 Roundtable. I'm State Senator Russell Ruderman from the Puna and Ka'u District on the Big Island, and I host the Ruderman Roundtable here on Think Tech, Hawaii, talking about environmental and good government issues. My guest today is Jeff Michelina. He's the Executive Director of the Blue Planet Foundation. His accomplishments in environmental advocacy include passing legislation that sets a binding cap on Hawaii's greenhouse gas emissions, requires that all new homes use solar water heaters, requires returnable deposits on all beverage containers, and incentives for renewable energy use, also that increase the funding of natural resources through tourism tax. He holds a Master's of Science and Engineering from the University of Illinois at Urbana-Champaign, where he specialized in decision theory. And the Blue Planet Foundation's mission is to clear the path for 100% clean energy in Hawaii and beyond. Thank you for joining us here today. Thanks, Senator. It's great to be here. Thank you. So tell me, I know you work a lot on energy issues. What's the state of energy in Hawaii? What grade would you currently give us on energy progress? So this is something Blue Planet Foundation does every year. We put out a report card. Our fifth annual is coming out this year. That's right. And folks can see it at HawaiiEnergyReportCard.org or .com. Hawaii Energy Report Card. So last year when we did our most recent one, which came out in September, we gave the state a B minus. And we looked at a number of metrics to arrive at that grade. B minus was the same grade the state received in 2015 also. The idea here is we've so much stagnated. We made some early progress, but unfortunately things that people know about slowing down a rooftop solar for one, some of the large solar projects on Oahu that were shelved. A lot of things kind of got put on hold during that next era discussion at the PUC. So we saw some stagnation. The real challenge in energy looking at electricity as well as transportation, transportation is something that we really need to start addressing in Hawaii. It's over half of the petroleum that we import goes into our cars and trucks and boats. That's an area that we haven't made much progress. And one of the challenges is we haven't set a goal yet of where we want to arrive for transportation. We have such a goal for electricity. The legislature passed it in 2015 trying to get to 100% by 2045. It sounds like we can get there earlier, but absent that goal we've been somewhat, you know, just turning water for transportation. So that's one of the priorities at the session for us this year is setting that ultimate goal for transportation. So we've never set a goal for transportation yet. And what would you like to see it be? I mean, certainly 100% getting off fossil fuel. Now the timeline, that's the question. I think we're going to be surprised. Just like with the electricity goal, we were somewhat surprised. During the conversation, 2050 seemed outrageous. The compromise was 2045. And just last month, the utility came out and said, you know what, we can actually achieve this by 2040. That's encouraging. I mean, I think once you set that vision and unlock the engineers and the experts and they start to drive towards that goal, we can do it. So to answer the question for transportation, honestly, we can probably turn this around pretty quick. Maybe 20 years, 15 years might even be more quick than that. We have a measure in that sets that goal for 2045, at least to have some sort of a, you know, backstop. And maybe we can move that up. An example we look at is, you know, at the turn of the previous century, when we went from horse driven carriage to, you know, internal combustion automobile, that was a dramatic change from, you know, having livestock on your roads to having, you know, gas stations and, you know, these cars. We have a great image of the Easterday parade in New York City in 1900. And it's all horse driven. And then 1913, and it's the same parade, but all cars. So that was a 13 year, you know, turnaround. I think we can make a fast change if we set our minds to it and have the right policies in place. I guess our progress on the electric side or the energy side speaks to how important it is to set a goal. Exactly, right. What is the greatest hurdle to modernizing our, let's talk for now about our electric grid and we'll get into transportation. Yeah. What are the greatest hurdles for securing and then modernizing our grid? We face a number of hurdles, but I think the fundamental one is how we reward our electric utility. Right now, we essentially allow them to recover and earn revenue on what they invest in the system. And we need to make a lot of investments in the system, but we're really not looking for investment. We're looking for the right types of investment and the right types of behaviors. There's a bill at the legislature that would establish a performance based rate making that would reward the utility for doing the things we want accomplished, our public policy goals, greater reliability, better customer service, lower rates, more renewable energy. And then they would be essentially, they would profit on achieving those metrics. So I think if we get those incentives right, we can see the right types of investments in the system. We built a grid, you know, that's worked great for over a century. And it was really designed around, you know, big power plants that send electricity in one way. But today we have some 80,000 rooftops, essentially independent