non-Department of Defense 
work under their civil works authorities to develop, manage, 
protect and enhance our Nation's water and related land 
resources for commercial navigation, flood risk management, 
ecosystem restoration, and allied purposes. Through the civil 
works authorities, the Department also provides emergency 
services for disaster relief and administers the Army's 
regulatory program.
    The Honolulu District received $825,000 in ARRA funds for 
two operations and maintenance projects and funding for their 
regulatory program. Both projects have been awarded, including 
$700,000 for maintenance dredging of the Haleiwa Harbor, which 
was completed in January 2010. The regulatory program obligated 
approximately $70,000 in ARRA funds. These projects accounted 
for an additional four jobs.
    For the Department of the Air Force. The Department 
received approximately $49.6 million of the $208 million for 36 
projects at Joint Base Pearl Harbor Hickam and Kaena Point. All 
projects have been awarded.
    Projects include $30 million in renovations for a new 
headquarters facility, $4 million for utility infrastructure 
upgrades and $8 million in pavement and building exterior 
improvements. Overall, the Air Force projects account for 100 
recovery-funded jobs to date. All but one of the Air Force 
projects was awarded to Hawaii-based companies.
    Under the category Department of Defense, except for 
military departments, Tripler Army Medical Center received 
approximately $10.6 million of the $208 million for eight 
projects. All eight projects have been awarded. Projects 
include $8.6 million for utility systems upgrades, and $600,000 
to replace an elevator. Overall, these projects account for 
approximately four recovery-funded jobs, to date.
    So, in conclusion Mr. Chairman, the Department of Defense 
has awarded over $208 million of ARRA funds for 112 DOD 
projects and $7 million for three non-DOD projects. By the end 
of the fiscal year, one additional project will be awarded for 
over $100 million which will bring our final total to well over 
$318 million. Of the projects awarded, 98 of the 116 were 
awarded to Hawaii-based companies. The Department of Defense, 
through ARRA funds, assisted you to spur economic activity with 
over 400 recovery-funded jobs to date. At the same time, this 
funding certainly enhanced the readiness of our military 
services.
    Thank you for your continued support of our Armed Services 
and thank you for the opportunity to provide this statement 
today.
    Chairman Inouye. I thank you very much, General.
     [The statement follows:]
      Prepared Statement of Brigadier General Darrell K. Williams
    Mr. Chairman, I am pleased to appear before you today to provide an 
overview of the Department of Defense's support of the American 
Reinvestment and Recovery Act (ARRA) of 2009 in Hawaii.
    The Department of Defense (DOD) received approximately $208 million 
in ARRA funds for 112 construction projects in the state of Hawaii. All 
DOD projects have been awarded and 42 projects are complete. DOD has 
also received more than $110 million to award four non-DOD projects. 
Three projects have been awarded with one project completed. The last 
project will be awarded by September 2010. Overall the Department of 
Defense will award more than $318 million in ARRA funds in the state of 
Hawaii. As a result of the ARRA funds, contractors have identified more 
than 400 recovery funded jobs according to the most recent reporting 
period ending March 31, 2010.
    I will now provide a summary of the ARRA program based upon funds 
received by each service to include the non-Department of Defense 
contracts being executed by the Navy and the Army.
                         department of the navy
    The Department received approximately $77 million of the $208 
million in ARRA funds (DOD) for five projects on Oahu and two projects 
on Kauai. All seven projects have been awarded. Projects include $22 
million to repair wharves at Joint Base Pearl Harbor Hickam, $20.7 
million to repair the runway at Pacific Missile Range Facility (PMRF), 
Kauai, $21.9 million to install photovoltaic (solar energy) systems on 
Oahu and Kauai, and a new $9.6 million child development center at 
Marine Corps Base Hawaii.
    Naval Facilities Engineering Command, Pacific (NAVFAC Pacific) also 
administers non-Department of Defense projects located on Navy 
property. The Department awarded a $6.2 million Visitor Parking Center 
at the Arizona Memorial for the Department of the Interior. No later 
than September 2010 NAVFAC Pacific is projecting to award a research 
lab and regional headquarters for the National Oceanic and Atmospheric 
Administration (NOAA) which is part of the Department of Commerce for 
over $100 million.
    Overall the Navy awarded $83.1 million in projects which account 
for 128 recovery funded jobs to date. All but one project was awarded 
to companies headquartered in Hawaii.
                         department of the army
    The Army Corps of Engineers, Honolulu District received 
approximately $36.6 million of the $208 million in ARRA funds for 24 
Facilities Sustainment, Restoration and Modernization projects. All 24 
projects have been awarded. Army projects include $9.9 million for 
projects to install photovoltaic cells and $2.9 million to repair 
various bridges. All of the projects were awarded to small businesses.
    The Directorate of Public Works, U.S. Army Garrison Hawaii received 
approximately $34.6 million of the $208 million in ARRA funds for 35 
projects. All 35 projects have been awarded. Projects include $10.4 
million for road repairs, $3.4 million for roof repairs on six 
buildings, and $6.7 million for runway and apron repair.
    These Army projects accounted for 164 recovery funded jobs to date. 
All but four projects were awarded to Hawaii-based companies.
                  arra civil works projects in hawaii
    The Corps of Engineers also executes non-Department of Defense work 
under their Civil Works authorities to develop, manage, protect and 
enhance our Nation's water and related land resources for commercial 
navigation, flood risk management, ecosystem restoration and allied 
purposes. Through the Civil Works authorities, the Department also 
provides emergency services for disaster relief and administers the 
Army's regulatory program.
    The Honolulu District received $825,000 in ARRA funds for two 
Operations and Maintenance projects and funding for their Regulatory 
program. Both projects have been awarded including $700,000 for 
maintenance dredging of Haleiwa Harbor which was completed in January 
2010. The Regulatory Program obligated approximately $70,000 in ARRA 
funds. These projects accounted for an additional 4 jobs.
                      department of the air force
    The Department received approximately $49.6 million of the $208 
million in ARRA funds for 36 projects at Joint Base Pearl Harbor Hickam 
and Kaena Point. All projects have been awarded. Projects include $30 
million in renovations for a new headquarters facility, $4 million for 
utility infrastructure upgrades and $8 million in pavement and building 
exterior improvements. Overall the Air Force projects account for 
roughly 100 recovery funded jobs to date. All but one of the Air Force 
projects was awarded to Hawaii-based companies.
          department of defense (except military departments)
    Tripler Army Medical Center received approximately $10.6 million of 
the $208 million in ARRA funds for 8 projects. All 8 projects have been 
awarded. Projects include $8.6 million for utility system upgrades and 
$600,000 to replace an elevator. Overall these projects account for 
approximately 4 recovery funded jobs to date.
                               conclusion
    Mr. Chairman, in total, the Department of Defense has awarded over 
$208 million of ARRA funding for 112 DOD projects and $7 million for 
three non-DOD projects. By the end of the fiscal year one additional 
project will be awarded for over $100 million which will bring our 
final total well over $318 million. Of the projects awarded, 98 of 116 
were awarded to Hawaii-based companies. The Department of Defense 
through ARRA funds assisted you to spur economic activity with over 400 
recovery funded jobs to date. At the same time this funding enhanced 
the readiness of our military services. Thank you for your continued 
support of our Armed Services and thank you for the opportunity to 
provide this statement today.

    Chairman Inouye. Before we proceed with questioning, I'd 
like to hear from the whole panel.
    So, may I call upon Mr. Morioka?
STATEMENT OF BRENNON T. MORIOKA, DIRECTOR, DEPARTMENT 
            OF TRANSPORTATION, STATE OF HAWAII
    Mr. Morioka. Thank you, Mr. Chairman Inouye, Senator Akaka, 
Brennon Morioka, on behalf of the State Department of 
Transportation here in Hawaii. And we are very pleased to 
provide you with testimony on the current status and 
accomplishments of the State of Hawaii and utilizing funds 
provided by the American Recovery and Reinvestment Act for 
transportation purposes.
    We are extremely grateful for the additional funds that 
came to Hawaii provided by this act. As you mentioned, it did 
go to help contractors, suppliers and local companies in these 
tough economic times and to allow them to either retain 
employees, or bring some of them back who were sitting on the 
bench and currently not getting a paycheck. And so we do 
believe that this was one of the ways to help our local 
economy, but also help the local families.
     The stimulus funds have helped significantly in supporting 
Hawaii's efforts to focus on investing in our transportation 
infrastructure, create jobs and stimulate our economy. And 
based on the requirements in developing the number of jobs that 
were either sustained or created, Hawaii reported approximately 
2,300 jobs that were created or funded by ARRA through the 
transportation program here in Hawaii.
    As you are aware, determining which State and county 
projects would be funded through this unprecedented level of 
funding to the State required a significant amount of 
coordination and collaboration between all of our agencies, 
both the Federal highways administration, the State Department 
of Transportation, and our four counties, especially the four 
mayors and their transportation directors.
    We also worked very closely with your office, Senator, as 
well as the staff of the other congressional delegation. And so 
we're very thankful for all of the support and guidance that we 
received throughout the entire process.
    Due to the strong level of collaboration between Federal, 
State and county agencies, we do believe and we are of the 
opinion that Hawaii has one of the most diverse lists of 
projects funded by the ARRA transportation monies. And it was 
also important to ensure that these monies were distributed 
equally, fairly, through geographic and economically distressed 
areas.
    So, in order to do that, we did meet extensively with all 
four counties, especially the mayors, directly, in order to 
discuss and identify the projects that we would move forward, 
statewide. We did have to meet certain requirements, and the 
four counties received approximately one-half of the stimulus 
funds, which is usually more than what they typically get in 
terms of the formula monies that we receive annually, so we did 
place a big focus on assisting our county partners, and making 
sure that their infrastructure projects were able to be funded, 
as well.
    The selection process included meeting certain criteria, 
including meeting the ARRA timelines; focusing on economically 
distressed areas, such as the Big Island and Molokai; within 
the State, we made a conscious decision to make sure that we 
focused on trying to select projects that had a more diverse 
nature, in terms of the various trades to be used, so that we 
did not focus on the same trade, that we would be able to 
spread the work and employment opportunities out to as many of 
our trade unions as possible; and we worked on providing 
secondary benefits such as promoting future job growth such as 
low-cost housing, as an example, the Mid-Level Road in Kona was 
one that is a project that could open up for future development 
and future employment opportunities in the Kona area.
    We also took into account the selection of the projects 
that would employ people over a much longer period of time. We 
looked at construction projects that would last approximately 2 
to 3 years, rather than just 2 to 3 months. And I think when 
you start comparing the percentages of funds that Hawaii used 
for such projects such as resurfacing, which is a very quick 
and easy project to do, nationally other States used 
approximately 49 percent of their ARRA funds on resurfacing. 
But, in our case, we used only approximately 14 percent of our 
funds on resurfacing. Because we did want to focus on the 
projects that would employ people through this economic 
condition, and get us through that period, rather than just 
have them employed for 2 or 3 months, and then go back on the 
unemployment roles and then we're back in the same problem.
    So, we do believe that our--we are very proud of the list 
collective--that we collectively put together, and I think our 
residents are beneficiaries of that, by having employment as 
well as allowing us to catch up on much of our significant 
backlogs on infrastructure demands.
    So, of the highway projects, Hawaii received approximately 
$126 million in highway monies. There were a total of 24 
highway projects, 14 State, 10 county that were selected for 
implementation. Six out of the 14 State projects have been 
completed and 4 are currently in active construction. There are 
three other projects that we have for the State that have been 
issued and for those to proceed, the contractors are starting 
to process their material orders and their permits.
    Five out of the 10 counted projects already have been 
issued notice to proceed, and will be continuing to be worked 
on. Three are in the process of being issued notice to proceed 
within this month of July, and two other county projects will 
be advertised very shortly.
    So, as a result of many of the favorable bids that we had 
from the original list of the 24 projects, we were able to add 
four additional State projects and two additional projects on 
Maui County.
    We also received monies for airport infrastructure. We 
received two Transportation Security Administration (TSA) 
grants and one Airport Improvement Program (AIP) grant from the 
Federal Aviation Administration (FAA). The first one was the 
AIP grant for $15 million for a $17 million to make 
improvements to the apron pavement at Kahului Airport of which 
we are approximately 78 percent complete with the project.
    The two TSA grants which we are very grateful for the 
assistance of your offices in helping Hawaii be 1 of 11 States 
who received TSA grants for airport improvements, both of them 
are for explosion detection systems. One at Kahului Airport 
which we have currently completed--we just recently dedicated 
the systems, about 1 month ago. That was $7.2 million of ARRA 
funds out of a $24 million project. And we are about to issue a 
notice to proceed in this month for the Honolulu International 
Airport EDS project, which is a $64 million project, of which 
$25 million will be paid for out of ARRA.
    We were also very grateful to receive a TIGER grant which 
was done through a competitive process. We worked very closely 
with your office, Mr. Chairman, in working on positioning 
Hawaii on receiving this grant.
    We submitted a single grant with three harbor projects 
for--we received $24.5 million for one of the projects, which 
is a Pier 29 reconstruction, here in Honolulu Harbor. We also, 
as part of the grant, we had also put in for improvements to 
Pier 4 in Hilo, and Pier 2A out in Kahului Harbor. And so, as a 
part of the upcoming TIGER applications, we will be 
resubmitting those two projects, as well, and hopefully we will 
position ourselves, once again, on receiving monies for those 
harbor projects.
    Hawaii also received Federal Transportation Administration 
(FTA) monies of which we were, Department of Transportation 
(DOT) was primarily a pass-through and assisted the four 
counties on the use of those funds. Most of those monies were 
primarily used to--on the Big Island they were used for 
construction of bus shelters, but also to expand their service 
by acquiring more buses to expand their services on the Big 
Island.
    On Kauai, they used it to replace some of their aging 
buses, as well as purchase new buses to expand their program, 
as well. And on Maui, they also used it to purchase new buses 
for the expansion of their services.
    In going through this whole ARRA process, we did have a few 
observations in working through it, because it was 
unanticipated monies, when you look over a long period of time 
and you budget out where your resources are going. So, this was 
a new influx of money with the same amount of resources that we 
had in terms of manpower, so it took a lot of prioritization on 
making sure that we focused our efforts on the highest 
priorities. And, obviously, that was getting the ARRA projects 
out, because they had the strictest amount of timelines to meet 
before--or else you would lose some of the monies.
    So, it did create some strain on our internal staff, but I 
think through the resiliency of much of our staff, and the 
coordination between the counties and our Federal partners, we 
were able to manage and prioritize and make sure that we met 
all of the deadlines that ARRA imposed on us, as well as 
maintaining our current and existing programs that we have to 
do every year, anyway.
    We do also understand the desire, and need for reporting 
and oversight for these additional monies but at the same time, 
this additional amount of paperwork also took away from some of 
the resources that is traditionally used to actually deliver 
the projects. So, I think that is something that we are going 
to have to look at internally, to see if this kind of oversight 
and reporting requirements are included in future legislation 
and authorizations that we're going to also have to look at how 
we do business internally to make sure that we can accommodate 
those requirements, moving forward.
    One of our biggest concerns about some of the things that 
have happened through the ARRA process is that the additional 
oversight by some of the Federal agencies has--there is the 
perception of some of the--or reintroducing of some of the old 
barriers between the Federal agencies and the State DOTs across 
the country. This--you know, following a number of years of 
development of relationships between Federal highways and all 
of the State agencies, the State DOTs across the country--and 
even more so here in Hawaii, because I think we are very proud 
of the relationship that we have with our Division of Federal 
Highways here in Hawaii. I think we have worked through some of 
those issues as best as we can. I think the Division 
Administrator, A. Wong, has done the best that he has been able 
to do in terms of following the requirements of oversight that 
they have to have over the State agencies as well as the county 
agencies, but also providing us with as much of the flexibility 
as possible and not moving backwards in terms of some of the 
stewardship relationship that we have developed with Federal 
highways as we are both serving the same customers. We are both 
trying to achieve the same mission, and I think Mr. Wong 
definitely understands that, and he is doing his best to make 
sure that the relationship is done in a mutual way. But, we 
also understand, from the DOT's perspective, that he also has 
his responsibilities for the oversight that needs to be.
    So, we'll continue to work with Federal highways on making 
sure that we try and maintain that level of relationship and 
partnering, while still acknowledging and respecting the fact 
that oversight has to be had.
    So, in closing, I do want to thank you for the opportunity 
to brief you on the status of our use of the ARRA funds that 
have been provided to Hawaii, and also to thank you for all of 
the support and guidance that you, personally, have provided to 
us, as well as all of your staffs. Because I don't think, 
without that cooperation, that Hawaii would not have been as 
successful as we have been. So, thank you very much.
    Chairman Inouye. I thank you very much, Mr. Morioka.
     [The statement follows:]
                Prepared Statement of Brennon T. Morioka
    The State Department of Transportation (DOT) is pleased to provide 
this testimony that outlines our current status and accomplishments in 
utilizing funds provided by the American Recovery and Reinvestment Act 
(ARRA) of 2009.
    We are extremely grateful for the additional funds that were 
provided by this act to the State of Hawaii as it helps contractors, 
suppliers and local companies in these tough economic times and to 
allow for the state and counties to embark on projects that may not 
have otherwise proceeded. The Federal stimulus funds have helped in 
supporting Hawaii's efforts to focus on investing in the repair and 
modernization of Hawaii's infrastructure, create jobs and stimulate our 
local economy. Stimulus funds created 2,317 jobs for transportation 
infrastructure in Hawaii.
    Determining which state and county road projects would be funded 
required an unprecedented level of coordination and collaboration 
between the Federal Highway Administration, the state Department of 
Transportation, the four county mayors and their transportation 
directors, and the Oahu Metropolitan Planning Organization. We also 
worked closely with Senator Inouye and his staff and would like to 
thank them for their input and support.
    Projects were first evaluated on their ability to meet the ARRA 
milestone requirements. It was also important that we ensured the 
projects were fairly distributed geographically, including in 
economically distressed areas and other regions where the project would 
have an impact in the creation of jobs. We also put an emphasis on 
projects that had the potential to employ a diverse cross section of 
construction trades and provide such employment over a longer duration 
of time.
    A summary of the Department's ARRA program is as follows:
Selection of Highway Projects
    The selection of projects to be undertaken with ARRA funds was a 
result of a collaborative effort between the four counties and the 
State DOT to ensure an equitable distribution of ARRA funds.
    After a list of prospective county and state projects was compiled 
by DOT and the respective county agencies, we met with the Mayors of 
each county individually to discuss and identify projects statewide.
    The final selection of projects was based on the following 
criteria:
  --Projects:
    --That would meet the ARRA timelines;
    --In economically distressed areas (Hawaii and Molokai);
    --That would employ a diversity of trades;
    --That would provide secondary benefits in promoting future job 
            growth such as low cost housing;
    --That would provide general transportation benefits to road and 
            highway users.
    It should be noted that the counties received nearly half of the 
ARRA funds for ready-to-go projects, which is a far greater amount of 
funding typically provided through the typical formula funds of the 
Federal aid program.
    We also took into account the selection of projects that would 
employ people over a longer period of time (2-3 years) versus the 
approach taken by other jurisdictions that selected projects that were 
easy and quick to get out but would employ people over a shorter period 
of time (2-3 months). How Hawaii is investing taxpayer monies is 
important. We felt it important to make sure the investment of these 
funds would go towards extended employment and longer term benefits.
    We are aware that approximately 49 percent of ARRA funds spent for 
highway systems on a national level has or will be used on resurfacing 
projects. It is important to note that in comparison, only 14 percent 
of the ARRA funds apportioned to Hawaii is being used on resurfacing 
projects.
Status of Highway Projects
    Currently, of the 24 (14 state and 10 local) original ARRA highway 
projects, 6 of the 14 state projects have already been completed and 4 
are currently in construction.
    Because we were able to realize lower bid proposals for ARRA-funded 
projects, four more state road improvement projects have been added to 
the certified list. All four of these additional HDOT projects have 
already started construction.
    We also remain committed to provide assistance to Economically 
Distressed Areas (EDAs), in this case Molokai and the Big Island.
Status of Airports Projects
    The Airports Division received 3 ARRA grants. The following is a 
project status report:
  --The structural improvements project for the apron pavement at 
        Kahului Airport is 78 percent complete. The grant amount is $15 
        million.
  --The EDS integration improvements project at Kahului Airport is 100 
        percent complete. The grant amount is approximately $7.2 
        million.
  --Phase II of the EDS integration improvements project at Honolulu 
        International Airport has an NTP date of July 19, 2010. The 
        grant amount is approximately $24.6 million.
Status of Harbors Project
    The Harbors Division received 1 TIGER grant. The following is a 
project status report.
  --The reconstruction of Pier 29 has an NTP date of December 2010. The 
        grant amount is $24.5 million and the estimated state match is 
        $7 million. Received grant agreement from MARAD on July 2, 
        2010. Ready to commence project upon release and availability 
        of funds.
Status of FTA Projects
    The project to construct bus shelters on the Big Island is 
complete. The grant amount is $27,812.
    The project for additional bus shelters on the Big Island is 75 
percent complete. The grant amount is $44,514.
    The project to purchase buses for expansion of services on the Big 
Island is 100 percent complete. The grant amount is $905,486.
    The bus replacement program on Kauai is 100 percent complete. The 
grant amount is $331,632.
    The project to purchase buses for expansion of services on Kauai is 
100 percent complete. The grant amount is $646,180.
    The project to purchases buses for expansion of services on Maui is 
98 percent complete. The grant amount is $977,811.
Observations
    Through this process to meet the rigorous deadlines and stricter 
requirements imposed by the act, we did see the kind of resiliency and 
hard working individuals that we all posses within our agencies. We 
developed new strategies and innovative approaches to deliver projects 
faster, in light of some of the resource challenges we faced due to the 
economic climate of our state and our nation.
    However, with the addition of these unanticipated funds to further 
accelerate infrastructure initiatives, the challenges to deliver and 
perform were sometimes overwhelming and often made for difficult 
choices in order to distribute the necessary resources to meet the new 
initiatives while maintaining existing responsibilities. It needs to be 
recognized that the benefactor agencies needed to dedicate a 
significant amount of resources to manage, monitor, and fulfill the new 
Federal requirements that came with acceptance of these additional 
Federal funds. However, although the act did provide for allowance for 
this fact, it was not apparent that there was much flexibility provided 
or acknowledgement that every state is different in their laws and 
processes became enormous obstacles that needed to be overcome in order 
to succeed.
    Greater flexibility in working through Federal regulations would 
have assisted agencies in delivering projects more quickly. Strict 
compliance with all pre-existing requirements, though not necessarily 
critical to the delivery of a project but more applicable to the 
``process'' by which they are delivered, such as the TIP and STIP 
processes, seemed to be contrary to the intent of the act to create and 
stimulate the economy in the quickest fashion possible.
    We also understand the desire for the amount of reporting and 
oversight control by our Federal agency partners, especially in light 
of much of the perception of a lack of oversight of financial 
institutions. However, the degree to which the reporting and oversight 
was required and/or requested also took away from the same resources 
necessary to deliver the projects themselves. This had a tremendous 
impact on Hawaii's agencies as our good intentions to spread the work 
around to benefit the largest amount of stakeholders also resulted in a 
greater amount of paperwork. Reporting on three very large projects 
would have been far easier for agencies as compared to tracking and 
reporting on a two dozen smaller projects. Therefore, the incentive to 
distribute the ARRA funds more equitably did not exist and states that 
did distribute funds to a wider base were, in essence, penalized for 
doing so.
    One of our biggest concerns, however, has been that ARRA has 
reintroduced some of the barriers between the Federal agencies and the 
state DOTs. Following a number of years working toward stewardship 
agreements and partnering relationships, the oversight requirements 
imposed on FHWA and the local agencies have reestablished some of the 
perception that the role of FHWA will be more of a policing role rather 
than a partnering role. We are hopeful that this is not going to be the 
case moving forward and we will continue to work with our local 
division office towards that end as we believe we have built a trusting 
relationship with the local FHWA staff that we are currently proud of.
Closing
    Thank you for providing us an opportunity to brief you on Hawaii's 
efforts to use ARRA funds prudently and expeditiously. These projects 
demonstrate how the state, counties, and Federal agencies can work 
together to serve the critical needs of Hawaii's residents and focus on 
investing in the repair and modernization of Hawaii's transportation 
infrastructure and create jobs for the people in our state.

                                                                     STATE AND COUNTY PROJECTS USING FEDERAL RECOVERY FUNDS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Jurisd.       Island                                      Project Title                                     ARRA Cost     Notes or Remarks   Status 6/30/2010
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
S1............................  STATE.......  Oahu........  H-1, Seismic Retrofit, Farrington Highway & Makakilo Separation, Oahu \5\.....        $865,200  NTP 7/13/09......  Completed
S2............................  STATE.......  Oahu........  Kamehameha Highway, South Punaluu Bridge Replacement, Oahu \3\................     $15,298,510  NTP 8/26/09......  30 percent
S3............................  STATE.......  Hawaii......  Hawaii Belt Road, Clean & Paint Steel Members, Kukuaiu, Kuwaikahi, Ninole and       $4,301,949  NTP 9/8/09.......  67 percent
                                                             Maulua Bridges, Hawaii \3\.
S4............................  STATE.......  Kauai.......  Maalo Road Resurfacing, MP 0-MP 1.0, Kauai \5\................................        $729,083  NTP 7/20/09......  Completed
S5............................  STATE.......  Kauai.......  Kuhio Highway Resurfacing, Kawaihau Road to Kapaa Bridge, Kauai \5\...........      $1,021,416  NTP 7/20/09......  Completed
S6............................  STATE.......  Kauai.......  Kuhio Highway, Short Term Improvements, Kuamoo Road to Temporary Bypass Road    \4\ $17,000,00  $34 million        Awaiting FHWA
                                                             \1\.                                                                                        0   total; $17         decision on Sect
                                                                                                                                                             million ARRA.      106
S7............................  STATE.......  Maui........  Piilani Highway Pavement Preservation, Lipoa Street to Kilohana, Maui \3\.....      $2,979,480  NTP 8/31/09......  91 percent
S8............................  STATE.......  Maui........  Hana Highway PPM, Kaupakalua Road to Huelo, Maui \5\..........................        $619,301  NTP 8/26/09......  Completed
S9............................  STATE.......  Molokai.....  Maunaloa Highway Resurfacing, MP 5--Airport, Molokai \5\......................      $2,688,406  NTP 8/26/09......  Completed
S10...........................  STATE.......  Molokai.....  Kalae Highway PPM, Maunaloa Highway to Kalaupapa Lookout, Molokai \5\.........      $1,061,781  NTP 8/26/09......  Completed
SBU1..........................  STATE.......  Molokai.....  Puupeelua Hwy Resurfacing, Maunaloa Hwy to Farrington Ave & Farrington Hwy          $5,315,832  NTP 12/3/09......  85 percent
                                                             Resurfacing, Puupeelua Ave to Kalae Hwy (Route 480 Pavement Preservation),
                                                             Molokai \3\.
SBU2..........................  STATE.......  Maui........  Kaahumanu Ave, Waiale Bridge Girder Replacement, Maui \3\.....................      $1,922,456  NTP 4/2/2010.....  0 percent
SBU3..........................  STATE.......  Oahu........  H-1 Dowel Retrofit, Kaimuki and Palailai Areas, Oahu \3\......................      $6,350,000  NTP 1/29/10......  0 percent
SBU4..........................  STATE.......  Oahu........  H-3 Seismic Retrofit, Mokapu I/C, Oahu \3\....................................      $1,599,283  NTP 6/30/10......  0 percent
C1............................  COUNTY......  Oahu........  Traffic Signals at Various Locations, Phase 10 \3\............................      $3,407,221  NTP 12/21/09.....  1 percent
C2............................  COUNTY......  Oahu........  Traffic Imp. At Various Locations, Harding Ave. and 5th & 11th Aves \3\.......      $2,456,715  NTP 7/10.........  .................
C3............................  COUNTY......  Oahu........  Waipio Point Access Road Improvements \3\.....................................      $3,585,927  NTP 7/10.........  .................
C4............................  COUNTY......  Oahu........  Traffic Management Center Auxiliary Power Facility \3\........................        $291,652  NTP 4/30/10......  0 percent
C5............................  COUNTY......  Oahu........  Kalaeloa Blvd Widening and Reconstruction, Phase 1 OR&L ROW to Lauwiliwili          $6,773,817  NTP 7/10.........  .................
                                                             Street \3\.
C6............................  COUNTY......  Hawaii......  Ane Keohokalaoloe Highway, Hawaii \3\.........................................     $28,541,891  NTP 3/29/10......  5 percent
C7............................  COUNTY......  Kauai.......  Lydgate Park to Kapaa Bike/Ped Path (phase III) \1\...........................  \4\ $4,120,000  .................  Not advertised
                                                                                                                                                                                yet
C8............................  COUNTY......  Maui........  Market Street Improvements, Phase 2 \3\.......................................      $2,421,990  NTP 11/27/09.....  36 percent
MCBU1.........................  COUNTY......  Maui........  Resurfacing Various Roads, Ohukai and Kaniau \3\..............................        $409,558  NTP 4/12/10......  94 percent
MCBU2.........................  COUNTY......  Maui........  Lower Main Street and Kanaloa Ave Slurry Sealing \1\..........................  \4\ $1,000,000  BACKUP PROJECT...  Not advertised
                                                                                                                                                                                yet

       AIRPORT PROJECTS

                                STATE.......  Maui........  Apron Pavement Structural Improvements, Kahului Airport \3\...................     $15,000,000  NTP 6/16/09......  78 percent
                                                                                                                                                                                complete
                                STATE.......  Maui........  OGG EDS Integration Improvements, Kahului Airport \3\.........................      $7,240,743  NTP 5/15/08......  Completed
                                STATE.......  Oahu........  HNL EDS Integration Improvements, Phase II, Honolulu International Airport \2\     $24,573,200  NTP 7/19/10......  .................

        HARBOR PROJECT

T1............................  STATE.......  Oahu........  Reconstruction of Pier 29 Container Yard, Honolulu Harbor \2\.................     $24,500,000  $31.5 million      Going through
                                                                                                                                                             total; $24.5       Award process.
                                                                                                                                                             million ARRA.      Received grant
                                                                                                                                                                                agreement from
                                                                                                                                                                                MARAD on 7/2/10.

       TRANSIT PROJECTS

HC19..........................  COUNTY......  Hawaii......  Construct Bus Shelters \5\....................................................         $27,812  Contract awarded   Completed
                                                                                                                                                             9/30/09.
HCBU 1........................  COUNTY......  Hawaii......  Additional Bus shelters \3\...................................................         $44,514  BACKUP PROJECT...  75 percent
HC21..........................  COUNTY......  Hawaii......  Purchase Buses for Expansion of Services \5\..................................        $905,486  Contract awarded   Completed
                                                                                                                                                             9/30/09.
KC24..........................  COUNTY......  Kauai.......  Bus Replacement Program \5\...................................................        $331,632  Contract awarded   Completed
                                                                                                                                                             6/28/09.
KC25..........................  COUNTY......  Kauai.......  Purchase Buses for Expansion of Services \5\..................................        $646,180  Contract awarded   Completed
                                                                                                                                                             6/28/09.
MC53..........................  COUNTY......  Maui........  Purchase Buses for Expansion of Services \3\..................................        $977,811  Contract awarded   98 percent
                                                                                                                                                             6/30/09.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Obligated.
\2\ Estimated cost.
\3\ Advertised/opened bids but have not issued NTP.
\4\ Completed.
\5\ Currently in construction.

