 We're back. We're live. It's, what is it? Monday. Monday. Ooh, 12 noon. We are where we want to be. And that voice is the voice of Alan Roshima, President and CEO of Hawaiian Electric Companies. Wow. Thank you, Alan. Thanks for coming down. Thanks, Jay. Always a pleasure. We'd love to follow your accent. It's been a while. Thank you. It has. It has, you know. The last time wasn't when you were first appointed. It was after that. It was probably after next year. I don't remember. It all blends together. Yeah, yeah, yeah. So much has happened since then. And the person on the phone in, in Hilo, Big Island is Marco Mangelsdorf at Provision Solar, our co-host and regular guest on this show, which is Energy 808, The Cutting Edge. Hi, Marco. One enchanted Monday. I'm with my good friend Jay and Alan. Thank you so much for being with us today, Alan. Can't top that. So let's catch up with you, Alan. Sure. You know, it's been four years plus since you took this job. How has it been? It must, you know, this is a life experience. You know, it's part of your grand legacy, isn't it? Well, I don't know about that. It's been fun. You know, when we started out, you know, this was not planned, as you know, Jay. It's been a great, great experience. Hopefully, all the stuff I've done in my X number of years around here have contributed to the fun I'm having. So I think we've done quite a bit. And including the 20 months of next era that we're kind of at a standstill. Yeah, I want to talk about that. You know, that was, to me, it was, I wanted to see that deal happen. As a matter of fact. And it must have been fairly disruptive. It was, it was a lot of, there was a lot of hostility going on during that period. And I was waiting for it to be over so you could get back to business, that sort of thing. How was it from your point of view? Well, it was everything you said. We wanted to see it happen as well, because we thought it could help propel the state in towards 100%. I think there are a lot of misperceptions about next era and its motives. It's unfortunate, but it's past. And when the decision finally came down, our organization was ready to go either way. So next era was very good during the 20 months and allowing us to pursue our transformation and not standstill, but we just couldn't execute. As you know, I mean, we just couldn't. Yeah. So. Well, you know, it's, I guess it's, it's a lesson or maybe a whole combination of lessons. What about the other things? I remember when we spoke last four plus years ago, or at least when we spoke at the beginning of your, of your current, current gig, your current gig. You talked about two things. And I want to mention them and sort of catch up with you. One was that you wanted to make one company. You wanted to put it together. Great. And the other was that you wanted to change the corporate culture, sort of update the corporate culture. You talk about how that all worked out. Oh, absolutely. One company is imperative for, for the three companies we have to, to basically be up to date in today's environment. I like to tell our employees that we are fortunate. We're not victims. That disruption has occurred everywhere. We're not the only ones. We're fortunate because it occurred with our company earlier than other companies. And so those companies who don't realize they're being disrupted are the ones who will eventually fail. And so the fact that we know we've been disrupted, that we've taken steps to be more customer focused and to stay on top of technology and the new push is really transformative for us is to be more into the soft sciences, bringing people who can advise us as to how to use technology for the customer benefit and not, not just be top down on these are the best things for you is therefore do it, right? It's all about how we transform our messaging, how we listen to our customers and how we listen to other stakeholders. So those things have been transformative to the culture. So we've been getting accolades in the industry on how we've come up with our integrated grid planning, how we go out to our stakeholders before we present a plan so that by the time it gets to the PUC, they will have known everyone's point of view. It's not that we always agree, but at least the points of disagreement are clear. And so a more rational decision can be made without guessing or prolonged processes. And hopefully a cool headed decision. Yeah. Without getting emotionally involved in hostile. Correct. Correct. And I think, I think through the four years in you have a great recollection, we were kind of caught in the company's inability to deal with the great disruption here in a short period of time. In 2008, the white clean energy initiative was enacted or we signed on to it. And rooftop solar, given the high fuel oil prices, and the high credits that were being offered by government made sense for people to go to rooftop solar. Our organization wasn't prepared to integrate that in a rational way. And it engineers our program and, you know, Marco can can confirm this to always seek the perfect solution and not take unnecessary risk. And we're out of that