power plants on people's roofs that are providing power back to the grid, providing for themselves and possibly putting it back on the grid. So we have to reimagine our energy system with a kind of a two-way flow of power. And in that form, we see the utility sort of evolving into a systems operator or like an internet service provider instead of a content provider that they are today. So those are some of the hurdles. It's going to take more intelligence in the system. Some of those investments where you need to see storage, things they call demand response that can help balance the supply and the demand. But it's going to take a utility that's, I think, incented to do those correct investments to make it happen. So the bill that you just discussed, which would modify their incentives, because right now they're basically incentivized to spend as much money as they can justify. Is that correct? Is that oversimplifying it? I think that's the motivation today. Whereas you're proposing that they would get profit based on achieving certain goals that are in our society's interest. That's right. That's what's the name of that bill, by the way. I mean, we had a good title for it that kind of captured this idea, but it's essentially performance-based rate making. But to be clear about that, I mean, we have a public utilities commission that looks at all the investments over $2.5 million, essentially, and makes sure it's used and useful as one of the tests. It's a justifiable expenditure by the utility. And this would modify that slightly to make sure that those investments are really in service of achieving these goals. Sometimes we hear in discussions about what the modern grid will look like. We hear about community-based renewable energy, or sometimes that overlaps with a discussion about microgrids. Can you tell me about that, or where do we stand with that? Sure. This is very timely. This is a measure that was passed in 2015 to essentially allow people who don't have the ability to participate in solar today. They maybe live in a multifamily, or the roof isn't quite suitable, they have too much shade, to get a share in a project elsewhere and then receive credit for the energy that's produced, just like a community garden might work. So a great idea at the time, still a great idea, but you slowly work through the process. And any day now, we should hear from the Public Utilities Commission on what that final form of a program, at least the first phase of a program, might look like. I see. So it'll be exciting for anyone who hasn't been able to participate in solar yet. There might be a new opportunity out there. Even if you're again in a multifamily and just can't do it yourself, this will open up renewable energy for everyone to participate. So that's imminent. It's going to basically come out of the fees you're probably applying any day now. We've heard a lot about the end of net metering in Hawaii, and the effect that it may have had on developing rooftop solar. Where does that stand now? And what do you think about that whole situation? So net metering came to an end over a year ago. Net metering is really why we saw that huge revolution. And it was truly a revolution. In 2008, when some of the best minds in the room were projecting where we were going to be for rooftop solar, at the time we had about one megawatt in 2008, they said we're going to get to 23 megawatts in 2015, which at the time seemed pretty radical. At the end of 2015, we actually had 350 megawatts, 15 times more than we anticipated. And a lot of that had to do with the module prices decreasing, the net metering program, of course, and then new business models that really enabled all sorts of folks to participate because they got rid of that upfront cost and just let you pay over time. Net metering changed, or the loss of net metering changed that equation. It wasn't nearly as profitable for folks to do rooftop solar, but still penciled out for most people. The prices come down such, and tax credits make it within, it pencils out. The challenge now, though, was more of a technical challenge, and that's what the utility is working through. There's something called the distributed energy resources docket at the public utilities commission. They had the first phase that came out where there was kind of a number of programs. People could get a battery and do self-supply without exporting to the grid. That's kind of come to an end now, and now they're looking at the second phase of that. And we hope this is a phase that really gets the pricing signals right, so it's still an option for people to go solar. People that want to get battery storage can do that, and they're properly valued for the services that they provide to the grid. So this is a very dynamic place, but we need some stability in that market and the right policies in place. So solar is available to everyone, and that's really our vision, is to democratize energy, make sure there's customer choice, and if the market wants to invest, we put in over a billion dollars in private capital from folks who put solar on the rooftop, and that's getting us closer to 100 percent. So the more we can enable folks to make those choices, I think the better off we'll all be because we all benefit from moving away from fossil fuel and toward renewable energy. Now, did I hear you say 350 megawatts? At the end of 2015, folks' rooftops. That's on rooftops that doesn't even include the utility scale. Not the utility, right? That's just the rooftop. Only rooftop, we have 350 