    Chairman Inouye. And now I'm going to call upon Mr. Guerin 
of the General Services Administration.
STATEMENT OF WILLIAM J. GUERIN, RECOVERY EXECUTIVE, 
            NATIONAL RECOVERY PROGRAM MANAGEMENT 
            OFFICE, PUBLIC BUILDINGS SERVICE, GENERAL 
            SERVICES ADMINISTRATION
    Mr. Guerin. Good morning, Mr. Chairman, Senator Akaka. 
Thanks for the opportunity for GSA to come and talk about what 
we've accomplished for economic recovery here and across the 
country.
    We have received funding in $130 million or more for two 
projects in Hawaii, the Federal building here and the Federal 
building courthouse in Hilo. Both of those projects are 
underway, but I'd like to first talk about what we've 
accomplished generally before I get into some specifics about 
those two projects.
    We submitted our first spend plan to fund projects in March 
30, 2009 based on two overwhelming criteria: the potential to 
put people back to work quickly, and the opportunity for us to 
transform our Federal buildings into high-performance green 
buildings.
    As we've realized savings from projects underway, we have 
revised our spending plans to reallocate funding. These savings 
were used to enhance or accelerate construction of existing 
projects, or to fund new projects. Today, we have revised our 
spending plan four times, and the latest version of that is 
actually in Congress, now, being reviewed and will be available 
for us to spend money on Friday of this week.
    Our objective is to deliver projects on-schedule, on-
budget, and on-green. We established aggressive targets to 
fulfill the intentions of the Recovery Act.
    As of June 28, we've obligated over $4.3 billion of 
recovery money to over 500 companies, and we've spent over $485 
million of that money already. We're on track to meet our next 
target of awarding $5 billion in total construction projects 
before September 30, 2010.
    We're meeting our performance target of on-green by 
investing in high-performance, green building projects. We're 
using recovery funds, and we have the opportunity to become a 
green proving ground, that is, to provide practical data on 
improving emerging green technologies and practices to 
determine what the return on investment of those technologies 
might be.
    Our investments are helping to stimulate the economy in 
every State, including the State of Hawaii. Using Recovery Act 
funds, GSA has invested in two of Hawaii's landmark buildings, 
one here in Honolulu and one here in Hilo, as I said.
    Construction began in late April on the Prince Jonah Kuhio 
Kalanianaole Federal Building and Courthouse. We received $121 
million in Recovery Act funds to modernize and renovate the 
building. These funds are being used to install an energy 
efficient heating and ventilation system, to renovate the 
restrooms and install new water efficient fixtures there, 
upgrade fire alarms and sprinkler systems, and replace the 
majority of lighting in the building. These modifications are 
expected to reduce energy consumption by nearly 30 percent, and 
will qualify the building for a green silver rating. I had the 
opportunity to tour the building yesterday and construction is 
underway. We have a lot going on there, we're moving people 
around inside of the building, in order to make way to get the 
courthouse started, and that project is going to start very 
soon.
    It should be--the first phase is complete, and construction 
began in April 2010. The first phase will be done in 2014. At 
that point, we'll be looking for additional funds to come and 
finish the Federal building courthouse complex.
    Construction work on the Hilo Federal building began last 
August after the project received over $7 million in Recovery 
Act funds. The work includes improvements to the plumbing and 
electrical systems, historic preservation measures, upgrades to 
the life safety systems and a seismic retrofit of the building. 
We expect that project to be completed in full in the summer 
2011.
    To clarify, when GSA obligates money, we are making a 
contract award directly with our contractors. The contract 
award is a catalyst for money to start flowing. Contractors 
immediately begin to secure financing, hire personnel and 
initiate early steps to perform their project. As progress is 
made, contractors invoice and get paid for the work they 
perform. These project payments are made over the life of the 
contract and provide steady support for our economy over an 
extended period, not just a jolt that lasts for a few months. 
As of June 28, our contractors reported that our investments 
have funded 2,688 jobs across GSA's program.
    GSA's infrastructure investments vary in scope, type, and 
complexity. They range from the two landmark projects, here, in 
the 50th State, to the new courthouse in Austin, Texas, to as 
large as the new Department of Homeland Security (DHS) 
headquarters in Washington, DC, at the St. Elizabeth's Campus. 
That's going to be the largest Federal project in the area 
since the construction of the Pentagon.
    Many of our projects include exciting approaches to energy 
conservation, including geothermal heat source pumps for both 
heating and cooling, and we're shooting for net-zero energy 
uses in all of our buildings, starting with one of our land 
ports of entry on the southern border.
    Project labor agreements came from the Presidential 
Executive order regarding PLAs and we've had the opportunity to 
use PLAs in several of our projects. We're promoting the use of 
PLAs in our construction solicitations for projects greater 
than $25 million. This is consistent with President Obama's 
Executive Order 13502 on the use of project labor agreements 
for Federal construction projects. PLAs are a collective 
bargaining agreement on the terms of employment for all 
laborers on the project, whether they are union or non-union. 
The agreement is between the contractor, its subcontractors and 
the labor unions.
    Appeal A was successfully negotiated between the contractor 
and labor here in Hawaii at the Prince Kuhio Building.
    In addition to our Recovery Act funds, GSA expects to 
receive approximately $856 billion from other agencies. Today, 
we received over $450 million in Recovery Act reimbursable 
work, and of that we have obligated over $300 million in 
contracts on behalf of other Federal agencies.
    I've described our accomplishments and contributions to the 
Nation's economic recovery through the Recovery Act of 2009. We 
look forward to working with you and the members of this 
committee as we continue to deliver this important work.
    Thank you for the opportunity to appear here today, and I'd 
be happy to answer any questions you have when the time comes.
    Chairman Inouye. I thank you very much, sir.
     [The statement follows:]
                Prepared Statement of William J. Guerin
    Good Morning Chairman Inouye, Vice Chairman Cochran, and members of 
the Committee. My name is William Guerin and I am the Recovery 
Executive for the National Recovery Program Management Office of GSA's 
Public Buildings Service (PBS). Thank you for the opportunity to appear 
before you today to discuss GSA's contribution to our nation's economic 
recovery through green modernization and new construction of our 
Federal buildings.
    Last year, the American Recovery and Reinvestment Act (Recovery 
Act) gave GSA an unprecedented and exciting opportunity to contribute 
to our nation's economic recovery and environmental sustainability. The 
investments we made and continue to make in our public buildings are 
helping to stimulate job growth and retention in the construction and 
real estate sectors, reduce energy consumption, improve the 
environmental performance of our inventory, reduce our backlog of 
repairs and alterations, and increase the value of our assets. In 
addition, our investments will help further developments in energy 
efficient technologies, renewable energy generation, and green building 
solutions.
    We are successfully meeting our established milestones to meet the 
intent and goals of the Recovery Act. I will first summarize, and then 
further elaborate on our accomplishments. Since enactment of the 
Recovery Act on February 17, 2009, we have accomplished the following:
  --Submitted our first spend plan, identifying projects funded by the 
        Recovery Act, to Congress on March 31, 2009. We have since 
        submitted four revisions. Our fourth spend plan is still within 
        the mandated 15 day congressional review period and will fund 
        268 projects in all 50 states, the District of Columbia, and 
        two U.S. territories.
  --Established and met our target dates for contract awards:
    --$1 billion in contract awards by August 1, 2009,
    --$2 billion in total contract awards by December 31, 2009, and
    --$4 billion in total contract awards by March 31, 2010.
  --Put GSA on track to meet our next targets:
    --$5 billion in total contract awards by September 30, 2010.
    As of June 28, 2010, we have obligated nearly $4.3 billion to more 
than 500 companies and outlayed over $471 million.
  --In addition to our Recovery Act Funds, GSA expects to receive 
        approximately $856 million in Recovery Act funds from other 
        agencies. To date, we have received $459 million in Recovery 
        Act reimbursable work authorizations and, of that, have 
        obligated over $301 million in contracts on behalf of other 
        agencies.
  --Over the last 3 reporting periods, GSA obtained nearly 100 percent 
        compliance on contract recipient employment reporting on all 
        500+ separate contract awards. During the first quarter, only 
        one recipient did not comply; in the second reporting cycle, 
        GSA achieved 100 percent compliance. PBS received over 99 
        percent reporting compliance during the most recent reporting 
        quarter that closed in April.
  --Established PBS as a Green Proving Ground to provide practical data 
        in order to measure the returns on investment in emerging green 
        technologies and practices.
    GSA is proud of these accomplishments and our opportunity to 
contribute to our nation's economic recovery and reinvestment in our 
building infrastructure. I will now elaborate further on what we have 
done as well as describe some of our exciting building projects.
Organizational Response
    Given the urgency of the situation and the goals of the Recovery 
Act we moved forward quickly and diligently to select the best projects 
for accomplishing the goals of the Recovery Act based on two over-
arching criteria: potential of the projects to put people back to work 
quickly and to transform Federal buildings into high-performance green 
buildings. To help manage and oversee our Recovery Act program, PBS 
created a new national approach to program management and we adopted a 
credo of ``On Schedule, On Budget and On Green.''
    As described earlier, we met our targets of ``On Schedule and On 
Budget'' by exceeding our aggressive goal of obligating $4 billion by 
March 31, 2010. This is particularly remarkable given that project 
awards were on average 8-10 percent below our projected cost estimates. 
Lower-than-expected contract awards made additional funds available, 
which we reallocated and invested in new high-performance features and 
projects. To further describe the magnitude of this achievement, in 
order to meet the March goal we accelerated schedules for 116 projects 
representing $561 million in investments.
    We are working towards meeting our performance target of ``On 
Green'' with our Recovery Act funding targeted at high-performance 
green building projects. The funding provided by the Recovery Act has 
jump-started our effort to meet mandated energy and water conservation 
targets in the years to come. We appreciate Congress' foresight to 
direct the majority of our funding toward converting GSA's facilities 
into high performance green buildings.
    In order to meet these aggressive measures, we set interim target 
dates for project awards in each quarter and monitor project progress, 
identify schedule variances early, streamline and accelerate projects, 
and share best practices. PBS has quickly identified opportunities for 
reinvestment and updated its spend plan to enhance or accelerate 
funding of other projects. To date, we have revised our spend plan four 
times: revisions were submitted on November 23, 2009, January 19, 2010, 
March 5, 2010, and most recently, on June 24, 2010. Speedy revisions to 
the spend plan were essential to meet our interim goals and are 
essential in meeting the mandated timelines in the Recovery Act.
Stimulating the Economy
    GSA's infrastructure investments vary in scope, type, and 
complexity and cover our entire portfolio. Funds from the Recovery Act 
are being used to convert our inventory to high-performance green 
buildings, as well as renovate and construct Federal buildings, 
courthouses, and land ports of entry. These projects range from single 
building system modernizations to large complex new construction 
projects. As of June 28, 2010 our obligations totaling nearly $4.3 
billion for the 262 projects on Spend Plan #3, are funding the 
following projects in all 50 states, 2 territories and in the District 
of Columbia:
  --New Federal Buildings and Courthouses: 11.
  --Land Ports of Entry: 7.
  --High Performance Green Buildings--Full & Partial Modernizations: 
        45.
  --High Performance Green Buildings--Limited Scope Projects: 199.
    Notably, GSA's ``obligations'' are awards flowing directly to our 
contractors, i.e., directly into the construction, real estate and 
architecture/engineering sectors. While contract award is the catalyst 
for money flowing through the economy, funds associated with 
construction or design projects are not immediately outlayed following 
contract award. Rather, payments to contractors for progress made over 
the life of the contract provide steady support for our economy over an 
extended period--not a jolt that lasts only a few months.
    Less visible but important contributions to economic recovery 
follow shortly after we award a contract: contractors immediately begin 
to secure financing, hire personnel, and initiate early steps to 
perform the project.
    Reports from our Recovery Act funding recipients indicate that as 
of June 28, 2010 2,688 prime contractor jobs were funded as a direct 
result of PBS Recovery Act funding during the reporting quarter ending 
June 30, 2010.
Diversity of Investments
    As noted, the projects we have funded vary in amount of investment, 
scope of project, type of project, and geographic region. For example, 
in Austin, Texas, we are building a new courthouse that incorporates 
many innovative green features such as high-efficiency heating, 
ventilation and air conditioning (HVAC) systems and extensive use of 
natural light. PBS is building this courthouse to achieve Leadership in 
Energy and Environmental Design (LEED) Silver certification through the 
U.S. Green Building Council (USGBC). Although construction began in 
September, the project team continues to review the design to determine 
if additional high-performance green building features can be added to 
the project, including recycled interior finish materials and a highly 
insulated cool roof. Anticipated completion date is December 2012.
    Our progress toward the development of the St. Elizabeths campus, 
in Washington, DC is on track. The St. Elizabeths project is the 
Washington metropolitan area's largest Federal project since 
construction of the Pentagon, and will help revitalize and spur 
additional development in Southeast Washington's Anacostia community. 
The completed complex will feature green roofs, landscaped courtyards 
to capture and reuse surface water runoff, and innovative HVAC systems. 
We registered all buildings at St. Elizabeths with USGBC, and we expect 
the St. Elizabeths campus to earn a LEED Silver certification and are 
striving for Gold certification.
    The B.H. Whipple Federal Building project in Fort Snelling, 
Minnesota will renovate the main building, the motor pool building and 
add a new Sally Port. The facility will use a geothermal/ground source 
heat pump system for both heating and cooling that will greatly reduce 
the facility's energy usage. A geothermal well field will require 
removal of most of the site pavement and will therefore promote storm 
water management for a ``95 percent rain event.'' Other features 
include installing a high efficiency sprinkler system and plantings, 
and high efficiency LED site lighting. The Building Automation System 
will be upgraded to include demand controlled ventilation, an upgrade 
of the building lighting control system to include dimmable ballasts, 
occupancy sensor controls and daylight harvesting near exterior windows 
and solar thermal technology providing 30 percent of the building's 
domestic hot water. Once completed, the building will achieve at least 
a 30 percent efficiency improvement over a baseline HVAC system 
compliant with ASHRAE 2007 90.1.
Green Technologies and Practices
    We are leveraging our Recovery Act investments to turn our large, 
varied and stable inventory of buildings into a proving ground for 
green building technologies, materials, and operating regimes. By 
adopting new ideas and products, then evaluating and publicizing our 
results, GSA is working to become one of the commercial real estate 
industry's ``go to'' sources for data on the environmental and economic 
payback of new systems and procedures. Our investments in innovative 
technologies and alternative energy solutions can help lead the 
transformation to new green jobs and new green industries. The table 
below identifies the number of green technologies we are including in 
our projects.

------------------------------------------------------------------------
                                                           Projects With
                                                             Expected
                         System                            Completion by
                                                             12/31/10
------------------------------------------------------------------------
System Tune-ups/Recommissioning.........................              58
Lighting................................................              40
Water...................................................               7
PV Roof.................................................              11
Roof....................................................              26
Facade/Windows..........................................              11
Advanced Meters.........................................             150
Solar Hot Water.........................................               2
Wind....................................................               2
------------------------------------------------------------------------

    Restroom renovations at the Lewis F. Powell Federal Courthouse in 
Richmond, Virginia were successfully completed on May 3, 2010. This 
project focused on energy and water conservation, using more modern 
toilets, urinals and faucets. These new products use less water than 
the standard commercial products used in today's buildings. Also, 
modern lighting products were installed that use less energy per bulb 
and provide high quality illumination. In addition, motion sensor light 
switches were installed to minimize unnecessary energy usage. The 
contract was awarded on August 21, 2009 utilizing Recovery Act funds 
and employed approximately 10-15 employees from the prime contractor's 
staff and approximately 8 difference local subcontractors. The 
contractor worked quickly and provided a successful project on time and 
well within the budget allowed for this work.
    At the Columbus, New Mexico Land Port of Entry, we are providing 
additional funds to design a net zero energy building. A net zero 
energy building is a highly energy-efficient building that uses 
renewable energy-generation technologies to produce as much energy as 
it consumes from traditional utility grids over the course of a year. 
Not only will this reduce greenhouse gas emissions, but it will also 
support the mission need of agencies housed there to maintain critical 
systems in the event of a complete loss of utilities. Building systems 
and technologies may include: integrated building walls containing 
super-insulation and high-performance glass; high-efficiency HVAC 
systems; energy-saving lighting systems; ground-source heat pumps; 
passive solar heating; natural ventilation; use of day lighting; solar 
heated air; and solar thermal water heaters.
    At the Dayton Federal Building, we are installing an automated HVAC 
system as well as a lighting control system that includes occupancy 
sensors and dimmable ballasts. In addition, the building will harvest 
daylight near exterior windows to improve the quality of light and 
reduce the need for artificial lighting.
    We are also pursuing projects that will upgrade the performance of 
specific systems within many of our buildings. These ``Limited Scope'' 
projects focus on improving energy performance and are evaluated in the 
context of the existing physical condition of the building. We 
evaluated these buildings and identified opportunities to ``tune-up'' 
the systems, improve building mechanical system controls, recommission 
building systems and retrofit or replace lighting or HVAC systems. To 
better achieve the goals of the Energy Independence and Security Act 
(EISA) of 2007, we particularly focused on those projects related to 
renewable energy production and water conservation.
    In addition to the Limited Scope projects, PBS has obligated over 
$113 million for High-Performance Green Building Small Projects that 
represent other opportunities for funding measures to convert our 
buildings to high-performance green buildings. These projects tend to 
be smaller in scope and size.
Recipient Reporting
    The Recovery Act requires contractors and other recipients of 
Recovery Act funds to submit quarterly reports that provide the public 
information on the prime and sub-awards, funding, and project status. 
The third reporting period closed on April 16.
    For this reporting period, we continued the multimedia outreach 
approach we developed last reporting quarter to ensure recipients were 
aware of the quarterly reporting requirement. We telephoned our prime 
recipients directing them to the FederalReporting.gov website used to 
register and report; we e-mailed Recipient Reporting Guidance to all 
recipients; we provided pre-populated report templates; and we posted 
guidance to the gsa.gov/recovery website. We also continued to leverage 
our call center to assist recipients with reporting questions. Our 
recipients have provided positive feedback about GSA's call center, and 
have expressed gratitude to our staff for assisting with the reporting 
process. I am proud to report that as of April 16, 2010, more than 99 
percent of GSA's recipients have reported in 539 reports.
    As of June 28, 2010 GSA has funded 2,838 jobs (3,057 including RWA 
work). PBS has funded 2,688 jobs from PBS funds and an additional 69 
jobs funded from RWAs.
Support to Other Agencies
    In addition to GSA's Recovery Act program, we are supporting the 
real estate needs of other agencies that have received Recovery Act 
funding, such as SSA, DHS, DoS. As of June 28, we have entered into 
reimbursable work agreements with customer agencies totaling $459 
million across 35 projects. In total, we anticipate receiving 
approximately $856 million for Recovery Act projects from our 
customers.
Conclusion
    Congress entrusted GSA with a significant increase in funding to 
support the construction and modernization of high performance green 
buildings while quickly putting people back to work during these 
challenging economic times. We have risen to the challenge, and we are 
implementing our program rapidly and successfully.
    Today, I have described GSA's accomplishments and contributions to 
our nation's economic recovery through our investments in green 
technologies and reinvestments in our public buildings funded by the 
American Recovery and Reinvestment Act of 2009. We look forward to 
working with you and members of this Committee as we continue to 
deliver this important work.

    Chairman Inouye. And now may I call upon NOAA's 
Representative Broglie. Mr. Broglie.
STATEMENT OF WILLIAM F. BROGLIE, CHIEF ADMINISTRATIVE 
            OFFICER, NATIONAL OCEANIC AND ATMOSPHERIC 
            ADMINISTRATION, DEPARTMENT OF COMMERCE
    Mr. Broglie. Chairman Inouye, Senator Akaka, I appreciate 
the opportunity today to discuss the impact of the American 
Recovery and Reinvestment Act of 2009 in the course of the NOAA 
Pacific Regional Center.
    I know you are both well aware of the good work that NOAA 
does, but for other present here today, I wanted to talk a 
little bit about NOAA in Hawaii, and the Pacific Regional 
Center, to maybe frame for folks why the ARRA funding is so 
important to NOAA for this project.
    NOAA has a significant presence in Hawaii, with over 600 
employees and associates working here. The programs NOAA 
manages in Hawaii and the Pacific Region are large and diverse, 
spanning a geographic area covering over 30 million square 
miles, five time zones and encompassing nearly one-half of U.S. 
Exclusive Economic Zone.
    NOAA's responsibilities, include tsunami, climate and 
weather prediction, including tsunami and severe weather 
warnings fisheries management and stock assessments, marine 
mammal and endangered species protection, coral reef 
conservation, including marine debris removal, National Marine 
Sanctuary management and operation, and supporting the 
development and sustainment of hazard resilient communities.
    NOAA operates three ocean-going research and survey vessels 
that are permanently homeported in Hawaii, and operate 
throughout the Pacific. In 2010, there was total investment in 
programs and operations in Hawaii is more than $126 million, 
much of which is brought directly into the local economy 
through Federal jobs, contracts, and cooperative research 
projects conducted in Hawaii.
    As NOAA's programs and mission responsibilities in the 
Pacific grew over time, we established a presence in nearly 18 
different dispersed locations across Oahu. For almost a decade, 
NOAA has had a vision for a Pacific Regional Center, a 
centralized location that would allow NOAA to better integrate 
its research, products and services.
    Approximately 6 years ago, NOAA entered into a partnership 
with the U.S. Navy in Hawaii to begin developing the new 
Pacific Regional Center on historic Ford Island, at Pearl 
Harbor. Undergoing its own revitalization plan, Ford Island 
provided the ideal location for NOAA's new Pacific Region 
headquarters: deep-water berthing for vessels, seawater for 
scientific research, and space that could support over 700 
people in the future.
    NOAA's development of the new Regional Center proceeded in 
three phases. First, a new Ship Operations Facility supporting 
our research and survey vessels opened the fall 2007. A new 
marine science and storage facility is currently under 
construction and is scheduled for completion in 2011. The 
third, and largest, phase, the development of the Center's main 
facility, received critical capital investment funds under 
ARRA.
    The Center's main facility will encompass over 300,000 
square feet of lab and office space, renovating two World War 
II-era hangars and developing a new third building that will 
join those together.
    Later this summer on NOAA's behalf, the Navy will award the 
construction contract for the Center's main facility, with 
projected completion and occupancy in early 2013. The ARRA 
funding allowed NOAA to move forward with the main facility 
construction, and the overall consolidation at Ford Island.
    The impact of ARRA funding in the context of the Center can 
be measured at multiple levels. In the short term, from a jobs 
perspective, we expect the award of the construction contract 
to bring over $140 million in construction jobs to the labor 
market in Hawaii. Over the long term, having a world-class 
science and research facility located in Hawaii is expected to 
further promote international, scientific, and local 
educational partnerships. This world-class facility is expected 
to aide in recruiting the next generation of scientists and 
researchers to work on the critical science issues facing the 
Nation and the Pacific region in the future.
    NOAA also expects the project to promote further 
partnership opportunities on common operational and research 
issues with the Navy, given our joint presence at Pearl Harbor. 
The new facility will promote NOAA's continued commitment to 
sustainable design, achieving at least a LEED Silver status, 
and will allow NOAA to partner with the Navy in its deployment 
of solar energy and photovoltaic cell systems on Navy buildings 
in the near future.
    In summary, NOAA's Pacific Regional Center main facility is 
expected to bring benefits to the local economy here in Hawaii, 
both in the short term, through the creation or sustainment of 
construction-related jobs, and in the long term, by creating a 
modern, state-of-the-art lab and office facility that promotes 
science and educational partnerships and attracts the next 
generation of scientists and researchers. The funding also 
allows NOAA to realize the programmatic vision of establishing 
a NOAA facility that better serves Hawaii and the broader 
Pacific Region.
    We appreciate your historic and continued support of NOAA 
and its programs, and particularly this project. Thank you for 
inviting me to provide this testimony.
    [The statement follows:]
                Prepared Statement of William F. Broglie
    My name is William Broglie, and I am the Chief Administrative 
Officer for the National Oceanic and Atmospheric Administration (NOAA). 
I appreciate the opportunity today to offer a few perspectives on the 
American Reinvestment and Recovery Act of 2009 in the context of the 
NOAA Pacific Regional Center.
    NOAA has a significant presence not only in Hawaii, with 
approximately 600 employees and associates working here, but also in 
the larger Pacific Region, with offices in Guam, the Commonwealth of 
the Northern Mariana Islands, the Republic of Palau, the Federated 
States of Micronesia, American Samoa, and the Republic of the Marshall 
Islands. The programs NOAA manages in the Pacific are large and 
diverse, spanning a geographic area covering over 30 million square 
miles, spanning 5 time zones and encompassing nearly one-half of U.S. 
Exclusive Economic Zone. NOAA's responsibilities, including 
international, fall broadly into the following areas:
  --Tsunami, climate and weather prediction (the latter encompassing 
        both the Northern and Southern Hemispheres, and ranging from 
        tropical to sub-polar):
    --Tsunami information and warnings,
    --Severe weather warnings (hurricanes, typhoons, flash floods, high 
            surf, high winds, and even snow),
    --El Nino/La Nina predictions and climate change impacts;
  --Fisheries management and stock assessments; including tuna, 
        swordfish, snappers, lobsters;
  --Marine mammal and endangered species protection (monk seals, 
        Pacific sea turtles, whales), research, and recovery;
  --Coral reef conservation, including marine debris removal;
  --National Marine Sanctuary management and operation including the 
        Hawaii Humpback Whale Sanctuary and the Papahanaumokuakea 
        Marine National Monument; and
  --Hazard resilient communities.
    NOAA operates three ocean-going research and survey vessels that 
are permanently homeported in Hawaii, but operate throughout the 
Pacific. Other NOAA vessels have missions that take them into the 
Pacific. NOAA's total fiscal year 2010 investment in programs and 
operations in Hawaii is more than $126 million, much of which is 
brought directly into the local economy through Federal jobs, contracts 
for services, and cooperative research projects conducted in Hawaii.
    As NOAA's program and mission responsibilities in the Pacific grew, 
it established a presence in nearly 18 different sites across Oahu. For 
almost a decade, NOAA has had a vision for a Pacific Regional Center, a 
centralized location that would allow NOAA to better integrate its 
research, products and services.
    Approximately 6 years ago, NOAA entered into a very productive 
partnership with the U.S. Navy in Hawaii to begin developing the new 
Pacific Regional Center on historic Ford Island, at Pearl Harbor. 
Undergoing its own revitalization plan, Ford Island provided the ideal 
location for NOAA's new Pacific Region headquarters: deep-water 
berthing for vessels, seawater for scientific research, and space that 
could support over 700 people in the future. NOAA's development of the 
Pacific Regional Center (PRC) proceeded in three phases. First, a new 
Ship Operations Facility supporting our research and survey vessels 
opened the fall of 2007. A new marine science and storage facility is 
currently under construction and is scheduled to be completed in 2011. 
The third phase--development of the PRC Main Facility--received 
critical capital investment from American Recovery and Reinvestment Act 
(ARRA) funding.
    The PRC main facility will encompass over 300,000 square feet of 
lab and office space in two renovated World War II era hangars and a 
third, new building that together will realize NOAA's goal of an 
integrated facility.
    Later this summer on NOAA's behalf, the Navy will award the 
construction award for the Pacific Regional Center's Main Facility, 
with projected completion and occupancy in early 2013. The ARRA funding 
allowed NOAA to move forward with the Main Facility construction, and 
has therefore significantly reduced the time to completion of the 
project and the overall consolidation at Ford Island. The impact of 
ARRA funding in the context of the Pacific Regional Center can be 
measured at multiple levels. In the short term, from a jobs 
perspective, we expect the award of the construction contract to bring 
over $140 million in construction jobs to the labor market in Hawaii. 
Over the long-term, having a world-class science and research facility 
located in Hawaii is expected to further promote international 
scientific and local educational partnerships. From a historical 
perspective, the ARRA funds allow us to restore and adaptively re-use 
World War II era buildings in a manner that preserves many of the 
structural components of the buildings, consistent with interests of 
Historic Preservation Partners with whom we have collaborated on the 
project.
    This world class facility is expected to aide in recruiting the 
next generation of scientists and researchers to work on the critical 
science issues facing the Nation and the Pacific region in the future. 
NOAA also expects the project to promote further partnership 
opportunities on common operational and research issues with the Navy, 
given our joint presence at Pearl Harbor. The new facility will promote 
NOAA's continued commitment to sustainable design, achieving at least a 
LEED Silver status, and will allow NOAA to partner with the Navy in its 
deployment of solar energy/photovoltaic cell systems on Navy buildings 
in the near future.
    We were very fortunate that the Pacific Regional Center Main 
Facility was well into the design process when the ARRA funding became 
available, which ensured that we could award the necessary contracts by 
September 30, 2010--the expiration date for the ARRA funding. We are 
also fortunate that funding required for other non-construction costs, 
such as funding to begin work on the information technology required 
for the building, and normal project-contingency funds had been 
separately appropriated; since such funding will be obligated after the 
expiration of the ARRA funds. The Administration's fiscal year 2011 
budget request includes funding to support remaining project 
requirements, such as outfitting the building with information 
technology and furniture, and funding for the inevitable contingencies 
that do not occur until after the construction is already underway. We 
appreciate your continued support of this project, and look forward to 
its completion in 2013.
    NOAA's Pacific Regional Center Main Facility is expected to bring 
benefits to the local economy here in Hawaii both in the short-term, 
through the creation or sustainment of construction-related jobs, and 
in the long-term, by creating a modern, state-of-the-art laboratory and 
office facility that promotes science and educational partnerships and 
attracts the next generation of scientists and researchers. The funding 
also allows NOAA to realize the programmatic vision of establishing a 
NOAA facility that consolidates most of the programs that serve Hawaii 
and the broader Pacific Region. One program that would not be 
consolidated is the Weather Forecast Office that is co-located on the 
University of Hawaii, Manoa campus.
    Thanks you for inviting me to provide this testimony, I am happy to 
answer any questions you might have.

    Chairman Inouye. Thank you very much.
    I'd like to ask a general question to all of you, all of 
the witnesses. How many jobs have been retained or created as a 
result of ARRA funding?
    Sir?

                           REPORT BY QUARTERS

    General Williams. Sir, right now we take all of the 
information, I think, as does everyone from the recovery.gov 
Web site. And that is where the contractors report the number 
of jobs that have been created. Right now, on the Web site, it 
captures recovery-funded jobs, but it may not capture exactly 
how many have been retained, and how many jobs have actually 
been created. So, what we capture right now is recovery-funded 
jobs, which is a collection of both.
    Chairman Inouye. How much is that? How many?
    General Williams. Right now, the number is 405, however, 
that just goes to the end of--the end of March, the 31st of 
March. That was the end of the second quarter. And the way it 
works, right now, based on my knowledge, is that they report by 
quarter. We have just completed the end of the third quarter, 
which ended the last portion of June, and then the contractors 
take the first 10 days of the next quarter--we're in, as we 
speak, they're updating that Web site. Then, for us, in the 
military departments, we take the next 20 days or so to 
validate the input of the contractors, based on our awarded of 
that contract.
    So, somewhere around 30 to 45 days after the end of the 
quarter, we actually have updated information. So, right now, 
we're reporting 405, but I suspect that the number is much 
higher. We should know in the month of August.
    Chairman Inouye. I thank you, General.
    Brennon?
    Mr. Morioka. The report that we have for transportation-
related jobs, either sustained or created, the last report was 
2,317 jobs here in Hawaii, and that's between the highway 
funding, airport funding, and FTA funding.
    Chairman Inouye. GSA?
    Mr. Guerin. Nationally, Senator, we've created over 2,600 
jobs, based on the formula that the General described.
    We also use a formula that we've talked about with Congress 
before of $92,000 per job. And if you use that, in the $130 
million in the State of Hawaii, we could create upward of 1,400 
jobs, here in the islands. That's assuming that all of the 
projects--all the jobs created for both the Federal buildings 
in Hilo and Honolulu.
    Mr. Broglie. In NOAA's assessment, once the construction 
contract is awarded in September, is that we'll be looking at 
creating or sustaining approximately 1,400 construction-related 
jobs over the 2\1/2\ years period of the construction project. 
We haven't really tried to estimate beyond that, other jobs--
service-related job that will be associated with supporting the 
facility once it's constructed and we occupy it.
    Chairman Inouye. I ask that question because as we all are 
aware, sadly, the National unemployment numbers of 9.7 percent 
and in Hawaii it's 6.7 percent. And thanks to you, we've kept 
it going. And I hope it can continue.
    Now, if I may continue, General, your area of 
responsibility, PACOM's area, is the largest in the world. I 
realize the funding here is just a drop in a bucketful of DOD 
funding, but does it help you in maintaining your mission?
    General Williams. Sir, I don't think there's any question 
that the funding that we will receive, in fact, assists us with 
maintaining military readiness. Much of it, as you know, is 
related to our various facilities, and those facilities, of 
course, house our command and control structures as well as 
some of the non-DOD projects, for example, that will assist 
NOAA, that will also assist Trippler Army Medical Hospital. So, 
I don't think there's any question that it contributes to 
military readiness. And every bit of funding that we receive, 
we think, contributes to that cause. So, thank you very much.
    Chairman Inouye. Thank you.
    Mr. Morioka, you spoke about concerns over oversight. Can 
you describe that further?
    Mr. Morioka. There's--part of the--the direction for 
Federal highways has been there's more oversight involvement by 
Federal highways in receiving more reports from the DOT's, 
looking through records and documentation on a more frequent 
basis. And so, that--just that increased level of oversight has 
required us to staff up on making sure that we have those 
records and documents available to Federal highways.
    I think--part of our concern is more so just the 
relationship direction, from a national perspective. Here, in 
Hawaii, we initiated with our Federal highway partners, a 
stewardship agreement approximately 6 years ago. And I think 
when we at DOT in Hawaii started to ramp up and become more 
aggressive in our project delivery at about the same time, I 
don't think we would have been successful in our efforts, if it 
wasn't for the kind of partnership that we had with Federal 
highways. And we continue to have that very good relationship 
and partnering with our local office.
    But we do know that there is some concern, especially with 
much of the banking industry and some of the oversight issues, 
that the desire for more oversight on a broader basis is a 
potential direction that might--that many of the Federal 
agencies might be going to. And we hear it more from our other 
State DOT's when we attend and talk with our other--my 
counterparts in other State DOT's, that the relationship 
between Federal highways and their departments are not as 
productive as they used to be.
    That's surely not the case, here. And I think that's in 
large part due to Mr. Wong and the quality of much of his staff 
in trying to perpetuate the stewardship and partnering 
agreements that we have. But, it's just our concern that we 
don't want to go back to the old days, where it was more of a 
policing effort, rather than a partnering effort.
    But, currently, that's not the case. We're just concerned 
that we don't go backwards, because I think we've come a long 
way in the last few years.

                               OVERSIGHT

    Chairman Inouye. Do you believe that some of the oversight 
is unnecessary?
    Mr. Morioka. No, I think there just needs to be an ability 
to strike a balance between the two.
    Chairman Inouye. Okay. Is Mr. Wong here? Have you got any 
comment to make?
    Mr. Wong. I think Brennon's observations are correct. Our 
differing with a higher level of accountability, transparency, 
we knew was going to be a challenge going into it. The question 
is whether it's going to be sustained by this, after ARRA 
expires and we go back to the legislation that we work under, 
which up for reauthorization, so that's still a big unknown.
    But, you know, partnership, I think, has been strong. We 
met the challenge with the adjustments. I think what we're 
seeing in terms of the oversight piece of it, is a little bit 
more checking on the expenditure and the things and that does 
take a little bit of trying.
    We are not trying to examine that, I guess, with an ``I 
gotcha'' mentality, but more as, you know, if there are 
weaknesses in that process that we use this opportunity to 
address those weaknesses on a more systemic basis.
    So, for the overall good and probably the future of a 
program like this, I think this experience has been positive. 
But, in the sense that, I think with the resource restrictions 
and that type of thing, is has been a challenge.
    Chairman Inouye. So, are you satisfied with the 
relationship?
    Mr. Wong. I think it's worked very well. I think we've had 
a big challenge to step up to and with some of the limitations 
that occurred during that process, I think we've worked very 
well together.
    Chairman Inouye. Congratulations.
    Mr. Wong. Thank you, sir.
    Chairman Inouye. This way we save a few bucks down there.
    Mr. Wong. We try to.
    Chairman Inouye. Do you think that the monies are being 
spent in a timely fashion?
    Mr. Morioka. Yes, I do. I think just the way that we select 
the projects and the types of projects that we selected--our 
construction projects are going to be stretched over 2 to 3 
years. I know there is a desire to see the expenditure rates go 
up a lot faster, to actually expend all of the--the ARRA funds 
itself. But when you look at the outlay of cash flow for a 
construction project, it's going to be done over a 3-year 
period. And, for us, that was a very conscious decision. We 
know that the expenditures were going to be slower, but it was 
going to be done on--over a longer period of time, making sure 
that the people are employed for a longer period of time. The 
types of projects that we chose were going to be larger 
infrastructure investments, and so I think we're expending the 
money in an appropriate timeframe, based on the types of 
projects that we have. And I think the projects that we have 
are the right projects for Hawaii.
    Chairman Inouye. I must say that I was impressed at your 
statistics of 14 percent for resurfacing, and the national 
average is 40?
    Mr. Morioka. Forty-nine.
    Chairman Inouye. I think your decision was correct.
    Mr. Morioka. Thank you.
    Chairman Inouye. I thank you very much.

                             PROJECT STATUS

    Mr. Guerin, have the Hilo and Honolulu projects progressed 
as planned?
    Mr. Guerin. They are. It took some time to procure both of 
the projects but they are now in construction and they are now 
moving forward, so I think we're right on track. We've been at 
this more than 1 year, now, and to add both of those projects 
in construction, as you know, Hilo has been an unfortunate 
victim of not enough funding for a period of time, and then we 
managed--because of the downturn in the economy--to get very 
good bids on the project. We were surprised about that, but 
happy to finally award that project, because it's been a need 
for a long time and has been seeking funds for several years, 
now.
    The work, here, in Honolulu is more timely, but that 
project was designed quickly. It's a CMS constructor project, 
where the CM is helping us finish the design, as well as go 
into construction, and that's moving very well, as well. So, 
we're underway and we have a good project schedule.
    The phasing for Honolulu is fairly elaborate because we 
can't move the courts out of the courthouse. Finding space for 
courtrooms and chambers that's adequate for the judge's needs 
is a tough trick anywhere, and in Honolulu it's a tough trick, 
as well. So, we have a phased construction project there, in 
the courthouse, we ran through the plans yesterday with the 
project team, and it's very well thought out, and moving 
forward.
    Chairman Inouye. I'm especially pleased with the project 
labor agreement. I think it will provide a steady workforce and 
on-time completion.
    Mr. Guerin. We agree, Senator. The GSA led the charge with 
PLAs with the Executive order. Really, we haven't used them in 
the past. Came to find out, that several locations, the 
contractor and labor have been using PLAs that we were just not 
aware of. So there was a little bit of trepidation coming into 
it. But, we've been very successful with PLAs, so far, across 
the country and the project here is a good example of that.
    Chairman Inouye. Thank you very much.
    And with NOAA, you have this child development facility on 
Ford Island? I think that's one of your projects with the Navy?
    Mr. Broglie. We're working closely with the Navy to reach 
agreement on how to leverage the investments that the Navy is 
already making at a Ford Island Child Development Center, to 
make sure that it meets not only the Navy's needs, but also can 
best serve NOAA's family needs moving forward, as well.
    Chairman Inouye. I'm glad this is happening, because it's 
money being put to good use.
    Mr. Broglie. We've benefited, Senator, with a very good 
partnership relationship at multiple levels with the Navy over 
the past several years and this is one example of it.
    Chairman Inouye. Well, as you know, I have a NOAA Executive 
on my staff. And I'm constantly being propagandized.
    Mr. Broglie. We appreciate her on multiple levels.
    Mr. Guerin. Do you need a GSA member, also?
    Chairman Inouye. We'll consider that.
    I'd like to call upon Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Brennon Morioka, you say that you're applying right now 
about 2,300 or so on the jobs that you have, this stimulus 
money. Is that a cap, or is there a possibility of increasing 
that?
    Mr. Morioka. No, we anticipate to actually have a much 
higher number by the time we're done. Many of our projects, 
some of the larger ones, are just starting out. We still have a 
couple more to bid that are fairly sizable, especially the Mid-
Level Road in Kona. It has only started a few months ago, so 
that project will ramp up significantly, and that's a $35 
million project for the county of Hawaii. And so those numbers 
will continue to add. So, I think this number is going to 
increase significantly.

                              KONA PROJECT

    Senator Akaka. Particularly, I'm interested in that, they 
call it Leiopua 2010, I think, or 2020.
    Mr. Morioka. Leiopua 20--yeah.
    Senator Akaka. 2020, yes.
    Mr. Morioka. Correct.
    Senator Akaka. And it's a project in Kona on the sand, as 
you stand by Honakohau Road, there, above that is where this 
road is, to be constructed.
    Mr. Morioka. Correct. It's a very good development. It's a 
regional vision for the people of Kona, something driven by the 
need for affordable housing, workforce housing in Kona. And so 
two of the major developments are affordable housing. It's 
Department of Hawaiian Homelands, for their development, and 
HHFDC's affordable housing program, that they have partnered 
with four cities to develop. And it's not just only affordable 
housing but it's development of a community with commercial 
facilities, recreational facilities, and so it very much is a 
community vision, rather than just building houses.
    And the Mid-Level Road that the county is building is just 
a part of building that community. But it's a significant part.
    Senator Akaka. Yes, that village you're talking about, is 
called Ka Makana, affordable housing.
    Mr. Morioka. Yes.
    Senator Akaka. And that, of course, is part of the 
community that we expect to rise from that project.
    Can you tell me, further, about the status of that project?
    Mr. Morioka. Well, I know DHHL is moving on two of their 
villages, they're in active construction. I believe Four Cities 
is still working out some of their permitting issues, and--but 
they will be entering into construction of their housing and 
commercial development, but the county also has quite a bit of 
construction in their facilities and their centers along 
Kealakehe Parkway that the Mid-Level Road ties into. So, this 
road really is, is a major vein for the development of this 
because it ties in and provides the network to connect all of 
these different components of the community.
    So, the development of this area of Leiopua is definitely 
moving along very rapidly.
    Senator Akaka. I'm happy that culture is brought in this, 
as well. I understand the name of the highway is going to be 
Ane Keohokalole Highway.
    Mr. Morioka. Yes.
    Senator Akaka. And that name is Queen Liliuokalani's 
mother's name. So, with that, it makes it more precious for the 
Kona area.
    Mr. Morioka. Absolutely. And then Mayor Kenoi actually 
invited the family to the groundbreaking. So, it was a very 
touching ceremony.
    Senator Akaka. Thank you.
    General Williams, I'm very pleased to know that already 
you've had 106 DOD construction projects in place. And this has 
been awarded in Hawaii, and you've created in those, about 400 
jobs. I want to ask you is that--are you looking toward more 
jobs than 400?
    General Williams. Senator, as I explained earlier, those 
figures really just reflect to the end of the second quarter. 
But we--I hate to speculate, but we certainly believe that when 
the end of third quarter data comes in that we'll see the 
number of jobs significantly increased.
    Senator Akaka. And I also understand that your focus has 
been on what you called sustainment, restoration and 
modernization types of projects. And as you know, today, in 
Congress, we're of course very aware of the deficit and we've 
been discussing--because I'm a senior member of the Armed 
Services--been discussing the funding between what we call the 
warfighters, and ensuring that the DOD has the necessary 
funding for this SRM. But, we continue to try to provide enough 
for the readiness of our troops. What are some of the other 
projects that we ought to keep in mind for Hawaii if funds 
become available that will help enhance PACOM's readiness 
programs?