environment. Now we can't always seek perfection, but we have to seek rationality. And so we got kind of caught up in the that vortex. We're past that now. And I think the regulators and stakeholders see that we're probably a lot more aligned with the state's policies. And so if we can all be accountable for getting us there, that's the way we want to do it. Yeah, my observation is that when the next era thing was, you know, it was over, everybody took a deep breath and decided to move forward everybody, the community around energy. And I think, you know, you're, I noticed almost immediately that you were a very good odor, that, you know, you had achieved a kind of new balance with regulators with the public. And the kind of aggravations that happened before next era had gone away. And I, and I imagine that's the way it is now. Well, I like to think so. But we I feel we've turned a corner in kind of earning back some trust. But we're not totally there yet. And we have to try really hard to stay on that path. And we have to demonstrate it and not just talk about it. So what I see happening in the company, are people who are used to doing it one way are now looking for hybrid solutions. And we're constantly challenging one another, and not waiting for others to challenge us. So those are all the good things. And I think, you know, as an industry, utility industry, energy groups, you know, we're getting a lot of accolades, we don't necessarily get that in Hawaii. But on a national scale, you get on a national tree as a leader in renewables and so forth. I mean, our last RFP results, right, you get as much battery storage, and solar energy paired to offset energy evening peak, and deliver clean energy offsetting up to 100 million gallons of fossil fuel. On the utility side, nationally, was like, this is amazing. And yet, our coverage locally is, oh, they found some other things to do. Because I don't think people see the enormity of Hawaii's challenges and opportunities. And so, which is also okay from our standpoint, as we become more the normal, rather than the abnormal. That's fine. Where I do want to get it, though, is that everybody has a role in it. It's not us. It's everybody. And where do people find some accountability in moving us to a carbon neutral environment? Right? This is very challenging. When you think about, you know, say four years ago, or six or eight years ago, there were things happening, but it was the low hanging fruit kinds of things. Now there's all this, all these other challenges, other issues mean just to name one that comes to mind the way I just came from this, this conference on climate change. Climate change is a big factor here. Absolutely. Absolutely. I frankly, you know, we're looking at, we're being judged on some things by a 10 year average of a look back. And I'm challenging our people to say, give me any one of those 10 years that we're being judged by by the last three years. And if you can find one, then I want to know it. And if you can't find one, then we have to look for more rationality and how we're judged on reliability, et cetera. As you know, it's been really challenging. You know, the storms and the frequency of the storms and the enormity of the storms in micro areas. And some people don't realize it because they don't get hit. But if you lived on windward Oahu at the end of 2018, you know how much water was dumped there. If you lived in Hilo, right, the enormity of that, Marco can can testify, there was a lot of water. And then you go to Maui, and Lanai, and Molokai, the water and the wind, then the brush fires. So there's a lot of challenges. There are a lot of things going on. And it's almost constant. It's constant. Yeah, so I mean, you know, to me, just looking from the outside in your job as CEO has changed in the past four years, because so many things are happening so much more quickly. I mean, technology, for example, the technology of batteries, the linking of batteries and solar, the event with geothermal, that's changed things. Right. You know, and I mean, and the whole, you know, the the priorities and the mix, you know, the portfolio mix has changed. Exactly. And that means the planning has to change. Right, right. Like every day, there must be something else. Always, always. And we're, we can't be the impediment, right? We have to be agnostic, but looking out for rational decisions at the right time. So I think that's the challenge for us. And really not trying to impose, you know, totally engineering-esque mind as to what we think it ought to be. But really listening to all the stakeholders and saying, you know, there's room for everyone. And it's not always going to be at the lowest price. We're going to seek the lowest price, but that's not our state policy. But in fact, the prices renewables have come down. Absolutely. And the deals you're making now are really relative to what was a few years ago. Absolutely. Way better. Absolutely. So that's what makes it monumental. I mean, to those people who say we should move even faster than we're doing, we couldn't have gotten these deals two years ago in the scale that we've gotten. So