 Okay, we're back, we're live on a Monday, wow, 12 noon for Energy 808, the cutting edge. We're calling this particular episode, L'Energie Po Paris, that's French. And the tagline of that is recent energy news and developments, of course, with our dear friend, Marco Mangelsdorf, who joins us from Honolulu International Airport. Hi Marco. Well, as they say in the streets of Geneva, where I lived in the mid-1980s, Maywee and Konichiwa, and thank you for having me. They never said Konichiwa and Geneva, I know well enough to know that. The French I can get along with though. Okay, La Première is changing the guard in the House Energy and Environment Committee. This is a significant change in the legislature, which is under fire, you know, according to the people who are reporting on KonKon and the things that the people who want KonKon would like to change about the legislature. So the legislature, this year, we have a new chair of the most important committee for this show, the House Energy and Environment Committee. You want to report on that, Marco? Sure, this is something that was reported last week in the Star Advertisers, and it's important to note that it's not a done-done deal because the election, the general election is not taking place. It'll be in 15 days from now, and that will most likely lead to Representative Chris Lee being reelected because he's in the House, the Hawaii House, and they come up for re-election every two years. And also, Nicole Lohan from the corner side of the island, she's been Chris's vice chair in the EAT Committee, Energy and Environment Committee. So most likely both Chris and Nicole, who's, Nicole's running without opposition, by the way. Most likely they will be reelected, and if that's the case, apparently Chris is moving to the Judiciary Committee, and Nicole would step up from the vice chair position to the chair position for the EAT Committee. Chris has been the EAT chair since I'm going to say roughly 2010-ish when Nina left when she was capped by Neil Abercrombie to be the chair of the PUC. So Chris has been there for about eight-plus years, so this is a significant tenure on Chris's part, and I think very highly of Chris, and I also think very highly of Nicole as well. So I have great hopes and expectations that Nicole will be a winner in the EAT Committee as well, and there are far too many men who are in the energy field, and I'm always happy to see a woman step up to an important position like that, and she'll be joined on the Senate side, most likely by Senator Lorraine Inouye, who will most likely continue to be the chair of the Senate Energy and Transportation Committee. So hopefully what eluded Chris and Lorraine over the past three years in terms of a tax credit specifically for battery storage, hopefully Lorraine and Nicole come the end of the session sometime in May, early May, late April next year, will be able to get across finish line a battery storage bill, which I think would be very good for all concerns. Okay, I have a bunch of questions I'd like to unpack with you. So Chris was supporting the credit for the battery, the battery tax credit, right? He was supporting that for batteries. Why would things look better now? Part of it, I guess, Jay, it's wishful thinking on my part that the combination that we've had for the past three years evidently wasn't enough to bring it across the finish line in terms of getting it out of conference committee and to the floor for a vote at the end of the session. So there's no disparagement towards Chris, but sometimes things need to be shaken and not stirred in James Bondi in terms to get some results. So I'm hopeful that Nicole and Lorraine will be able to do what Nicole and Chris and Lorraine have not, were not able to do for the past three years. Yeah, and as we'll see with later points in our show, this could be very important for the development of solar in the state of Hawaii. So is it that going from the energy committee in the House to the House Judiciary Committee is something desirable? What is attractive about it? Why would Chris want to go there or putting it another way? Why would he not kick and scream to stay in energy? Well, that's a question for Chris, and I certainly don't have any. I haven't spoken to him about this news, so I don't have any first-hand information. I can only surmise that maybe he was ready for a bit of a change. I mean, he's a real bright guy, and the Judiciary Committee chairing that is no slouch in terms of, you know, do you see interesting stuff in terms of how the state judiciary shapes up, so maybe Chris was, you know, ready for a change or ready for a new challenge, but you know, it would be great to have him back on the show and can ask him directly. Yeah, I agree. Now, you seem to assume that Lorraine Inouye was going to stay as chair of the Senate Energy Transportation Committee. Is that, has that been announced, or are you just assuming that for the lack of an announcement to the contrary, she will stay? The latter. I don't have any reason to believe that Lorraine was going to another committee chair position. I haven't spoken to her. I saw Lorraine at an event a couple weeks ago, but I didn't ask her specifically, but you know, barring any change of view or desire on her part, I know she's interested in both energy and transportation. She also wanted for important bills, has been for the past session or two, to have a new transportation, oh, Airports Commission, if I'm not mistaken, that I know is something important to her, it's a high priority and she was not successful last session, so yeah, as far as I know, Lorraine is going to be in the same position, you know, unless she decides to go somewhere else. All this has to be taken in light of the impending vote on ConCon. We don't have Conham, the educational amendment anymore, that was stricken by the Supreme