             CHILD DEVELOPMENT CENTER ON MARINE CORPS BASE

    General Williams. Well, I would certainly go back to each 
of the service components and ask that specific question. But, 
first of all, thank you for your support of some of the less-
than-high-profile projects. I mean, one of the ones that I 
testified about today that's very, very near and dear to our 
hearts, for example, is the $9.6 million in funding that was 
awarded for a child development center on the Marine Corps 
base. It's that kind of funding that I believe you're talking 
about. In addition, NOAA just testified that, you know, their 
coordination with the Navy, also resulting in use of another 
child development center.
    Well, for the military services, in particular, as you well 
know, while that may not be a high-profile project, it 
certainly helps to reduce the strain on many of our military 
families, especially those with extremely high operational 
tempo that are related to deployments. So, these kind of 
facilities, these childcare facilities are extremely important, 
and those are the kind of projects that we need to continue to 
support, and we appreciate your support on that.
    Senator Akaka. Well, we're grateful that you are focusing 
on families of our military personnel. That is so important in 
readiness.
    I just want to mention another project that, for years, 
we've been trying to work on, and that's trying to place a new 
cable in Hickam to provide the energy and power through Hickam, 
and hopefully there will be funds to do that. I don't know 
whether that's on the list of your projects.
    General Williams. Sir, I'll have to check that particular 
fact and get back to you. We'll specifically look for your 
request on that project.
    [The information follows:]

    The repair of the electrical distribution system is being 
executed in seven phases. Phase seven--estimated at $8.5 
million O&M--of the seven phase Hickam AFB Repair Electrical 
Distribution System was not on the ARRA list because at the 
time of submission the project did not meet the initial 2009 
ARRA guidance of being awarded within 90-120 days of funds 
receipt. The seventh phase, which places the final leg of the 
existing overhead Hawaii Air National Guard circuit 
underground, corrects safety deficiencies, and replaces live 
front transformers, is currently under design. HQ PACAF did 
submit the project as its number 1 priority for the fiscal year 
2011 PACAF congressional Milcon insert and O&M Earmark 
Candidates. Phases 1 thru 3 are 100 percent complete and were 
funded with Milcon. Phases 4 thru 6 are O&M funded projects and 
are at various stages of construction, and on target to be 
completed by spring 2011. Phase 7 is currently in design and 
should be completed by the time earmark funds are provided.

    Senator Akaka. Mr. Broglie, the Kohala Center received a 
Recovery Act award to improve the condition of the Peliconi A 
watershed in South Kohala on the Big Island. This project is 
expected to reduce sediment, runoff into the bay that damages 
coral. Given such challenges as runoff, climate change and 
increased ocean pH levels, can you tell us what more must be 
done to protect corals and clean ecosystems?
    Mr. Broglie. Senator, I'll probably need to get back to you 
with a fuller answer on that, consulting with the programmatic 
areas, I know they handle coral reef and ecosystem sustainment. 
I don't have an immediate answer for you today.

                           REPORTING PROCESS

    Senator Akaka. Mr. Guerin, you indicated in your testimony, 
and in our discussion earlier, the job creation totals from GSA 
and Public Building Service. What data quality review 
procedures or steps did you follow to ensure the reliability of 
filling those jobs reported?
    Mr. Guerin. I think that gets to some of the comments that 
the General made, and also the discussion with Mr. Morioka 
about the recipient reporting process and the activity 
associated with that. The President has instituted a very 
robust reporting process that requires each recipient receives 
funds from the Recovery Act to report to the Federal Government 
on a quarterly basis. And those results are just being compiled 
now for the third quarter.
    But it's a very iterative process whereby GSA, 
particularly, has created templates, worksheets for recipients 
so that we reach out to them to give them information, so, that 
they can provide back to us. Their job is, specifically, to 
tell us how many jobs, how many person-hours of work was 
accomplished during the reporting period.
    But GSA has been very actively engaged in trying to make 
that easier for people, because it is a burden. It is a--it's a 
very significant process that is focused on the recipients of 
the funds. So, we've tried to do everything we can--we have a 
call center whereby we reach out to people to remind them that, 
you know, it's time, again, to report, to make sure that the 
forms are filled out properly, to make sure that it's as easy 
as possible for them to report information to us, and we 
believe the information is quite accurate.
    The first go-around was, there was some, you know, well-
publicized congressional districts that didn't exist, those 
kinds of things, but the administration has been very 
aggressive about trying to correct that information and make 
sure that the information reported back to us is as accurate as 
possible, and I believe they've made great strides in that.
    In my own program, I run a program management office 
specifically focused on the Recovery Act, and I have a whole 
subset of people in my organization that are specifically 
devoted to recipient reporting and ensuring that that reporting 
process is done correctly. So, I believe the information is as 
accurate as we can make it.
    Senator Akaka. You've reported that you've now hired about 
1,400 people to work--is there a----
    Mr. Guerin. No exactly, Senator. What I said is, based on a 
CEA data point of $92,000 per job, if you took the $130 million 
that's coming to the State of Hawaii, that could potentially 
equate to 1,400 jobs.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Chairman Inouye. Thank you.
    I'd just like to add, and join Senator Akaka on commending 
the military on child development programs. I think most 
Americans don't realize that in World War II the--my regiment 
was quite, I think, typical. Four percent of the officers and 
men were married, 96 percent were single. Today, 70 percent are 
married, with dependents, and 30 percent single. As a result, 
we have more children in the military than ever before. Your 
concerns about kids are, I think, well placed.
    General Williams. Sir, I would further say that family 
readiness is military readiness.
    Chairman Inouye. Thank you, sir.
    And thank you, I'd like to thank the panel. We appreciate 
it very much.
    Our next panel is made up of the Executive Vice President 
and Chief Information Officer of Hawaii Pacific Health, Mr. 
Steve Robertson, and the Director of Continuing/Distance 
Education and Strategic Planning, College of Pharmacy, 
University of Hawaii at Hilo, Dr. Karen Pellegrin.
    Mr. Robertson? Welcome, sir.
STATEMENT OF STEVE ROBERTSON, EXECUTIVE VICE PRESIDENT 
            AND CHIEF INFORMATION OFFICER, HAWAII 
            HEALTH INFORMATION EXCHANGE
    Mr. Robertson. Thank you.
    Thank you, Chairman Inouye, Senator Akaka, I want to thank 
you for inviting us to testify today. I'm actually here as the 
Board President of the Hawaii Health Information Exchange. And 
I'm happy to report that over the last few months, we've been 
awarded $11.4 million in grants under ARRA to facilitate the 
fundamental transformation of health information technology in 
the State and across the country.
    The Hawaii Health Information Exchange is a nonprofit 
company that was formed in 2006 by a group of stakeholders--
healthcare stakeholders--that were interested in actually 
beginning the process of working collaboratively to really 
improve the efficiencies and overall healthcare processes in 
the State. In September of last year, became the State-
designated entity for implementing the Statewide Health 
Information Exchange.
    Our Board of Directors is broad, we've got representation 
from the community, the neighbor islands, and the local 
healthcare industry, spanning hospitals, physician groups and 
insurance plans.
    Over the next couple of years we've got two main goals as 
funded by these grants. The first one is to assist in the 
adoption of electronic health records and the second one is to 
enable the safe, secure health information exchange between 
care providers, among other things.
    And what I'd like to do is to kind of give you an example 
of what that really means from a practical sense. Today, if you 
walk into a physician's office, more chances than not--greater 
than 50 percent of the time--what you see are paper medical 
records, sitting right there behind the registration desk. And 
all of your care is documented in that paper, and when you 
leave that visit, your care gets coordinated via faxes and 
other paper mechanisms. So, we've been operating that way for 
more than 100 years, and it's served us well. But to really 
transform healthcare we need to do more than that, we need to 
go electronic.
    So, if we take that example a little bit further, let's say 
we've got a patient who's medivaced from a neighbor island into 
an Oahu emergency room. If it's just paper alone, that 
emergency room physician--if the patient is unconscious and no 
one else is with that patient, the emergency room physician has 
to act on the information that's available. If it's all on 
paper, sitting in a clinic somewhere on a neighbor island, 
that's not going to be particularly helpful. So, what will 
occur if we become electronic, in other words, if we can get 
all of our primary care physicians onto an electronic health 
records and get those electronic health records actually 
talking to each other, then we can provide better care by 
ensuring that emergency room physician has access to the 
complete medical record.
    So, that doctor will be able to look up that patient's 
record, see what other kinds of medications, allergies might be 
present or the existing physical conditions of that patient, 
and provide the best possible care given the amount of 
information that's available.
    Our goal is to use the ARRA funds to make that possible. 
So, when you look at our total funding of $11.4 million, to 
date we've added 7 physicians with the hope of creating a total 
of 27. But the real savings, and the real value is going to 
come from these increased efficiencies by providing better 
care. So, the fewer medical errors that are present, the less 
costly--the lower the utilization of hospital admissions, et 
cetera.
    As I said, the $11.4 million actually comes from two 
grants. The first one is to actually build--to plan and 
implement a Health Information Exchange in Hawaii. And that 
grant award amount is $5.6 million and do that over 4 years. 
The award occurred in February, so it's fairly recent. So, 
we're still in the early stages.
    We're in the process of developing the statewide health 
information technology plan, strategic plans and operational 
plans to do Health Information Exchange. And these plans will 
be submitted for approval to the State Coordinating Committee 
for Health IT in August with the expectation that we will get 
the strategic plan and operational plans approved later in the 
year so that we begin the hard work of actually creating the 
system.
    The second grant is a $5.8 million, 4-year grant awarded in 
April, and it's to build the Hawaii Pacific Regional Extension 
Center. So, this grant covers Hawaii in addition to supporting 
Guam, Samoa, and the Marianas Islands. And its primary purpose 
is to help primary care physicians choose and implement 
electronic health records. So, the idea is, the more physicians 
we get on board with electronic health records, then we 
actually do through Health Information Exchange, provide better 
care across the State.
    Our operational plan has already been submitted and 
approved by the Office of the National Coordinator, and we 
expect to, again, this grant has two existing positions, so 
once the final rules and regulations regarding the meaningful 
use of electronic medical records is in place, we'll begin the 
full rollout. So, the idea is that will be fully staffed within 
12 months or sooner.
    In closing, I just want to say, Senator Inouye and Senator 
Akaka it's--we very much appreciate the opportunity and the 
funding that Hawaii has. A lot of us have been talking about 
doing this sort of thing for a very long time but never really 
made real progress. And it's only because of the ARRA stimulus 
money that we can actually now put these dreams to use to 
fundamentally change healthcare and set the foundation for 
healthcare reform across the country.
    Thank you very much.
    Chairman Inouye. Thank you very much, sir.
     [The statement follows:]
                 Prepared Statement of Steve Robertson
    Aloha Honorable Chairman Inouye, Honorable Chairman Akaka, and 
members of the Appropriations Committee.
    Thank you for offering the Hawai`i Health Information Exchange 
(Hawai`i HIE) this opportunity to testify today on the American 
Reinvestment and Recovery (ARRA) HITECH Act programs: the State HIE 
Program and the Hawai`i-Pacific Regional Extension Center program. We 
appreciate your support in helping to secure this funding for Hawai`i 
and for your commitment to improving the healthcare system.
    The Hawai`i Health Information Exchange (Hawai`i HIE) is a 
501(c)(3) nonprofit company established in 2006 by leading healthcare 
stakeholders in Hawai`i for the purpose of improving healthcare 
delivery throughout the State through seamless, effective, and safe 
health information exchange. In September of 2009, the Hawai`i HIE was 
designated by the Governor as the entity to develop and implement a 
statewide health information exchange that will ultimately support the 
national health information network.
    The Hawai`i HIE has a broad and representative board of directors 
that includes physicians, hospitals, insurance plans, community 
representatives, business representatives, laboratories, the John A 
Burns School of Medicine, and others. Our united vision is to build a 
statewide system that enables our patients to receive the best possible 
care by facilitating coordination between care providers and to improve 
health outcomes while improving efficiencies that help mitigate the 
spiraling costs of healthcare. The opportunities afforded by the 
American Reinvestment and Recovery Act of 2009 will help Hawai`i to 
expedite its long-term HIE goals.
    On February 8, 2010, the Hawai`i HIE was awarded a $5,602,318 grant 
under the State HIE Cooperative Agreement Program through the Office of 
the National Coordinator for Health IT (ONC) to develop and implement a 
State HIE Plan over a 4 year period. The HIE Cooperative Agreement 
Program builds on existing efforts to advance regional and state-level 
health information exchange while moving toward nationwide 
interoperability.
    Our goal, working with key stakeholders in partnership with the 
State Coordinating Committee for Health IT that includes members from 
the Department of Budget and Finance, Department of Human Services, 
Department of Health, Department of Accounting and General Services, 
and the Department of Commerce and Consumer Affairs, is to develop the 
State's strategic and operational plans by August 31. Our Executive 
Director, Christine Sakuda, meets weekly with State Health IT 
Coordinator, Mark Anderson to ensure appropriate progress is being 
made. To date, we are on track. ONC approval of these plans is expected 
in October, with the hope that the work of building the Exchange can 
begin shortly thereafter.
    Transparency and inclusivity are two of Hawaii HIE's core values. 
We recognize that broad community input from all of Hawai`i is 
imperative to our process. We achieve this through our website at 
www.hawaiihie.org, our blog at http://hawaiihie.ning.com/, and through 
open community meetings. To date, we have conducted informational 
meetings on the islands of Kaua'i, Maui, Molokai, Lana`i, Hawai`i 
Island, and O`ahu. These meetings provided an overview of the State HIE 
plans and findings while encouraging community members to share their 
ideas and concerns. Our message was warmly received on all islands and 
well attended by the islands' diverse healthcare stakeholder 
population. Overwhelmingly, the participants see the advantages of a 
health information exchange to improve the quality of Hawai`i's 
healthcare delivery system through increased coordination of care, 
ready access to needed information at the point of care and increased 
access to quality patient health information.
    The Hawai`i HIE received a second grant award of $5,859,716 from 
ONC on April 6, 2010 to manage the Hawai`i Pacific Regional Extension 
Center (REC) Program. The goal of the Hawai`i Pacific REC is to support 
primary care providers in effectively choosing and implementing 
electronic health records (EHRs), establishing privacy and security 
best practices, redesigning workflow, and instituting health 
information exchange. The Hawai`i HIE has subcontracted with Mountain 
Pacific Quality Health-Hawai`i (MPQH-H) and the Telecommunications and 
Information Group (TIP-G) at the University of Hawai`i to serve all of 
the Hawaiian Islands, as well as Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands. The ultimate outcome of 
the REC program is to help providers reach meaningful use of electronic 
health records, as defined by the Centers for Medicare and Medicaid 
Services (CMS), and, as a result, become eligible for stimulus 
incentives offered by the CMS Programs.
    The Hawai`i-Pacific REC's operational plan has been approved by ONC 
and we are now developing the administrative and project plans to meet 
the aggressive timelines set forth by ONC pending the final CMS rule on 
electronic medical record ``Meaningful Use'' requirements. Meaningful 
Use is one of the yardsticks by which we will measure our success.
    In addition to improving health outcomes and mitigating the rising 
costs of healthcare, we believe these ARRA HITECH Act grants in 
coordination with the third ARRA HITECH Act grant on the Hawai`i Island 
called the Hawaii County Beacon Community Consortium (HCBCC) will serve 
as a much needed catalyst in spurring more investments in health 
information technology throughout the State and further develop a 
demand for highly skilled information technology professionals. 
Christine Sakuda currently represents the Hawai`i HIE on the Board of 
the HCBCC that help in state HIE planning efforts. Together, these 
initiatives bring us closer to achieving the same vision, where 
hospitals, clinicians, and patients are meaningful users of health IT, 
with measurable improvements in healthcare quality, safety, efficiency, 
and population health.
    Thank you for this opportunity to testify.
                       hawai`i hie board members
    Money Atwal--CFO & Chief Information Officer, HHSC East Hawai`i 
Region (Hilo Medical Center)
    Francis Chan--Chief Information Officer, Clinical Laboratories of 
Hawai`i, LLC
    Jennifer Diesman--Vice President, Hawai`i Medical Service 
Association
    Susan Forbes--CEO, Hawai`i Health Information Corporation
    Beth Giesting--CEO, Hawai`i Primary Care Association
    Bruce ``Skip'' Keane--Community Member
    Emmanuel Kintu--Exec. Director, Kalihi Palama Health Center
    Janet Liang--President, Kaiser Hawai`i
    Wesley Lo--CEO, Maui Memorial Medical Center
    Roy Magnusson, MD--Assoc. Dean, John A Burns School of Medicine
    John McComas--CEO, AlohaCare
    Gary Okamoto, MD--Past President, Hawai`i Medical Association
    Kevin Roberts--President, Castle Medical Center
    Steve Robertson--Exec. Vice President and Chief Information 
Officer, Hawai`i Pacific Health
    David Saito, MD--Officer, Hawai`i Independent Physician's 
Association
    Christine Sakuda--Executive Director, Hawai`i HIE
    Barbara Kim Stanton--Exec. Director, AARP
    Jim Tollefson--President/CEO, Chamber of Commerce
    Lisa Wong--Member, Society of Human Resource Managers
    Raymond Yeung--Vice President, Diagnostic Laboratory Services, Inc.
    Jeffrey Yu, MD--Chief Technology Officer, The Queen's Health System

    Chairman Inouye. Dr. Pellegrin.
STATEMENT OF DR. KAREN PELLEGRIN, Ph.D., M.B.A., 
            DIRECTOR, CONTINUING/DISTANCE EDUCATION AND 
            STRATEGIC PLANNING, COLLEGE OF PHARMACY, 
            UNIVERSITY OF HAWAII AT HILO
    Dr. Pellegrin. On behalf of the University of Hawaii at 
Hilo College of Pharmacy, thank you very much, Senator Inouye, 
Senator Akaka, for the opportunity to participate in this field 
hearing. I am the Director of Continuing Education and 
Strategic Planning for the College and Principal Investigator 
for the Beacon grant. The Beacon Community Cooperative 
Agreement Program is funded through the U.S. Department of 
Health and Human Services Office of the National Coordinator 
for Health Information Technology.
    The Hawaii County Beacon Community Consortium is one of 15 
sites across the Nation selected to achieve the vision of 
healthcare where hospitals, clinicians and patients are 
meaningful users of health information technology, and together 
achieve measurable improvements in healthcare quality, cost 
efficiency, and population health. We were awarded over $16 
million to achieve a more sustainable model of healthcare.
    The College of Pharmacy is honored to be the lead applicant 
organization for the Hawaii County Beacon Community Consortium. 
In addition to the College of Pharmacy, key stakeholder 
organizations include the Hawaii County acute care hospitals, 
federally qualified health centers, Hui Malama Ola Na Oiwi, 
East Hawaii IPA, the mayor's office, HMSA, and the Hawaii 
Health Information Exchange, all committed to demonstrating the 
Beacon vision in Hawaii County.
    We're in the startup phase of our grant, and we look 
forward to achieving the following milestones in the very near 
future. We will meet the other Beacon site team leaders in 
Seattle next week, the Microsoft Amalga Health Information 
Exchange for Hawaii Island will go live by the end of the third 
quarter of this year, Mayor Kenoi is featuring the Beacon 
project in his August 13 healthcare conference, Beacon 
officials from HHS will be visiting the Big Island in early 
August, and we expect our budget revisions to be approved by 
ONC very soon, at which time we will begin hiring staff.
    As with all of the Beacon communities, our proposed budget 
was reduced by about 19 percent, leaving a balance of 
approximately $16.1 million. Because of the importance of the 
human factor in successful implementation and use of 
information technology, no cuts were made to our original 
personnel budget, which includes funds for 15 to 17 full-time 
employees in Hawaii for 3 years. We believe that this is an 
important strategic investment, not only for Hawaii County, but 
for the State of Hawaii and the Nation. The Hawaii County 
Beacon Community Consortium members are committed to ensuring a 
strong return on this investment.
    Thank you for the opportunity to testify.
    Chairman Inouye. I thank you very much.
     [The statement follows:]
                Prepared Statement of Karen L. Pellegrin
    On behalf of the University of Hawai`i at Hilo (UHH) College of 
Pharmacy, thank you for the opportunity to participate in this field 
hearing. I am Karen Pellegrin, Director of Continuing Education and 
Strategic Planning for the College and Principal Investigator for the 
Beacon grant. The Beacon Community Cooperative Agreement Program is 
funded through the U.S. Department of Health and Human Services Office 
of the National Coordinator for Health Information Technology (ONC) 
under the American Recovery and Reinvestment Act (ARRA) of 2009.
    The Beacon Program provides funding to communities to build and 
strengthen their health information technology (health IT) 
infrastructure and exchange capabilities. These communities will 
demonstrate the vision of a future where hospitals, clinicians, and 
patients are meaningful users of health IT, and together the community 
achieves measurable improvements in healthcare quality, safety, 
efficiency, and population health.
    The Hawaii County Beacon Community Consortium was selected as one 
of 15 sites across the nation at the cutting edge of electronic health 
record (EHR) adoption and health information exchange. We were awarded 
over $16 million to achieve a new level of sustainable healthcare 
quality and efficiency. We plan to demonstrate how health IT can help 
providers and consumers develop innovative ways of delivering care 
leading to sustainable and measurable health and efficiency 
improvements. Along with the other Beacon sites, our successes and 
lessons learned will guide state and other community efforts across the 
nation to achieve similar goals enabled by health IT.
    The UH Hilo College of Pharmacy is the lead applicant organization 
for the Hawaii County Beacon Community Consortium (HCBCC) application 
submitted on January 29. In addition to the College of Pharmacy, the 
stakeholders represented on the consortium governing board include 
senior leaders from the Hawaii County acute care hospitals, federally 
qualified health centers, Hui Malama Ola Na Oiwi, East Hawaii IPA, 
Mayor's Office, HMSA, and the Hawaii Health Information Exchange 
(HHIE), all committed to demonstrating the Beacon vision in Hawaii 
County.
    Since the Beacon grant awardees were announced May 4, the Hawaii 
County Beacon Community Consortium has achieved the following 
milestones:
  --The Privacy Committee has completed a privacy policy, patient 
        authorization form, and participant agreement.
  --The Hawaii Island Health Information Exchange was incorporated on 
        June 22 to prepare for the implementation of the Amalga HIE for 
        Hawaii Island and for sustainability beyond the 3-year grant 
        period.
  --All required documents have been submitted to ONCHIT on time.
    In the near future, we look forward to achieving the following 
milestones:
  --Team members will attend the first in-person meeting of all Beacon 
        sites which will be held in Seattle July 12-14.
  --The Amalga HIE for Hawaii Island will go live in the third quarter 
        of this year.
  --Mayor Kenoi is featuring the Beacon project in his August 13 
        healthcare conference.
  --Beacon officials from HHS will visit the Big Island in early August 
        to discuss the importance of the Beacon sites and learn about 
        our unique challenges and improvement plans.
  --We expect our budget revisions to be approved by ONCHIT soon, at 
        which time we will begin hiring staff.
    As with all of the Beacon communities, our proposed budget was 
reduced by about 19 percent, leaving a balance of approximately $16.1 
million. Because of the importance of the human factor in successful 
implementation and use of information technology, our revised budget 
reflects that most of the cuts were in health information technology. 
No change was made to our original personnel budget, which includes 
funds for 15 to 17 full-time employees in Hawaii for 3 years. In 
summary, our current revised budget of direct costs includes over $6 
million for health information technology, almost $5 million for staff 
in Hawaii, almost $1 million for consultants (particularly for care re-
design and sustainability consultants), and almost $1 million in other 
expenses. Approximately $2.5 million in indirect costs will go to the 
University of Hawaii Hilo according to the federally negotiated rate.
    We believe that this is an important strategic investment not only 
for Hawaii County, but also for the State of Hawaii and the nation. The 
Hawaii County Beacon Community Consortium members are committed to 
working together to ensure a strong return on this investment.
    Thank you for this opportunity to testify.

    Chairman Inouye. In recent days, I've been very much 
interested and concerned about what you're talking about. I'm 
well aware that in cancer, very few cancer specialists operate 
their offices on naval islands--Malakai or Maui or places like 
that--they're all in Honolulu. As a result, say, 5 years ago, 
if you were required to have chemotherapy, you were required to 
make 24 trips. That's extra cost.
    Today, with electronic telehealth and telemedicine, two 
trips would be enough--the first one to diagnosis and the last 
one to see how you've done well. And in between it's done by 
electronic devices. And just to think the costs involved, the 
time spent, you're saving a lot--a lot of lives.
    And I was impressed with statistics coming from Georgia 
where they have a large number of those with diabetes. And 
although rural Georgia has less in population than the city in 
Georgia, there are more amputees caused by diabetes in rural 
Georgia than in the town of Georgia. And it's because of the 
lack of transportation, the lack of communications.
    So, what you're doing for Hawaii is extremely important. It 
will provide first-class healthcare for all people, whether 
you're a Nihau or Lanai or Malakai, and I commend all of you.
    And I'm glad to see the pharmacy college operating well.
    Dr. Pellegrin. Thank you.
    Chairman Inouye. For you're the only one in the Pacific, 
now.
    Dr. Pellegrin. Yes, that's correct, that's correct.
    We appreciate your support.
    Chairman Inouye. Well, someday I may go in there and get 
myself an aspirin.
    Dr. Pellegrin. We'll treat you well.
    Chairman Inouye. Now, you spoke about collaboration between 
all of these federally approved centers and native Hawaiian 
centers and such. Can this model be employed in, say, Maui and 
Kauai?
    Dr. Pellegrin. It is certainly our belief and our intention 
that we will build a model that is scaleable and transportable. 
I would assume that each community will have its unique 
factors, but our goal is to develop a model that would be able 
to be adapted to other communities in Hawaii and likely the 
Nation.
    Chairman Inouye. Well, I congratulate you for all of the 
fast advancements you've made so far. You've been in business 
for less than 2 years.
    Dr. Pellegrin. I think 2006 was the official start, but our 
final cohort of students will start this fall.
    Chairman Inouye. Mr. Robertson, when will we achieve, say, 
70 percent of our doctors electronically fixed up, or most of 
our hospitals? Right now, I gather, nationally less than 5 
percent?
    Mr. Robertson. Yes. I think if we're talking about locally 
or nationally, I know that I can tell you that Hawaii is 
actually doing pretty well, in terms of the hospitals. We've 
got our--at least three of our largest healthcare systems in 
Hawaii are in electronic medical records and several others are 
getting their--or have some system.
    I think our biggest challenge is going to be in primary 
care. The cost and the impact to physician workflow is pretty 
dramatic. But, I think given the incentives, the CMS incentives 
and Medicaid incentives, that's going to go a long way to 
propelling that. So, in terms of getting a number, if we're 
successful, we'll achieve that within 3 to 4 years.
    Chairman Inouye. We're watching your activity very closely, 
because if you're as successful as you predict, you'll get more 
money.
    Mr. Robertson. We look forward to that.
    Chairman Inouye. Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    I am so glad to hear in your testimony how you're moving 
along here on our health programs, as well as our pharmacy 
programs.
    Dr. Pellegrin, I'm proud that Hawaii Beacon Community 
Consortium was selected, and it was selected to be one of only 
15 sites nationwide to implement a Beacon Program. So, I 
congratulate you and all of your consortium colleagues in your 
successful efforts to secure this important grant. The college 
has significant strengths and challenges within its healthcare 
delivery system.
    Doctor, in your testimony you mention that the Beacon 
Program communities will achieve measurable improvements in 
high-quality, safety, efficiency, and population health. How 
does the consortium intend to achieve these goals?
    Dr. Pellegrin. We are in the process of submitting our 
final set of measures and plans for achieving improvements in 
those measures. Some of the key areas that we are looking at to 
achieve measurable improvement is in things like access to 
appropriate care, so we can look at, for example, the numbers 
of patient who need to leave the island to receive care, the 
ability to provide specialty care on the island.
    Another important area is in the area of prevention and 
management of chronic disease. And a key measure of that will 
be, and is nationally, preventable hospitalizations for 
particular conditions of chronic diseases. If we are managing 
those patient populations well, we can keep them out of the 
hospital. We can prevent, at least, some of those 
hospitalizations.
    And then finally, we're also looking at measurable 
improvements in the reduction of disparities among populations 
at risk. As I know you know, the Native Hawaiian population has 
a shorter life expectancy than other populations. This is a 3-
year grant, and so we are going to focus on areas like 
diabetes, where there is a higher rate among the Native 
Hawaiian population. And organizations like Hui Malama Ola Na 
Oiwi play such an important role in ensuring the delivery of 
culturally competent care to that population. So, we look 
forward to working with that organization closely, to learn 
lessons from them and apply those throughout the county.
    Senator Akaka. Well, I certainly want to wish you well. And 
that, without question, it will certainly be achieved.
    Dr. Pellegrin. Thank you.
    Senator Akaka. Mr. Robertson, public health surveillance 
data helps the Department of Health and healthcare providers, 
as well, identify trends and react to epidemics--food poisoning 
and other adverse situations. How will the coalition interface 
with the public health surveillance data, and what will the 
potential benefits of this increased collaboration be?
    Mr. Robertson. Okay, well, that is a fundamental 
requirement for the Health Information Exchange. And we are 
working with the Department of Health and the Hawaii emergency 
surveillance system to do that. And we've actually piloted some 
of that effort, already, separately between Hawaii-Pacific 
Health, and the Queen's Medical Center to provide that data and 
set those data standards.
    So, the idea is that many of those standards and protocols 
will be adopted by the Health Information Exchange so that all 
can participate. But we're probably--we're still a few months 
from being able to do that.
    Senator Akaka. Thank you. Thank you very much.
    The health information technology, Mr. Robertson, has--to 
improve the quality and accessibility of care, reduce costs and 
medical errors. What is your current evaluation of the use of 
health information technology in Hawaii? And how will the 
stimulus resources be utilized to promote greater use of health 
technology?
    Mr. Robertson. I think Hawaii is leading the country with 
regard to the adoption of health information technology. I 
think--there's a national organization called the Health 
Information Management Society, it's a professional group that 
actually benchmarks our organizations. And when you look at 
where Hawaii is, many of its top providers are in the top 10 
percent of the country with their capabilities. I think that 
puts us in a really good position to make these programs really 
effective.
    The ARRA stimulus money, in addition to the incentives for 
hospitals and physicians to implement electronic medical record 
is going to accelerate that adoption curve over the next 3 to 5 
years, we're starting to see a lot of that activity today.
    Again, that just positions us better to do that kind of 
communication to truly coordinate care, and to provide a level 
of--actually put ourselves in a position so that we can hold 
ourselves all accountable, with true, transparent performance 
measures, which will drive that adoption even more, so that we 
can all compete on quality and cost.
    Senator Akaka. Thank you very much, Mr. Robertson.
    Thank you, Mr. Chairman.
    Chairman Inouye. Dr. Pellegrin, Mr. Robertson, thank you 
very much.
    Mr. Robertson. Thank you, Senator.
    Chairman Inouye. Our third panel, Cable Administrator, 
Hawaii Department of Commerce and Consumer Affairs, Mr. Clyde 
Sonobe; Vice President for Information Technology and Chief 
Information Officer University of Hawaii, Dr. David Lassner; 
Vice President, Gold Ivory, LLC, Ms. Su Shin; and the General 
Counsel of Hawaiian Telecom, Mr. John Komeiji.
    I thank you for joining us this morning, Mr. Sonobe.
STATEMENT OF CLYDE S. SONOBE, ADMINISTRATOR, CABLE 
            TELEVISION DIVISION, DEPARTMENT OF COMMERCE 
            AND CONSUMER AFFAIRS, STATE OF HAWAII
    Mr. Sonobe. Good morning, and thank you Chairman Inouye, 
and thank you for inviting me to testify about the state of 
Hawaii's Broadband Mapping Project under ARRA and the impact of 
its grant to Hawaii's citizens. It's a privilege to appear 
before you.
    The State of Hawaii's Department of Commerce and Consumer 
Affairs (DCCA) has been awarded a $1.9 million Federal grant to 
develop an interactive, online map that can be used by 
consumers to identify the availability, speed, and location of 
broadband services in the State of Hawaii. The grant includes 
approximately $1.4 million in funds for broadband data 
collection and mapping activities over a 2-year period, and 
$500,000 in funds for broadband adoption activities over a 5-
year period.
    Hawaii's map will be included as part of the national 
broadband map that is being developed with input from each of 
the States. The CCA has teamed with the University of Hawaii 
and the Pacific Disaster Center to complete the mapping portion 
of the project. Using substantial expertise and resources 
available within the State, the team has made significant 
progress in completing multiple layers of real-time location 
and broadband serviceability data. Broadband providers have 
been generally cooperative, and staff at the U.S. Department of 
Commerce's National Telecommunications and Information 
Administration have been very helpful in assisting DCCA through 
its various Federal grant obligations.
    Although the mapping data is still being processed, it is 
anticipated that the results will reinforce the State's 
longstanding position that portions of Hawaii are extremely 
difficult to serve, and as a result, broadband availability is 
very low in remote regions of the State. Accordingly, DCCA has 
recently requested additional Federal funding in the amount of 
$2.4 million from the National Telecommunications and 
Information Administration (NTIA) to pursue two Federal 
programs: one for State broadband capacity-building, and one 
for technical assistance and outreach. These two programs, 
which are still being organized, are paying that increasing 
broadband adoption and penetration in the State and coincide 
with parallel State program resulting from recent State 
legislation, House Bill 2698, relating to technology, telework 
promotion, and broadband assistance.
    DCC believes the mapping activities promote the State's 
long-term broadband plan, as developed by the State task force. 
The State task force was established in 2007 to provide 
recommendations on how to advance broadband in the State. In 
its final report, dated December 2008, the task force made four 
recommendations, including, establishing a forward-looking 
vision to make Hawaii globally competitive; creating a one-stop 
broadband advancement authority; welcoming trans-Pacific 
submarine fiber to Hawaii; and stimulating demand for 
broadband.
    DCCA's mapping project will produce highly accurate and 
reliable resource for consumers in Hawaii, enabling them to 
identify and choose between the growing number of broadband 
services that are becoming available in the State. The 
broadband map will also encourage increased competition between 
broadband service providers, by giving them additional 
information on communities within the State that would benefit 
from availability of new broadband services.
    Furthermore, DCCA's broadband adoption programs will 
complement State efforts and goals to reach out to consumers 
and increase broadband penetration.
    In sum, the ARRA has been beneficial in helping to further 
the State's objective in its broadband plan. It is vital for 
DCCA to ensure that all citizens of Hawaii receive the most 
benefit from the stimulus funding, and have meaningful access 
to broadband services.
    Thank you, again, for this opportunity to appear before you 
today and for your continued help in the area of broadband and 
telecommunications.
    Chairman Inouye. Thank you, Mr. Sonobe.
     [The statement follows:]
                 Prepared Statement of Clyde S. Sonobe
    Chairman Inouye and Members of the Committee, thank you for 
inviting me to testify about the State of Hawaii's broadband grant 
under the American Recovery and Reinvestment Act, and the impact of its 
grant on Hawaii's citizens. It is a privilege to appear before you 
today.
    The State of Hawaii's Department of Commerce and Consumer Affairs 
(DCCA) has been awarded a $1.9 million Federal grant to develop an 
interactive online map that can be used by consumers to identify the 
availability, speed and location of broadband services in the State of 
Hawaii. The grant includes approximately $1.4 million in Federal funds 
for broadband data collection and mapping activities over a 2-year 
period, and $500,000 in Federal funds for broadband adoption activities 
over a 5-year period.
    DCCA has teamed with the University of Hawaii's Pacific Disaster 
Center and other entities within Hawaii to complete the mapping portion 
of the project. Using the substantial expertise and resources available 
within the State, the team has made significant progress in compiling 
multiple layers of real-time location and broadband serviceability 
data. Broadband providers have been generally cooperative, apparently 
recognizing the public benefits that can be achieved through this 
process, and staff at the U.S. Department of Commerce's National 
Telecommunications and Information Administration (NTIA) have been very 
helpful in shepherding DCCA through its various Federal grant 
obligations.
    Although the mapping data is still being processed, it is 
anticipated that the results will reinforce the State's long-standing 
position that portions of Hawaii are extremely difficult to serve and, 
as a result, broadband availability is very low in remote regions of 
the State.
    Further, the broadband adoption and penetration rate may be 
relatively low throughout the State as compared to the rest of the 
country.
    Accordingly, DCCA has requested additional Federal funding from 
NTIA to pursue two Federal programs--one for state broadband capacity 
building and one for technical assistance and outreach. These two 
programs, which are still being organized, are aimed at increasing 
broadband adoption and penetration in the State and coincide with a 
parallel state program resulting from state legislation H.B. 2698, 
relating to technology, telework promotion and broadband assistance.
    DCCA is working to manage these two efforts jointly. Such an 
approach should result in substantial synergies, including the use of 
State and Federal funds in a 20/80 percent match to fund the hiring of 
up to three people, including their expenses, to work on broadband 
adoption.
    DCCA believes its matching and planning activities promote the 
goals of the State's broadband plan as developed by the Hawaii 
Broadband Task Force (Task Force). The Task Force was established in 
2007 by Hawaii's State Legislature through Act 2 of the First Special 
Session of Hawaii 2007 to provide recommendations on how to advance 
broadband within the State. In its Final Report dated December 2008, 
the Task Force made four recommendations, including: Establishing a 
Forward-Looking Vision to Make Hawaii Globally Competitive; Creating a 
One-Stop Broadband Advancement Authority; Welcoming Trans-Pacific 
Submarine Fiber to Hawaii; and Stimulating Demand for Broadband.
    DCCA's mapping project will produce a highly accurate and reliable 
resource for consumers in Hawaii, enabling them to identify and choose 
between the growing number of broadband services that are becoming 
available in the State. The broadband map will also encourage increased 
competition between broadband service providers by giving them 
additional information on communities within the State that would 
benefit from the availability of new broadband services. Furthermore, 
DCCA's broadband adoption programs will complement the State's efforts 
and goals to reach out to consumers and increase broadband penetration.
    In sum, the ARRA has been beneficial in helping to further the 
State's objectives in its broadband plan. It is vital for DCCA to 
ensure that all citizens of Hawaii receive the most benefit from the 
stimulus funding and have meaningful access to broadband services.
    Thank you again for the opportunity to appear before you today. I 
would be happy to answer any questions you may have.