it's everything in this right time. And you have to stay abreast of all of the trends and pricing. So as you predict oil prices, as you predict battery, and the battery, the huge technology increases and pricing changes and batteries is largely due to the electrification of transportation. I mean, I may not always agree with Elon Musk, but but what he's done to promote electrification of transportation has caused, you know, big leaps in battery technology and pricing. Yeah, right. I think that's really catching on. I mean, we don't have that many yet. Brandon Morioka was here a couple weeks ago. There are many yet, but it seems to me from this conference this morning, that that things that's getting traction now, and you're going to see a kind of logarithmic increase going forward because people are getting interested. And while electric is doing a lot of charging station projects, including Maui and in Oahu. So I think all the, you know, all the the factors are in play for an expansion of electric vehicles and buses, too, by the way. Right. So we've been a big fan of the municipalization, you know, electrification. We've been working very closely with Pro Terra, the only US manufacturer of those are the buses that DTS is looking at right. Correct. And we played a role in trying to attract Pro Terra to demonstrate here. And I was just with Ryan Popple again in Palm Beach last week at an EEI meeting, some of which was devoted to electrification and the municipal buses. And he did a shout out to Hawaiian electric in Hawaii because of the things we're doing here. So I don't know if you saw some of the news releases, but JTB travel plaza transportation is ordered three Pro Terra buses for the tourist industry, which will cause other competitors to jump on board. And, you know, our county's mayors are all for electrification or decarbonization of the transportation fleet. So Hawaii's going to lead in that we're like in the top five of per capita adoption of EVs. We could be number, stay number two, even without a lot of government incentives here. Just because of our population, we are committed, I think Hawaii is committed to cleaning up the environment. And as you know, I mean, Hawaii is a group of early adopters. True. I mean, goes way back deep in the culture. Right. When I help, you know, part of the start of the cell phone industry in Hawaii, and they came abundantly clear that Hawaii's population was going to go in a different direction than elsewhere and adopt faster, right. And the mobility factor was a lot more evident in Hawaii early on. I mean, it's just our culture. Yeah, goes back to Thomas Edison, right 19th century. It goes back to the Ali, I mean, Ilani Palace was electrified for the White House. Very symbolic. It's not it's not that one thing only. It's a whole stream of things. So before I before I forget you completely, Marco, can you take the con on this for a little bit and ask Alan some questions? Absolutely. Thank you, Jay. I just wanted to make a quick comment about a comment you made a little while ago, Alan about the challenge of integrating more and more rooftop solar. And I want to give a shout out to you and all the folks at Eco Helico Miko, especially on the and the engineering side. And as we both know, engineers tend to be I think a bit more risk averse than perhaps the policy side folks. Now, having been added here in Hawaii for going on 20 years, I don't think any of us would have thought possible five 1015 years ago, the degree to which rooftop solar was going to be deployed and penetrating into the grid. And it's a lot of that is due to the fact that your company has your companies have pushed the boundaries, pushed the envelopes of what what was thought virtually impossible to in fact, turning out to be very possible. So I just want to give you and your your team kudos for that because that says definitely noteworthy. Well, thanks, Marco. That's very meaningful coming from you. Thanks. Thank you so much. Sure. And I kind of I got a two part question for you, Alan, which is first part is what keeps you excited coming to work in the morning now that you are in year five of your tenure at HECO and second part is what do you what have you found to be the most challenging and or disappointing in your four plus years at Hawaiian Electric? Okay. What keeps me going? I mean, and Jay knows me for a long time. I'm I'm a frustrated architect, Marco. I like to build things. I got talked out of going into architecture of my high school counselors who always knew better than me that, you know, they thought I should be a doctor or a lawyer. You know, if we could go back now, you know, how those things work, right? And so you do how you're programmed. But I like to build things. And I, what keeps me going is that I feel like I'm building an an organization that is so critical to Hawaii's a past and future. So I see the growth in our people. And I see the growth in our organization as a whole. And that's what keeps me going. My primary purpose for taking this on at my advanced age was that that the give back to Hawaii, and that is to create a bench of now, I had to say