Court on Friday, but we do have ConCon up on the ballot coming soon. And one of the big issues is, you know, it's a system broken so bad that we need a constitutional convention. And the people who discussed that, you know, seem to be saying, you know, really, the jury's out on how people are going to vote on this thing. The polls seem to favor, and the ads on television seem to favor not voting for ConCon, but there's a lot of action here that suggests that people will vote for ConCon, and ConCon is directed in large part at reforming the legislature. Term limits, for example, you know, things around the conference committee procedures, who knows what. But, you know, I find interesting is that the public view of the legislature is way low, 20% of the people surveyed liked the way the legislature functions, and the rest didn't. So maybe we need reform in the legislature. Maybe people will see that as a key issue in the ConCon. Who knows, but we need to have this discussion after the vote on election day. Anyway, let's go to point two, and that is utility ownership models. Some what, two or three years ago, D-Bed led a contract for consulting with Boston Consulting and London Economics on the appeal, the propriety of different ownership models for utilities. And we have been waiting for Gordau. This is a $1 million plus report that is supposed to be returned to D-Bed. I don't know what the deadline is, but it may already have sort of lost its relevance. But what's the status? Where is this happening, Marco, and what do you expect? In 2015, the legislature passed a bill that was signed into law by David E. Gay, appropriating about a million bucks to have D-Bed do a request for proposals, which they did, looking at utility ownership models. And this was in light of the long process of the Public Utilities Commission, considering whether Hawaii Electric Industries was going to be purchased by next year at Energy in Florida. So this went out to D-Bed, and D-Bed was won by a couple of companies, Boston Consulting and London Economics over on the East Coast, to go ahead and spend a million bucks in change to look at utility ownership models. And these folks have been going on various meet and greet tours, two of them that I'm aware of in the past year or so. And then their third is going to be next month, which they've announced they're going to be going around the state for one last Q&A, essentially, prior to all expectations that the report would be submitted to the legislature prior to the opening of the legislature in January, which is typically right around the middle of the month. And what I believe is going to be the case is the report, and I don't have any foresight or particular insight information on this, but my reading of the tea leaves is that the report is going to be extremely heavy towards looking at the new shiny bobble in town, which is performance-based rate-making or PBR performance-based rate-making, which there's a docket open right now with the commission looking at PBR. And I fear that this million-dollar-plus study is going to give short thrift to the co-op model. It's going to give short thrift to the municipal model, and probably spent a lot of its time looking at performance-based rate-making because at the Verge conference back in June at the Hilton Hawaiian Village, which I attended along with a bunch of other energy stakeholders, the Boston Consulting folks were there in force, and they seemed to be just going on and on and on about PBR. So I hope that it is a holistic, comprehensive research piece that doesn't just get a mention in the Pacific Business News and the Star Advertiser and then it's put on the shelf, but that it really does contribute something substantive and thoughtful to the dialogue in terms of what some of the best options are for running our utilities here. So I hope that they do a good job and I hope they give the taxpayers our collective money for it. No, that's what lingers for me, the million dollars. Here, this PBR initiative was a matter of the PUC on its own motion, opening a docket to look into PBR performance-based rate-making and also the legislature, which I thought was kind of a duplication of effort, asking the PUC to look into PBR after the PUC had already decided to look into PBR. Now we get a third voice, if you will, on PBR and that is this report for a million dollars. Gee whiz, it comes from three sides and I am likewise amazed that when you say the ownership models and you say this report was intended to evaluate possible ownership models, it doesn't appear to be doing that. And certainly you have an interest in that as the chief executive or one of the founders of HIEC on the Big Island. It's really interesting that they don't even sound like they're going to address that. So here we have another voice on PBR, which is being covered roundly by the PUC and with very competent staff and help there and two new commissioners who presumably are well familiar with it. Now we have this consulting group, two consulting groups from the mainland. You know, in my observation, maybe it's just me, when I see these consulting groups coming around and having all these meetings in Hawaii, what they do is they listen to what everybody says and then they effectively regurgitate it back to us and they charge a lot of money. And I wondered about the usefulness of this report when it was first initiated. So now after three years, we have something that arguably is no longer relevant because we already have a PUC docket on it. I don't get a good feeling on this whole scenario if you want to know, Marco. Gee, I couldn't tell, Jay. Okay, what does that mean? You agree or disagree? Well, you know, I want to see the report and I want to be provoked by it in terms of something provocative and not, you know, not the usual problem because I think it's a very interesting