    Chairman Inouye. Dr. Lassner.
STATEMENT OF DR. DAVID LASSNER, VICE PRESIDENT FOR 
            INFORMATION TECHNOLOGY AND CHIEF 
            INFORMATION OFFICER, UNIVERSITY OF HAWAII
    Dr. Lassner. Mr. Chairman, thank you for this opportunity 
to share some perspectives from the University of Hawaii on the 
impact of the ARRA on broadband in Hawaii.
    Let me quickly summarize four key aspects of the ARRA that 
advance broadband. The ARRA charged the Federal Communications 
Commission, the FCC, to create our Nation's first national 
broadband plan, and I know there's been some talk about that 
this week, here. That plan was delivered in March, and 
implementation activities are now underway.
    Second, the ARRA provided funding for State-based data 
collection efforts to implement, in fact, your Broadband Data 
Improvement Act of 2008. Mr. Sonobe just commented on that 
activity. The university is proud to be working with him on 
this.
    Third, the ARRA created some significant new grant and loan 
programs in the Department of Commerce and Department of 
Agriculture to actually deploy broadband. And I'll say a little 
bit more about those programs and their hoped-for impact in 
Hawaii, as will my colleagues.
    And then fourth, the ARRA provided substantial funding to 
the National Science Foundation, which although it's not the 
lead agency on broadband, they developed some programs which 
can support broadband, including in Hawaii.
    I should also say that, from the UH perspective, a number 
of our faculty are quite entrepreneurial, and have competed 
for, and won, so far 71 projects totaling $62.8 million in non-
broadband related ARRA activities that often aren't thought of, 
because they come from Department of Health and Human Services, 
Department of Energy, Department of the Interior, Department of 
Justice, where our faculty are always trying to advance the 
state of the art in their professions.
    The projects I've been involved with have been primarily 
focused on connecting anchor institutions or community anchor 
institutions throughout the State of Hawaii. And one of the 
real breakthroughs over the past couple of years has been a 
recognition by the Obama administration of the importance of 
connecting the Nation's schools, libraries, community colleges, 
hospitals and universities to begin to really create a 
broadband future for our Nation. Connecting these institutions 
creates jobs, it increases the infrastructure that than can be 
available for connecting homes and businesses, and these are 
the institutions that also deliver the public services that 
really deliver on the promise of broadband for our Nation that 
are education--cheaper, faster, more available--human services, 
health services--such as we just heard about on the previous 
panel--and economic diversification and development.
    The university submitted four proposals and the sad story 
is that none of them have yet been funded, but the good story 
is that they are all still in play as we speak. And any of them 
could be funded, literally, any day, at this point. So, let me 
quickly summarize these proposals.
    One of them is called Ke Ala `lke, the Path to Knowledge. 
And this is a large proposal prepared by the University of 
Hawaii system, the Hawaii State Department of Education and 
Hawaii State Public Library System that would provide 
fiberoptic capability at every public school, every public 
library, every community college, every public university, and 
all of the remote learning centers on six islands throughout 
the State of Hawaii, providing gigabit capability, or 1 billion 
bits per second, at every one of these locations. That one 
would create, using the Federal Government's estimate, about 
430 jobs and this would really put Hawaii in a leadership 
position, I believe we would be the first State in the country 
that would have every public school and every public library on 
every island connected.
    Our second proposal fits in as a Public Computing Center 
proposal. This, again, involves the University of Hawaii and 
the Hawaii State Public Library System. We would acquire 693 
new public-use broadband-connected computers at 66 locations, 
again, on six islands. And the idea is that we would use the 
community colleges and public libraries as a safety net for 
members of the public who cannot afford broadband or computers, 
or who are homeless, and they would have locations where they 
would be able to access broadband capabilities to look for 
jobs, to advance themselves economically, participate in 
education and training, perhaps even make appointments for 
healthcare--the kinds of things that they really can't do. And 
using the public libraries and the community colleges, they 
have extensive outreach capabilities, and these are 
institutions that are very accustomed to serving the public 
throughout the State.
    The second two proposals are to the National Science 
Foundation (NSF), and these really address the area of 
advancing our science and technology capabilities for economic 
development and diversification.
    The first one is in a new program that NSF created called 
Academic Research Infrastructure. And this is something I've 
been struggling with for about 20 years, trying to keep 
Hawaii--like Alaska, we have real challenges connecting to the 
rest of the Nation, because we have to rely on expensive 
submarine fiber. This is a $10 million proposal to the National 
Science Foundation that would provide us with connectivity to 
the U.S. mainland, and to the national fiberoptic networks, 
comparable to most other universities, two 10-gigabit per 
second connections.
    The fourth proposal, the second one to the National Science 
Foundation, is to the EPSCoR Program, I think you're familiar 
with, and that is an inter-island high-speed connectivity 
proposal that would connect the University of Hawaii at Hilo, 
picking up the Manoa Kay observatories on the way, connect them 
to the Maui Super Computing Center, then over to Oahu to the 
University of Hawaii at Manoa and then onward to Kapiolani 
Community College, which has been very involved in science and 
technology and engineering education on a statewide and, in 
fact, throughout the Pacific basis.
    The first two of these proposals were ranked first and 
second by the Governor in her ranking of the proposals to the 
Department of Commerce and if all four of these proposals are 
funded and in fact, all four are still currently under review 
and in play, this would be a hugely--I think you can see how 
these fit together, connecting all of our schools, libraries, 
community colleges to each other, connecting between the 
islands, connecting to the rest of the country and providing 
the safety net of computers for the public that really doesn't 
have access to these capabilities, yet, at home.
    Last time I was here, I reported on some of the concerns we 
had with some of these programs. And I'm happy to report that 
the Department of Commerce really stepped up to the plate. I 
think it improved their online system for submission of 
proposals, the guidelines were much friendlier for us, for the 
kinds of proposal that we wanted to submit, to connect 
community anchor institutions to serve the public. And I--I 
could use the word ``brutal'' but I would say they are 
exceeding diligent in ensuring that our proposals are well-
founded, both technically and administratively, and that we're 
going to be capable of fulfilling. And I think that's part of 
the reason--they're being extremely careful about what they 
fund.
    These are--it's been a real pleasure, I think, to work--for 
us to work with the Department of Education and the Hawaii 
State Public Library System on a statewide basis are really 
looking after the needs of people on all of our islands, 
together and holistically.
    I'll just share one concern that, last week, I know the 
House supplemental budget included a rescission of some funds 
for some of these broadband programs. And, obviously, if any 
funds are cut from these programs, that's going to limit the 
number of awards that can be made. And so, for those of us who 
are still pending, that's of concern, that less funds means 
less projects that would be funded, potentially, including 
ours.
    Thank you for this opportunity.
    Chairman Inouye. I thank you, sir.
     [The statement follows:]
                  Prepared Statement of David Lassner
    Thank you for this opportunity to share some perspectives from the 
University of Hawaii (UH) on the impact of the ARRA on broadband in 
Hawaii.
American Recovery and Reinvestment Act (ARRA) of 2009 and Broadband
    It is useful to summarize some key elements of the ARRA that 
advance Broadband:
  --The ARRA charged the Federal Communications Commission to create 
        our nation's first national broadband plan. The FCC delivered 
        that plan to Congress and the nation in March of this year, and 
        implementation activities are now underway.
  --The ARRA provided funding for state-based data collection efforts 
        to implement the Broadband Data Improvement Act of 2008. Mr. 
        Clyde Sonobe of the State Department of Commerce and Consumer 
        Affairs, is leading this initiative for Hawaii. The University 
        is pleased to be partnering in this initiative by applying the 
        expertise in geospatial information systems of the Pacific 
        Disaster Center on Maui, which is now managed by the University 
        of Hawaii.
  --The ARRA created new grant and loan programs in the Department of 
        Commerce and Department of Agriculture to deploy broadband in 
        accord with a clearly defined set of statutory purposes and to 
        provide support for broadband adoption and usage.
  --The ARRA provided substantial additional funding for the National 
        Science Foundation (NSF), some of which was used for programs 
        that can fund broadband connectivity.
    I will focus my testimony today on these latter two sets of 
programs and describe the University of Hawaii initiatives to respond 
to these opportunities.
The Importance of Anchor Institutions
    I would like to first provide some context regarding the importance 
of community anchor institutions in advancing our national broadband 
agenda.
    Last spring I had the opportunity to work with a group of 
colleagues around the country as we tried to communicate to the new 
Obama Administration the importance of colleges, universities, schools, 
libraries and hospitals as broadband anchors in creating our nation's 
future. I believe that it is now well-understood within the Federal 
government that connecting these institutions will create jobs, 
increase our infrastructure capacity to enable higher-speed broadband 
in more places, improve the quality of a wide range of educational, 
public and human services, drive economic diversification and 
development, increase our nation's competitiveness, create future 
demand for more advanced broadband services, and provide a safety net 
for those who might otherwise be left behind.
    The importance of connecting community anchor institutions is 
emphasized in particular in the National Broadband Plan and in the 
Department of Commerce's Broadband Technology Opportunities (BTOP) 
program. In addition, the National Science Foundation continues to have 
a keen interest in connecting colleges and universities, among others, 
for the purpose of advancing research and related Science and 
Technology capabilities.
The University of Hawaii's Broadband-Related ARRA Proposals
    In addition to our work with Mr. Sonobe on the Broadband Data 
Mapping project, the University has four broadband-related ARRA 
proposals under active consideration at this time.
    Ke Ala `Ike.--The University of Hawaii, Hawaii Department of 
Education and Hawaii State Public Library System collaborated to submit 
a large statewide Comprehensive Community Infrastructure proposal to 
the Broadband Technology Opportunities Program (BTOP) to provide or 
upgrade direct fiber optic connectivity at every public school 
including public charter schools, every public library, every community 
college, every public university, and every community college remote 
education center used for distance learning on six islands. As a result 
of this project, each of the 388 participating sites would have 
external connectivity of at least 1 gigabit (billion bits) per second. 
This proposal would also deploy advanced high definition interactive 
distance learning capabilities in higher education to begin to 
demonstrate the uses and benefits of higher speed broadband services. 
Notable benefits to disconnected communities would include pulling the 
first fiber optic cable to Hana, Maui and Lanai City. If this proposal 
is funded, I believe that Hawaii would be the first state in the Nation 
to have provisioned direct fiber optic connectivity to every public 
school, every public library, every community college and every public 
university with gigabit or faster connectivity. Using the Federal 
government's methodology for understanding job creation, it is 
estimated that 430 job-years would be created by this project including 
275 indirect and 155 induced job-years. The total project cost is 
$42,466,000, and this project is currently undergoing a due diligence 
review.
    Access for All.--The University of Hawaii and the Hawaii State 
Public Library System also collaborated on a Public Computing Center 
proposal to the BTOP program to provide public computers and training 
in every public library and in community college libraries and 
education centers throughout the State. A total of 693 new public-use 
broadband-connected computers would be provided in 66 locations on six 
islands. In 2008 the Hawaii Broadband Task Force recommended that 
``Government lead by example in demonstrating the value of broadband to 
our citizenry, deploying broadband services to the public, and ensuring 
that we do not leave behind the economically disadvantaged members of 
our communities who may be inhibited from full participation in the 
21st century.'' While the current financial crisis has made it 
impossible for the State to financially invest in this vision, the 
``Access for All'' project partners have taken this to heart and worked 
together to develop this proposal to create a statewide safety net for 
our most disadvantaged citizens This safety net will be used to help 
Hawaii's citizens improve their social, personal and economic well-
being. The total project cost is just over $2.4 million. This project 
is currently also undergoing a due diligence review.
    Connecting Hawaii to the U.S. National Cyberinfrastructure.--Using 
a portion of the ARRA funds appropriated to the National Science 
Foundation, NSF created the Academic Research Infrastructure Program: 
Recovery and Reinvestment (ARI-R\2\) to support 21st century research 
and research training infrastructure in our Nation's academic 
institutions and nonprofit research organizations. The program's 
purpose is to revitalize existing research facilities so that they 
provide next-generation research infrastructure and facilitate the 
integration of researchers with shared resources such as remote 
instruments and research platforms, data repositories, and national 
computing facilities. The ARI-R\2\ program invited proposals for 
broadband connectivity to support research, and the University of 
Hawaii submitted a proposal to address a previously unfunded 
recommendation in the America COMPETES Act to improve high-speed 
connectivity between Hawaii's research and education community and the 
national cyberinfrastructure for research. This is particularly timely, 
given the announcement last week of $62 million in BTOP funding to 
Internet2 and partners for a major upgrade the fiber optic research and 
education backbone network that serves the 48 states on the U.S. 
mainland. This proposal would provide two 10 gigabit per second 
circuits between Hawaii and the West Coast, with a total project cost 
of just under $10 million. This proposal is currently under active 
consideration by the NSF.
    Connecting the Islands: Cyber Connectivity for Science and 
Technology in Hawaii.--ARRA funding also enabled NSF to create a new 
Research Infrastructure Improvement Program: Inter-Campus and Intra-
Campus Cyber Connectivity (RII C\2\) for the jurisdictions 
participating in the Experimental Program to Stimulate Competitive 
Research (EPSCoR). RII C\2\ is intended to enhance broadband access for 
academic research and the utilization of cyberinfrastructure consistent 
with the jurisdiction's Science and Technology plan. The University 
submitted a proposal to provide 10 gigabit per second connectivity from 
the University of Hawaii at Hilo to the Maui High Performance Computing 
Center to UH-Manoa to Kapiolani CC, which is active in Hawaii's EPSCoR 
program activities. This is about a $1.2 million proposal, which is 
also currently under active consideration by the NSF.
    The Department of Commerce requested each governor to provide input 
on the proposals submitted from within their states, and the first two 
proposals described above were ranked #1 and #2 respectively.
    In addition to these four active proposals, the UH Pacific Business 
Center Program requested just over $1.5 million in BTOP Sustainable 
Broadband Adoption funding for a Pacific Basin Islands Ecommerce Portal 
that would set up a broadband-based ecommerce portal for the U.S. 
affiliated Pacific Basin islands, specifically American Samoa, the 
Commonwealth of Northern Marianas Islands, the Republic of the Marshall 
Islands, the Republic of Palau, Guam and the Federated States of 
Micronesia. In addition, the U.S. State of Hawaii will be served, and 
will also act as the base of operations. This proposal has not entered 
a due diligence
    Others on the panel will testify regarding additional broadband 
proposals submitted from within Hawaii and the benefits they would 
provide. I will just observe that if all four of these currently active 
University proposals are funded, we will enjoy a fundamental leap in 
the capabilities available to the education and research community in 
Hawaii. We would have a world-class education and research network 
serving all islands within the State, with adequate domestically-
provided connectivity for the first time in many years. Of course, with 
the funding of a new 100-gigabit per second national research and 
education broadband backbone network on the mainland, we will need to 
continue to be vigilant and active to avoid falling behind again.
Observations on the Process
    At the August hearing on this topic in Hawaii, I shared with the 
Committee a number of concerns with the BTOP program as implemented in 
Round 1. It turned out that no Hawaii BTOP proposals were funded during 
Round 1.
    From my perspective representing a Community Anchor Institutions 
within Hawaii and as a repeat applicant to the BTOP program, I am happy 
to report that there were substantial improvements in Round 2 of the 
program. The new online system that was so troublesome during Round 1 
was dramatically improved for Round 2. And more importantly, the 
program guidelines for Comprehensive Community Infrastructure were much 
friendlier to Community Anchor Institutions, including the public 
schools, libraries, public universities community colleges and the 
remote education centers through which we provide so many services 
throughout the State.
    I should also report to this Committee that my limited experience 
with four ARRA proposals at two Federal agencies indicates that these 
agencies are taking their stewardship responsibilities extremely 
seriously. Their technical and administrative review processes have 
been extremely thorough and highly focused on ensuring compliance with 
all applicable rules and laws, verifying the public benefit, and 
ensuring that the projects can be executed as proposed.
Conclusion
    At the time of this writing we are in active conversation with 
Federal officials regarding all four of the University's ARRA broadband 
proposals. We are hopeful for success, and believe that with anchor 
institutions in nearly every Hawaii community on every island connected 
at very high speeds we will be able to dramatically advance education 
and research throughout the State.
    Just as importantly, these projects will enable us to fulfill our 
responsibilities as Community Anchor Institutions. Hawaii's ambitions 
for ubiquitous high-speed broadband connectivity as expressed in the 
Hawaii Broadband Task Force Report are far more ambitious than those 
called for in the National Broadband Plan. Widespread gigabit 
connectivity, beginning in these institutions, will also drive adoption 
and demand by consumers and businesses for advanced applications that 
could return the United States to the international leadership position 
in affordable high speed connectivity we lost over the past decade.

    Chairman Inouye. Ms. Shin.
STATEMENT OF SU SHIN, VICE PRESIDENT, GOLD IVORY, LLC
    Ms. Shin. Thank you.
    Mr. Chairman, Thank you so much for inviting me here today 
to provide some testimony on Gold Ivory's experience with the 
ARRA.
    First, a little bit of background on our company. Gold 
Ivory is an affiliate of Waimana Enterprises, which is a native 
Hawaiian company with many, many years of utility 
infrastructure experience and also intimate knowledge of 
telecommunications issues unique to Hawaii. In the last decade, 
Waimana focused its resources on providing telecommunication 
services to the most rural and underserved areas of our 
islands. Through these efforts, Waimana witnessed and 
experienced the lack of basic communications infrastructure and 
equipment for local public safety agencies to be able to 
perform their duties adequately. And Mr. Sonobe talked about 
some of the lack of access in remote areas in his statements, 
as well.
    For the past 3 years, Waimana has been working very closely 
with public safety agencies trying to find a way to help them 
build out this much, much needed infrastructure. Currently, the 
public safety agencies in our rural communities rely on an 
antiquated system that does not provide first responders with 
sufficient access to communication where and when they need it.
    Also, as experienced during Hurricane Anike, the network is 
not hardened, and is susceptible to outages. When Congress 
passed the ARRA, creating the Broadband Technology 
Opportunities Program, or BTOP, this became--or we realized 
this was a vehicle for providing funding necessary to build out 
this public safety communications infrastructure statewide that 
was so needed.
    Initially, we had met with all four counties to design a 
statewide network, dedicated for public safety use. As it turns 
out, because their needs were greater, only Kauai, Maui, and 
Hawaii counties chose to participate.
    Last year, Gold Ivory submitted an application in response 
to the first round of BTOP funding. The application proposed a 
robust and hardened network that provided interoperability and 
increased coverage across all neighbor islands that would 
survive a catastrophic event so that first responders can 
coordinate recovery efforts, both on-island and off.
    Upon the request of the counties, it also transferred 
ownership of the completed network to the public safety 
agencies for their dedicated use.
    Our application was, unfortunately, denied in the round 1 
funding, because it did not allow commercial traffic to 
interconnect to this public safety network. So, when the second 
round of funding was announced, Gold Ivory resubmitted its 
application, however we made a key revision to allow 
interconnection with commercial traffic to meet those 
programmatic requirements. The network was strategically 
designed to provide both backhaul capacity, as well as maximum 
coverage for future LTE-700 MHz technologies, which was 
recently authorized by the Federal Communications Commission 
(FCC) for public safety use.
    We just completed the due diligence phase, which Dr. 
Lassner talked about just now, of our second application. 
During that process, however, the National Telecommunications 
and Information Administration or NTIA, with very little regard 
for its impact on the needs of public safety. As a result, our 
network was stripped down to a skeleton system that provides 
limited redundancy and a significant reduction of capacity. 
This means that the mission-critical communications network of 
the public safety entities in our most rural and underserved 
communities will be vulnerable to a single point of failure.
    Also, during due diligence, we were required to meet cost 
metrics identified in a recent FCC technical paper. The paper 
identifies significant cost differences between a stand-alone 
public safety network, and an incentive-based partnership 
network. The fundamental difference between the two is that a 
stand-alone network model anticipates building an entirely new 
network from the ground up for a single customer base, much 
like our project is proposing to do.
    The incentive-based partnership is less costly to build 
out, because it assumes that public safety agencies will be 
able to leverage existing commercial infrastructure and have 
access to an existing back-haul network.
    Due to the remote and rural nature of our project sites, 
there is little to no existing broadband infrastructure and it 
is extremely costly to build out.
    Our proposal is a combination of a stand-alone network, and 
an incentive-based partnership model. Because of the need to 
build out expensive infrastructure, our network's initial 
capital investment is similar to that of a stand-alone public 
safety network. However, our ongoing operating expenses will be 
lower, much like an incentive-based partnership. This is 
possible because of the revenue generated from its commercial 
interconnections, as required by this Federal program.
    While our network is a hybrid model, the NTIA due diligence 
team only evaluated our application costs against the metrics 
for the less costly incentive-based partnership model. We do--
we would like to highlight the fact that our total project 
budget was roughly $180 million, but of that amount, $50 
million is an in-kind contribution to the project that we 
provided. We would like to highlight the fact that that's 26 
percent of the total project cost. And the reason that large 
in-kind contribution is possible is because we are able to 
leverage our existing state-of-the-art buried fiber network 
that currently is in existence.
    All of this being said, the final design of our proposal 
still provides the counties with a basic network infrastructure 
that does not exist today. This opportunity would not be 
possible without the passage of the ARRA. We look forward to 
the positive impacts this historic program will bring to 
Hawaii, including job creation, and the many social benefits of 
broadband connectivity mentioned by all of our previous 
speakers. And we humbly request your support of our project.
    Thank you for the opportunity to testify.
    Chairman Inouye. I thank you very much, Ms. Chin.
     [The statement follows:]
                     Prepared Statement of Su Shin
    Mr. Chairman and Committee members, my name is Su Shin and I am the 
Vice President of Gold Ivory, LLC. Thank you for inviting me here today 
to provide testimony on our experience with the American Recovery and 
Reinvestment Act of 2009 (the ARRA). The United States Congress was 
bold and visionary in passing the ARRA to stimulate the economy and 
fuel a revival of jobs in America. As further explained below, Gold 
Ivory has attempted to bring the benefits and opportunities created in 
the ARRA from its origins in Washington, DC directly to the residents 
and businesses of our State.
    Gold Ivory is affiliated with Waimana Enterprises, Inc. (Waimana), 
a native Hawaiian company with many years of utility infrastructure 
experience and intimate knowledge of telecommunications issues unique 
to Hawaii. In the last decade, Waimana focused its resources on 
providing telecommunication services to the most rural and underserved 
areas of our islands. Through these efforts, Waimana witnessed and 
experienced the lack of basic communications infrastructure and 
equipment for local public safety agencies to perform their duties. 
This problem, however, is not exclusive to Hawaii. Thus, one of the 
five stated purposes of the Broadband Technology Opportunities Program 
(BTOP), created by the ARRA, is to support broadband programs that 
``improve access to, and use of, broadband service by public safety 
agencies.'' Additionally, the express language of the ARRA identifies a 
native Hawaiian organization as an eligible grant applicant under the 
BTOP program. Thus, Waimana, through its affiliate Gold Ivory, 
identified BTOP as a means for providing critical broadband 
infrastructure to the remote areas of our state.
    In July 2009, the National Telecommunications and Information 
Administration (NTIA), Department of Commerce, issued the first BTOP 
Notice of Funds Availability (NOFA). Gold Ivory partnered with Raytheon 
and Alcatel-Lucent, industry leaders in broadband technology, to submit 
an application to design and construct a public safety broadband 
network to serve the rural counties of Kauai, Maui, and Hawaii. Gold 
Ivory worked closely with first responders from each respective county 
to identify essential broadband needs and address critical 
shortcomings. Three fundamental problems were identified across all 
three counties:
  --Lack of Coverage--first responders are unable to communicate with 
        each other in many remote areas;
  --Lack of Capacity--first responders are unable to take advantage of 
        current technology (e.g., video surveillance, mobile data 
        services, CAD dispatch, and GIS/Mapping) due to insufficient 
        bandwidth; and
  --Lack of Redundancy--currently, public safety agencies rely on a 
        single network primarily supported by pole-hung fiber, which is 
        highly susceptible to service outages due to natural and 
        manmade disasters.
    Gold Ivory submitted an application to NTIA that addressed these 
problems by proposing a robust Hawaii Public Safety Broadband Network 
(HPSBN) that drastically increased the coverage areas on each island, 
provided virtually unlimited bandwidth through a pair of dedicated 
fiber (OC 192), and inter-connected the public safety agencies to 
support interoperability. Upon completion, Gold Ivory proposed to 
transfer ownership of the HPSBN to each respective county, which 
required that the HPSBN be for the exclusive use of county agencies. 
Unfortunately, the NTIA denied Gold Ivory's application on the basis 
that it did not allow commercial traffic to interconnect to the HPSBN, 
despite the NOFA's recognition of unique law enforcement needs.
    In January 2010, NTIA issued a second NOFA for BTOP funding (Second 
NOFA). Gold Ivory again submitted an application for a robust Hawaii 
Broadband Network (HBN) to primarily serve the public safety agencies 
of the Counties of Kauai, Maui, and Hawaii. The HBN was strategically 
designed to provide both backhaul capacity and maximum coverage for 
future LTE 700 MHz technologies for public safety agencies. It also 
addressed the critical component of redundancy by providing back-up 
connections to ensure that mission critical communications are not 
interrupted and can survive disasters. Unlike the first application, 
however, the HBN was designed to allow interconnection with commercial 
traffic.
    Last month, Gold Ivory was notified by the NTIA that it qualified 
for advancement to the due diligence phase. The NTIA due diligence team 
was professional and responsive throughout the review process, and we 
wholeheartedly appreciate the significant responsibility placed upon 
the review team. However, in the spirit of providing constructive 
feedback to improve future programs aimed at improving public safety 
broadband networks, we respectfully call attention to two fundamental 
concerns.
    The first concern deals with the design standards of the HBN. As 
stated earlier, the HBN was primarily designed to generally accepted 
public safety reliability and survivability standards, which ensures a 
fully functioning network after a catastrophic event so that first 
responders can coordinate recovery efforts both on-island and with 
neighboring islands. Under the guidance of the NTIA due diligence team, 
however, the robust HBN was stripped down to a skeleton system that 
provides limited redundancy and a significant reduction in capacity 
from an OC48 to an OC12. This means that the mission-critical 
communications network of the public safety entities in the rural and 
underserved counties will be vulnerable to a single point of failure.
    The second concern is one of due process. After Gold Ivory 
submitted its second application, the Federal Communications Commission 
(FCC) issued an OBI Technical Paper Series entitled ``A Broadband 
Network Cost Model: A Basis for Public Funding Essential to Bringing 
Nationwide Interoperable Communications to America's First Responders'' 
(April 2010) (the Technical Paper). The Technical Paper astutely 
identifies significant differences between a Stand-Alone Public Safety 
Network and an Incentive-Based Partnership Network. The Stand-Alone 
Public Safety Network model anticipates building an entirely new 
network from the ground up for a single customer base. The Incentive-
Based Partnership leverages existing commercial assets that already 
have backhaul to a functioning core network, which eliminates the cost 
of building a new network from the ground up. The Stand-Alone Network 
would require at least 2.5 times more capital investment, excluding 
deployable equipment, and proportionally even more in operating costs. 
As such, the Technical Paper recommends the Incentive-Based Partnership 
model.
    Fundamentally, the HBN is a Stand-Alone Public Safety Network. The 
NTIA due diligence team, however, evaluated the HBN against the 
Technical Paper's metrics for the less costly Incentive-Based 
Partnership model. From a due process standpoint, Gold Ivory 
respectfully challenges the fairness of holding its application to 
standards that were not referenced in the NOFA and published after the 
application deadline. This situation is exacerbated by the NTIA's 
restriction of the HBN budget to meet metrics that are not relevant or 
applicable to a Stand-Alone Network model.
    Our due diligence period recently ended and we are awaiting a final 
decision from NTIA. However, we have been advised that our application 
is on hold pending final review of new applications submitted under a 
May 2010 amendment by the NTIA of its second NOFA to selectively accept 
applications for BTOP funding from state and local governmental 
entities that recently received FCC approval to use the 700 MHz public 
safety broadband spectrum. As a qualified applicant, local and State 
agencies of Hawaii had until July 1, 2010, to submit an application. 
While Gold Ivory endorses the need for improvements to Hawaii's public 
safety broadband infrastructure and equipment, it is unreasonable to 
delay our application process because BTOP applications are funded on a 
``rolling basis subject to the availability of funds.''
    That being said, the final design of the HBN still provides the 
counties with a basic network infrastructure that does not exist today 
and can be expanded over time. The NTIA should be applauded for the 
resources and efforts expended toward implementing the historic BTOP 
initiative of the ARRA. The FCC should also be commended for their 
creation of a National Broadband Plan and specifically recognizing the 
need to create a nationwide interoperable public safety broadband 
wireless network for first responders and other public safety 
personnel. Finally, the United States Congress should be praised for 
their vision and leadership in steering our country through one of its 
worst economic crises.
    Thank you for the opportunity to testify on our experience with the 
ARRA.

    Chairman Inouye. Mr. Komeiji.
STATEMENT OF JOHN KOMEIJI, SENIOR VICE PRESIDENT AND 
            GENERAL COUNSEL, HAWAIIAN TELCOM
    Mr. Komeiji. Thank you, Mr. Chair. Hawaiian Telcom also 
thanks you for the opportunity to testify before you today and 
to report to you the status of our applications with the two 
programs, the two programs being the Broadband Technology 
Opportunities Program as well as the Broadband Infrastructure 
Program (BIP).
    We have submitted applications for two projects, one coming 
under what they call BTOP and one coming under BIP.
    In terms of our BTOP application, we filed our application 
in conjunction with the Hawaii County to increase and improve 
broadband access for the residents, businesses and critical 
community facilities on the Big Island. Our total project is 
$6.2 million, and of that amount, we're requesting that the 
Government assist us in the amount of $4.3 million.
    The primary purpose of that project is to create a ``middle 
mile'' segment between Pahala to Volcano. That would allow us 
to complete a loop around the entire Big Island, which allows 
for redundancy as well as resiliency for our network.
    We also would be upgrading broadband access points at 22 
central office communications which would again allow greater 
broadband access to the residents and businesses on the Big 
Island. We also will be extending fiber facilities to the nine 
most critical county-designated sites to, again, allow them--
for emergency responders, first responders, as well as in 
catastrophic emergencies.
    So, we believe that our project improves the lives of the 
people on the Big Island. We estimate that about 62,000 
households will get increased broadband coverage; 4,300 
businesses will get increased broadband coverage. We also will, 
as I mentioned, provide key points of communication for the 
county in this project.
    We estimate that about 102 jobs will be created by this 
particular project.
    We, like the previous speakers, we also went through a 
rigorous and detailed NTIA due diligence. But our take is a 
little bit different from everyone else in the sense that, 
although it was very vigorous and they've propounded question 
after question to us, we took away the fact that they were very 
interested in assisting us, rather than trying to shoot us down 
in terms of our project. They seemed quite helpful to us--like 
I said, not taking away from the rigorousness of their review--
they seemed quite helpful and went out of their way, in fact, 
in our minds, to kind of help us complete and provide a very 
good application.
    So, we've actually completed our broadband, our due 
diligence on June 24, and are optimistic and hopeful that this 
particular project will get funded.
    And the other project we have is under the RUS, the BIP 
project, and it's a East Hawaii Fiber Broadband Project. And 
this is a ``last mile'' project which would help connect up and 
serve about 6,100 households, 54 businesses, and 31 critical 
community facilities in the Pepeekeo Point area, Hawaiian 
Paradise Park Makai area, Hawaiian Acres, Fern Forest, Royal 
Hawaiian Estates and Kalapana area. This is a $5.4 million 
project, $3.8 million of it which would be funding that we 
would be requesting, and we would provide the balance of the 
amounts. In this particular project, there are about 69 jobs 
that we think would be created by this particular project.
    Now, under the BIP process, there is no due--as we 
understand it--no due diligence so we're not quite certain as 
to the status of this particular project, in terms of obtaining 
funding. But again, we think that this project is very viable, 
it's also very important to the Big Island.
    So, in summary, again, we're very hopeful about both 
projects, and we thank you for your assistance and for your 
continued support in this area.
    Chairman Inouye. Thank you very much.
     [The statement follows:]
                   Prepared Statement of John Komeiji
    Chairman Inouye and Members of the Senate Appropriations Committee: 
I am John Komeiji, testifying on behalf of Hawaiian Telcom, in support 
of its Hawaii County Community Broadband Upgrade project application, 
submitted for the Broadband Technology Opportunities Program (BTOP), 
and its East Hawaii Fiber Broadband Project application submitted for 
the Broadband Infrastructure Program (BIP), both under the American 
Recovery and Reinvestment Act of 2009.
    BTOP and BIP were established to award and administer grants to (1) 
increase broadband penetration in underserved areas, (2) improve 
broadband access to public safety agencies, (3) stimulate demand for 
broadband and (4) spur job creation and stimulate long-term economic 
growth. Both Hawaiian Telcom's Hawaii County Community Broadband 
Upgrade project and East Hawaii Fiber Broadband project more than meet 
these objectives.
                            project summary
Hawaii County Community Broadband Upgrade Project
    This project is a $6.2 million private-public partnership effort 
between Hawaiian Telcom and the County of Hawaii to increase and 
improve broadband access for residents, businesses and critical 
community facilities on the Big Island. Of the $6.2 million, $4.3 
million is being requested in grant funds with Hawaiian Telcom funding 
the $1.9 million balance. The project is projected to benefit 
approximately 62,450 households and 4,360 businesses. It will also 
provide a needed boost to the Big Island economy by creating an 
estimated 102 new jobs: 19 direct jobs and 83 indirect and induced 
jobs.
    The project includes:
  --Construction of a ``middle mile'' fiber segment from Pahala to 
        Volcano to complete Hawaiian Telcom's fiber ring network 
        encircling the Big Island (see Attachment I);
  --Upgrading broadband access points at 22 Central Office 
        telecommunication locations on the Big Island;
  --Extending direct connect fiber facilities to the 9 most critical 
        County-designated sites; and
  --Upgrading broadband access at 82 County sites, including 42 Public 
        Safety Entities (Civil Defense, police and fire stations) and 
        40 Critical Community Facilities that provide essential County 
        services.
East Hawaii Fiber Broadband Project
    This is a $5.4 million ``last mile'' project to extend high-speed 
fiber broadband service to 6,180 households, 54 businesses and 31 
Critical Community Facilities in the underserved rural East Hawaii 
areas of Pepeekeo Point, Hawaiian Paradise Park Makai, Hawaiian Acres, 
Fern Forest, Royal Hawaiian Estates and Kalapana (see Attachment II). 
Of the $5.4 million, $3.8 million of grant funding is being requested 
with Hawaiian Telcom funding the $1.6 million balance. Extension of 
Hawaiian Telcom's fiber network into these communities will allow them 
first-time access to affordable, reliable broadband services and to 
various online programs, communications and work-at-home opportunities. 
Hawaiian Telcom is receiving an increasing number of calls and letters 
from residents in these communities who are frustrated by their lack of 
access to affordable broadband service and are requesting that Hawaiian 
Telcom extend broadband service to the underserved communities of East 
Hawaii. This project is expected to create 69 jobs: 23 direct jobs and 
46 indirect and induced jobs.
                     need for btop and bip projects
    Constructing a network on the Big Island is typically more costly 
than construction in the more urban parts of the state. The Big Island, 
with a landmass of approximately 4,028 miles, is more than six times 
larger than the island of Oahu, but has about one-fourtieth, or 2.5 
percent of the population of Oahu. While most of the island's 
population is congregated in Hilo on the east side of the island and 
Kona on the west, the rest of the island consists of highly dispersed 
rural communities. Demographics also show that Hawaii County is an 
economically distressed county. The geography of the island is 
characterized by dramatic changes in topography, climate, and character 
across very short distances, and the underlying structure is mainly 
lava rock. The combination of higher construction costs, distances and 
relatively small customer base does not justify a business case for 
upgrading and expanding the broadband network, without government 
funding support.
    At present, residents and businesses of Hawaii County, particularly 
those in underserved communities, have limited affordable access, if 
any, to High Speed Internet service (up to 11 Mbps), Enhanced IP Data 
Service (speeds up to 1 Gbps), Routed Network Services and other 
advanced applications using network infrastructure with wider 
bandwidths. County facilities are currently limited to a maximum of 1.5 
Mbps.
            benefits to big island residents and businesses
    Completion of the BTOP Hawaii County Community Broadband Upgrade 
project will have a positive impact on the expansion and accessibility 
of affordable broadband services to most of the Big Island, while 
completion of the BIP East Hawaii Fiber Broadband Project will provide 
first-time access to affordable, reliable broadband services to the six 
underserved East Hawaii communities. In particular, for the BTOP 
project:
  --Completion of the fiber ring around the southern half of the island 
        (from Pahala to Volcano) will create a ``mesh'' network that is 
        better able to survive fiber cuts than a radial network or a 
        simple ring, by eliminating ``single cut'' vulnerability 
        points. This improves both the reliability and resiliency of 
        the broadband network against the effects of hurricanes, 
        earthquakes, and tsunamis, as well as fires and automobile 
        accidents.
  --Upgrading broadband access points at 22 Central Office locations, 
        together with completion of the fiber ring will create a 
        network expandable to capacities in excess of 800 Gbps that can 
        be accessed at affordable rates by more of the island 
        population. This network upgrade will improve ``last mile'' 
        services to about 62,450 households and 4,360 businesses, with 
        broadband traffic traversing the newly created fiber ring.
  --Extending direct connect fiber facilities to the 9 most critical 
        County-designated sites will enable the County to access 
        greater broadband services to improve its internal and external 
        communications and data services needs, as well as its ability 
        to serve residents and businesses, especially in emergency 
        situations. Due to County budget limitations, this type of 
        upgrade would normally take many years for the County to 
        justify.
  --Upgrading broadband access at 82 County sites, including 42 Public 
        Safety Entities and 40 Critical County Community Facilities, 
        will improve emergency response times and information sharing 
        on a real time basis between and among County agencies and the 
        general public for both small and large scale events, as well 
        as improve the reliability of all telecommunication services, 
        including critical E-911 service.
  --Improved broadband access and reliability will help create an 
        estimated 102 jobs (19 direct and 83 indirect) and foster 
        economic development.
          why hawaiian telcom's applications should be funded
    Both the Hawaii County Community Broadband Upgrade project and the 
East Hawaii Fiber Broadband project have numerous community benefits 
and are the most cost effective means of improving broadband services 
to the largest number of current and future broadband customers on the 
Big Island. This is due to the fact that the projects leverage Hawaiian 
Telcom's current extensive network infrastructure investments as well 
as its on-island workforce.
    Hawaiian Telcom owns and operates an existing network that serves 
most of the island through a combination of advanced and legacy 
systems, microwave facilities and non-diverse fiber circuits. Although 
the projects are designed to expand and improve broadband access, these 
upgrades will be part of the island-wide network. Thus both projects, 
but especially the Hawaii County Community Broadband Upgrade project, 
will serve a broader customer base than a stand-alone project and set 
the foundation for both customers and competitors to rely on Hawaiian 
Telcom's network to meet their communication needs and broadband growth 
for years to come.
    Hawaiian Telcom has the proven expertise to construct and operate 
communication networks and our experienced workforce, combined with the 
above projects, will ensure a resilient, well maintained network that 
will be upgraded and grow as the Big Island's demands for broadband 
grows. However, as indicated previously, without Federal assistance 
there is no business case to justify the expenditure of funds to 
complete the fiber ring from Pahala to Volcano, make the other 
improvements to the network and to extend broadband service to the six 
underserved rural East Hawaii communities that currently do not have 
access to wired broadband service.
    Demographics show that Hawaii County is an economically distressed 
county and the Hawaii County Community Broadband Upgrade is the only 
application that benefits the majority of the Big Island community. 
Federal assistance from the Recovery Act will allow this project to 
move forward and allow the residents and businesses to enjoy the 
benefits of an enhanced broadband network and the improved economic 
development that greater broadband access is expected to create. In 
addition, Federal assistance for the BIP East Hawaii Fiber Broadband 
Project will also allow Hawaiian Telcom to extend broadband service to 
the underserved rural East Hawaii areas of Pepeekeo Point, Hawaiian 
Paradise Park Makai, Hawaiian Acres, Fern Forest, Royal Hawaiian 
Estates and Kalapana.
    Hawaiian Telcom respectfully requests your support for both the 
Hawaii County Community Broadband Upgrade project and the East Hawaii 
Fiber Broadband Project which will help realize the broadband benefits 
and objectives of the Recovery Act of 2009. Thank you for the 
opportunity to testify.