megawatts. That's a pretty serious amount of power, huh? It is, yeah. We have a long way to go. I mean, to understand our whole system is to require gigawatts. Right. Why didn't that meter and go away? Is it because of the grid reliability, or is it because of the finances of the utility company? You know, to be fair, it was certainly both. But for the utility, I mean, when your biggest competitor is your customer, you have to rethink where you're heading. And one of the issues that they brought up, which we don't agree with, is this idea that people are getting paid for the power that they pushed back out for the same that they're buying the power from. There are other costs out there to keep the grid just operating. These people pay up to 20 bucks a month for just staying connected to the grid. We think that covers a lot of it. They also sacrifice any extra power that they create at the end of a one-year building period. That goes to the utility at no cost. But really, it's somewhat of a blunt tool. We thought it was a very effective tool. And where they're moving toward is something that really accurately represents what energy is worth on the grid at any given time. And that's an important concept, I think, to wrap our minds around, that energy at noon today is pretty cheap because it's a supply and demand sort of thing. And energy at six in the evening is probably going to be more expensive as the sun goes down and everyone turns on their lights and things. So something that reflects that reality will be better for all of us. So that would include the potential of smart meters and differential rates for different times of day. That's right. We have to take a short break. We're going to come back in just one minute. I'm here on the Ruderman Round Table with Jeff Nicolina, the Executive Director of Blue Planet Foundation. Thank you for joining us. I'm Jay Fiedel and with Ray Starling, I host Hawaii, the State of Clean Energy, four o'clock every Wednesday, the Hawaii Energy Policy Forum, making discovery of what's going on in energy in this community. Ray, what do you think? We've got a great group of shows coming up, finishing out this year and starting next year. Dean Nishida has been with us today. He's the new consumer advocate and he has told us a lot, but he's got a lot more to tell. So we're going to have him back and others like him in future shows. And Dean, how much of that do you agree with? There's a lot to be said and I'm interested in seeing some of your other shows. Okay, we'll be back four o'clock every Wednesday here on Think Tech Hawaii. Hey, has your signal just been taken over or am I supposed to be here? This is Andrew, the security guy, your co-host on Hibachi Talk. Please join us every Friday on Think Tech Hawaii. And welcome back to the Ruderman Round Table. I'm here with Jeff Nicolina, Executive Director of the Blue Planet Foundation. We're talking about energy issues in the State of Hawaii. Tell me, Jeff, about 20 percent of electricity used in Hawaii is used to cool buildings, air conditioning in particular. Tell me about that. Are there alternative solutions on the horizon like seawater cooling or what other initiatives might we put forward to try to address that part of it? Seawater conditioning is a great solution. We don't always think of that resource that's just offshore and it can actually provide cooleth. You just go down deep enough and the water is pretty much cold enough to provide air conditioning. So there's a project proposed that's currently being developed for Honolulu and they're signing up contracts that would pipe that cold water, actually bring it up to shore, go through heat exchanger, and then bring that chilled water through buildings for air conditioning. So using our cold ocean resource for AC and a similar project they're looking at in Waikiki, which really has a 24-7 air conditioning demand. What else might we do to not waste so much air conditioning? So glad you asked. There's a bill at the legislature to do what New York has done, which is require stores or restaurants if they have the air conditioning on to keep the doors closed. This is something that most folks have experienced if you walk down Kalakau Avenue and Waikiki, you get the blast of cold air. The temperature there is usually inversely proportional to the price of stuff inside. We think a common sense solution to just, I mean, if we're reaching 100% we at least have to do the fundamentals right and that's being efficient with the energy that we do create. So we hope to pass that measure this year. It doesn't mean you have to close your doors, you just have to have the solution to make sure you're not leaking that air conditioning out. It could be an air curtain or something like that. So you could put like the plastic curtains or something or a fan air curtain. Wonderful. Sounds great. Do you think that seawater cooling could be used? I'm interested in my own district. We're proposing an ag park that might use cold ocean water for chilling for cold storage. Do you think that's a possibility? Could it be used for that? It could be also for maybe hydroponics too, in a way. It's going cold where the car is. The challenge is always looking at how far apart things are. That was the issue with Honolulu is how far can they take it where the the Marshall price doesn't, yeah, it still pencils out to put in the pipe. But if you have an ag park you're going to get around a lot of those challenges of digging up streets and everything. So it might be, this is something what