this, the 2700 employees of Hawaiian Electric are some of the best anywhere. I mean, truly, even as we're going through the next day or merger, and we're able to benchmark this, there's no doubt that we have good people. What my job is to make sure that they get the right tools and the development culture to really get to the best they can be. And so that our board, as they look for succession within the company, and it's not just my job, it's throughout the company, feels confident that we have people within the company who have the right skill sets, who have the right external views, and or ability to communicate so that they can feel confident that the company can move on notwithstanding the loss of any one two or three people. So that's what keeps me going. I see that happening. We still have a lot of work to do. And it's going to happen. So as you may know, we've done some reorganizations two years ago. And now again, as we came out of next era, to be able to execute on our transformation. And our transformation really is being able to deliver the stuff that people expect of the utilities, i.e. turned on the light switch and the lights go on, and they don't care how it happens. And frankly, they don't want to know how it happens. But on the other side, as we face these new challenges, how do you get new revenue streams and new value for customers? And so that other side of the house where we have developed, so you mentioned Brennan, electrification of transportation, AJ Hale Gao and marketing, Sean McCormick, who's working on new products and services. These are things that we are developing. Mindy Hartstein, who's running our poll infrastructure enterprise as we take over sole ownership of all of the polls in our jurisdiction to be able to be utilized for things like 5G antenna sites for building a new generation for a new time. It's a new business side, right? Yeah. And so as I see the growth, and as it goes down into the company farther into the company, that's what keeps me going. Yeah. And the story, that's what keeps me going. The biggest challenge for me, just because I'm an impatient person, people think I'm patient, but it looks like a patient. But kind of impatient is the length of time it takes to for change management. So you cannot turn on a dime. And so our one company initiative, Marco, where we are looking at bringing more synergy within the three companies and processes that bring value to our customers. I specifically asked Jay Ignacio to be the account leader on that, because I wanted to be sure that it was not an Oahu centric mentality, it was a neighbor island centric mentality that will drive this. So my pledge to our employees this year is that we're going to execute with finality on the one company this year, 2019, sooner the better, but not before it's time. And so that to me has been something I wanted to deliver earlier. But the 20 months we spent in the next year, a merger, where we learned a lot, but it also held up a lot. So I couldn't do it. Yeah, yeah, it fits though. Yeah, it fits now. It's the right thing at the right time. Yeah. And we have our new ERP system in place, right? That we couldn't execute on because of the next year of merger, because rightly so people said, Why do you get the approval to go and merge next era has that same platform so you could save on the execution? Well, we stopped it for 20 months. And then all of a sudden we have to really hurry up and get it done. Because we're living on borrowed time, way past borrowed time on our legacy systems. But now it gives us the platform to move forward with one company. Speaking of, if I could follow up with a quick question on that for Alan. So what do you believe that you have yet to do yet to accomplish in your tenure, Alan, however much longer your tenure at Hawaiian Electric? What is what will what do you hope to see wrapped up and accomplished by the time you you move on? Now that I'm trying to hurry you out the door, I'm just kind of wondering what what what what you'd like to have completed? Well, I'd like to see the transformation permeate more of our organization. And it will. I'd like to see one company wrap up and people fully aligned around what we have to do. In the end, I want I want our customers to see us as a valued service and not just a renewable energy company. Because I think we're we have to be more than that. We're one of the few companies in Hawaii that has a reach to so much of Hawaii. And our economy depends on a as we all the three of us agree on a stable grid on the technology that has to be implemented to allow renewable energy and decarbonization. Those are things the state needs the state needs and it has to be done rationally. So I really love to see that people see the company as a community, a supporter with input from the community and not top down from engineers. The engineers play a huge role. But so do our customers and other stakeholders, including vendors and independent power producers, state government, entrepreneurs, entrepreneurs. I would love to see a more entrepreneurial, total environment in Hawaii. I mean, I just came back from Florida and my