    Chairman Inouye. I believe that all of you are aware that I 
spent the last 2 days with the Chairman of the FCC, 
Genachowski, and I wanted him to see firsthand and discuss with 
people the problems we have on these seven inhabited islands, 
mountainous, and I must say that he spent every hour doing 
something.
    Yesterday--the day before yesterday--we were on the Big 
Island, meeting with the mayor and his first responder team to 
get some of the challenges and concerns. Then after that, we 
met with--we went all over the islands, looking at the 
remoteness, and realizing that this is not like Kansas.
    And then we met with Hawaiian community, and Hawaii mayors. 
We had a wonderful meeting there. We also met with Alaskans and 
Indians--American Indians. Yesterday, we had a luncheon 
meeting, he also went to Queen's Hospital and saw the effect of 
electronic communications. So, he had a full dose of 
information. And I can assure you that, as a result, we'll get 
something, here.
    I'm having a major meeting, not only with him, but with the 
Commission when I get back to Washington, and I hope that we 
can get results.
    So, if I may ask a few questions, on your map, are you 
getting good cooperation from communication providers in 
Hawaii?
    Mr. Sonobe. I think, generally, they have been very 
cooperative, Senator.
    Chairman Inouye. In general.
    Mr. Sonobe. The map currently calls for data at the census 
block level. The State feels that for the map to be more 
informative, that the information should really be at the 
address level.
    So, initially, the NTIA's requirement was that data to be 
reported at the address level, and our request initially went 
out for information, as such. There was some hesitance on the 
part of the providers to provide that information. The NTIA 
then changed their requirement to make it a census block 
reporting requirement, and at that point, the providers became 
more cooperative. So, I think----
    Chairman Inouye. Because without the data you won't be able 
to make the map.
    Mr. Sonobe. Right. And again, the point the State would 
take is that for it to be truly informative and useful, that 
the data should be at the address level.
    Chairman Inouye. When will the map be ready for public 
viewing?
    Mr. Sonobe. The initial data was sent to the NTIA at the 
end of April. The final map is due in September.
    Chairman Inouye. Thank you very much.
    Dr. Lassner, yours is a very ambitious program. When are 
you going to have this connection between all of the schools 
and libraries?
    Dr. Lassner. If we're funded, which we haven't been yet, 
this would----
    Chairman Inouye. Assuming you're funded.
    Dr. Lassner. Assuming we're funded, we think it's about a 
2-year project.
    Chairman Inouye. I'll do my best to get the funding.
    Dr. Lassner. Thank you.
    Chairman Inouye. And, how do you propose to connect with 
the mainland?
    Dr. Lassner. It's--what we've done is, we've proposed to 
buy capacity on one of the new submarine fibers that was just 
installed this year, that comes from southeast Asia, to Guam, 
to Hawaii, to the mainland. And one of the least expensive 
times to buy capacity is when the fiber is new and they still 
have vacant capacity. So we've proposed to the National Science 
Foundation to get the money to actually purchase the ownership 
of a portion of that for--it's called an indefeasible right of 
use, or IRU, for two 10-gigabit per second circuits. Then, in 
California, we will connect to Los Angeles, and then up to 
Seattle.
    And then here, from our hub at the University of Hawaii at 
Manoa, we would make that available to all of the community 
colleges, campuses. If the schools are participating with 
Internet, too, or other things, we'll work it that way.
    Then from our operating budget, we'll pay the maintenance 
on that.
    Chairman Inouye. What will that cost for all of this?
    Dr. Lassner. That's about a $10 million project. And that's 
in process at NSF right now.
    Chairman Inouye. I think I'll have my staff call upon you 
for further discussion about this.
    And now, I'm interested in your work with first responders. 
Are we on the right track?
    Ms. Shin. I think that--I made some statements earlier 
about what we had originally proposed, and what our design 
ended up looking like at the end of our process. We certainly 
would have loved for it to--the network, the public safety 
network--to have the kind of redundancy and resiliency that we 
had originally designed into the network.
    However, we think that this is a tremendous opportunity, 
and again, it will provide sort of that basic infrastructure 
that the public safety entities can utilize and build upon.
    So, I guess it's--although it's not perfect, we are--we're 
fairly confident that it will help the public safety entities 
and will improve what they have today.
    Chairman Inouye. At the present time, our first responders, 
they're not able to communicate with each other.
    Ms. Shin. There are many areas in some of these remote 
spots of our, especially over at our neighbor islands, where 
they are unable to do even basic, push-to-talk radio 
communications, much less broadband, which is what we're 
talking about here.
    Chairman Inouye. It's no secret that the Asia-Pacific area 
has become an area of major concern to our Nation. It's no 
longer the Atlantic Ocean, because we think that the potential 
explosions, if it does happen, would be happening in our area. 
That being the case, some of us feel that the military should 
be tied up with your communication system. What do you think 
about that?
    Ms. Shin. That's really the idea that we had when designing 
this network. It was intended to be a fully interoperable 
network, so that in the event of some--either natural or man-
made disaster, if, say the Federal Emergency Management Agency 
(FEMA) were to have to fly in, or, you know, Homeland Security 
or whomever, that the network would be designed such that there 
would be--it would be relatively easy for all of those public 
safety entities at all of those different levels and 
jurisdictions to be able to communicate with each other fairly 
effortlessly.
    So, that was the intent of the design of our network, so.
    Chairman Inouye. I will have my staff get together with you 
because if we can get the military interested, funding would be 
very simple.
    Ms. Shin. Thank you.
    Chairman Inouye. They're loaded.
    Ms. Shin. Thank you.
    Chairman Inouye. Well, Mr. Komeiji?
    Mr. Komeiji. Yes, sir.
    Chairman Inouye. How is chapter 11 going? I--didn't ask 
that question.
    Mr. Komeiji. We've cleared the hurdle with the bankruptcy 
court. The bankruptcy court has approved our plan for 
reorganization and we're currently awaiting on, I think it was 
January 4, we filed an application with the Public Utility 
Commission asking that they also approve the plan. So, 
currently, we're awaiting some decision by the Public Utility 
Commission regarding the plan.
    The plan itself, I'm sure you know, would reduce our debt 
by about $800 million.
    Chairman Inouye. I want to be helpful because your 
organization is a very important element in our civilization 
here, so----
    Mr. Komeiji. Thank you, sir.
    Chairman Inouye. If I can be of any help, you let me know.
    Mr. Komeiji. Yes, sir.
    Chairman Inouye. Have you been able to get together with 
the FCC Chairman?
    Mr. Komeiji. No, we have not----
    Chairman Inouye. I thought that you had met yesterday?
    Mr. Komeiji. Yes--no, sir.
    We have a pending application before the FCC dealing with 
the Universal Service Fund, and that's something that's very 
important to us. And I think that your visit with the Chairman 
will help us, in terms of attempting to get a waiver. 
Basically, what we're seeing is, the way the FCC looks at the 
Universal Service Fund now, it considers the State as a whole. 
So, because Oahu and Honolulu is so urbanized, they consider 
the whole State urbanized.
    So, what we've been asking them is to understand that the 
separate islands are very rural in nature, so that they should 
break up the study areas into smaller groups.
    Chairman Inouye. I think he was convinced when he took that 
flight.
    Mr. Komeiji. Yes. But because of that, I think--because of 
the pending application before them, I think it would put him 
in a very difficult situation to meet with us. So, we 
understand the reluctance to meet with us on a formal basis.
    Chairman Inouye. Would you get together with my staff and 
prepare a memo so I can understand your problem----
    Mr. Komeiji. Yes, sir.
    Chairman Inouye [continuing]. Better?
    Mr. Komeiji. Thank you, we will.
    Chairman Inouye. Well, I'd like to thank the panel for your 
testimony today; you've been very helpful. I'll do what I can.
    Mr. Komeiji. Thank you.
    Chairman Inouye. The fourth panel consists of the Renewable 
Energy Program Manager of the Hawaii Department of Business and 
Economic Development and Tourism, Ms. Maria Tome; the Manager 
of System Integration, Hawaiian Electric Company, Mr. Leon 
Roose; Vice President and General Manager ULPLSC, Dr. James 
Rekoske; and the Engineering Manager of the Kauai Island 
Utility Cooperative, Mr. Michael Yamane.
    Well, Ms. Tome?
STATEMENT OF MARIA TOME, RENEWABLE ENERGY PROGRAM 
            MANAGER, STATE ENERGY OFFICE, HAWAII 
            DEPARTMENT OF BUSINESS, ECONOMIC 
            DEVELOPMENT & TOURISM
    Ms. Tome. Good afternoon--yes, good morning, Chairman 
Inouye. Thank you for the opportunity to provide comments on 
the progress of Hawaii's implementation of energy funding for 
the American Recovery and Reinvestment Act. You have written 
testimony that's quite extensive, and I'll summarize the 
process that we used and the progress that we are making on 
this.
    The Hawaii State Energy Office, together with other State 
agencies, administrative offices, and a wide variety of 
participants from the private sector have made great strides in 
wisely planning and spending Recovery Act formula funding for 
energy in the State of Hawaii. The current energy 
transformation began in 2006 with Governor Lingle's Energy for 
Tomorrow Initiative. We identified both short- and long-term 
changes needed for success. We realized that outside help was 
needed to provide the expertise, confidence, and activation 
energy to spark the transformation.
    So in 2008, the Hawaii Clean Energy Initiative (HCEI) was 
launched in partnership with the U.S. Department of Energy. Its 
goal is a 70 percent clean energy economy by 2030. This 
requires transforming the regulatory and policy framework, as 
well as changing many of the business models that had implied 
fossil energy generation, transmission, delivery, and use.
    Through the HCEI process, the Hawaii Clean Energy 
Initiative process, we brought together many of the public 
sector partners and private industries that are now involved in 
our energy transformation. Recovery Act energy funding provides 
Hawaii a timely downpayment for reinvestment in our energy 
future.
    We were able to bring the Recovery Act funds into plans 
that had already been developed for the HCEI, and to expand and 
accelerate the start of important projects. Once the plans were 
set, a number of months were spent working alongside the 
Department of Energy through the challenges well known to many, 
the National Environmental Policy Act (NEPA), Buy American, 
Davis-Bacon and other issues not foreseen in the spring 2009.
    Additionally, the State of Hawaii has endured significant 
budget pressures, reductions in force and furloughs, which were 
necessary under the circumstances, but made for a challenging 
environment in which to move rapidly. After receiving final 
guidance from the U.S. DOE in December 2009, our team set to 
finalizing the agreements and obligating the funds. In an 
adverse environment, our team has met every goal which the U.S. 
DOE has set, including just last week, the goal of 85 percent 
obligation of State energy program funds by June 30, 2010.
    So Recovery Act funding has been a tremendous catalyst to 
fueling energy transformation, especially in a period when 
financial resources have been constrained, both in the State 
and private sector budgets. The time spent in 2009 aligning the 
spend plan to both long-term transformation and short-term 
recovery objectives has been shown this year to have been time 
well spent.
    Several great examples of the impact of Recovery Act energy 
funds in Hawaii may be found in our written testimony. If we 
have time I'd like to highlight one example. The appliance 
rebate program was announced at a press conference on May 13 
and officially launched on May 24, 2010. If offered consumers a 
$250 rebate to trade in an older inefficient refrigerator and 
replace it with a new ENERGY STAR refrigerator. The old 
refrigerator was hauled away and delivered to a recycler. New 
ENERGY STAR qualified refrigerators employ 50 percent less 
energy than ones made just 10 years ago, so replacing a single 
10-year-old refrigerator can save island residents between 
$1,700 and $2,000 over its 15-year lifespan. The rebate was 
available for a total of 4,356 refrigerators statewide, and 
nearly 4,000 were sold on the very first day. Please note that 
while $1.2 million of stimulus funding was committed directly 
to consumers under the program and the merchandise has moved, 
the U.S. DOE has been invoiced for less than $100,000 due to 
the lag times in these--these types of programs.
    Likewise, for other projects described in the written 
testimony, funding is obligated, hiring is in progress, and 
work is underway. So Recovery Act energy funds are being spent 
at an opportune time. While the pain of high oil prices is 
still being felt, displaced workers are excited about new 
energy opportunities, and the images of the gulf oil spill 
remind us of the importance and urgency of developing our 
alternatives.
    Hawaii's success in achieving and exceeding the HCEI goal 
of 70 percent clean energy will not only attain energy 
security, independence, and economic vitality for the State and 
its residents, but will serve as a model of energy system 
transformation for other States, regions, and nations.
    Thank you for your support of Hawaii's energy 
transformation and for the opportunity to testify.
    Chairman Inouye. Thank you very much.
    Ms. Tome. Thank you.
     [The statement follows:]
                    Prepared Statement of Maria Tome
    The State Energy Office of the State of Hawaii Department of 
Business, Economic Development, and Tourism (DBEDT) appreciates the 
opportunity to submit testimony, with input from the U.S. Department of 
Energy (USDOE), to the Committee.
    This statement will cover the Hawaii portions of the energy formula 
grants under the American Recovery and Reinvestment Act of 2009 (ARRA) 
as well as input from the USDOE regarding competitively awarded 
projects to be deployed in the State of Hawaii.
    This submission is organized into the following sections: Hawaii's 
Total Energy Formula Funding under the Recovery Act (ARRA); Strategic 
Approach for Building the Expenditure Plan; Formula Funding Expenditure 
Project Plan and Status; and U.S. Department of Energy Competitive 
Grants in Hawaii.
            hawaii's total energy formula funding under arra
    State Energy Program (SEP) DE-FOA-0000052--$25.93 million.
    Energy Efficiency and Conservation Block Grants (EECBG) DE-FOA-
0000013--$15.1 million total ($9.6 million to State; $5.5 million to 
Counties).
    State Energy Efficient Appliance Rebate Program (SEEARP) DE-FOA-
0000119--$1.236 million
    Weatherization Assistance Program (WAP) Formula Grants DE-FOA-
0000051--$4.04 million.
    Energy Assurance Programs:
  --Enhancing State Government Energy Assurance Capabilities and 
        Planning for Smart Grid Resiliency DE-FOA-0000091--$318,000.
  --State Electricity Regulators Assistance Funding DE-FOA-0000100--
        $782,000.
    Total Formula Funding $47.38 million
    The purposes of ARRA energy funding are ``[T]o preserve and create 
jobs and promote economic recovery; to assist those most impacted by 
the recession; to provide investments needed to increase economic 
efficiency by spurring technological advances in science and health; to 
invest in transportation, environmental protection, and other 
infrastructure that will provide long-term economic benefits; and, to 
stabilize State and local government budgets, in order to minimize and 
avoid reductions in essential services and counterproductive state and 
local tax increases.''
ARRA--State Energy Program (SEP)
    Goals: The existing goals of the long-standing State Energy Program 
(SEP) are to:
  --Increase energy efficiency to reduce energy costs and consumption 
        for consumers, businesses and government;
  --Reduce reliance on imported energy;
  --Improve the reliability of electricity and fuel supply and the 
        delivery of energy services; and
  --Reduce the impacts of energy production and use on the environment.
    The goals of the additional ARRA funds allocated to the SEP are to:
  --Stimulate the creation or increased retention of jobs;
  --Save energy (kWH/therms/gallons/BTUs/etc.);
  --Increase energy generation from renewable sources; and
  --Reduce greenhouse gas emissions.
ARRA--Energy Efficiency and Conservation Block Grants (EECBG)
    Purpose: The purpose of the EECBG program is to assist eligible 
entities in creating and implementing strategies to achieve the 
following:
  --Reduce fossil fuel emissions in a manner that is environmentally 
        sustainable and, to the maximum extent practicable, maximize 
        benefits for local and regional communities;
  --Reduce the total energy use of the eligible entities; and
  --Improve energy efficiency in the building sector, the 
        transportation sector, and other appropriate sectors.
ARRA--State Energy Efficient Appliance Rebate Program (SEEARP)
    Purpose: The Appliance Rebate Program Objectives are:
  --Save energy by encouraging appliance replacement through consumer 
        rebates.
  --Make rebates available to consumers.
  --Enhance existing rebate programs by leveraging ENERGY STAR national 
        partner relationships and local program infrastructure.
  --Keep administrative costs low while adhering to monitoring and 
        evaluation requirements.
  --Promote state and national tracking and accountability.
  --Use existing ENERGY STAR consumer education and outreach materials.
ARRA--Weatherization Assistance Program Formula Grants
    Purpose: The Weatherization Assistance Program (WAP) objective is 
to increase the energy efficiency of dwellings owned or occupied by 
low-income persons, reduce their total residential expenditures, and 
improve their health and safety. The WAP priority population is persons 
who are particularly vulnerable such as the elderly, persons with 
disabilities, families with children, high residential energy users, 
and households with high energy burdens.
ARRA--Enhancing State Government Energy Assurance Capabilities and 
        Planning for Smart Grid Resiliency (DE-FOA-0000091)
    Purpose: The following activities shall be addressed when 
structuring projects under this funding opportunity:
  --Create in-house expertise at the State level on energy assurance 
        planning and resiliency, focusing on Smart Grid.
  --Develop new, or refine existing, Energy Assurance Plans to 
        incorporate response actions to new energy portfolios, 
        including Smart Grid technologies.
  --Revise appropriate State policies, procedures and practices to 
        reflect the Energy Assurance Plans.
  --Develop and initiate a process or mechanism for tracking the 
        duration, response, restoration, and recovery time of energy 
        supply disruption events.
  --Train appropriate personnel on energy infrastructure and supply 
        systems and the content and execution of energy assurance 
        plans.
  --Conduct energy emergency exercises (intra and interstate) to 
        evaluate the effectiveness of the energy assurance plans.
ARRA--State Electricity Regulators Assistance Funding (DE-FOA-0000100)
    Purpose: ARRA funding for electricity sector activities and 
initiatives will significantly affect utility investment in the 
electric power sector. State Public Utility Commissions (PUCs) will be 
involved in implementing key facets of ARRA electricity-related 
initiatives. To ensure that PUCs can meet the demands caused by the 
increased workload required to fully address the electricity sector 
initiatives included in the ARRA, the USDOE made funding available to 
PUCs to hire additional staff so they can ensure appropriate technical 
expertise will be dedicated to regulatory activities pertaining to ARRA 
electricity-related initiatives. The intent of the funds made available 
through the ARRA State Electricity Regulators Assistance Initiative is 
to supplement, not supplant, normal state appropriations for PUC 
staffing, expressly for the purpose of addressing the significant 
increase in PUC workload created by ARRA electricity-related 
initiatives.
          strategic approach for building the expenditure plan
    In January 2008, the State of Hawaii, in partnership with the U.S. 
Department of Energy (DOE), announced the Hawaii Clean Energy 
Initiative (HCEI), which sets an ambitious goal of moving Hawaii to 70 
percent clean energy by 2030. Analysis and planning to achieve this 70 
percent clean energy objective has been underway for the last 30 
months. This HCEI objective is the overarching policy and 
implementation framework for planning the expenditure of ARRA's energy 
funding. The goal in utilizing ARRA energy funding is to catalyze 
significant progress in many of the components of HCEI. Achieving this 
alignment was accomplished through the efforts of many HCEI partners 
and stakeholders.
    Hawaii's ARRA funding expenditure plan was developed after broad 
consultation to ensure that it supplemented HCEI and other related 
initiatives already underway. Specific attention was paid to the DOE's 
and national laboratories' annual operating plans to ensure that the 
state's spending plan complemented but did not duplicate intended 
Federal expenditures.
    Beginning in February and continuing through July 2009, meetings 
were held with energy sector stakeholders to discuss priorities and to 
build awareness of the spending plans. The plan also received input and 
guidance from HCEI Working Groups' recommendations and from HCEI 
partner projects. Potential technical support from the national 
laboratories was also factored in. Central to this planning effort was 
focus on augmenting programs and processes already in place in order to 
speed deployment of the funds into the market. In April, a meeting of 
Hawaii's key energy community members and agencies which are funding 
energy projects was held to construct a ``landscape'' of existing 
initiatives into which ARRA funding could be deployed. Briefings were 
provided by the Department of Defense, the University of Hawaii, the 
Pacific International Center for High Technology Research, electric and 
gas utilities, and state agencies such as the Department of Accounting 
and General Services and the Department of Hawaiian Home Lands, among 
others. The existing goals and budgets of these agencies were taken 
into consideration when drafting the ARRA plan in order to avoid 
redundant efforts.
    The objective has been to create a plan which integrates multiple 
Hawaii energy sectors, each of which has multiple formula funding 
sources. Planning and analysis focused on identifying opportunities to 
enhance projects which fit Hawaii's strategic plan, which have a sound 
basis and rationale, and which can be implemented quickly to obtain 
measurable results.
    The complexity of Hawaii's energy system and programs makes a 
comprehensive effort challenging, but a thoughtful and inclusive 
approach, as undertaken in developing this plan, is essential to its 
success.
    ARRA has been a tremendous catalyst to fueling energy 
transformation, especially in a period when financial resources have 
been constrained both in the state and private sector budgets. The time 
spent in 2009 aligning the spend plan to both long term transformation 
and short term recovery objectives has been shown this year to have 
been time well spent.
          formula funding project expenditure plan and status
    Formula funding project spending plan summary:
  --SEP--Energy Efficiency Programs--$7,990,280
  --SEP--Electric Power and Renewable Programs--$9,663,425
  --SEP--Transportation Programs--$5,292,357
  --SEP--Clean Energy Policy--$780,227
  --SEP--Communication and Outreach--$1,084,000
  --SEP--Administration--$1,119,711
  --EECBG--State Portion--$9,593,500
  --SEEARP--Energy Efficient Appliance Rebate--$1,235,985
  --Energy Assurance Programs--$1,100,000
State Energy Program (SEP) ARRA Grant--$25,930,000
    The State Energy Program is managed by the Department of Business, 
Economic Development, and Tourism (DBEDT). The Director of DBEDT is the 
State Energy Resources Coordinator. Within DBEDT is the Strategic 
Industries Division, which functions as the Hawaii State Energy Office.
    Significant deliverables under this Recovery Act grant include: 
Energy Efficiency Programs; Electric Power and Renewable Energy 
Programs; Transportation Energy Programs; Education and Outreach; and 
Clean Energy Policy.
    The expenditure of ARRA funds has focused on wisely using these 
resources to target strategic market interventions that can cause 
permanent structural change; identify opportunities for better 
integration of initiatives for technology deployment and market 
transformation; and promote collaboration across public and private 
agencies.
    These market interventions are expected to provide energy savings 
and renewable energy generation as follows per market area:
  --Buildings: 49,000 MBtus
  --Electric Power & Renewable Energy: 4,023,000 MBtus
  --Transportation: 37,000 MBtus
    We have met the USDOE's goal of 85 percent of SEP funding being 
obligated by June 30, 2010, and are on track to meet the goal of 100 
percent obligation prior to September 30, 2010.
SEP--Energy Efficiency Programs
    Energy efficiency programs provide quick economic stimulus through 
employing local construction industry personnel in projects to retrofit 
existing buildings or to install energy-efficient equipment. Reduced 
energy costs are realized quickly and the savings can be directed to 
growth, investment, and employment.
            High Performance Buildings Program--$800,000
    The goal of this program is to accelerate adoption of highly 
energy-efficient buildings. Buildings account for 72 percent of 
electricity consumed in the United States, produce 38 percent of all 
carbon dioxide emissions, 40 percent of raw materials use, 30 percent 
of waste output (136 million tons annually), and 14 percent of potable 
water consumption. The strategy will include providing technical 
assistance and training to building owners, developers, design 
professionals, and county building code officials to ensure that new 
and renovated buildings are designed and built with high efficiency and 
do not compromise our energy future. We are bringing buildings to 
Energy Star and Leadership in Energy and Environmental Design (LEED) 
standards.
    The U.S. Environmental Protection Agency established an Energy Star 
buildings program which allows building owners and managers to 
``benchmark'' or identify energy use per square foot, compare building 
performance to a national standard, and to receive certification of the 
energy efficiency of their buildings. Energy Star buildings are in the 
top 25 percent of building performance. Our goal is to ensure that as 
many buildings meet the Energy Star standard and make improvements to 
meet Energy Star standards.
    Our strategy also includes building design and operations to meet a 
higher and more robust efficient building standard which has 
international recognition, provides third party verification for 
performance, and is included in the Governor's Administrative Directive 
06-01 to state agencies. This standard is Leadership in Energy and 
Environmental Design. Buildings built or renovated to LEED (Silver 
Standard) are generally 30 percent more energy efficient.
    Support updating and adoption of a higher efficiency building code. 
The State of Hawaii has adopted the International Energy Conservation 
Code (IECC) of 2006; we are targeting adoption of IECC 2009 by the end 
of this year.
    Funds for these projects are 90 percent obligated. Approximately 10 
percent of the work has been completed. Two contracts have been 
executed with kick off meetings planned for July. The third contract 
has been awarded and will be executed this quarter.
    The 10th Annual Build and Buy Green Conference \1\ was completed in 
May; it featured 42 speakers and 47 exhibitors and attracted 350 
attendees.
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    \1\ http://hawaii.gov/dbedt/info/energy/efficiency/bbg/index_html.
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            Government & Residential Energy Efficiency Programs--
                    $6,865,280
    The residential efficiency program supports the U.S. Department of 
Energy's Weatherization Assistance Program (WAP), which services 
qualified low-income households. Our funds will expand the WAP program 
measures by providing education, audits, and the installation of high 
efficiency residential appliances. ($500,000)
    A project with the Public Utilities Commission supports activities 
of the Public Benefits Fee program, expanding and accelerating the 
energy savings significantly for electric utility customers on Oahu, 
Maui, Molokai, Lanai, and Hawaii islands. ($6,165,280)
    A project with the Kauai Island Utility Cooperative expands and 
accelerates the energy savings for electric utility customers on Kauai. 
($200,000)
    We initiated the very popular statewide rebate program for 
replacement refrigerators which, in combination with ARRA-State Energy 
Program and the ARRA-State Energy Efficiency Appliance Rebate Program, 
resulted in about 8,000 Energy Star refrigerators purchased in 1 month.
    Funds for these projects are 100 percent obligated; work has begun 
and is approximately 15 percent completed.
            Hospitality Sector Energy Efficiency Program--$325,000
    The strategy for this program is to develop an assessment to 
attract financing for a sea water air conditioning chilled water loop 
for Waikiki hotels. The Greening of Waikiki provides a stronger 
marketing edge and operating/economic efficiencies for a major Hawaii 
attraction. A Waikiki Roundtable event bringing together major Waikiki 
hotel managers and engineers to present the program has galvanized 
hotel interest. Our analysis shows that there are already six Energy 
Star hotels and over 4 million square feet of hotel rooms and grounds 
that meet Energy Star. A sea water air conditioning project would make 
Waikiki a first in the nation.
    Project has been expanded to include hotels statewide and a 
contractor for Energy Star benchmarking and verification has been 
selected per state procurement requirements. A kickoff meeting will be 
scheduled very shortly.
    Funds for this project are 40 percent obligated. Work has begun, 
and is approximately 5 percent complete.
SEP--Electric Power and Renewable Energy
    Electric Power and Renewable Energy programs attract investment to 
transform Hawaii's energy system to be less reliant on petroleum (and 
less vulnerable to oil price shocks) and more reliant on locally-
available energy sources with more stable costs. Attracting investment 
to Hawaii can assist with its economic recovery, while reinvesting in 
Hawaii's electricity and fuel generation and distribution systems for 
improved economic stability.
            Renewable Energy Program Support
    To meet at least 40 percent of Hawaii's energy needs with renewable 
sources (solar, wind, wave, OTEC, geothermal, hydropower, and 
bioenergy) by 2030, as required by State statute, multiple successful 
projects--properly sited, cost-effective, publicly accepted, 
effectively permitted, and interconnected--will be needed.
    Support will be provided to tip major projects currently in the 
pipeline toward accelerated completion; assist with identifying and 
completing project permitting requirements in an efficient and 
effective manner; facilitate communication with renewable energy 
project developers, landowners, investors, environmental groups, the 
public, and others; enable interconnection, conversion, and storage of 
renewable energy; document project success and lessons learned; provide 
information, guidance, and case studies to other project developers and 
the public; and facilitate the transfer of credible and current 
information on the long term costs, benefits, and realistic assessments 
of technologies from and to Hawaii's residents, decision-makers, 
landowners, media, and the public.
    To accomplish this work, positions have been created; staff has 
been hired; and work is proceeding on solar energy support; wind energy 
support; renewable energy resource assessment, data analysis, and 
technology assessments of wave, ocean thermal energy conversion, 
geothermal, hydropower, bioenergy, and energy storage; collaborative 
efforts with Federal, State, and County agencies; and providing 
information and meeting with project developers, researchers, land 
owners, teachers, students, and the general public on renewable energy 
issues and opportunities.
    Additional renewable energy support projects include:
    e-Permitting Portal--$375,000.--In this project, an on-line 
permitting service is created for all Hawaii State Department of Health 
(DOH) permits and regulatory approvals required for renewable energy 
projects. Users will be able to create individual permit files and 
track the processing status of their permit applications.
    The funds have been 100 percent obligated following finalization of 
the contract on May 25, 2010. DBEDT, DOH, and Windsor Solutions--the 
contractor retained to conduct the technical work--have scheduled 
project kick-off meetings the entire week of July 19, 2010. Windsor has 
already begun work on this project.
    Permitting Guidebooks and Online Information--$150,000.--Funds for 
this project will be used to complete the Hawaii-specific renewable 
energy permitting guidebooks for each of the main renewable energy 
technologies and for each of the Counties. The contractor will provide 
an overview of Federal, state, and county permitting requirements and 
enable access to the permitting guidebooks on-line. In addition to 
providing links to the permitting and approving agencies, users will be 
able to create individual project files, or ``permit plans,'' to 
identify the necessary permits and estimate project development 
timelines.
    The solicitation for this contract is being finalized and will be 
released soon. Work is scheduled to begin in September, 2010.
    Energy Storage Project to Demonstrate Renewable Energy Support 
Technologies--$1,800,000.--Energy storage is expected to play a 
critical role in helping Hawaii reduce its dependence on the use of 
fossil fuels; provide support for intermittent energy sources; and 
increase the use of renewable energy. Energy storage could help to 
diversify Hawaii's energy sources and improve price predictability, 
stability, and energy security for Hawaii's electric utilities and 
energy consumers.
    This project will demonstrate the use of energy storage on the 
electrical grid to provide grid stability and support, to ``tip'' 
intermittent energy projects from concept into reality by the 
development of technical solutions to interconnection concerns.
    Funds will be used to support the purchase and installation of two 
energy storage systems at locations on the Maui Electric Company (MECO) 
and Hawaii Electric Light Company (HELCO) grids with high penetrations 
of renewable distributed generation.
    The installation of commercially-available energy storage systems 
on these grids will improve understanding of the use of energy storage 
to increase the penetration of renewable energy on Hawaii's electrical 
grids, ultimately leading to an increased ability of the electrical 
distribution systems to accept higher levels of renewable distributed 
generation such as wind and solar and the attraction of private sector 
investment in renewable and energy storage systems.
    With adequate levels of dispatchable energy storage, higher 
penetration of intermittent resources, such as photovoltaics, will be 
achievable; grid resiliency and reliability will be improved; and 
additional renewable energy investments can be expected.
    We are working with the utility to refine the scope of the project, 
and will seek input from the national laboratories on technical aspects 
of the energy storage system specifications. The funds are to be fully 
obligated by the end of July.
            Support for Interisland Cable
    The interisland cable has been identified as an essential component 
of Hawaii's energy future. An interisland cable would increase access 
to renewable energy projects statewide, which could lead to consumer 
and business cost savings, as well as improved energy security and grid 
resiliency.
    One of the important benefits that could be realized with an inter-
island cable is better use of the excellent wind energy resources which 
are available in certain areas of Hawaii. Wind energy is one of the 
lowest cost of the proven and mature utility--scale renewable energy 
technologies.
    Although Hawaii's power grids are not yet interconnected, there are 
several inter-island telecommunications cables already interconnecting 
the islands. Undersea power cables are in use in other states and 
countries. ARRA funding will support initial studies, environmental 
surveys, and other non-construction aspects of inter-island cable 
development. Specific projects include:
    Cable Special Deputy Attorney General--$200,000.--This contract 
will aid the State of Hawaii in the development of the interisland 
cable by advising on legal, regulatory, business, financing, and 
strategic decisions. This funding will reduce risk for the State and 
consumer, and shorten the timeline for getting the undersea cable in 
place.
    Funds are 100 percent obligated; contract has been executed; work 
has begun.
    Cable Subject Matter Expert--$500,000.--This contract will aid the 
State of Hawaii in the development of the interisland cable by 
providing advice based on experience in development of undersea power 
transmission cables. This funding will reduce risk for the State and 
consumer, and shorten the timeline for getting the undersea cable in 
place.
    Funds are 100 percent obligated; contract has been executed; work 
has begun.
    Request for Information--$50,000.--This project enabled the State 
of Hawaii and the Hawaiian Electric Company (HECO) to collect 
information regarding the financing and development of the interisland 
cable via a cable developers' conference. The results of the RFI will 
be used in the Request for Proposals (RFP) for the interisland cable. 
This will directly reduce ambiguity and cost for the cable.
    Funds are 100 percent obligated; contract has been executed; work 
is substantially complete.
    Technical Assistance for Cable Interconnection--$500,000.--This 
project will provide expertise and assistance on technical and 
interconnection aspects of the interisland cable project. This funding 
will reduce the risks for the State, consumers, and potential project 
developers, and reduce the project and financing costs by providing 
independent information on technical alternatives.
    These funds are expected to be obligated in August.
    Interisland Cable Environmental Impact Statement (EIS)--
$2,997,947.--This contract will provide required environmental review 
documentation to satisfy the requirements of the National Environmental 
Policy Act (NEPA) and the Hawaii Environmental Policy Act (HEPA) for 
both a programmatic EIS for the Interisland Wind project and also 
project-specific environmental analyses for the Interisland Cable based 
on the alternatives selected. As part of the EIS, the consultant team 
will examine impacts on cultural resources; historic and archeological 
resources; socioeconomic impacts; coastal aquatic ecology; endangered, 
threatened and protected species; coral reef ecology; whales and marine 
mammals; wildlife and fisheries biology; water quality; ecological and 
human health; offshore habitats; essential fish habitats; visual 
impacts; preferred routing alternatives; and other issues. The EIS work 
will also include rigorous public involvement on the affected islands 
through a comprehensive public outreach and participation process.
    Funds are 100 percent obligated; contract has been executed; work 
has begun.
    Undersea Cable Ocean Floor Surveys--$300,000.--This project 
conducts ocean floor surveys for the proposed deep water undersea cable 
route south of Oahu, collecting side-scan sonar data, high resolution 
near-bottom bathymetry data, and subbottom sonar data, accurately 
positioned with a short baseline acoustic navigation system. A website 
disseminates the data from the surveys and provides access to maps, 
features, images and video.
    Funds are 100 percent obligated; contract has been executed; work 
is largely complete.
SEP--Transportation Energy Transformation Program
    This project plans and implements actions to transform Hawaii's 
transportation energy supplies from 95 percent petroleum-based liquid 
fuels to a variety of locally-available energy sources including 
renewable electricity and biofuels. The transportation energy 
diversification project will ready Hawaii for significant deployment of 
electric drive vehicles and other advanced transportation energy 
technologies, as well as the development of locally produced fuels.
    To accomplish this work, positions have been created; staff has 
been hired; and work is proceeding on vehicles; fuels; agri-bioenergy 
assessments; collaborative efforts with Federal, State, and County 
agencies; and providing information and meeting with project 
developers, researchers, land owners, teachers, students, and the 
general public on transportation energy, vehicle, and fuel-related 
issues. Additional transportation energy support projects include:
            Hawaii EV Ready Program--$4,024,780
    This program provides grants and rebates for the installation of 
electric vehicle chargers and the purchase of new, commercially-
available full-speed electric motor vehicles. Result: 1,000-5,000 
electric vehicle chargers installed and 200-600 electric vehicle 
purchases supported by grant and rebate funds.
    Funds for this project are 100 percent obligated. $1,024,780 has 
been allocated for the rebate program; $3,000,000 is available for 
grants. The allocation between grants rebates may be adjusted based on 
the needs of the market in this highly dynamic time for electric and 
other advanced technology vehicles.
    The Grant Opportunity Announcement, released on June 9, 2010, 
invites grant applications from Hawai`i businesses, nonprofit 
organizations, and State and county government entities to support the 
installation of commercially available and standard-compliant electric 
vehicle (EV) charging equipment and to accelerate the adoption of full-
speed electric motor vehicles in Hawai`i. The application due date is 
July 26, 2010, 11 AM Hawaii Time. Selected projects are to be announced 
August 31, 2010.
    The Hawai`i EV Ready Rebate Program, scheduled to begin in August 
of 2010, will provide rebates for Hawaii residents, businesses, State 
and County agencies, and nonprofit entities for the initial purchase of 
new, commercially available electric vehicles for use in Hawaii and for 
the purchase and installation of commercially available charging 
equipment in Hawaii.
    More information and documents are available at http://
electricvehicle.hawaii.gov.
            State Fleet Program--$475,500
    This program supports State infrastructure and vehicle fleet 
demonstrations and transformation, providing funds for vehicles and 
infrastructure. Result: deployment of electric vehicles in State fleets 
and installation of charge stations in State owned facilities.
    Funds for this project are 100 percent obligated. The Department of 
Accounting and General Services (DAGS) operates the Hawaii State motor 
pool and will be using the funds to acquire electric, plug-in hybrid 
electric, advanced technology, or alternative fuel vehicles and to 
install electric vehicle chargers. DAGS will assist Hawaii State 
government agencies to lead by example through acquisition of electric 
or plug-in hybrid electric vehicles and to comply with statutory 
requirements for electric vehicle parking at state facilities, 
including parking lots, in accordance with Act 156, Session Laws of 
Hawaii 2009.\2\
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            Transportation Energy Transformation Strategy--$60,000
    This project includes public input and participation in vehicle, 
fuel, and food project development via websites, e-mails, personal 
communication, presentations, and reports; collecting data and 
documenting success; and developing, directing, and participating in 
collaborative bioenergy, integrated agricultural and energy analysis, 
and food-and-fuel development tasks.
    In addition to the work described above, DBEDT is participating as 
a member of the Center for Bio Energy Research and Development (CBERD), 
established in September 2008 with an award from the National Science 
Foundation through the Industry/University Cooperative Research Center 
program. The University of Hawaii was selected as one of five 
participating university sites along with the South Dakota School of 
Mines and Technology; Kansas State University; State University of New 
York at Stony Brook; and North Carolina State University. Second year 
funding was received in September 2009. CBERD provides a valuable 
service for the identification of solutions and provides a forum for 
understanding of Hawaii's unique bioenergy crop, by-product, and scale 
needs. The Center will focus on aspects of life cycle analysis--from 
raw material acquisition through production, use, end-of-life 
treatment, recycling, and disposal--of bioenergy feedstocks. The goal 
of the current projects are (1) to conduct a net energy analysis of a 
plantation-scale Eucalyptus production system, and (2) to identify the 
carbon and greenhouse gas implications of utilizing existing Eucalyptus 
trees for bioenergy production. Activities by the Center support and 
extend recent advances made by industrial partners. On June 8, 2010, 
the State Energy Office signed a contract to contribute $20,000 
annually for three years in support of the Center.
    Funds for this project are 100 percent obligated.
Clean Energy Policy--$780,227
    This project supports, coordinates, facilitates, engages, and 
participates in Hawaii Clean Energy Initiative activities, programs, 
and plan development to ensure the achievement of the Clean Energy Goal 
of transforming Hawaii to a clean energy economy consistent with the 
State's energy goals and policies provided under Section 226-18, Hawaii 
Revised Statutes.
    Funds for this project are 100 percent obligated. Work has 
commenced and is proceeding at an accelerated pace. We are on track to 
complete the work needed and fully expend the funds.
SEP--Education and Outreach
            Communications--$500,000
    Provide information to the public, decision-makers, the media, 
investors, project developers, private sector, nonprofit, government 
entities about Hawaii's progress in renewable energy and energy 
efficiency programs, policies, goals, economic development 
opportunities; provide information on the use of energy-efficient and 
renewable energy technologies including solar, wind, hydropower, wave 
energy, ocean thermal energy, geothermal, interisland cable, 
transportation, electric vehicles, fuel cells, building efficiency, and 
energy conservation; encourage input and provide information on energy 
policies and planning (FiT, decoupling, etc.); and provide information 
on energy project financing and funding. Provide information to the 
media (i.e., radio, television, print interviews, news segments/
articles, news conferences, special events, etc.); local, national and 
international energy industry representatives; property owners; 
business, community, government, military, and other stakeholders; and 
the general public. Provide website content and updates for consumers, 
businesses, government, military, community and education sectors.
    Funds for this project are not obligated at this time as we are 
going through the procurement process and anticipate a contract being 
signed in August 2010.
            Energy Conference Services--$160,000
    Under a UH Conference Center contract, the State will provide 
technical assistance, training, and public education activities to 
encourage the use of energy-efficient and renewable energy 
technologies. In order to maximize grass-roots and business support, we 
will work with UH Conference Center to assist with conferences, 
workshops, and/or meeting logistical needs such as registration, 
speaker coordination, audio visual, etc. As part of the State's 
business-to-business goal, Hawaii must continue to showcase energy 
projects and programs in order to stimulate job growth and economic 
development opportunities.
    Funds for this project are 100 percent obligated; contract signed 
on June 15, 2010.
SEP--Administration
    Administration of the State Energy Program ARRA funds includes 
Program oversight, coordination, management, procurement, contracting, 
accounting, and reporting in accordance with Federal and State 
requirements.
    Funds for this task are 100 percent obligated. Work has commenced 
and is proceeding at an accelerated pace. We are on track to complete 
the work needed and fully expend the funds.
EECBG--Energy Efficiency and Conservation Block Grant--$9,593,500
            DHHL Homestead Energy Program--$2,900,000
    The Department of Hawaiian Home Lands (DHHL) is partnering with 
DLIR Office of Community Services in assisting DHHL homestead 
communities. The project covers 400 homestead homes and will be 
conducted over a period of 18 months. Included are conducting home 
energy audits and assessments; delivering energy efficiency and 
conservation education/training; and retrofitting/installing homes with 
solar water heating systems and energy-efficient lighting.
    Funds are 100 percent obligated. Contracts are in place; work has 
begun.
            Department of Accounting and General Services (DAGS): ``PV 
                    on State Buildings''--$2,970,000
    Funds will be used for the installation of photovoltaic (PV) 
systems as a demonstration and educational project involving a 
renewable energy technology that will reduce State consumption of 
electrical power generated with fossil fuels. The DAGS goal is to 
achieve 40 percent reduction in energy consumption for State office 
buildings under its management and control.
    Funds are 100 percent obligated. Contract is in place; work will 
begin at the end of July, 2010.
            KIUC Customer Energy Efficiency Project Augmentation--
                    $200,000
    These funds are allocated to KIUC through DBEDT to offer the 
customer energy efficiency rebate programs for government and nonprofit 
buildings on Kauai. These funds are in addition to the $200,000 KIUC 
customer energy efficiency project.
    Funds are 100 percent obligated; contract is in place; work will 
begin soon.
            DBEDT Innovative Clean Energy Financing--$2,922,928
    The innovative clean energy financing initiatives support public 
adoption of energy technologies by overcoming market barriers; i.e. up-
front economic costs and risks, through financing mechanisms such as 
Property Assessed Clean Energy and Loan Loss Reserve Fund.
    The ``Property Assessed Clean Energy'' (PACE) program is a local 
government (County) level retrofit financing program providing property 
owners with a more desirable retrofit capital option than otherwise 
available. In addition to leading to a significant number of energy 
saving retrofits, this activity will serve as a model for future 
retrofit financing programs throughout the state. The participating 
Counties will be chosen based on interest and willingness to accelerate 
program implementation and desire to continue operating the program 
into the future. Funds provide initial capital for the program to 
enable financing of retrofits to an estimated 110 homes; the program is 
intended to enable the participating Counties to attract private 
capital for subsequent retrofit cycles. Using the DBEDT ``I-O Model 
Type 2 (2010)'' multiplier, this grant will generate $1.3 million in 
direct, indirect and induced income to Hawaii's economy, and 23 job-
years over the grant duration.
    The ``Loan Loss Reserve Fund'' will be used to expand the capital 
available to fund building retrofits and energy improvements across all 
building segments by creating and funding a loan loss reserve fund. 
This will provide support for the large market for energy efficiency 
and renewable energy loans that banks have been slow to respond. This 
will leverage private investment. Moreover, by mitigating the risk 
associated with these loans, Hawaii will help borrowers gain access to 
lower cost capital than would be possible without the reserve leading 
to more attractive interest rates for the supported loan products. Once 
banks have sufficient data to confidently assess the risks associated 
with energy efficiency and renewable energy loans, they can develop 
underwriting criteria for determining the associated risk and resulting 
pricing.
            DBEDT EECBG Administration--$600,268
    Funds have been allocated to two administrative positions and 
miscellaneous expenses to assist with the administration of the EECBG 
funds.
SEEARP--State Energy Efficient Appliance Rebate Program--$1,236,000
    The Hawai`i Energy Efficient (Energy Star) Appliance Rebate 
Program, marketed as ``Trade Up for Cool Cash'' and ``Replace, Recycle, 
Save,'' was a riveting success statewide. The program, which was 
announced at a press conference on May 13, 2010, and officially 
launched on May 24, 2010, targeted the replacement of older, 
inefficient refrigerators with qualified Energy Star rated appliances 
by offering consumers a $250 rebate. Consumers were required to trade-
in their older operating refrigerator, preferably their oldest one, 
which was then hauled away and delivered to a recycler. The Public 
Utilities Commission-Public Benefits Fee Administrator, Hawaii Energy, 
managed the appliance rebate program for the Counties of Honolulu, 
Maui, and Hawai`i, while Kauai Island Utility Cooperative (KIUC) 
handled the rebates for Kaua`i County.
    The rebate was available for a total of 4,356 refrigerators 
statewide, and nearly 4,000 were sold on the very first day. An 
additional 4,000 rebates for Energy Star refrigerators, following 
SEEARP criteria, were made available through another source of ARRA 
funding, on all islands except Kauai. Retailers saw a large increase in 
business, along with their delivery divisions and the recycling 
companies, but the actual level of job creation is unknown. KIUC's 
informal poll of the retailers, delivery companies, and recycling 
company on Kauai concluded that there wasn't enough sustained activity 
to create additional jobs, since their program only lasted 5 days. 
Hawaii Energy budgeted for personnel costs but has not yet reported on 
jobs created.
    Participating retailers played an important part of the program by 
assisting consumers wanting to participate in the program and in 
helping them obtain their rebates. These retailers pledged to provide 
delivery of the new refrigerator and haul away and properly recycle the 
old refrigerator, making them a ``one stop shop'' for the rebate 
program.
    Sears is a good example of what retailers did to boost their sales 
and promotions. The stores opened early on the start date of the 
program, offered free coffee and pastries to the early-shoppers, and 
implemented efficient processes to assist customers. Consumers seemed 
to echo a general feeling that the program provided them with an 
opportunity to get rid of their old refrigerator--something many had 
been putting off for some time. Customers who purchased a new 
refrigerator are also taking a step toward helping Hawaii reduce its 
dependence on oil and fossil fuel; and, they're going to be saving 
money that can go toward other necessities. With such a high level of 
consumer interest, the program is certain to run through its available 
rebate applications soon.
    The tremendous response to the appliance rebate program is largely 
due to media interest and heavy coverage. A total of 27 articles were 
written in print/online media including the Honolulu Advertiser, the 
Honolulu Star-Bulletin, The Garden Island, Maui News, Hawai`i Tribune 
Herald, Pacific Business News, and Business Week. Additionally, the 
program was covered by 17 broadcast television/radio segments, which 
include KHON2, KITV4, KHNL8, KGMB9, KHPR, and KSSK.
    Cooperation and consensus among the State, Hawaii Energy, and KIUC 
were the keys to accomplishing a program not only benefitting our 
economy and the environment, but also incentivizing consumers to move 
sooner rather than later. The underlying goal for this program was to 
involve everyone, State program managers, the two implementers, 
consumers, retailers, distributors, haulers, recyclers, print media, 
television, and radio stations. We wanted to help consumers statewide 
take full advantage of these funds. As we designed this program, we 
looked at all the issues at hand, but we never forgot about making the 
process simple enough for qualified consumers to take advantage of the 
program, while allowing our implementers to effectively control the 
roll-out. As a result of this cooperative effort, up-front marketing 
costs of the statewide program were reduced, allowing more of the 
Federal funds to be spent for rebates.
    Funds for this project are 100 percent obligated. We will be 
invoiced shortly and funds will be expended soon.
Energy Assurance Formula Grants
    This program is intended to increase expertise in regulatory and 
energy assurance issues related to smart grid and to increase training 
and staff capability with new technology. Specific projects are:
            State Electricity Regulators Assistance Funding--$782,000
    This funding will be used to improve the State Public Utility 
Commission's (PUC's) ability to gain the expertise required to handle 
increasingly complex issues associated with Smart Grid technology and 
the associated regulatory issues. The SERAF program aims to ensure that 
PUCs can meet the increased demands caused by the increased workloads 
through the hiring of additional staff. This goes to ensure appropriate 
technical expertise will be dedicated to regulatory activities 
pertaining to Recovery Act electricity-related initiatives. The Hawaii 
PUC was received its award notification in November 2009.
            Enhancing State Government Energy Assurance Capabilities 
                    and Planning for Smart Grid Resiliency--$318,000
    This funding is to create expertise at the State level on energy 
assurance planning and resiliency, focusing on Smart Grid; support 
development of energy assurance planning and plans; train personnel on 
execution of energy assurance plans; and fund energy emergency 
exercises to evaluate the effectiveness of the energy assurance plans. 
Hawaii's Energy Assurance proposal was submitted on July 27, 2009. The 
awards have been awarded and received.
    The Request for Proposals for the contract under this project was 
released July 1, 2010. In-house work has begun on the project and we 
are on track to meet program goals, objectives, and timelines.
                      usdoe recovery act projects
    The Recovery Act supports the Department of Energy's diverse 
research and development (R&D) portfolio, while weatherizing homes, 
funding Energy Efficiency and Conservation Block Grants (EECBG), and 
funding the State Energy Program. The latter three investments are 
making homes, businesses, and towns across the Nation more energy 
efficient, saving Americans money on their energy bills. Formula grants 
awarded to Counties under the EECBG program are listed below. In 
addition to Recovery Act Section 1603 grants in lieu of tax credits, 
DOE is working with the Department of the Treasury to formulate another 
program to issue grants in lieu of tax credits for qualified renewable 
energy projects. Lastly, the Recovery Act expanded the fund for the DOE 
Loan Guarantee Program to support commercial applications of qualified 
technologies.
County Block Grants--$5,474,700
    The Energy Efficiency and Conservation Block Grant Program touches 
communities throughout the United States, highlighting the importance 
of sustainability at the county and municipal levels. With approval 
from DOE, the State of Hawaii's EECBG plans at the County level are 
complete and projects are under development, putting Americans to work 
and helping move Hawaii toward a clean energy economy. The following 
four counties highlight some of the EECBG projects Hawaii has underway.
  --City and County of Honolulu--$3,863,700.--The six projects include 
        four lighting improvement projects and two solar photovoltaic 
        (PV) system facility installations. These projects have not 
        started as yet. A possible seventh project is being discussed 
        with USDOE.
  --Hawaii County--$737,800.--Of the six projects overall, three relate 
        to green retrofits and public education; the funds have been 
        encumbered and the consultants selected. One project addresses 
        financing for energy efficiency and renewable energy; a 
        contract has been issued for this project. One project seeks to 
        improve government operations with respect to sustainability; a 
        contract for this project has been issued. Lastly, a street 
        light retrofit project is still pending.
  --Maui County--$605,300.--The 13 total projects include 12 for energy 
        audits followed by solar PV system installations and one 
        project for feasibility of a waste-to-energy facility. Maui 
        County has encumbered $25,000 related to the energy audit 
        projects.
  --Kauai County--$267,900.--To install a solar PV system at a fire 
        station. Phase I is a $25,000 plan and design phase. Phase II 
        will solicit for the build phase. Currently, Kauai County is 
        awaiting a tax clearance prior to a notice to proceed to the 
        company selected to do the Phase I work.
Recovery Act Competitive Grants
    The Office of Energy Efficiency and Renewable Energy and the Office 
of Electricity and Energy Reliability both supported various 
competitive grant solicitations related to priority objectives of DOE 
programs. Several Hawaii-based projects were selected from numerous 
responses to Funding Opportunity Announcements. These projects include 
funding of:
  --$25,000,000 awarded to UOP for pilot and demonstration scale 
        biorefineries;
  --$5,500,000 awarded to the Kauai Island Utility Cooperative Smart 
        Grid project;
  --$5,300,000 awarded to the Hawaiian Electric Company Oahu Smart Grid 
        project;
  --$3,000,000 awarded to Phycal for innovative concepts for beneficial 
        reuse of carbon dioxide;
  --$2,500,000 awarded to the University of Hawaii to develop a new 
        cross-disciplinary program focused on areas of clean energy 
        technologies, renewable energy production, storage, 
        integration, and smart grid technologies;
  --$750,000 awarded to HECO for wind energy technology R&D and 
        testing; and
  --$750,000 awarded to Pacific Center for Advanced Technology Training 
        (University of Hawaii Community Colleges) to develop and 
        enhance a career pathway for technicians that will deploy and 
        maintain electric power transmission and distribution through 
        the application of smart grid technologies.
Hawaii Section 1603 DOE/Treasury Grants
    As of July 2, 2010, grants have been awarded to 20 statewide 
projects, totaling more than $9.4 million.\3\ These projects include 15 
solar electric projects, four solar thermal projects, and one fuel cell 
project. The grants in-lieu of tax credits program was developed as an 
alternative to investment tax credits (ITC) and production tax credits 
(PTC) renewable energy developers received over the last two decades. 
The erosion of profits of large lending institutions around 2008, 
eliminated the opportunity to effectively employ the tax credits. The 
new, Section 1603 grants created by the Recovery Act provided an 
alternative to ITC and PTC for renewable energy developers. Projects in 
Hawaii are among about 800 awarded across the Nation spurring private 
sector investment in renewable energy projects.
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Loan Guarantee for First Wind
    DOE's Loan Guarantee Program issued a conditional commitment for a 
loan guarantee to First Wind Holdings, LLC for the construction of a 30 
megawatt wind energy facility to be located in the Kahuku area of Oahu. 
A formal ground breaking ceremony is scheduled for this facility on 
July 13, 2010. Construction will continue throughout the summer and 
fall of 2010. If the project is commissioned before January 1, 2011 
this it would also be eligible for a Section 1603 grant.