time for utilities now. I think it's a very interesting time for Hawaiian Electric and the five islands that they serve across the stage. And I would like to see something from these consulting bright minds that causes some serious discussion. I mean, one of the juiciest questions to me is, you know, is it time, you know, to move away from what has been typically referred to as cost of services model, which investor on utilities have been over the years, which is they have a cost of what they provide, right? And they are assured or I should say they have permitted a certain return on that cost that the Public Utilities Commission establishes that thou shalt make up to X percent return on equity, but no more than. So the PBR and the co-op model are very different approaches to running a utility company. I'm always concerned when I see, you know, these sophisticated questions being handled by not one but two consulting groups on the mainland when we are, in fact, conducting our own PUC proceedings here. Because, you know, at the end of the day, I have to say, maybe this sounds very local of me, but I think this is a local issue best appreciated by local regulators rather than consultants for a million dollars. And I said before to you that, you know, if they had only offered me the million dollar contract, I would have been happy to do it for a lot less than a million dollars. And on that note, why don't we take a short break and contemplate it all? And when we come back, we're going to talk about utility scale solar and rooftop solar and which one is moving where? We'll also talk about PGV and what's going on with geothermal. We'll be right back after this break. And Aloha. My name is Calvin Griffin, the host of Hawaii Uniform. And every Friday at 11 o'clock here on Think Tech Hawaii, we bring in the latest in what's happening within the military community. And we also invite all of your response to things that's happening here. For those of you who haven't seen the program before, again, we invite your participation. We're here to give information, not disinformation. And we always enjoy response from the public. But join us here, Hawaii Uniform, Fridays, 11 a.m. here on Think Tech Hawaii. Aloha. Hey, Stan Energyman here on Think Tech Hawaii. They won't let me do political commentary, so I'm stuck doing energy stuff. But I really like energy stuff, so I'm going to keep on doing it. So join me every Friday on Stan Energyman at lunchtime, at noon, on my lunch hour. We're going to talk about everything energy, especially if it begins with the word hydrogen. We're going to definitely be talking about it. We'll talk about how we can make Hawaii cleaner, how we can make the world a better place, just basically save the planet. Even Miss America can't even talk about stuff like that anymore. We got it nailed down here. We'll see you on Friday at noon with Stan Energyman. Hey, we're back. We're live with Marco Manglisdorf moving right along. We have two other issues to discuss. And one of them is utility-scale solar against rooftop solar. The practical and which is more practical, and which is going to prevail as the most likely to succeed in Hawaii. What do you think? I think I'm conflicted, my friend, and I'll tell you why. Because I have a very personal stake, selfish stake, in the continued health and viability of rooftop solar, which I've been doing here in Hawaii for the past 18-plus years, but a total of 40 years when I go back to my first solar job in the Bay Area, Argentina, California, back in 1978. So I'm committed to the idea that rooftop solar is a good thing. It allows people to have a weeded more of energy independence. It gives them a really cool thing on their roof that they're producing some or all of their own power that they need for their day-to-day need. And it's just really, really cool. And I really believe in decentralized energy. And solar is the best energy source to be able to do that by far. And yet, the other side of me knows full well that the way of controlling electric rates, if not bringing them down in price over town, which I think is even harder stretched in terms of a downward trend as far as electricity to the retail consumer, is one of the ways you do that is you bring down the cost of generation. And one way not to do it, of course, is to spend more and more money or have power plants that are based on burning some type of combustion fuel, whether it's oil, whether it's natural gas or coal. So utility-scale solar, plus towards, we're seeing is coming down, down, down in cost in terms of the cost of solar has gone down significantly in the past year as the cost of battery storage is going down as well. So it makes more sense for the economics to double down, triple down on utility-scale because it's gonna be cheaper compared to rooftop. Yeah, no surprise really, because when you do larger installations to have economies of scale working for you in every way and the cost of the panels and the cost of the structure in which they rest in the cost of the labor and all the fastenings. And I think arguably you get a better product when you have a contract that's controllable that way. I'm reminded of the Puerto Rico where we had to show one side of this field of solar was installed by one installer and one was installed by the other installer and one of them withstood the hurricane completely and worked after the hurricane, the other was destroyed. So it really makes a big difference in a large field of solar who does it and presumably you can achieve a better result if you have a top flight installer and top flight fastening equipment. But anyway, the other thing I was gonna mention is there's been pressure already on the industry, on the legislature, on the PUC to move to that economies of scale. And I think we're seeing it realized now and I think that probably you'll see more