Lyft driver inspired me. I truly inspired me by what he's doing and how he got started. And the entrepreneurial spirit of this, this immigrant. Yeah, I mean, it's just inspiring. And I'd love to see more of that in Hawaii. Hopefully not good. We'll see that. Yeah. Marco, you want more? Sure. Sure, always more. And I know because we're kind of running out of time. So let me kind of drill a little bit down to something a bit more big island specific, if I could please, Alan, I'll be just a little bit provocative, but not overly so, I think, given how this I think a juicy and important question. And I think it's fair to say that the future of Pune geothermal venture is somewhat nebulous now, given the damage that's taking place in that area, as far as lava flow and so forth, which represents a substantial sizable contribution to the Helco grid has for 25 some odd years. And then we've also got this power plant up the coast in the KO area called Honua Ola or what's the other word Honua Ola? Yes, it used to be who Honua Ola correct. And in that particular power plant, haven't gone online yet is actually under a court challenge by Henry Curtis and life of the land we're waiting for a Supreme Court decision sometime in months to come. The possibility of it would be remanded the decision of a couple years ago to approve the power plant or the PPA power purchase agreement going into effect was it was appealed so it's conceivable it could be remanded back to the commission and the and Honua Ola coming online is also somewhat nebulous. So my question to you is, if you can address this, what effect if if neither of these power plants were to go back online for the foreseeable future, what effect would this have on Helco generation and grid modernization plans? Oh, we'll get there. You know, as you know, the big island was actually leading the state in renewable energy, we were going to be at 70%. But for, you know, lava and PGV going offline. What we did, we agreed to expedite the RFP for an additional project on the big island. Working with the Commission on that when PGV was, you know, had to go out. So we've got projects in the funnel for grid solar plus battery. We're looking at all kinds of things. There's a second round to it. Marco, as you know, right, that will I think produce more projects. We have to live as a regulated utility and a believer in the rule of law to abide by our contracts and and to give the opportunity for people to perform. We meet regularly with Honuaola for updates. We need to know what their plans are, how they're going to execute. We recently had a group meeting with government, the county and the state regarding PGV. And so their efforts of foot for PGV to come up with a plan on how they will either come back up or and how they're going to satisfy the community requirements. So we we want to see renewable energy in the forms that are acceptable to the state. And if they can pass all the hurdles, and we are not the ones that are going to see the naysayers. I mean, they're competing views on every kind of technology out there, right? Wind, for example. Sure. So so we can't be arbiter. We have to do what's rational and best for our customers. And if the PUC approves that then we will live by the contracts to get it done. I'd like to ask a question about the future. And tripping off something you said a minute ago, that Hawaiian Electric doesn't want to just be a renewable energy company. We'll be a I think you said a service come full service company going forward. And I know in there somewhere is the vision of what a full service company is, and what services you might be engaged in outside of renewable energy. Can you talk about your vision for that going forward? Well, I this kind of goes back to our sustainable communities effort. So we already have a program going on in Waimanalo. And we've are holding hands with like commandment of schools and others. In terms of developing communities and asking the communities, how can we be of assistance? And lo and behold, I mean, what the community, just this one community says is one of the biggest benefits of us coming in and trying to help organize their thoughts, is they're not connected with one another. And so they can have the discussions about what their future ought to be, what their needs are. So it's not us saying this is what you need. But we can be a facilitator for those discussions. And then it leads to other things. So resilience is a big deal for island communities, right? And as people understand how, for example, that Aina Hina and Hawaii Kai are served by a transmission line that goes over the koalao through Waimanalo and goes back up the mountains to serve the East Honolulu. We're vulnerable, right? We're vulnerable. So as the community see that, then they come up with, gee, why don't we do these things? Can we start looking at these things? And the answer is yes, right? But it's coming up from the community. Now, when I talked about the poll infrastructure, we had been in negotiations for years with Hawaiian Telcom to kind of relieve it of some of its financial obligations, but to be able to promote synergies