    Chairman Inouye. Mr. Roose.
STATEMENT OF LEON ROOSE, MANAGER, SYSTEMS INTEGRATION, 
            HAWAIIAN ELECTRIC COMPANY
    Mr. Roose. Thank you, Mr. Chairman.
    I'd like to first express Hawaiian Electric's appreciation 
for this opportunity to testify and share with you what we've 
been doing with our funds and awards we've received. You know, 
we're very grateful to have been a recipient of approximately 
$8.5 million in funds for three projects, three ARRA projects. 
I'm going to talk about each of them a little bit here.
    First project is the one in which we received the largest 
funding, and that was $5 million, and it's called our East Oahu 
Switching Project. This project is essentially designed to 
utilize new smart grid switching technology on the HECO system, 
very cutting edge application. It really offers us an 
opportunity to use a very innovative approach, which will in 
effect reduce outage time for many of our customers when we 
have events on our system. It can reduce outage times from 
hours to minutes, it will significantly lower the 
implementation costs of the project, which--by roughly about 50 
percent based on how we were previously going to do it and how 
we plan to do it today with the smart grid switching 
technology. It's going to reduce community impacts, so now we 
don't have to dig up many streets to put in new lines and 
infrastructure, again deploying technology as a solution. It 
will enable the acquisition of key new skill sets for our 
utility staff as we move into this future of a more smarter and 
resilient system.
    In particular, this project will create or retain more than 
20 jobs on the utility front, and also adds resources from 
contractors during the planning and implementation stages. It 
also offers a significant opportunity for HECO to retrain its 
workforce, again in smart technology solutions. And we really 
believe that the lessons learned and results from this effort 
can be utilized to establish, you know, hardware communication, 
logic foundations for many mainland utilities and applications 
of a similar manner throughout the country. So I think will 
really show as a showcase for those kinds of projects.
    Another project that we did receive some ARRA funding for 
was in the amount of $750,000, and was what we called our Wind 
Grant. That money was awarded by DOE wind program. We actually 
got that money back on July 14, 2009. That effort will fund 
sort of three components, and all three of those are well 
underway at this point. We're going to be putting out some 
fairly cutting edge technology to actually forecast the way 
wind farms and solar, you know, facilities will actually move 
around as the wind drops off or picks up and the Sun, you know, 
the amount of solar radiation that is picked up by solar panels 
changes as clouds move over.
    This is a fairly significant issue for utilities in general 
across the country. And as we increase our penetration of these 
resources on our system, our ability to effectively operate in 
that environment is critical. And so the creation of tools like 
this are really essential for our future operation and keep 
pushing forward our ability to take on more of this kind of 
energy.
    The second part of the initiative is we're--we're in the 
process of developing a roadmap for our smart grid future for 
our utilities. That work is pretty winding up at this point, 
and we're putting together a documentation of that roadmap. And 
again, that's a critical element, as that will really establish 
our foundation as we look forward, not just in the near-term 
activities, but how they link over the long-term with our 
initiatives.
    And the third area, we're going to be gathering a lot of 
data from existing facilities that are out there in the field 
and pulling that data back and giving it to our operators in 
ways in which they can make good operational decisions. That's 
another key, sort of, R&D effort, but is crucial as we look 
forward into the future of our operations.
    The third full grant is one that we got very recently, and 
this was one we worked in conjunction with the University of 
Hawaii, and it is one we're very proud of. We've got $2.5 
million there, and really a lot of the focus of that money will 
be to rebuild the curriculum at the University of Hawaii in the 
Engineering College and beyond that, but in particular in the 
Engineering College, in the Electrical Engineering Division or 
department in the area of power--power systems. As a former 
alumni of the university and having gone to school there, you 
know, at one time we did have that curriculum at the 
university. Today it no longer exists. And so this money and 
initiative is a key part of seeding the restoration of a 
program at the university to train our future engineers who are 
going to be vital to us as we move forward into the future in 
the power industry and the kind of work that we do at Hawaii 
Electric.
    So again, we find this to be very important, we're working 
close with the university, we're also providing a lot of staff 
support. One of the--one of my directors on my staff is going 
to be serving as an adjunct professor at the university, 
teaching many of the courses and doing lectures. And they've 
actually started already this year. It's been very good. Again, 
this money will help take that to the next level and we can 
build upon that.
    I appreciate the opportunity to testify today and I'd be 
happy to answer any questions. Thank you.
    Chairman Inouye. Thank you very much.
     [The statement follows:]
                    Prepared Statement of Leon Roose
    Chairman Inouye and Members of the Committee: My name is Leon Roose 
and I am the Manager of System Integration at Hawaiian Electric Company 
(HECO). Thank you very much for the opportunity to brief you in person 
on the status of Hawaiian Electric Company's projects that have 
received Federal stimulus funding under the American Recovery and 
Reinvestment Act (ARRA). HECO is grateful to have been a recipient of 
these funds as the projects they are funding are helping us to progress 
towards our clean energy future at a quicker pace.
FOA 58--East Oahu Switching Project (approx. $5 million)
    The East Oahu Switching Project is designed to utilize new smart 
grid switching technology on the HECO system as a means to reliably and 
timely restore service to customers after an outage event. In effect, 
it will intelligently automate high load distribution lines in urban 
Honolulu. The project offers an innovative approach which will reduce 
outage times from hours to minutes, lower implementation costs by up to 
50 percent and reduce community impacts in comparison to the 
traditional approach of building new distribution lines, improve 
safety, and enable acquisition of new skill sets and tools for utility 
staff.
    The new technology to be installed on the HECO grid will address 
these smart grid characteristics:
  --Optimizing asset utilization and operating efficiency of the 
        electric power system. HECO's approach is specifically focused 
        on moving from HECO's distribution grid design of ``overbuild 
        for capacity and reliability'' paradigm to one of ``capacity 
        extension and reliability improvement through monitoring, 
        control, and automation''.
  --Anticipating and responding to system disturbances by using feeder 
        automation, installing intelligent substation controllers, 
        automated switches, and reclosers to quickly isolate and 
        restore power. This includes advanced control center grid 
        visualization, intelligent information analysis/filtering, and 
        tools for ``predictive avoidance'' of operational problems.
  --Operating resiliently to attacks in the area of cyber security by 
        applying NIST interoperability and cyber security frameworks to 
        the communication backbone used in this project.
    The project will secure existing utility ``green'' jobs and adds 
resources from contractors during the planning and implementation 
stages. It also offers a significant opportunity for HECO to retrain 
its workforce in smart technology solutions. The project exemplifies a 
significant step in the staged evolution to a smart grid and provides a 
clear demonstration in support of national smart grid deployment 
efforts. The lessons learned and results from this effort can be used 
to establish hardware, communication and logic foundations for mainland 
utilities and technology vendors throughout the country.
ARRA Wind Grant ($750,000)
    The initiatives funded under this $750,000 ARRA grant are well 
underway with various subcontractors engaged in deploying remote 
sensing equipment (i.e. sodar and lidar) to pilot a real-time ramp 
event forecasting effort. Three initiatives were funded, all supporting 
utility focused effort to increase the ability to accommodate more 
variable renewable technologies such as wind on our island grids.
    The first initiative, WindNET as it is called, is supported by AWS 
TruePower and mainland utilities, SCE, BPA, PG&E and CaISO, all having 
previously been funded under Department of Energy (DOE) wind 
forecasting initiatives known as WindSENSE.
    In the second initiative a Smart Grid roadmap is to be completed 
for the family of Hawaiian Electric Companies (HECO/MECO/HELCO). The 
development of this roadmap is critical to enabling the effective 
investment of capital in new smart electrical infrastructure tailored 
to the needs of the island utility grids. Results and recommendations 
arising from this initiative which will inform further coordinated work 
and implementation of smart grid infrastructure.
    The third initiative is the integration of grid monitoring and 
resource data into the operational environment. Hawaii's Big Island 
utility, HELCO, is leading the piloting of solar, grid based monitoring 
and visualization capability into the operations environment. Initial 
pilot efforts will inform the development of refined and tailored 
pilots and deployment activities funded for HECO and MECO.
FOA 152--University of Hawaii/HECO Workforce Development ($2.5 million)
    HECO is teaming up with the University of Hawaii (UH) under FOA 
152, a $2.5 million workforce development initiative, to initiate 
responsive and dynamic training programs to develop the existing 
workforce on clean energy alternatives and improve the workforce 
pipeline in all sectors from tourism, business, and manufacturing to 
the Department of Defense. The partnership will leverage industry staff 
to help train our next generation on energy reliability and provide 
education and training opportunities to support the education and 
development of the existing workforce. Through this funding, UH will 
support reestablishing their power engineering curriculum, internship 
programs with industry, and broaden educational opportunities to help 
inform the public. HECO staff will offer support in various initiatives 
as presenters, adjunct faculty and active feedback to the UH program.
FOA 313--Informing Smart Distributed Management System RD&D Initiatives 
        (approx. $8.8 million)
    HECO just recently submitted its proposal for this 5 year grant. We 
expect to hear if we have been awarded this grant in the Fall of 2010. 
As part of this proposal, a multi-disciplinary team of participants 
including the family of Hawaiian Electric Companies (HECO/MECO/HELCO), 
Sacramento Municipal Utility District (SMUD), Siemens, BEW Engineering, 
GL, PowerWorld, University of Hawaii, SAIC, Honeywell, CPower, and 
Akuacom, has been formed with the goals of supporting utilities in 
accelerating adoption of reliable transformational technologies and 
facilitating appropriate consumer behavior modeling and design of 
capabilities needed to bring an integrated distributed management 
system (DMS) into operation. We are also looking to support diverse 
demand-side management (DSM) and consumer energy conservation and 
efficiency (EC&E) programs.
    Three utility focused initiatives, which link together development 
of accurate distributed resource models and integration capability, 
design of smarter consumer loads, and demonstration to build user 
confidence in smart technologies, form the basis of this DMS proposal. 
The three initiatives include:
    Initiative 1--Enhancing Grid Capabilities to Model, Visualize and 
Control Distributed Resources.--Develop commercially reliable 
distributed modeling tools and capability to effectively monitor, 
update, and incorporate a broad spectrum of data (e.g. system, resource 
and customer) for distributed resources management.
    Initiative 2--Engaging Smart Loads.--Build in grid specific 
customer usage and desired load control characteristics into 
transmission and distribution planning process, new DMS and DSM energy 
efficiency programs.
    Initiative 3--Building Operational Confidence.--Involve users in a 
utility-level pilot to demonstrate distributed resource control for 
grid management utilizing developed models and tools.
    The objectives of these initiatives include:
  --Developing and integrating into commercially available, utility-
        based transmission and distribution tools, accurate algorithms 
        for modeling distributed technologies (e.g. inverter-based) and 
        capturing desired attributes (individual or aggregated 
        response) for smart grid operations.
  --Evaluating and quantifying appropriate customer usage 
        characteristics and large sector (tourism, residential, 
        military) behavior attributes into utility system models to 
        inform requirements for grid responsive DMS and design of new 
        DSM/EE programs.
  --Conducting Sensitivity of Response Analysis (SRA) using new 
        aggregation models to help quantify the level of accuracy and 
        control needed to improve operator confidence in use of DMS for 
        grid operations.
  --Developing appropriate pilot implementation of developed models and 
        tools with at least 6 months of demonstration data.
  --Gather ``lessons-learned'' to inform new processes/procedures to 
        best integrate smart technologies for DMS while building 
        operational confidence that improves grid response and 
        reliability.
    Thank you again for providing this opportunity to update the 
Committee on Hawaiian Electric Company's use of Federal stimulus funds 
through the American Recovery and Reinvestment Act. I will be happy to 
answer any questions you may have.