of this large utility scale solar being installed. It's a financing question first. When nobody had the money to install solar, well, let the homeowner, the single family homeowner raise the money and that's the way we financed the installation. But now apparently they have systems and financial arrangements where they can raise the money at the utility level using the RFP method. And gee, they don't seem to have any problem raising the money. Therefore they don't have any problem doing the projects. What do you think? Well, in fact, it's not repair money. It's not utility money that's being ponied up. It's outside investor money. And we learned last week, I believe it was a week before that one of the winners of the seven winners, I believe it is for the multi-megawatts worth of solar plus storage in the last RFP round that one electric did is a company called Inter with an IE Interjects out of Canada. They are going to be providing 30 megawatts of PV on the Big Island plus 120 megawatt hours of storage and they're also going to be providing 15 megawatts on Maui with a smaller amount of storage. And we don't know the price yet. That's still, I guess, subject to negotiation, but we'll know probably by the end of the year. But it's likely to be somewhere in the seven to eight cents a kilowatt hour range. And by comparison, the retail rate on the Big Island this month is right around 36 cents and up and higher than that. Wow, that's a huge difference. Yeah, I think it's been emerging since the day when you and I first met each other and started talking about these subjects. Fact is that solar, whether it's rooftop or whether it's utility scale, solar is the winner. There are so many other possibilities, you can name them on two hands for renewable energy, but solar has emerged in this state and I guess in the world as the winner for green energy. But anyway, that opens the discussion about geothermal. Geothermal is still not operating at Puna Geothermal Venture. The roads haven't been completed to get there. There are those who say it's not hard to reopen. Or Matt says that they can do it because they set it up so it's easy to restart. But a lot of people question that and of course the overriding consideration is the contract they have, maybe too rich and that if we look for cheaper energy, that's not a solution. So there are those who oppose reopening them. What's the sense of the public from your point of view in Hilo? How do people feel on the Big Island? Before I go there, I just want to briefly say that in defense of rooftop solar, that yes, utility scale solar is cheaper. There's no doubt about that, but all the stakeholders, including Hawaiian Electric and the governor and the legislature and the PUC and great pairs want to see more rooftop solar. So the question is, what's the best blend? What's, it's a very dynamic mix and how do we move forward? So now talking about PGV, I attended along with a number of other people at talk couple of weeks ago at Emilo Astronomy Center at UH Hilo campus, where Mike Calachini, who's kind of the general manager there for ORMAT at PGV, Mike was there. My friend, Jake Nassio, President Helico and my friend, Warren Lee, former President Helico and now president of Honua, Ola, which is the renamed Honua, oh gosh, Honua plant, which is going to burn biomass, assuming they make it through the last hurdle. So Mike's position has been the same these past months and he said so again in public that ORMAT has every intention to restart the plant, but it's going to be, you know, I would say a ways out there and a whole bunch of stuff and a lot of money have to be spent. And one of my principal critiques, the two of them actually is the, as you alluded to, first 25 megawatts of that plant are under a so-called avoided cost contract, which is most definitely not in the interest of ratepayers. And I don't believe we'll ever be, if anything is going to get worse in terms of the, the cost to ratepayers to do avoided cost. And second, by the uncertainty of PGV, will it come back or won't it going on month after month and conceivably year after year for the next couple, three years? In effect, in my opinion, kind of freezes utility grid planning for Helico. And as far as it's a substantial amount of firm power, will it come back or won't it come back? And ultimately I think a key decision point is going to be from ORMAT, sometime around 12 months after the plant was shut down in early May of this year. So we're looking sometime early May, but it'll be 12 months have gone by. And maybe at that point ORMAT will recalculate or reconsider given the circumstances at the time, road closures, what's it gonna cost to do it? What's the regulatory environment like? I mean, the commission, the PUC could open a docket on the benefit or lack thereof of PGV coming back. They can't unilaterally void a power purchase agreement with their own authority, but they could certainly, it's their own discretion to open a docket on virtually anything, especially when it comes to important energy matters like that. So I think the jury's still out whether PGV is gonna come back or not. But I would say from now until early May, it'll probably be hopefully more clear in terms of whether it's still in the cards or not. Well, you know, Marco, you say the jury's out, the jury's out on all of the issues we talked about today, the jury's out on every single one of them. And that's why it's so good to be able to talk to you and catch up and check the progress of each one of these issues going forward. So we will discuss it again every single one of them and we'll try to keep people current on what's going on in energy 808, the cutting edge here on ThinkTech. Thank you so much, Marco. You rock in the energy world today. We'll keep on keeping on. All right, have a good flight. Talk soon. Thank you, sir. Okay, bye-bye.