they do at K-Holy Point, you know, with the chilled water. And they're growing cold crops. Right. It opens up a whole new. It's interesting because they're running cold pipes through the ground and just being cold condenses water from the air and you're actually getting fresh water as a result of piping that cold salt water through. Tell me about the Sustainable Transportation Coalition. I hate to call it Stitch, but its acronym looks a little bit like Stitch. It is Stitch, you guys are involved. It's somewhat thoughtful because the idea is transportation is not just one thing. It's walking, it's biking, it's transit, it's Uber or what have you. So can we stitch all these options together to make sure people have choices? But can we do it in a way that doesn't use fossil fuel? And this is sort of a restructured existing organization that was called Honolulu Clean Cities. Now it's statewide and the idea is just to really address our transportation challenge and getting all the pieces to work together. We think this is important, not just for solving transportation, but actually for solving our entire energy challenge. And this is where it gets kind of exciting. As we add electric vehicles to our power system, for example, we're adding batteries that are on wheels and we need a lot of battery storage on our utility grid. So can we kind of fix both problems at once? And these electric vehicles, we can charge them at different times of the day to absorb some of that extra solar in the middle of the day and possibly even push it back in the evening when we need more of it. You can turn the charging on and off pretty quickly. So if you have a cloud that comes over solar, for example, it just gives you more tools to be able to balance the load and the supply in the grid. So it's easier to solve these two problems at once than just alone. So that's why it's exciting. But it's not just electric vehicles, it could be hydrogen as well, hydrogen developed from, you know, you name it, any renewable resource. How's the electric vehicle program going in Hawaii and what's next for EVs in Hawaii? This is a place I think we're going to see incredible growth. We hit the 5,000th electric vehicle in December last year, last month. And it's curving upwards, even with the lower gasoline prices. Still is increasing. Still people are, yeah. And I think it's a number of reasons. People, anyone who's gotten behind the wheel of an EV knows what it's like. It's fun to drive. It's fun to drive. I have a little Nissan Leaf myself over here in Oahu. There you go. I love driving past the gas stations. I'm thinking I'm never going to stop there. And then you charge to the capital. And the only thing you need to replace is the windshield wiper blades, right? So I mean, there's a number of benefits. I had to put air in the tire once, that's it. So technically I stopped there once. And so as more people experience it and then the more models that come out, Chevy has one that's coming out this year. Perfect for the big island because you're looking at over 200 mile range. So we do need to do more to support electric vehicle infrastructure as it grows. And that's going to be charging stations. It's going to be ensuring that there's parking. But we're really hitting that inflection of people adopting electric vehicles. Well, if I know on the big island, I'm part of the EV club. And we're pushing to complete a network of charging stations so that so that one can drive around the island with confidence of getting back because, you know, the distance is just such that Nissan Leaf, for example, couldn't reliably go across. I think we'll get there because the new the new models coming out to have new models extended range. And plus we're getting a lot of those charging stations put in. Our electric company has been a very much a partner in making this happen. As you might expect, there's so much electricity, but they've really been part of the solution. I'm very excited about electric vehicles in particular. And at that point, the other thing that I think is really important for electric vehicles and to really capture this value of pairing it with a renewable grid is workplace charging. You know, so many folks go to work, they plug their car in and it sits during the middle of the day when we have this abundance of sunshine and energy. And I see if we can start to get more workplace charging, we can really take advantage of that benefit. Is there a push to do that? Is there any kind of not a scope and scale that we need to make it happen? Workplace charging. Okay, great. Tell me, what is a clean, what's a clean filet and what's a mode shift project? If I'm saying those right. A mode shift, easy one to address. Okay. There if you're, you know, you typically drive your car to work. Can we get folks on a bike or on transit or rideshare or some other program just shifting the mode? Okay. And that's, you know, you look around Europe and other places. I was in Vancouver recently, they've done a really good job with that. I think it's a convenience and providing the choices. You have a myriad choices. You don't have to jump in your car and if we can give people those choices and then use some social pressure too. I think the more people see people on bikes or see people walking or using ridesharing services, the more we'll get. Do you think the Department of Transportation has a role to play in establishing bike lanes and making that the more acceptable on the roadway or is it more of a private effort? I think it's going to be