    Chairman Inouye. Dr. Rekoske.
STATEMENT OF JIM REKOSKE, VICE PRESIDENT AND GENERAL 
            MANAGER, RENEWABLE ENERGY AND CHEMICALS, 
            HONEYWELL UOP
    Dr. Rekoske. Mr. Chairman, thank you for allowing me the 
opportunity to appear before you today in your beautiful State. 
My name is Jim Rekoske, and I'm the Vice President and General 
Manager for Renewable Energy and Chemicals at Honeywell's UOP 
business. It is an honor for me to be here in Hawaii to discuss 
the Integrated Biorefinery Project in Kapolei. This exciting 
project is the result of funding made available by the United 
States Department of Energy under the American Recovery and 
Reinvestment Act of 2009.
    Honeywell proudly supported the American Recovery and 
Reinvestment Act because we believed it would stimulate the 
economy and provide jobs through innovative projects like our 
project in Kapolei. The Department of Energy has funded the 
construction of a pilot scale production unit that will use 
local sources in the production of renewable transportation 
fuels. This project supports efforts to improve United States 
energy security and reduce greenhouse gas emissions. It will 
also help grow the U.S. sustainable biofuels industry, create 
jobs both in Hawaii and throughout the country.
    The Integrated Biorefinery project in Kapolei is led by 
Honeywell's UOP business, a global leader in the development 
and licensing of technologies for the production of fuels and 
chemicals. Today, 60 percent of the world's gasoline and 85 
percent of the world's biodegradable detergents are made using 
technology invented and developed at UOP.
    Honeywell's capabilities, however, are much broader and 
include technologies and solutions that are helping to solve 
many of the world's toughest challenges, such as safety, 
security, energy generation, efficiency, production, and 
comfort. Nearly 50 percent of Honeywell's current product 
portfolio delivers energy efficiency benefits. If immediately 
and comprehensively adopted today, these products could reduce 
the country's energy usage by 20 to 25 percent.
    Throughout its history, UOP has played an important role in 
every major step change in fuel production. Our commitment to 
and investment in renewable fuels is no different. In 2006, 
driven by growing concerns over energy security, rising 
greenhouse gas emissions and the volatility of fuel prices, we 
began to focus on developing profitable and efficient methods 
for the conversion of natural oils and wastes to usable fuels.
    Our technologies enable the conversion of natural oils, 
energy crops, and wastes into real fuels that perform as well 
as, or better than, their petroleum counterparts. These fuels 
work as drop-in replacements, meaning they can be used without 
modification to today's established infrastructure, including 
refineries, storage, delivery, and engine technology.
    The advantages of these fuels have been proven in a number 
of ways. Honeywell green diesel has been used to power 
automobiles currently available for commercial use. Honeywell 
green jet fuel, as a 50 percent blend with kerosene, has 
powered four commercial airlines in demonstration flights, and 
was most recently used for test flights with the U.S. Air Force 
and the Navy F/A-18 Green Hornet. In each case, Honeywell 
renewable fuels met or exceeded existing specifications for 
petroleum products.
    Our technologies are designed to be feedstock flexible to 
allow use of a wide range of sustainable natural oils including 
algae, camelina, animal fats and more. These are nonfood feed 
stocks that do not use land or water currently set aside for 
food crops. Over the lifecycle of the products, these feed 
stocks have the potential to reduce greenhouse gas emissions as 
much as 80 percent compared with fuels made from crude oil.
    The Kapolei facility will demonstrate the scalability of 
technology that converts biomass into a liquid biofuel known as 
pyrolysis oil and then upgrades this oil to produce green 
transportation fuels. Honeywell and its partners will evaluate 
the fuels produced and perform life cycle analysis of the 
process to fully understand the environmental implications.
    A key element to this project is the potential for job 
creation. Honeywell has hired local firms to support the permit 
activities and environmental studies needed for construction of 
the facility. The construction will utilize local labor and 
stimulate additional jobs throughout the country, as 80 percent 
of the materials required will be sourced from within the 
United States. In addition, Honeywell plans to employ local 
labor to run the day-to-day operations of the facility.
    Beyond plant support, there is significant potential for 
new jobs in the agricultural sector. The site will process a 
wide range of local feed stocks, including Guinea grass, sugar 
cane bagasse, algal residues, sorghum by-products, eucalyptus 
and more. Anticipating long-term success, Honeywell intends to 
deploy the technology mastered here on a commercial scale. When 
deployed commercially, each site would enable the production of 
up to 50 million gallons of renewable fuel annually, and 
require approximately 800 construction workers to build and 
1,000 production workers to operate the value chain.
    Validation of the technology in Kapolei will enable 
commercial-scale biofuel production throughout the United 
States using sustainable feed stocks suited to each region's 
environment and economy. We are confident that the success of 
this facility will mean future green jobs for the American 
workforce.
    Thank you for your time today. We see tremendous momentum 
as a result of your support and I commend your interest and 
dedication to these valuable projects.
    Chairman Inouye. Thank you very much, Doctor.
     [The statement follows:]
                   Prepared Statement of Jim Rekoske
    Senator Inouye, thank you for allowing me the opportunity to appear 
before you today in your beautiful state. My name is Jim Rekoske, and I 
am the Vice President and General Manager for Renewable Energy and 
Chemicals at Honeywell's UOP business. It is an honor for me to be here 
in Hawaii to discuss the Integrated Biorefinery Project in Kapolei. 
This exciting project is the result of funding made available by the 
United States Department of Energy under the American Recovery and 
Reinvestment Act of 2009.
    Honeywell proudly supported the American Recovery and Reinvestment 
Act because we believed it would stimulate the economy and provide jobs 
through innovative projects like our project in Kapolei. The Department 
of Energy has funded the construction of a pilot scale production unit 
that will use local sources in the production of renewable 
transportation fuels. This project supports efforts to improve United 
States energy security and reduce greenhouse gas emissions. It will 
also help grow the U.S. sustainable biofuels industry and create jobs 
both in Hawaii and throughout the country.
    The Integrated Biorefinery project in Kapolei is lead by 
Honeywell's UOP business, a global leader in the development and 
licensing of technologies for the production of fuels and chemicals. 
Today, 60 percent of the world's gasoline and 85 percent of the world's 
biodegradable detergents are made using technology developed by UOP. 
Honeywell's capabilities, however, are much broader and include 
technologies and solutions that are helping to solve many of the 
world's toughest challenges, such as safety, security, energy 
generation, efficiency, productivity, and comfort. Nearly 50 percent of 
Honeywell's current product portfolio delivers energy efficiency 
benefits. If immediately and comprehensively adopted today these 
products could reduce the country's energy use by 20 to 25 percent.
    Throughout its history, UOP has played an important role in every 
major step change in fuel production. Our commitment to and investment 
in renewable fuels is no different. In 2006, driven by growing concerns 
over energy security, rising greenhouse gas emissions and the 
volatility of fuel prices, we began to focus on developing profitable 
and efficient methods for the conversion of natural oils and wastes to 
usable fuels.
    Our technologies enable the conversion of natural oils, energy 
crops, and wastes into real fuels that perform as well as, or better 
than, their petroleum counterparts. These fuels work as drop-in 
replacements meaning they can be used without modification to today's 
established infrastructure including refineries, storage, delivery, and 
engine technology.
    The advantages of these fuels have been proven in a number of ways. 
Honeywell Green DieselTM has been used to power automobiles 
currently available for commercial use. Honeywell Green Jet 
FuelTM, as a 50 percent blend with kerosene, has powered 
four commercial airlines in demonstration flights, and was most 
recently used for test flights with the U.S. Air Force and the Navy F/
A-18 Green Hornet. In each case, Honeywell renewable fuels met or 
exceeded existing specifications for petroleum products.
    Our technologies are designed to be feedstock flexible to allow 
used of a wide range of sustainable natural oils including algae, 
camelina, animal fats and more. These are non-food feedstocks that do 
not use land or water currently set aside for food crops. Over the 
lifecycle of the products, these feedstocks have the potential to 
reduce greenhouse gas emissions as much as 80 percent compared with 
fuels made from crude.
    The Kapolei facility will demonstrate the scalability of technology 
that converts biomass into a liquid biofuel known as pyrolysis oil and 
then upgrades this oil to produce green transportation fuels. Honeywell 
and its partners will evaluate the fuels produced and perform life 
cycle analysis of the process to fully understand the environmental 
implications.
    A key element to this project is the potential for job creation. 
Honeywell has hired local firms to support the permit activities and 
environmental studies needed for construction of the facility. The 
construction will utilize local labor and stimulate additional jobs 
throughout the country as 80 percent of the materials required will be 
sourced from the United States. In addition, Honeywell plans to employ 
local labor to run the day-to-day operations of the facility.
    Beyond plant support, there is significant potential for new jobs 
in the agricultural sector. The site will process a wide range of local 
feedstocks including Guinea grass, sugar cane bagasse, algal residues, 
sorghum by-products, eucalyptus and more.
    Anticipating long-term success, Honeywell intends to deploy the 
technology mastered here on a commercial scale. When deployed, each 
commercial site would enable the production of up to 50 million gallons 
of renewable fuel annually, and require approximately 800 construction 
workers to build and 1,000 production workers to operate.
    Validation of the technology in Kapolei will help enable 
commercial-scale biofuel production throughout the United States using 
sustainable feedstocks suited to each region's environment and economy. 
We are confident that the success of this facility will mean future 
green jobs for the American workforce.
    Thank you for your time today. We have seen tremendous momentum as 
a result of your support, and I commend your interest and dedication to 
these valuable projects.

    Chairman Inouye. Mr. Yamane.
STATEMENT OF MICHAEL V. YAMANE, P.E., MANAGER, 
            ENGINEERING, KAUAI ISLAND UTILITY 
            COOPERATIVE
    Mr. Yamane. Thank you, Mr. Chair. I'm Mike Yumane on behalf 
of Kauai Island Utility Cooperative (KIUC). You have my written 
testimony before you, I would just like to briefly highlight 
some key points.
    In July 2009, along with a consortium of 26 electric co-ops 
in 11 States, KIUC applied for the Department of Energy's Smart 
Grid demonstration project. The DOE awarded the project total 
cost of $67 million in December 2009. The cost of KIUC's 
project is $11 million, of which $5.5 million is being provided 
by ARRA funds.
    The project will involve replacing approximately 33,000 
meters with smart meters along with communication 
infrastructures that will allow two-way communication between 
the meter. KIUC anticipates procurement of materials at the end 
of July 2010, and installation of 33,000 smart meters shortly 
thereafter. The installation of these meters will take 
approximately 2 years and involved approximately 40,000 man-
hours of local electrical labor on Kauai.
    During this process KIUC relied heavily on the National 
Rural Electric Co-op and the Cooperative Research Network (CRN) 
to meet DOE requirements for procurement, installation, and 
reporting. KIUC is a small company with limited resources and 
expertise in this area and fully appreciates the support by the 
National Rural Electric Cooperative Association (NRECA).
    KIUC would also like to express its sincere gratitude to 
the Senator for your letter of support to the Department of 
Energy for KIUC on this matter.
    Thank you for the opportunity to testify.
    [The statement follows:]
                Prepared Statement of Michael V. Yamane
    Thank you for the opportunity to testify on Kauai Island Utility 
Cooperative (KIUC) Smart Grid Initiative funded by the American 
Recovery and Reinvestment Act (ARRA) funds. My name is Michael Yamane, 
Engineering Manager for KIUC.
    In July 2009, KIUC along with a consortium of 26 electric 
cooperatives in 11 states, and the National Rural Electric Cooperative 
Association's (NRECA) research arm, the Cooperative Research Network 
(CRN) applied for the Department of Energy's (DOE) Smart Grid 
Demonstrations, Enhanced Demand Side and Distribution System Management 
Project (DE-FOA-0000036).
    The DOE awarded NRECA's CRN half of the project's total cost of $67 
million in December 2009 to test and develop technologies that operate 
together to make the grid more efficient and reliable.
    The cost of KIUC's project is $11 million, of which $5.5 million is 
being provided by ARRA funds. The project will involve replacing 
approximately 33,000 meters with smart meters along with communications 
infrastructure that will allow two-way communication between the meter 
and KIUC. This Advanced Metering Infrastructure (AMI) will enable KIUC 
not only to do meter readings remotely, but also allow KIUC to 
demonstrate the effectiveness of load control and demand response 
options within households, outage management and detection down to the 
household level, and evaluate different rate designs depending on 
usage.
    The demonstration project, which includes replacing existing meters 
with new smart meters at members' homes and installing communications 
infrastructure, will assess smart grid effectiveness, and is estimated 
to last 5 years; 2 years for installation and 3 years for data 
gathering and analysis.
    The replacement meter is a communication device that communicates 
via wireless or Power Line Carrier (PLC) system and sends information 
back to our substations. The communications between our substations and 
KIUC will use existing fiber optics, Synchronis Optical Network 
(SONET), to transmit that information back to our office.
    KIUC anticipates procurement of materials at the end of July 2010 
and installation of 33,000 smart meters shortly thereafter. The 
installation of these meters will take 2 years and involve 
approximately 40,000 man-hours of local electrical labor. Installation 
of associated hardware and software will be occurring concurrently 
along with the remaining communication infrastructure.
    During this process KIUC relied heavily, and will continue to rely 
heavily on NRECA and CRN to meet DOE requirements for procurement, 
installation, and reporting. KIUC is a small company with limited 
resources and expertise in this area and fully appreciates the support 
by NRECA.
    KIUC would also like to express its sincere gratitude for the 
Senator's letter of support for KIUC on this matter.
    Thank you for the opportunity to testify.

    Chairman Inouye. Thank you.
    As all of us are aware, we pay more for fossil fuel than 
people in other States. But in a sense it's been a boon to us, 
because we have been literally forced to get into alternative 
sources. And, one of the dream projects we have is this cable, 
transmission cable. But before we can fund that, I think it's 
obvious that we must be able to prove that the wind energy and 
solar energy sources are available, that the use can be made 
and all of them are connected.
    What stage are we in now?
    Mr. Roose. For that project effort, we have been--and I've 
been responsible for the study efforts at Hawaiian toward that 
end. We've just completed and wrapped up about 1\1/2\ years of 
intensive technical engineering work to assess and determine 
how will we integrate that magnitude of wind and operate the 
system reliably and effectively, to look at the various types 
of cable configurations that would make the most sense in that 
interconnect.
    You know, that work is basically wrapped up. We've done it 
with incredible support from the Federal Government through the 
National Renewable Energy Lab, of the funded, you know, the 
creation of what we call the technical review committee. We 
brought in the best and the brightest from around the world, 
literally, to sit on this committee, and we've had six meetings 
through that year now to process those studies to help guide, 
advise, vet the work that was going on. And I think the work 
product that came out of that is really leading edge, I think 
it's something, you know, we're writing papers on it and many 
things.
    But, I think through that effort we have figured out how to 
integrate, how to make it operate. It's going to require 
investment, not just in the cable but in other things too, 
because it fundamentally will change the way the system 
operates.
    Chairman Inouye. Is the military a major partner?
    Mr. Roose. At this point in time, I think the military's 
role has been in discussions regarding the potential of cable 
landing sites on the bases, but those are among the various 
alternative sites that are being examined.
    Chairman Inouye. I think you should seriously consider them 
and consider Kaneohe and places like that for a landing site, 
because if the military is fully committed, funding could be a 
bit easier.
    Mr. Roose. I see. Yes, and we've been having many meetings 
with them and there will be many more for sure, and I'll take 
your advice very well.
    Chairman Inouye. Is the State satisfied that all the plots 
are being all in place?
    Ms. Tome. Yes, we are very happy at the new amount of 
collaboration and cooperation that we're seeing with National 
Labs coming in and working together to identify the technical 
issues and find solutions. They've been very, very helpful and 
the utility has been very cooperative on the development of the 
energy agreement in October 2008. That was a great step 
forward, and we're looking forward to continue to work with 
them on the policy side as well as the technical side and the 
financial side and get it all together. Because the continued 
dependence on oil is an alternative that puts us at great risk. 
And it's nice to see that pretty much everybody is on the same 
page on that.
    Chairman Inouye. Hawaii is ready because we are the first, 
I think, of the military to use electric buses. We were the 
first to consider alternative motion terminal energy 
conversion. And biofuel, I think we're too early in that, as a 
result the company went bankrupt, but we're trying.
    We are very interested in your Kapolei project. When will 
that be finished?
    Dr. Rekoske. Construction begins in September of this year, 
and we will have completion of the project and operations 
should be at the end of 2011. So, first operation should be 
December 2011 or no later than January 1, 2012.
    Chairman Inouye. And you'll have all in this say, 
ingredients for your operation here in Hawaii?
    Dr. Rekoske. Yes we will, that's the intent. The facility 
will be contained here in Hawaii, it will be operated by people 
here in Hawaii, and the raw materials, some of which will be 
sourced out of Hawaii for conversion, the biomass conversion, 
but the majority of it will be sourced here from Hawaii.
    Chairman Inouye. This Kapolei project, how much will it 
cost?
    Dr. Rekoske. The grant from the DOE was about $25 million, 
and we expect that it's going to be closer to $35 to $36 
million complete. The additional funds will be supplied by 
Honeywell, of course.
    Chairman Inouye. Well, on Kauai, you know, I want to see 
people succeed, but the meter, how would it help?
    Mr. Yamane. The direct benefits would be actually the 
communications. This meter will allow communications back to 
the utility. Right now we have communications to the 
substation, so basically you will be able to remotely read the 
meters, we'll be able to detect outages by household instead of 
by feeders, pretty much instantaneously, so that's the direct 
benefit. It's all part of this communication infrastructure. 
The meter itself is a communication device, along with some 
field routers and collectors, all the way to fiber back to the 
substation.
    Chairman Inouye. When will that be in place?
    Mr. Yamane. We anticipate--well, 33,000, that's pretty much 
our whole island, so anticipate that installation taking about 
2 years and then 3 years of reporting, gathering data to see 
the effectiveness of these devices. So, it's going to be a long 
process, it's going to take a while, it's going to involve some 
labor.
    Chairman Inouye. How would you say that your project is 
moving, fast?
    Mr. Yamane. It's going to move fast. The process of going 
through the grants and the reporting, we've been kind of 
buffered by that. We've been fortunate that the Nuclear 
Regulatory Commission (NRC) has been working directly with the 
DOE, so we've just been providing information from our company 
standpoint. We're at that point where things are really going 
to start moving soon, from about 1 month through this year, 
we're going to ramp up, we're going to look for local 
contractors to start installation, within house we're going to 
start installing some routers. So, from this point on, I think 
it's really going to move fast.
    Chairman Inouye. Well, we don't have fossil fuels, but 
we've got the Sun, the wind, the waves. So, let's take 
advantage of that. And I think we can count the pilot an 
example for the world.
    So, I thank you all very much.
    Our final panel, made up of the District Director of the 
Hawaii District Office of the Small Business Administration, 
Ms. Jane Sawyer; the President of Wilson Homecare, Ms. Shelley 
Wilson; and the co-owner of Rising Sun, LLC, Mr. Brad Albert.
    Mr. Albert is not here?
    Voice: I believe he was planning to be here. He had to fly 
in from Maui and we were expecting him about 11:15.
    Chairman Inouye. Well, Ms. Sawyer.
STATEMENT OF JANE SAWYER, DISTRICT DIRECTOR, HAWAII 
            DISTRICT OFFICE, SMALL BUSINESS 
            ADMINISTRATION
    Ms. Sawyer. Good morning, sir, how are you? It's a pleasure 
to see you again. Thank you, Senator Inouye. Hawaii small 
businesses are really fortunate to have such a strong voice in 
the U.S. Senate. My name is Jane Sawyer and I'm the Hawaii 
District Director for the SBA.
    Here in Hawaii, we have a district office, as well as a 
strong network of SBA affiliated partners, as you know. This 
network includes four small business development centers, and 
one specialty center, and our SCORE chapters with offices on 
Oahu and Maui, that leverage the wisdom of experienced 
executives through its mentoring programs.
    I want to thank you, Senator, for supporting this team on 
the ground by passing the Recovery Act. We know these are tough 
times for small businesses, making the SBA's mission more 
important than ever. In particular, the Recovery Act targeted 
the needs small businesses face in accessing capital during the 
credit crunch. The Recovery Act allowed us to temporarily raise 
guarantees on 7(a) loans to 90 percent and to reduce or 
eliminate fees in our flagship 7(a) and 504 loan programs. The 
SBA has turned just $680 million in taxpayer dollars into more 
than $30 billion in lending to small businesses. That's an 
excellent bang for the taxpayer buck.
    In addition, over 1,300 lenders who had not issued SBA 
loans since at least 2007, have once again started issuing SBA 
loans. Obviously, this provides more points of access to 
capital for small businesses, and that's our experience in 
Hawaii also. We're seeing great success with these programs 
here in Hawaii where the SBA's average weekly loan volume has 
increased by nearly 80 percent compared to the weeks before the 
Recovery Act. The SBA has approved more than 400 Recovery Act 
loans that have supported over $100 million in lending to 
Hawaii small businesses. This includes 290 loans in Honolulu 
county supporting over $85 million in lending, 62 loans in 
Hawaii County supporting over $5 million in lending, 45 loans 
in Maui County supporting over $13 million, and 29 loans in 
Kauai County supporting over $4 million in lending. And we know 
that this means jobs.
    Our borrowers nationwide are reporting that SBA-backed 
recovery 7(a) and 504 loans will help them create or retain 
over 700,000 jobs. Here in Hawaii, small businesses report that 
they are creating or retaining over 2,800 jobs as a result of 
these recovery loans. Shelley Wilson of Wilson Home Care and 
Brad Albert of Rising Sun Solar LLC--hopefully he'll arrive--
will personally attest to the positive impact stimulus funding 
has had right here in Hawaii.
    The Recovery Act has also provided the Federal Government 
with increased opportunities to get contracts into the hands of 
small businesses. Our goal is to help small businesses win at 
least 23 percent of prime contracts. Put simply, this is a win-
win situation. Small businesses get increased volume, sales, 
and hires. Federal agencies get to work with the most 
innovative, nimble, and responsive companies in the world.
    I am pleased to report that we are well on our way toward 
hitting many of our Recovery Act contracting targets. As of 
June 25, over 30 percent of Federal Recovery Act contracting 
dollars, totaling nearly $9 billion, have gone into the hands 
of small businesses. Here in Hawaii, small businesses have 
received a total of about $100 mi11ion. Hawaii businesses have 
received contracts from the Department of Defense, Department 
of Commerce, and the Department of Labor, to name just a few.
    Now that's good news with capital and contracts now. The 
bad news is our recovery loans are so popular that we ran out 
of money 1 month ago, a bit ahead of schedule. The President 
has consistently called on Congress to extend these loans 
through this fiscal year, but it has yet to act. Our message is 
clear, now is not the time to pull back from recovery loans. 
Small businesses still need our help. The credit market is 
still too tight, even for good, creditworthy borrowers. SBA 
recovery loans will help them regain traction in an economy 
that is still working toward full recovery. In fact, we 
received new data showing that SBA loan volume dropped 
dramatically the week of June 14 by about 50 percent. It proves 
that SBA lenders still need that little extra bit of support to 
make good loans to businesses like Wilson Homecare and Rising 
Sun LLC.
    We also look forward to working with the Senate to 
permanently increase the size of SBA loans to $5 million. We 
find that that trend is increasingly important to small 
businesses.
    With that said, we are here to listen and work with you to 
help America's small businesses create jobs, increase 
competitiveness, and drive our economy. Senator, thank you very 
much for the opportunity to speak on behalf of the SBA, and I'm 
pleased to answer any questions I might be able to.
    Chairman Inouye. Thank you very much, Ms. Sawyer.
     [The statement follows:]
                   Prepared Statement of Jane Sawyer
    Thank you Senator Inouye and Senator Akaka. The small business 
communities in Hawaii and throughout the country are fortunate to have 
such strong voices for them in the U.S. Senate. My name is Jane Sawyer 
and I am the Hawaii District Director for the Small Business 
Administration (SBA). I am honored to be testifying before you to 
report on the impact the Recovery Act has had in helping small 
businesses survive and grow during these difficult times. In addition 
to updating you on the SBA's Recovery Act efforts to date, I also look 
forward to hearing from you and the other witnesses about ways to 
improve our programs to provide small businesses with the tools and 
resources they need to help continue our economic recovery.
    Here in Hawaii, we have an SBA district office as well as a strong 
network of SBA-affiliated partners. This network includes three Small 
Business Development Centers and our SCORE chapter--with offices on 
Oahu and Maui--that leverages the wisdom of experienced executives 
through its mentoring program.
    I want to thank Senator Inouye and Senator Akaka for supporting 
this team that is ``on the ground'' by passing the Recovery Act. The 
condition of small business is critical to our economic recovery 
because more than half of Americans own or work for a small business, 
and about two of every three new jobs in America each year are created 
by small businesses. And we know these are tough times for small 
businesses, making the SBA's mission more important than ever. In 
particular, the Recovery Act targeted the needs small businesses 
faced--and continue to face--in accessing capital during the credit 
crunch. This money has successfully been put to work in the place where 
it can make the biggest impact--the hands of entrepreneurs and small 
business owners.
    The Recovery Act allowed us to temporarily raise guarantees on 7(a) 
loans to 90 percent and reduce or eliminate fees in our flagship 7(a) 
and 504 loan programs. The SBA has turned just $680 million in taxpayer 
dollars into more than $30 billion in lending to small businesses. That 
is an excellent bang for the taxpayer buck. In addition, over 1,300 
lenders who had not issued SBA loans since at least 2007 have once 
again started issuing SBA loans. Obviously, this provides more points 
of access to capital for small businesses.
    We're seeing great success with these programs right here in Hawaii 
where the SBA's average weekly loan volume has increased by nearly 80 
percent compared to the weeks before the Recovery Act. The SBA has 
approved more than 400 Recovery loans that have supported over $100 
million in lending to Hawaii small businesses. This includes 290 loans 
in Honolulu county supporting over $85 million in lending, 62 loans in 
Hawaii county supporting over $5 million in lending, 45 loans in Maui 
county supporting over $13 million in lending, and 29 loans in Kauai 
county supporting over $4 million in lending.
    And we know that this means jobs. Our borrowers nationwide are 
reporting that SBA-backed Recovery 7(a) and 504 loans will help them 
create or retain over 700,000 jobs.\1\ Here in Hawaii, small businesses 
report that they are creating or retaining over 2,800 jobs as a result 
of these Recovery loans. After my testimony, you will hear from two 
local small business owners who have directly benefited from the SBA's 
Recovery Act lending programs. Shelley Wilson of Wilson Home Care and 
Brad Albert of Rising Sun LLC can personally attest to the positive 
impact stimulus funding has had right here in Hawaii.
---------------------------------------------------------------------------
    \1\ Data is self-reported by the borrower and appears in the SBA 
loan application form.
---------------------------------------------------------------------------
    The Recovery Act has also provided the Federal government with 
increased opportunities to get contracts into the hands of small 
businesses. There are approximately $60 billion in Federal Recovery Act 
prime contracting opportunities. Our goal is to help small businesses 
win at least $13 billion of these contracts to meet the statutory goal 
of awarding 23 percent of prime contracts to small businesses. Put 
simply, this is a win-win situation. Small businesses get increased 
volume, sales, and hires. They get a ``lift'' to be competitive in the 
global marketplace and help lead the nation in its economic recovery. 
In addition, Federal agencies get to work with the most innovative, 
nimble, and responsive companies in the world.
    I am pleased to report that we are well on our way towards hitting 
many of our Recovery Act contracting targets. In fact, so far we have 
exceeded the overall 23 percent goal for stimulus contracts. As of June 
25, over 30 percent of Federal Recovery Act contracting dollars, 
totaling nearly $9 billion, have gone into the hands of small 
businesses. Moreover, various disadvantaged groups have received 
significant Recovery Act contracting dollars. We are currently 
achieving over two times our goal of 5 percent for Small Disadvantaged 
businesses, which have received over 12 percent of Recovery Act 
contracting dollars. Here in Hawaii, small businesses have received 
nearly 45 percent of Hawaii's Recovery Act contracting dollars, for a 
total of about $100 million.\2\ Hawaii small businesses have received 
contracts from the Department of Defense, Department of Commerce, and 
the Department of Labor, to name just a few.
---------------------------------------------------------------------------
    \2\ According to the Federal Procurement Data System (FPDS).
---------------------------------------------------------------------------
    That is the good news we are happy to share. The bad news is that 
these Recovery loans are so popular that we ran out of money a month 
ago. The President has consistently called on Congress to extend these 
loans through this fiscal year, but it has yet to act. Our message is 
clear: the lesson we have learned from the Recovery Act is that now is 
not the time to pull back. Small businesses still need our help. The 
credit market is still too tight, even for good, creditworthy 
borrowers. SBA Recovery loans will help them regain traction in an 
economy that is still working toward full recovery. In fact, we 
received new data showing that SBA loan volume dropped dramatically the 
week of June 14--by 50 percent. It proves that SBA lenders still need 
that little extra bit of support to make good loans to good businesses 
like Wilson Homecare and Rising Sun LLC.
    With that said, we are here to listen and work with you to help 
America's small businesses create jobs, increase competitiveness, and 
drive our economy. Senator Inouye and Senator Akaka, I thank you again 
for the opportunity to speak on behalf of the SBA. At this time, I am 
pleased to take your questions.

    Chairman Inouye. Ms. Wilson.
STATEMENT OF SHELLEY WILSON, PRESIDENT, WILSON HOMECARE
    Ms. Wilson. I don't have a formal presentation for you, and 
I did prepare the testimony that your offices have received, 
but I'm here as a witness and a example of how wonderful the 
SBA funding can be. And for a business like Wilson Homecare, 
it's a win-win situation in our community.
    I've been in business for about 15 years, servicing the 
Kapuna in our community, and my home healthcare company 
employees about 300 employees statewide, and we provide about 
5,000 hours a week in care to individuals primarily in their 
homes. And for many, many years, the community continually asks 
us for additional resources to provide services for those in 
need. And as you are well aware, our infrastructure and 
healthcare is challenged in itself, and the SBA made one of my 
long-term dreams possible last year when they funded the first 
senior living home for Wilson Homecare. And so not only will we 
be able to provide for services in individuals homes, we will 
have our own senior that's currently under construction in 
Kilauea. The monies that we received were about $2 million and 
the bank paid for the other portion of the loan that we 
received.
    And with that money we'll be able to create additional 
jobs. I know the construction industry has been very, very 
happy with me and with my project, and I've not really had any 
experience with construction workers before, but they're 
awfully friendly. And we have more than enough people that have 
been offering to help us with our project. There's so many 
people that need a job in the construction industry, and it's 
kind of a sad situation that we can't--we can't be building 
more. But the SBA certainly has made it possible for us to 
build this home. And by the end of the year we'll be moving in 
our very first residents into that property.
    Chairman Inouye. Thank you very much.
     [The statement follows:]
                  Prepared Statement of Shelley Wilson
    Thank you Senator Inouye and Senator Akaka for your continued 
support of the business community in Hawaii. The appreciation for the 
tremendous work that is being done in Washington on behalf of the State 
of Hawaii is in abundance throughout the islands. I'm honored to 
provide testimony that brings true life to the impact from the American 
Recovery and Reinvestment Act of 2009 in Hawaii and on my business.
    My name is Shelley Wilson and I am the president and founder of 
Wilson Homecare, a home healthcare agency that serves the island of 
Oahu. Wilson Homecare provides services in homes and facilities to 
individuals of all ages with many different personal care needs ranging 
from home assistant and nurse aide to skilled nursing care. The hours 
providing care to individuals range from 4 hours a week to 24 hours a 
day. Wilson Homecare currently provides an average of 5,500 hours per 
week in care. The 2009 annual revenues were $4.6 million, employing 343 
staff, and we were ranked as the 15th largest woman-owned business in 
Hawaii.
    I am active in the local business community, as the incoming chair 
of the Chamber of Commerce of Hawaii beginning July 2010, current chair 
of the Chamber Small Business Committee, a board member for Kapi'olani 
Medical Center for Women and Children, a board member for Kahi Mohala 
Behavioral Health, and a recent addition to the board of the East West 
Center, and past president of the Organization of Women Leaders.
    I was inspired to start my business in 1996 after moving to Hawaii 
from Iowa. I was injured in 1992 while on active duty with the Iowa 
Army National Guard. I spent several years recovering from an accident 
that left me incapacitated for much of the time. I developed a true 
appreciation for the homecare model during my recovery at home. Most 
days, I hoped the caregiver wasn't one of my family members. After it 
became too difficult to stay in a cold climate with my plethora of 
injuries, I decided to relocate to Hawaii in 1994. Sixteen years later, 
my family still asks when I'm moving back.
    At the age of 21, when I started Wilson Homecare, my passion to 
provide homecare services to others in need was borne from my own 
personal experiences. I wasn't an entrepreneur; I just wanted to 
provide people with options when they required care as I once did. I 
didn't have the arsenal of life experience that MBA programs speak 
about when embarking on developing one's business infrastructure. I 
didn't know about taxes, insurance, management, payroll, and the like. 
I was a feisty young person that had a life changing experience that 
only wanted to better the lives of others.
    My first few years as president of this company were anything but 
glamorous nor did it come with a paycheck. Headquarters was my living 
room in my tiny apartment and with one employee, me. It was challenging 
and most people told me to ``get a real job.'' I had three ``real 
jobs'' while I was trying to get the job I have now! Fortunately, I'm 
stubborn and was driven by my vision. I never lost sight of what my 
focus was in changing the lives of others. My first big break came when 
I received a modest SBA loan to help me get off the ground. That money 
assisted in developing collateral to sell my services to prospective 
clients, and enabled me to purchase basic office supplies, a reliable 
phone, and provided my first ``real'' debt. I was on my way!
    Flash forward to 2010 and Wilson Homecare has become the largest 
licensed private home healthcare company in Hawaii employing more than 
300 staff. The vision I once had became a reality in caring for 
thousands in our community and truly changing lives. I would not be 
here if it weren't for my first starter loan from the SBA. The initial 
investment the SBA made has provided so much to so many, from employing 
members of our community to helping care for their family needs, 
putting money back into our local business, and of course, providing 
the much needed home healthcare to those in need and giving the relief 
desperately needed to families and loved ones.
    I've continued to expand and grow the resources available to our 
aging community by starting another company that is currently building 
a senior living home in Kailua. Once again, my vision was made possible 
by the SBA through the 504 loan program which I received last year. I'm 
currently underway with construction and hope to welcome my first 
client by Thanksgiving. The Wilson Senior Living Home has invested 
approximately $4 million in the Windward communities, created dozens of 
construction jobs, will create another 30 healthcare jobs, and will 
provide a beautiful home where seniors will be cared for in a home 
environment with dignity and respect close to their loved ones.
    In essence, the American Recovery and Reinvestment Act of 2009 have 
built the first Wilson Senior Living Home and my second company. The 
approval of the loan for Wilson Senior Living came during a very 
difficult time in our economy when our community needed resources more 
than ever before. It was serendipity. The process was straight forward, 
and the SBA was incredibly supportive in guiding my way. I received a 
fairly quick reply from the loan committee, and I've been so thankful 
for the cost savings recently realized in loan fees. At the end of a 
construction project, every little bit counts!
    I often share my SBA success story with other small business owners 
so they're aware of the possibilities and seek out opportunities for 
their business to be successful, just as I did many years ago and again 
last year. I have continued to receive the support from the SBA as a 
partner in helping to carry out my vision and provide the care models 
our community desperately needs. I appreciate the opportunity to bring 
life to the ARRA funds I've received from the Small Business 
Administration and provide validation to the work that has been done to 
make it possible. I'm indebted.
    Aloha.

    Chairman Inouye. I'm glad you made it.
STATEMENT OF BRAD ALBERT, OWNER, RISING SUN, LLC
    Mr. Albert. Yeah, thanks, I was actually downstairs talking 
to Senator Gabbard's office about some other related issues.
    So, my name is Brad Albert, and I'm from Maui. I have a 
solar business on Maui. We started it in 2003, and before that 
we were an electrical contracting company. Since about 2005, 
we've been able to be 100 percent focused on installing solar 
systems, and that's what we do. We no longer do general 
electric work. We're the largest company--we've done the most 
number of installations on Maui, but we do other installations. 
Actually, I think I met you at the--we were the company that 
installed the system at NELHA, the Natural Energy Gateway 
Center--and we've benefited through our--we were awarded a job 
at the Maui Supercomputing Center, a research project for 
concentrated PV systems.
    So I guess part of my testimony is that the money that ARRA 
is providing to the military that's being spent on research for 
renewable energy is actually impacting our business in a 
positive way. And there was another solar contracting company 
that was originally awarded the bid that was owned, majority 
owned now by a Chinese manufacturer, so they had to step out--
step away from it and we got it, so I guess they're towing the 
line as far as making there are U.S. owned companies as well.
    I'm also a member of the Hawaii PV Coalition, or I'm the 
Chairman of the Hawaii PV Coalition, which is a nonprofit that 
looks at solar electric specifically, and then there's another 
group called the Hawaii Solar Energy Association that I'm also 
on the board of that organization. And that's the main lobbying 
group in Hawaii, in terms of policy and--and regulation.
    And right now, if I could, you know, kind of give you a few 
bits of testimony. I think the first thing is just to support 
Jane, like we were the recipient of a 7(a) loan, and our 
business is, you know, doing well, we're growing year to year. 
However, in order to finance our growth, we need access to 
capital. And so, we've been able to achieve that through the 
7(a) loans, and I'm pretty--I mean, 1 year ago I was really 
chewing my fingernails and I'm doing it again this year, in 
terms of going to the bank and asking for more money. Like I'm 
going to ask them to double our money this year, and we need it 
because we're doubling our business. And there's a 
proportionality to what you need in a line of credit to do 
business and hire more people and run a business.
    And I don't think that we would have gotten it if it wasn't 
for the ARRA money, and I really--it's hard to, you know, kind 
of judge, just everything I was reading and hearing on TV would 
suggest that the banks were not going to give us money, and we 
were like, ``Well, what are we going to do?'' And we got it, 
and so we were successful and we, you know, kept--at least kept 
everyone employed that we had employed and we did employ some 
more people towards the end of the year.
    One of the downfalls of having a tax-based policy, you 
know, we get tax credits and that motivates people to do their 
systems, is that it becomes seasonal and people do their 
systems toward the end of the year, so we typically have to 
hire on additional labor at the end of the year and then let 
them go at the beginning of the year. We'd like to try and 
smooth that out. And one of the--section 1603 of the Treasury 
Grant Program is making the tax credit that was a tax credit a 
grant. So you have to apply and say, ``I'd like to take the 30 
percent Federal tax credit for renewable energy as a grant,'' 
so that 60 days after you finish your project you get that in 
cash. That's been something that potentially helps smooth out 
the year, allows us to do more systems, and keep people 
employed year round.
    So, the way--that is due to expire at the end of this year, 
and part of my testimony is that we really feel like it could 
be--if it was extended, it would mean jobs and more renewable 
energy installed, not only in Hawaii but across the country. 
It's in my written testimony, but just to point out a few 
numbers. It would mean about 400 new jobs in Hawaii, and that's 
next year in 2011, but by 2016 it would actually mean 450 jobs, 
as well as retaining jobs. I think we'd actually lose some jobs 
if we didn't extend this program.
    The State of Hawaii put forth a feed-in tariff, which 
hasn't actually gone into effect yet, but all of those--I would 
say the large majority of those projects are counting on the 
Treasury Grant Program to fund their projects. In other words, 
the developers of these projects are going to have a hard time 
getting access to capital to fund these, you know, what amounts 
to primarily solar projects. And, you know, the solar energy 
that's being produced would be being sold into the grid, so 
through the feed-in tariff program--I don't know how familiar 
you are with the feed-in tariff because there really isn't a 
lot of feed-in tariff programs in the United States. I think 
there's one in Florida that was sold out in the first day that 
it came out. And there is a limited amount of feed-in tariff 
grid access here, it's 5 percent of the grid and I don't 
believe that it would be sold out in the first, you know, day. 
It really depends on how aggressive the pricing is.
    But the point anyway, is that there will be some jobs and 
81 megawatts of solar projects by 2016 is the estimate if this 
grant is extended. Nationally it would mean 65,000 new jobs by 
2016, and 5,100 megawatts of green energy installed.
    And so, I think the overall theme, aside from some of the 
stuff to do with, you know, the details with 7(a) or this 
Treasury Grant Program, is that like, you know, what's 
happening in the gulf and really what's happening around the 
world politically, it only like highlights, underlines, and 
bolds that America needs to continue to invest in renewable 
energy. And we're just a part of that. And my testimony, like 
there's all these little pieces, but anything that's involved 
in ARRA, whether it's money to the Government to research 
renewable energy, we're benefiting from that, whether being 
able to finance our business through this, you know, 7(a) loan 
program, which isn't really related to renewable, but it does 
relate, or the Treasury Grant Program.
    Like, you know, we need to stop talking how we're going to 
like, you know, do renewable energy and go solar, you know, and 
everyone's really good at campaigning and saying they're for 
renewable energy, but we need to, you know, there needs to be 
the means. You know, we need the money and the--and the 
determination to really go for it. Because this is what America 
needs, it's really what's going to, you know. I wrote in my 
written testimony here. ``America's success or failure to 
create clean energy policy will determine America's financial 
success and national security.'' And so, I think that's pretty 
clear.
    There's one other thing, which is the Solar Manufacturing 
Jobs Creation Act, and I would just ask you to support that as 
well. That will also create 160,000 additional jobs in the 
solar industry and related sectors by 2016. And, while also 
supporting 5,600 megawatts of additional solar installations by 
2016. So the point is, not that we should just be installing 
renewable energy and solar projects in the United States, but 
that we should be making the products that we're installing.
    Thank you for the opportunity to testify.
    [The statement follows:]
                   Prepared Statement of Brad Albert
    Thank you for the opportunity to testify. I am co-owner of Rising 
Sun Solar a Maui based licensed electrical contracting company C-28184 
specializing in the design and installation of residential and 
commercial solar electric systems. In addition to being a business 
owner I am president of the Hawaii PV Coalition and a board member of 
the Hawaii Solar Energy Association. My testimony will hopefully give 
you insight into how ARRA funds have helped to grow the Hawaii solar 
market creating jobs and reducing dependence on foreign oil.
    First and foremost as a an overriding and urgent priority the gulf 
oil spill only highlights and underlines in bold that: America needs to 
continue to invest in renewable energy!
    America's success or failure to create clean energy policy will 
determine America's financial success and national security.
    Rising Sun has benefitted from the ARRA SBA 7a loan guarantees. 
Access to capitol has been essential for our company to grow and manage 
cash flow. We have increased our SBA guaranteed line of credit year to 
year as our business has grown. Without the SBA loan guarantee our 
business would not be able to fund growth and create new jobs. 
Extending the loan guarantee will provide access to capitol for small 
businesses including many new businesses such as ours involved in 
renewable energy.
    The solar industry has also benefitted from Section 1603 Treasury 
Grant Program (TGP). As you know the TGP is scheduled to end this year. 
Extending the TGP for two more years is necessary and critical to make 
renewable energy projects happen in Hawaii and nationally. To date the 
TGP has funded 19 solar projects in Hawaii worth $10 million. In Hawaii 
a 2 year extension of the TGP would create 400 new jobs in 2012 and 450 
jobs by 2016 and would also result in an estimated additional 81 
megawatts of solar projects in Hawaii by 2016 (see attached report 
named TGPHawaii.pdf).
    Nationwide the TGP will create nearly 65,000 new jobs to the solar 
workforce resulting in 5,100 megawatts of new solar installations by 
2016. The benefits of the TGP are just beginning to take hold as the 
application and guidance for the program were only made available in 
the summer of 2009; less than 1 year ago. It is clear that the program 
is effective and should be extended. (See attached TGPUSA.pdf)
    According to Solar Energy Industries Association (SEIA) Solar 
Energy creates more jobs per megawatt of energy produced than any other 
form of energy (renewable or fossil). However the United States has 
lost its leadership in the manufacturing of solar cells. As recently as 
a decade ago, the United States accounted for 40 percent of global 
solar photovoltaic (PV) cell production. In 2008 the United States 
accounted for only 5 percent of world solar cell production. ARRA 
created a limited short-term incentive, but it isn't enough to support 
long term job growth in solar manufacturing.
    The Solar Manufacturing Jobs Creation Act H.R. 4085 and S. 2755 
would add equipment used to manufacture solar energy generating 
property to the eligible property list of the existing section 48 
commercial solar investment tax credit (ITC). Current law provides a 30 
percent tax credit for solar energy generating property placed in 
service in the United States before January 1, 2017. The legislation 
would allow a 30 percent credit for investments in equipment placed in 
service in U.S. Solar manufacturing facilities before January 1, 2017. 
An independent study by EuPD Research found that the proposed 
legislation would create nearly 160,000 additional jobs in the solar 
industry and related sectors by 2016, while also supporting 5,600 MW of 
additional solar installations through 2016. (See attached MITC.pdf)
    In conclusion economic recovery has begun and the solar industry is 
growing and creating jobs. However, from the perspective of a small 
solar business in Hawaii, our continued success will depend on the 
commitment and support of both Federal and state incentives. Clean 
energy and specifically PV solar needs to be a major focus for the 
America and Hawaii's energy future.
    Thank you for your consideration.
     Economic Impact of Treasury Grant Program Extension in Hawaii
    Hawaii stands to realize significant benefits from an extension of 
the section 1603 Treasury grant program. Currently, this program allows 
developers of renewable energy projects to claim a grant in lieu of tax 
credits for projects that commence construction before the end of 2010. 
However, the financial market conditions that necessitated this program 
continue and are not expected to clear before this program expires. 
Extending the commence construction deadline by 2 years will enable 
more projects in Hawaii; that's more jobs and more clean energy. 