within our operations. So when Hawaiian Telcom had part of the poll and we had part of the poll ownership, the telecom was a confusion. Well, it also, yeah, so you have the double polls in some cases. The vegetation management around the wires is bifurcated, right? We take care of the top end, they take care of the bottom end. Now that we have sole ownership and resources to do it, why can't we do it more synergistically? Right? It can only be a good thing. It can only be a good thing. One of the byproducts as you look into the future, Marco and Jay, you guys are there. Autonomous driving, 5G dispersion and what it can bring to households. Our polls becomes the the favored, the favored place to put antenna and sensors. And now because we have sole ownership and we have a group working on it with Mindy Hartstein, for example, we're working with the cell companies on location. And then we're working with our union brothers to make sure it's safe for them to access what their use are accessing, but now have other people in the space. Yeah, 5G has a different kind of technology, right? You need these mesh modes here and there. It's different than it is with 4G. Right. So you can be part of that, an important part of that. Absolutely. And so the cell companies are all coming to us now and we're kind of a non competitor in the space. And we're just looking for more connectivity. And this is what 5G brings, for example, on Molokai where half the island has no cell service. And we're kind of committed to try to make Molokai 100% faster. Well, if the community wants it, if they can get 5G there, and I've asked the state for assistance in helping, it's a small market. So there's really no economic incentive for the cell carriers to go. But if I can give them a conduit to go, i.e. will help them energize the poles for that purpose, as I get more cell service, then I can put more rooftop solar and connectivity with smart inverters. So it is, it is an integrated system. But what does it bring to the community? Should they choose to get it? Is it get access to telemedicine? They get access to distance learning? They get access to economic activity? Yeah, right. So they joined the 20th century in a non, you know, without a whole lot of infrastructure. Relatively quickly too. Quickly. And so it's underserved communities that we can be a conduit to help move things. Right? Yeah. So that's where our company and our community affairs people are spending a lot of time looking at being a service to the community that brings economic activity, brings, you know, ideas to communities to fulfill the community's vision for itself. Oh, I love it. I mean, what you've described as a kind of design thinking process out of Stanford, you know, where you you look at the problem and what you thought was the problem, maybe a different thing. Yeah. And then you have interactive design thinking with the community. Now you find a better a better problem to solve and a way to solve it. Right. I mean, and I always say that Hawaiian Electric is Hawaii's electric company. It's the common denominator connecting, but it connects beyond just renewables. It connects other things as well. It has to be. I mean, we have so few companies of our size and, you know, publicly traded, et cetera, with a responsibility commitment to Hawaii per se. And what I heard through the next Jared merger, despite my preference to getting involved, you know, in all the synergies that were brought was kind of like, no, we want a Hawaiian company with Hawaiian values, Hawaiian management to, to, you know, be such a big part of our state. And so I heard that. And so we're trying to, we're trying to be that, right, be even better at that than we were in the past. I think I think clearly it works better that way. Yeah. You know, just knowing about Hawaii the way Hawaii works and it's different together. J is different, right? Yeah, it is. It's different. It's not like another place or any other place. Right. Actually, I like to tell, I like to tell visitors that, you know, you can go to a meeting with people from Hawaii and they'll be nodding their heads. But that doesn't mean they're agreeing with you. They're acknowledging your lips are moving and we're being polite. We have a special culture. Don't take it as agreement. Marco, why don't you make your final statement to try to synergize everything that's happened? Oh, that's impossible to do with such erudite insight and commentary. I mean, it looks like we feel like we've barely scratched the surface. The three of us, I think, could go on for hours and hours. But I'll just thank you, Alan, for helping us start 2019 in a fantastic fashion. You're our first guest of this year. And I think it's, you know, considering how well you did for us. It's all downhill from here, but we'll try as we might. But you know, you're always welcome to come and sit down with us. And I really appreciate you coming to the show today. Well, thank you, Marco. Also my pleasure for you guys. Anytime. Thank you, Alan. Great to have you here today. If do it again. Yeah, yeah, yeah. Another four years. Before that, I'll be on a cruise.