mixed. I mean, yeah, we're going to see, I think, some encouragement from the public sector, but you see how fast the private sector can move. I mean, Uber and Lyft and those services, I mean, if given a path, they jump in. I'm guessing this is clean fuels, which gets to the biofuel question. Biofuels, which is important for transportation. And it's been a success story, certainly over in Hawaii Island with a Pacific biodiesel's facility. It's something that I've been driving on for a decade is biodiesel. And that's predominantly made out of waste, fats and greases from restaurants, but we can grow it here as well. And I think we'll see more of that as they've experimented with different crops that they can grow. In fact, the gas company is looking at some different crops that they can grow to make natural gas, truly natural gas, not out of fossil fuel, but out of locally grown. And so a measure that passed last year provides a production fuel tax credit for folks that can actually deliver locally grown fuels. That would apply to that. I know there's a program in my neighborhood, there's a fellow is trying to get an oil palm project off the ground and Pacific biodiesel has expressed a lot of interest in it. And I think we have had a pilot program, but he's trying to ramp it up to a commercial scale. Do you think, I mean, a lot of, I hear sometimes I hear electric vehicles versus biofuels versus hydrogen vehicles in the future. Are they all going to play a role, do you think? Is it too soon to know what it's going to look like? Definitely too soon. Or maybe there's option four that we have no idea. It could be a Mr. Fusion or a flux capacitor or something. But I think one will dominate. Right now it looks like electric vehicles because of all the work in batteries and how it pairs so well with a grid. I mean, everyone has an outlet at home, they can plug in and use it. We don't have that hydrogen infrastructure yet. But hydrogen could be pretty amazing because hydrogen's unlike, well, different than electricity. It's not as perishable. I mean, electricity you have to use instantly or put in a battery. Hydrogen you can put in those tanks that you see, just like that we store and we can store it for months, years. And you can fill up a car pretty quickly, if you had a question. And fill up a car. And that new Marai that Toyota is selling, it has a five kilo tank of hydrogen, which probably doesn't mean much. What it translates to is about 150 kilowatt hours of electricity. And you think a typical home in Hawaii uses about 20 kilowatt hours in a day. So potentially you have a car in your garage that can fuel your home for seven days. That changes everything, right? If you can fill up your car. And then if you need to, you have solar on your roof, maybe batteries. But then you have your backup in your garage that you can power your home on. Who knows what that's going to look like. But we see some of the bigger players starting to look at this. JTB, Hawaii, they were looking at some of their buses if they can repurpose them to electric or hydrogen. I think they're looking at electric now. Electric buses. Which would be great because if you've experienced some of the trolleys and the buses through Honolulu and Waikiki, probably over on your side too, they're loud, diesel, polluting. The ones here are open and everyone inside is exposed to that. You might imagine a silent, quiet, clean bus. And it would project the right image too. So we talked about biofuels a little bit. You have a bill that you've submitted relating to a vegetable energy production. Can you tell me about that? I think this may be a bill that you introduced. And it's related to that measure last year providing a production tax credit for renewable fuels. But we think it's important because we're right at that cusp of this being profitable and that's the proper role I think for tax credits is to provide a boost to get them more mainstream. In that regard, you mentioned the tax credits for renewable fuel production. Now there's also, did we pass tax credits for energy storage or is that something we're still logging over? Discussing, yeah. There is some measures at the legislature now looking at a standalone credit for energy storage. So last year we tried but failed. Failed, that's right, yeah. Folks can take advantage of a system credit. So if you do have a battery that's in combination with a solar system, the current credit applies for that. I see. So that would include self-supply type standalone house. Right. But I think we're getting to a point where we want to encourage people to get battery storage just because it's the right thing to do for the grid. Even if they're connected, yeah. So tell me if someone wants to get involved with Blue Planet Foundation or learn more about the projects you're doing, where can they find you? You can find us online at BluePlanetFoundation.org. Is there such a thing as membership? Can they sign up to be a member? It's not that kind of organization. We're not a member organization but we have a lot of friends. Friends, okay. Blue Planet tiers, folks that volunteer participate in other ways. Blue Planet tiers, okay. And that's, you know, we have everything from a student energy summit where there are a lot of volunteers that want to do more education stuff to policy sorts of things. So excuse me, Jeff, I have to interrupt you because we've run out of time. I'm here with Jeff McElina of the Blue Planet Foundation here on the Ruderman Roundtable. We hope you'll join us again. Mahalo.