    According to a recent study by EuPD Research:
  --A 2-year extension of the 1603 grant program will support 400 
        additional jobs in Hawaii in 2011 and over 450 additional jobs 
        in 2016. (The job impacts extend beyond 2012 because of 
        continued plant construction and ongoing operations and 
        maintenance positions. See chart above for more on employment 
        impacts on extending the grant program.)
  --Extending the grant program would also yield an additional 81 MW of 
        solar power in Hawaii by the end of 2016. See lower right chart 
        for more on the impacts of extending the grant program.
        
        
Current Impact of TGP
    To date, companies in Hawaii have received nearly $10 million in 
TGP funding for 20 renewable energy projects, 19 of which are solar 
electric and solar thermal projects. With a 2-year extension of the TGP 
commence construction deadline, these numbers will continue to grow.
                                 ______
                                 
                   Extend the Treasury Grant Program
    65,000 new jobs will be added.
    5,100 megawatts of additional solar power to be deployed across the 
United States.
    $400 million in government savings.
    Extending the existing Treasury Grant Program (TGP) by 2 years will 
add nearly 65,000 new jobs to the solar workforce and supporting 
industries across the United States in 2015.\1\ Such an extension to 
the program, which allows grants to be issued in lieu of tax credits 
for renewable energy, would also accelerate solar deployment across the 
United States, resulting in 5,100 megawatts (MW) of new solar 
installations through 2016--enough to power more than 1 million homes.
---------------------------------------------------------------------------
    \1\ These are jobs supported by the solar industry above baseline 
forecasts. Total industry employment increases from 2015 to 2016, but 
the added benefit of the Treasury Grant diminishes. This estimate is 
for solar energy only, it does not account for jobs created by other 
renewable energy technologies. Read the full report at http://seia.org/
galleries/pdf/EuPD Research Solar Report.pdf.
---------------------------------------------------------------------------
    Moreover, extension of the Treasury Grant Program will yield a net 
savings to the government of $400 million between 2010 and 2016, as the 
public cost of the extension is more than offset by the avoided 
unemployment costs to the government and additional income tax revenue 
generated by new jobs resulting from the extension.
    A 2-year extension is projected to create significant new jobs in 
the solar industry and supporting sectors across the United States. For 
example, California would gain more than 25,500 new jobs; Arizona would 
add approximately 7,200 new jobs; Texas would gain more than 6,700 new 
jobs; Michigan would add over 5,100 new jobs; New Mexico and Nevada 
would each gain more than 3,000 new jobs; Ohio and Oregon would each 
add more than 2,000 new jobs; Colorado and Florida would each add over 
1,800 new jobs; and New Jersey, New York, North Carolina, and 
Pennsylvania would each gain more than 1,000 new jobs.
    Extension of the Treasury Grant Program will also result in 
substantial increases in solar technology deployment. California could 
add over 2,500 MW of new solar installations; Arizona, nearly 1,000 MW; 
and Colorado, Connecticut, Florida, Nevada, and New Jersey each adding 
more than 100 MW of new solar power. 100 MW is enough to power 20,000 
American homes.


Background
    In 2009, the American Recovery and Reinvestment Act created the 
Treasury Grant Program, allowing a cash grant to be used in lieu of tax 
credits for renewable energy projects. Although the U.S. unemployment 
level remains high, the program is set to expire in December 2010. SEIA 
hired independent consulting firm EuPD Research to analyze the economic 
impact in the United States during 2010-2016 of extending the Treasury 
Grant Program by 2 years. The findings of the EuPD study complement the 
results of a Lawrence Berkeley National Laboratory study from April 
2010 showing strong employment levels in renewable energy industries 
during the first year (2009) of the TGP.
Recommendation
    Based on the EuPD study, SEIA recommends a 2-year extension of the 
Treasury Grant Program. Not only will this extension yield a fiscal 
benefit to the government, but it will result in over 65,000 new jobs 
in 2015 and support the manufacturing and installation of 5,100 MW of 
clean, reliable solar energy technologies during 2010-2016.
                                 ______
                                 
               The Solar Manufacturing Jobs Creation Act
  h.r. 4085 (thompson, camp, doggett, tiberi) and s. 2755 (menendez, 
                               stabenow)
Overview
    The Solar Manufacturing Jobs Creation Act would add equipment used 
to manufacture solar energy generating property to the eligible 
property list of the existing Section 48 commercial solar investment 
tax credit (ITC). Current law provides a 30 percent tax credit for 
solar energy generating property placed in service in the United States 
before January 1, 2017. The legislation would allow a 30 percent credit 
for investments in equipment placed in service in U.S. manufacturing 
facilities before January 1, 2017. An independent study by EuPD 
Research found that the proposed legislation would create nearly 
160,000 additional jobs in the solar industry and related sectors by 
2016, while also supporting 5,600 MW of additional solar installations 
through 2016.\1\
---------------------------------------------------------------------------
    \1\ Graphs show the number of jobs and installations supported by 
the solar industry above baseline forecasts without a Section 48 
amendment. This estimate is for solar energy only; it does not account 
for the impact of other renewable energy technologies. Read the full 
report at http://seia.org/galleries/pdf/EuPD Research Solar Report.pdf.
---------------------------------------------------------------------------
Supporting Points
    The United States is losing the global race for solar manufacturing 
jobs.
  --As recently as a decade ago, the United States accounted for more 
        than 40 percent of global solar photovoltaic (PV) cell 
        production. In 2008, the United States produced only 5 percent 
        of the world's solar cells, with Europe and Asia leading global 
        production.
    Other countries are racing to create domestic demand for solar 
cells and to attract solar manufacturing jobs. Many nations offer 
generous incentives to locate solar manufacturing in-country.
  --Philippines: 6-year income tax holiday.
  --Malaysia: 15-year income tax holiday.
  --Germany: Grants of 30 percent of investment costs for large 
        enterprises.
  --Singapore: Multi-year tax holidays.
    ARRA created a limited short-term incentive--but it isn't enough to 
support long-term job growth in solar manufacturing. The 2009 American 
Recovery and Reinvestment Act (ARRA) included a competitive tax credit 
capped at $2.3 billion in total tax expenditures for advanced energy 
manufacturing projects (new code Section 48C). The 48C credit is a very 
good start to increase domestic solar manufacturing; however:
  --Firms must apply and are not guaranteed to receive a 30 percent 
        credit unless certified as a recipient by Treasury; the program 
        will be oversubscribed and only a fraction will receive a 
        credit.
  --Now that the $2.3 billion cap is exhausted, the program is due to 
        sunset.
    SEIA supports the Administration's proposed $5 billion in 
additional funding for the Section 48C program.
    An improved tax incentive for solar manufacturing will create long-
term growth and U.S. jobs.
  --Independent consulting firm EuPD Research analyzed the economic 
        impact in the United States during 2010-2016 of amending 
        Section 48 to include solar manufacturing equipment. The 
        results of the study show that nearly 160,000 domestic jobs 
        would be created by 2016 as a result of this policy change. 
        Additionally, 5,600 MW of additional solar PV and CSP capacity 
        would be installed between 2010 and 2016.\1\
  --Solar energy creates more jobs per megawatt of energy produced than 
        any other form of energy (renewable or fossil). Tax incentives 
        to support U.S. solar manufacturing will ensure a strong solar 
        manufacturing base and maximize renewable energy employment.
  --Amending Section 48 (the commercial solar ITC) to include solar 
        manufacturing equipment would create a generally available and 
        immediately reliable 30 percent credit for the tools used to 
        create solar panels.
  --New U.S. solar manufacturing facilities could begin construction 
        soon after date of enactment with the 30 percent credit 
        definitively in their financial calculations. Firms would have 
        an incentive to make their investments early in order to 
        capitalize on the grant program, greatly increasing the amount 
        of investment and new jobs in the near term.
  --The solar industry also strongly supports the extension of the 
        Section 48C program and the Administration's proposed funding 
        level of $5 billion.
        
        
        
             about the solar energy industries association
    Established in 1974, the Solar Energy Industries Association is the 
national trade association of the U.S. solar energy industry. As the 
voice of the industry, SEIA works with its 1,000 member companies to 
make solar a mainstream and significant energy source by expanding 
markets, removing market barriers, strengthening the industry and 
educating the public on the benefits of solar energy. For a referenced 
version of this factsheet and more information, please visit 
www.seia.org.

    Chairman Inouye. You have to believe I'm with you on 
everything you've said.
    Mr. Albert. I know that you are.
    Chairman Inouye. I won't discuss this here, but there are 
elements in Congress that just don't want us to move. Your 
products--your projects are being seriously considered, and I 
can assure you that the majority of the Congress looks upon 
small business as an important part of the backbone of our 
economy. And, in order to make certain that these measures like 
yours are passed and implemented--we ordinarily have recesses 
in August to give us a little break. I just got notified 
yesterday that it's going to be 1 week less. But it's just as 
well, because if there's work to do we'll do the work. And I 
can assure you we're with you.
    Ms. Sawyer. Thank you.
    Chairman Inouye. Only thing, Mr. Albert, if you succeed too 
much, you won't be small business.
    Ms. Sawyer. And he has been very successful. We're really 
pleased. Brad and his partner started their business using an 
SBA Partner Small Business Development Center for counseling 
when they were setting up their business, helped them with 
their first proposal to get funding, and both times they've 
gone for funding they've been able to secure SBA financing. The 
second round was a significant increase and they took the 
credit for the fee waiver with the 7(a) line of credit they 
established with one of our local banks. So that was a 
significant amount of money for them.
    And likewise, with Shelley's project, the fee waiver left 
her enough money to put either back into the project or even to 
make sure that she could create those jobs. So, it's about 3 
percent of the total amount of the loan, which for--can be a--
with our programs, up to $60,000, depending on the amount of 
the loan.
    Chairman Inouye. Ms. Wilson, did you say you have 300 
employees?
    Ms. Wilson. In my home healthcare business that I've had 
for the last 15 years.
    Chairman Inouye. And when is this home going to be 
finished?
    Ms. Wilson. I'm hoping in September. I've been taking very 
good care of the construction workers, so I understand how that 
works now. So every Friday I show up with lunch and some 
beverages.
    Chairman Inouye. I can see why you've succeeded.
    Ms. Wilson. Actually, I'm using the additional money and 
I'm negotiating my solar this week, so we might need to talk 
after this. I have extra money to actually install some of the 
perks and the things that weren't within our budget initially.
    Ms. Sawyer. And now I know where to go on Friday afternoon 
or Friday for lunch because your care home is about 1 mile away 
from my residence, over on Kanuawei Bay Drive. It's a great 
facility.
    Chairman Inouye. How many rooms will you have there?
    Ms. Wilson. We'll have 20 private bathrooms and bedrooms, 
they're suites, and it's in a residential--it's a residential 
model, so the State licensing, adult residential care home type 
II, so it's within the neighborhood and not, you know, in the 
boonies, as far as most of the nursing homes or nursing 
facilities. So it's a smaller family type model that I intend 
to replicate in other areas in our island so people can stay 
within their communities.
    Chairman Inouye. How much would it cost for anyone to be 
one of your tenants?
    Ms. Wilson. One of our neighbors, the residents that will 
move in, the fees start around $8,000. And for home healthcare 
services, the rates within--the average rate is about $20 an 
hour, and so that adds up pretty quickly. And so some of our 
home healthcare patients pay $15,000 to $20,000 a month. So the 
long-term care figures are outrageous.
    Chairman Inouye. Fifteen or $20,000 a month?
    Ms. Wilson. For home healthcare, for $20 an hour. And so, 
this residential model is about one-half of what it costs if 
you have in-home care. And the other nursing homes and 
facilities within our island have pretty substantial wait 
lists. And the fees, the long-term care component that people 
are not prepared for, it's pretty shocking for most of our 
families and residents.
    Mr. Albert. I would add one thing, just that, you know, a 
lot of people think Brad is doing great in renewable energy, 
they don't need any help, right. I just would say that while 
we're doing well on paper, in terms of growing number of 
installations and so forth, we're so vulnerable each year, you 
know, year to year, that a tax credit is going to get taken 
away. And here in Hawaii regulatory issues that we don't have 
any more grid access, although there's a demand for solar 
systems, that we're kind of in a little bit of a debate with 
the utility over how many more solar systems we can install.
    So, I was listening on the monitor about smart grid, that's 
part of the solution too, so it's not just about installing 
more renewable energy, it's about making the grid capable of 
accepting all these renewable energy systems.
    Chairman Inouye. Hawaii has a law, if I'm not mistaken, 
that requires all new construction to have solar energy.
    Mr. Albert. That's solar hot water, and so that's more of 
an energy efficiency device, whereas the systems that we sell 
primarily are systems that generate energy on site and 
sometimes export to the grid. So, you know, solar hot water is 
part of the solar industry, but it's more of something that's 
just having the homes use less energy, whereas what we're 
selling is something that's generating clean energy instead of 
importing oil, which if you use less energy you do that, too.
    Chairman Inouye. Thank you very much, Mr. Albert.
    Mr. Albert. Thank you.
    Ms. Sawyer. Thank you.
    Ms. Wilson. Thank you.

                    ADDITIONAL SUBMITTED STATEMENTS

    Chairman Inouye. Before we recess, I'd like to announce 
that we'll keep the record open until July 22, so if you have 
any additional testimony you'd like to make, feel free to do 
so.
    And I hope that the other witnesses have been advised of 
that.
    So, thank you very much, appreciate it. Wish you very great 
success.
    [The statements follow:]
Prepared Statement of Abraham Y. Wong, Administrator, Hawaii Division, 
      Federal Highway Administration, Department of Transportation
    Chairman Inouye, Ranking Member Cochran, and Members of the 
Committee, thank you for the invitation to appear before you today to 
discuss the impact on Hawaii's economy of funding for highway 
infrastructure under the American Recovery and Reinvestment Act of 2009 
(Recovery Act). The Federal Highway Administration (FHWA) Hawaii 
Division Office has been working very closely with the Hawaii 
Department of Transportation (HDOT) to ensure that Recovery Act highway 
projects are implemented efficiently to put more people to work.
    Signed into law by President Obama on February 17, 2009, the 
Recovery Act was an unprecedented effort to jumpstart our economy, 
create or save millions of jobs, and put a down payment on addressing 
long neglected infrastructure challenges so our country can thrive in 
the 21st century. The Recovery Act has been a lifeline for Americans 
who work in construction and have been especially hard hit by the 
recession.
    Today, I want to update you on FHWA's activities for effectively 
administering the Recovery Act in Hawaii.
                                overview
    Overall, the Recovery Act provided $48.1 billion for transportation 
programs to be used for improvements to our Nation's highways and 
bridges, transit systems, airports, railways, and shipyards. The single 
largest investment of Transportation Recovery Act dollars--$27.5 
billion--was targeted at improving highways and bridges. This included 
$125.7 million for highway investment in Hawaii. Across the United 
States, FHWA has committed more than $26 billion from the Recovery Act 
to over 12,700 highway projects.
    We have six times more Recovery projects underway this summer than 
we did last. We are going to improve more than 30,000 miles of highway 
this summer--three times as many miles as we improved last summer and 
enough to make 10 trips across the country.
    We are going to make travel safer and easier for millions of 
people, and we are going to create jobs. Overall, the Recovery Act is 
already responsible for about 2.5 million jobs, with tens of thousands 
of those in the transportation sector.
                     recovery act impact in hawaii
    The FHWA has been working hard to ensure that the $125.7 million in 
highway funds Hawaii received under the Recovery Act are invested 
quickly and wisely. Our partnership with HDOT to administer the 
Recovery Act started before the Act was passed. Anticipating passage of 
the bill, the FHWA Hawaii Division Office worked with HDOT and 
coordinated with local agencies to identify projects that could be 
started and completed expeditiously while striking the best balance 
between funding and needs. The Hawaii Division Office used regularly 
scheduled meetings, video conferences, and various program planning 
scenarios to consider the most effective and efficient way forward for 
Hawaii.
    The Recovery Act dollars in Hawaii are being used to improve 
pavements, rebuild traffic signals and intersections, reduce 
congestion, and preserve and make bridges safer. The Hawaii Division 
Office has now authorized 23 projects in Hawaii, which we estimate will 
provide approximately 200 full time jobs. Of these authorized projects, 
20 have been awarded for a total of nearly $95 million, and HDOT has 
issued a notice to proceed with work starting on 17 of these projects 
totaling nearly $85 million. Hawaii has expended over $20.5 million of 
its highway dollars.
    The Recovery Act included a requirement that States obligate 100 
percent of their highway funds by March 1, 2010. Working with our State 
partners, all States met this ambitious deadline. In fact, Hawaii beat 
the deadline by nearly a week.
    The Recovery Act additionally requires States to give priority to 
projects located in Economically Distressed Areas (EDAs), and FHWA has 
oversight responsibility to ensure that the States fulfill this 
requirement. Currently, of the funds already obligated in Hawaii, 39 
percent are directed toward EDAs for 5 projects totaling over $48 
million. Our Hawaii Division Office will continue to work with the 
State to ensure that the State is giving priority to EDAs in the 
selection of any additional projects.
Projects Completed
    Eight of the State's projects have already been completed, and 
Hawaii's residents and visitors have begun to enjoy the benefits. For 
example, construction has been completed for seismic retrofit of two 
critical overpass bridges on the H-1 freeway in the Kapolei area of 
Oahu. This $865,000 Recovery Act project used fiber reinforced polymer 
wrap technology to ensure seismic safety for these key bridges. Another 
project has been funded that will provide a similar seismic resistance 
to a third bridge that carries Mokapu Boulevard over H-3 on the 
Windward side of the island.
    The Maunaloa Highway resurfacing project on Molokai provided new 
pavement to 1.96 miles of the island's roadway. This $2.6 million 
project provided work for an estimated 18 individuals in this 
Economically Distressed Area. The project started in August 2009 and 
was completed in December 2009.
    The Farrington Highway resurfacing provided 3.7 miles of new paving 
on Maui. This $5.4 million project provided employment opportunities 
for 18 individuals in this area. Work started in December 2009 and was 
completed last month.
    The Kalae Highway slurry seal was a $1 million pavement 
preservation project that provided employment for eight workers on 
Molokai. This approximately five-mile project will increase the service 
life of the roadway by preventing water intrusion into the pavement. 
This project was completed in January 2010 after approximately 3 
months.
Projects Under Construction
    Many important Recovery Act projects are also well underway 
throughout the State. For example, the $15.3 million South Punaluu 
Stream Bridge project is providing a new structure to carry the 
Kamehameha highway to Oahu's northwest shore. By replacing a structure 
that has been in service for 85 years, the new concrete bridge will 
meet current vehicle load, safety, and seismic standards. The new 
bridge will include 8-foot shoulders and a separated pedestrian path.
    Construction has also started on the $30 million Ane Keohokalole 
Mid-Level Highway, which will help ease increased traffic congestion in 
the rapidly growing Kailua-Kona area on Hawaii's west coast. The route, 
which serves an estimated 22,700 daily drivers, is home to Kealakehea 
High School, a community center, and will soon be home to a new campus 
of the University of Hawaii. Though the university's ``West Hawaii 
Center'' is not yet open, 1.5 miles of new road--the Ane Keohokalole 
Mid-Level Highway--must be built to accommodate traffic which is 
projected to increase by nearly 50 percent by 2029. The initial phase 
creates a two-lane, limited-access roadway that will also include bike 
lanes, sidewalks, a multi-use path, and be used as a transit route by 
the county's bus service. In addition to reducing congestion, the new 
road will make Kailua-Kona safer for pedestrians and bicyclists while 
improving the area for planned businesses and housing developments. The 
project is also opening up approximately 300 acres of state land for 
future development.
    A clean and paint project has started in the Paauila area on Hawaii 
Belt Road. This $4.3 million Recovery Act investment will protect and 
preserve four historic steel trestle bridges by removing the existing 
lead-based paint and repainting the bridges with a zinc-rich moisture 
cure polyurethane paint system.
    These are just a few examples of how, in Hawaii, Recovery Act 
dollars are providing needed investments for our people and 
infrastructure. This is happening throughout the entire United States. 
The Recovery Act projects will save lives on our Nation's highways, 
while strengthening the economy by helping our highway system move 
people and goods more efficiently and effectively.
Discretionary Transportation Investment Generating Economic Recovery 
        Grants
    In February, Department of Transportation (DOT) Secretary Ray 
LaHood announced the 51 award recipients of the $1.5 billion 
Transportation Investment Generating Economic Recovery (TIGER) 
Discretionary Grant Program that was provided in the Recovery Act for 
surface transportation projects of national, regional, or major 
metropolitan area significance. The DOT received over 1,400 TIGER Grant 
applications totaling nearly $60 billion.
    Hawaii received $24.5 million in TIGER funds for the reconstruction 
of Pier 29 in Honolulu Harbor. In 2008, the Pier 29 container yard at 
the Honolulu Harbor suffered structural failures, displacing the 
international carrier that used it. The TIGER funds will be used to 
reconstruct Pier 29, adding approximately 12 acres of upgraded cargo 
yard while also increasing efficiency and safety in Honolulu Harbor. 
Reconstructing Pier 29 will allow the international carrier that was 
displaced to return to Pier 29. Reconstructing Pier 29 will reduce 
truck traffic on busy and congested roadways in downtown Honolulu near 
Piers 1 and 2 by moving much of the traffic west toward the 
reconstructed Pier 29. Because Pier 29 is closer to Nimitz Highway and 
the primary intermodal highway routes, reconstructing Pier 29 helps 
reduce fuel consumption and greenhouse emissions from cargo movements 
at Piers 1 and 2 in the downtown Honolulu area.
           transparency, accountability, and risk management
    FHWA has moved forward aggressively to fulfill the President's 
commitment to transparency and accountability for Recovery Act funds. 
In Hawaii, the Division Office has been actively involved in assisting 
State and local partners to deliver the most challenging and complex 
projects in Hawaii's Recovery Act program. The Hawaii Division Office 
has also carried out 20 project reviews and, in some cases, recommended 
procedural changes to improve the quality or efficiency of meeting a 
requirement.
    While FHWA has established 4 National Review Teams to carry out in-
depth reviews in our identified risk areas across all 50 States and 
Puerto Rico, FHWA is depending on its Division Offices to carry out 
spot checks on the front lines of the agency's risk management. As we 
move forward with Recovery Act implementation, we will continue to 
employ risk mitigation strategies to fulfill our mandate that these 
funds are prudently spent.
                               conclusion
    At FHWA, we are mindful of the importance of ensuring the 
successful investment of highway dollars under the Recovery Act. In 
addition to the near-term employment impacts, these highway 
infrastructure investments will return economic benefits to Hawaii for 
many years to come. In the Hawaii Division Office, we are doing our 
part to work with HDOT to ensure that the State's remaining Recovery 
Act funds are invested as quickly and effectively as possible.
    Mr. Chairman, thank you for the opportunity to appear before you 
today. I would be happy to answer your questions.
                                 ______
                                 
   Prepared Statement of Laura M. Dierenfield, Chair, Safe Routes to 
           School National Partnership, Hawaii State Network
    Chairman Inouye, Ranking Member Cochran, and Members of the 
Committee: Thank you for hosting this open session on the ``American 
Recovery and Reinvestment Act of 2009--Invest in Hawaii'' program. We 
have many talented public and private sector leaders presenting here 
today who are working hard to make good use of ARRA funds.
    I represent a thriving coalition of bicycle and pedestrian 
advocates focused on restoring our keiki's (children's) most basic 
right to be safe and healthy in their own communities, reviving 
Hawaii's economy, renewing bonds between family and friends, and 
building resilience into our energy and transportation systems through 
investments in pathways and bikeways that connect us all as a community 
to one another in safe, equitable and efficient manner.
    We have been actively engaged in advocating for the completion of 
key bicycle and pedestrian projects using Federal stimulus dollars as 
well as tracking FHWA funds through SAFETEA-LU and the HIRE Act as well 
as EECBG funds for transportation energy efficiency initiatives. It is 
in these two areas we wish to make comments and recommendations about 
how to best invest in the future energy security, livability, health 
and happiness of Hawaii's people, especially our children.
       the need for bicycle and pedestrian investments in hawaii
    As an isolated society in the middle of the Pacific Ocean, we must 
be able to move people and goods effectively to maintain a strong 
economic future. We also desire communities that allow people to live 
actively and safely as part of their daily life. We also have a kuleana 
(responsibility) to manage the impacts of infrastructure, energy 
consumption and emissions on the environment. For these reasons, 
transportation becomes a critical cornerstone of Hawaii's economic 
viability, public health, and environmental sustainability. A balanced 
transportation network allows for the effective movement of people and 
goods, helps to reduce demand for expensive imported energy, enables 
healthy and active living, and preserves our natural environment by 
sharing mobility among many modes of transportation including driving, 
walking, bicycling and transit.
    Achieving an effective, healthy and sustainable balanced 
transportation network is not an easy task. Decades of transportation 
planning and land use have created a car-dominated culture that is 
becoming more and more expensive to maintain. Hawaii's families spend 
more on transportation than on food or clothes, combined. Fully one-
third of our residents do not drive due to age (too young or too old) 
or disability. Land use patterns have created neighborhoods separated 
from the workplace by severely congested freeways causing significant 
delays to and from work, school, shopping. Funding for roads and 
infrastructure is rapidly declining in these difficult economic times 
and it will become increasingly difficult to judiciously distribute 
funding for roadways throughout our many isolated island communities. 
Resident and visitor car fuel demand accounts for nearly one-third of 
the expensive imported gas to Hawaii and fossil fuel burning vehicles 
emit the majority of the carbon pollution in our state. But perhaps 
most concerning is the rapid rise of obesity in our state, both in 
adults and children. Hawaii spends over $290 million each year treating 
diseases related to inactivity and poor nutrition. By designing our 
transportation network around the needs of a car, we have created 
communities that are unfriendly, and at times hostile, to walking or 
bicycling. Hawaii families must be very diligent in finding 
opportunities to exercise or finding places for kids to play. It is 
rare to be able to step out your front door and enjoy a walk with your 
spouse or a bike ride with your kids.
    Together, we as a community must thread the powerful strands of 
sustainable land use practices, wise transportation investments, 
diligent planning and thoughtful design together into a healthy 
tapestry of productive, active, sustainable communities.
    The ARRA program, through your leadership, Chairman Inouye, is the 
needle that is weaving these powerful strands together for the future 
of Hawaii's people. And while Hawaii has been exemplary in seeking out 
and spending ARRA funds for transportation and energy projects, we 
continue to leave great opportunities on the table due to lack of 
internal leadership at the state and county levels to carry out these 
bicycle and pedestrian projects that carry such promise for energy 
security, natural resource preservation, healthy families and 
communities.
    We are increasingly concerned with the lack of a State Bicycle 
Coordinator and the understaffed Safe Routes to School (SRTS) program. 
This lack of leadership has kept Hawaii from fully capitalizing on ARRA 
funds and other FHWA funding for bicycle and pedestrian projects that 
are long overdue and have great promise for economic development, 
increased health and improved energy security. We can ill afford to 
keep these worthwhile dollars on the table, especially in a energy-
vulnerable and tourism-driven economy like ours where transportation 
efficiency and safe, scenic routes are critical to maintaining energy 
security and a strong visitor industry.
    The State Bicycle Coordinator position itself is also highly 
undervalued at an entry-level position, prompting those who get the 
position to soon leave for a promotion with HDOT, as happened with the 
three Coordinators during my tenure in transportation advocacy over the 
last 7 years. We have been told for several years now that the HDOT is 
working on upgrading that status, but there never seems to be any 
progress on that front.
    In a similar vein, we understand that the 100 percent federal 
funded Safe Routes to School program is funded with two half-time staff 
in the Traffic Branch, and much of that work is left to one person who 
also handles van pool and other demanding programs. This important 
Federal program continues to languish and stall, denying schools and 
communities important funding for local jobs and long overdue 
infrastructure improvements. Schools that applied for these funds in 
2007 are rapidly losing their in-kind community partners and their own 
will to continue to wait, now almost 3 years, for a notice to proceed 
with their projects.
    We want to be clear that the leadership at HDOT under Director 
Morioka has been exemplary in their openness to hear from groups like 
ours, and they have taken on some promising planning initiatives to 
advance pedestrian and bicycle infrastructure projects across the 
State. We applaud them on these efforts and we appreciate being 
involved. However these planning efforts will fall short without the 
internal leadership to carry out the plans.
    Our recommendation would be to upgrade the HDOT Bicycle Coordinator 
to a Senior Level Planner and conduct a legitimate national search for 
the position and fill it as soon as possible. We also feel that the 
SRTS program would be much better served with a full time SRTS 
Coordinator housed the Planning Branch of HDOT so that the SRTS 
Coordinator and the Bike Coordinator can work closely together to make 
best use of Federal stimulus dollars and Federal transportation aid.
      bicycling and walking belong in hawaii's clean energy future
    Hawaii's extreme energy vulnerability as isolated Pacific islands 
nearly wholly dependent on imported fuels, and abundant, but fragile, 
natural environment capable of harnessing the energy of wind, solar, 
wave and bio fuels, has positioned Hawaii as a magnet for alternative 
energy research. Federal, state and county leaders have recognized 
Hawaii's energy insecurity and existing ``natural capital'' and have 
taken bold steps to make Hawaii a test bed for alternative fuel 
technologies, including launching the Hawaii Clean Energy Initiative 
\1\, an unprecedented partnership between the U.S. DOE and Hawaii that 
has brought expertise and leadership to solve Hawaii's energy challenge 
as a model for the rest of the country. However, experts and existing 
stakeholders in the energy debate agree that true energy self-
sufficiency cannot solely rely on alternative generation. Demand 
reduction through increased energy efficiency must also be a key 
component of Hawaii's energy security strategy.
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    \1\ Hawaii Clean Energy Initiative, Information available at: 
http://www.hawaiicleanenergyinitiative.org/.
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    Transportation accounts for the largest amount of energy 
utilization in the islands, with resident and visitor fuel demand 
accounting for one-third of imported oil. Aviation, shipping and 
commercial trucking industries are dependent upon these imports. Where 
we can make the biggest difference is in personal household trips, half 
of which are 5 miles or less.\2\ For these short trips, bicycling is a 
great choice. As an oil-free, simple (no expensive research and 
development required), independent (not constrained by a fixed transit 
schedule), inexpensive (affordable mobility for all) and off-the-shelf 
technology (ready to deploy now), bicycling should be a major component 
of Hawaii's and of the United State's energy self-sufficiency and green 
house gas reduction plan.
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    \2\ RITA National Household Transportation Survey, 2001, Available 
at: http://www.bts.gov/programs.
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    Bicycling was once a viable transportation option in Hawaii. Eki 
Cyclery, still a profitable bike shop in Honolulu today, opened its 
doors in 1911 to ``meet Honolulu's growing demand for inexpensive, 
urban transportation''.\3\ Many of Hawaii's first bicycle plans were 
created following the oil shocks of the 1970's. Unfortunately, once the 
oil prices fell and the long lines at the gas pumps dwindled, these 
plans were shelved to make way for a system almost entirely reliant on 
personal motor vehicles. Bicycling could be safe and efficient options 
again as they were in the early 1900's, especially for short trips, if 
the right combination of engineering, education, encouragement and 
enforcement practices were in place.
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    \3\ Hawaii Business Magazine, February 2009.
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    We recommend that USDOE and DBEDT through the HCEI look at ARRA 
funds to accelerate planning, design and construction of existing 
bicycle and pedestrian projects in Bike Plan Hawaii, O'ahu's Bicycle 
Master Plan and other county bicycle and pedestrian plans.
                                 ______
                                 
                   Prepared Statement of Susan Miller
    Mahalo for the opportunity to provide testimony: I am Susan Miller. 
I work on a federal funded Medicaid Infrastructure Grant (Hire 
Abilities Hawaii) at the University of Hawaii. The nature of the grant 
is removing barriers to employment for persons with disabilities, and 
building infrastructure to promote access to competitive employment 
pathways in Hawaii.
    I have good news and bad news to share regarding our stimulus 
spending in Hawaii. The bad news first: in all of the challenges we 
have faced as a state, including all of the budget cuts, the losses of 
jobs and services in state government, and the reductions in funding in 
critical areas, like education, we have been slow to spend our stimulus 
funding. I am here to tell you that in this tough environment, people 
with disabilities have not been adequately included in the stimulus 
funding for employment.
    The good news is that we still have time to include the disability 
community in our stimulus funding. Projects in the following areas 
still need funding:
  --Benefits education, which helps persons with disabilities to 
        understand the impact on employment to their benefits so those 
        who are able may join the workforce and give up their benefits.
  --Job Accommodations in public sectors, which is new to Hawaii, 
        provides the technical support for people with disabilities to 
        gain and retain employment.
  --Employment First, which will create ``Yes We Can'' environment for 
        people with Development Disabilities in Hawaii, with an 
        assumption that all people who wish to work can find a place in 
        the job market, with the use of job coaching and supported 
        employment.
  --Medicaid Buy-in, which if enacted in Hawaii, will enable people 
        with disabilities to keep their Medicaid when they go to work, 
        which will provide them with the level of healthcare needed for 
        them to successful remain in the job market.
  --Transition for at-risk youth, including youth with disabilities, 
        who are often left behind since the summer jobs program by 
        Department of Labor is funded by TANF, and TANF funds are 
        prohibited from being used for people with disabilities.
    Let me repeat, there is still time to allocate funding toward 
programs that can serve people with disabilities.
    Mahalo again for the opportunity to give you my testimony.

                         CONCLUSION OF HEARING

    Chairman Inouye. And the committee will stand recessed.
    [Whereupon, at 12:30 p.m., Wednesday, July 7, the hearing 
was concluded, and the committee was recessed, to reconvene 
subject to the call of the Chair.]

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