 Live it's a Monday morning. I'm Jay Fiedel. This is Think Tech. We're talking about energy, energy 808, the cutting edge. Why 808, the cutting edge in energy. And we have Warren Lee. Warren Lee is the president, CEO of Honu. Who Honu? Who Honu? You let me know. I mean, did you set up that name so you could confuse people like me? Who Honu? Okay, I know again. It could be a great name for a condo project in Kakaako, by the way. Okay, who Honu? And that's been going on for a dozen years anyway. It's now it's evolved into a huge big fight. And there's so many players involved. And I just want to get the players down straight. Okay, so just I made a list. First of all, you got the activists who don't like the project and there must be 2030 activists in there. I try to think of an activist who wasn't involved and I'm sorry I couldn't think of an activist who wasn't involved. You got some political guys, you got some senators from the Hawaii State Senate who support the project. And I guess that means that, you know, the political establishment is largely behind it. You know, legislature, including former chair of the energy committee, Mina Morita. That was interesting to see that she likes the project. The PUC has ruled against the project. We can talk about that in a little while. The Supreme Court has, I don't know if you want to say the ruled against the project is certainly weighed in on it and made some, made some rulings there and we'll talk about that. And then you have, well, you have who knew what what is who know again you give me a kind of schematic about what it is. I mean I've seen various names for it over time. Various LLCs and corporations and what who is what what are you the president of and what is its relationship to all the other who home newer companies. Well, thank you, Jay. Good morning, and a lot to you and all your fans. Thank you, Warren. Thank you for being here. The It's through the legal process from going before the Public Intelligence Commission docket and what we registered as who who knew on bioenergy LLC is also known as who knew a lot bioenergy LLC so they are one and the same. So whenever it's a DBA doing business as a trade name. Right. So the, that's why when you see look at all our filings before the regulatory commissions PUC, it'll say who who know bioenergy, not to be confused with the everyday vernacular. And all is just a DBA. Hola. Hola. Yeah, business as whole. Hola. Okay. Okay. And who do you respond to I mean, are you the senior officer in this whole thing or are there other people maybe with the capital concentration wherever it is who you respond to in this deal. I'm the president of the corporate of the LLC, and I respond to a board of directors, which has 12345 members. Okay, who are the who are the members who own the thing. Where does the capital come from you have hundreds of millions of dollars invested was, do you have a big checkbook one. Yeah, I like to have one. Maybe we can do this together, but we have a private, we have a private investor who actually came in. You know, this project is some history behind this project. This project was started in 2008. 2008. That's about when I retired from the Hawaii election like complete. The owners of the plant came in and said, we would like to renegotiate the contract, or we'd like to have a new contract and all that at that time, but they were using coal as a field from Australia. He was called spark processing company contracts and I said in 2008, by the way, meet Mr. Jay Nassio, he's going to take over for me in two weeks. So you negotiate a contract with them. So, in 2008, they did petition, how co did petition the Public Utilities Commission for a waiver from competitive bidding framework. Why did they do that because it was a plant that was ready to go and helco was, you know, always wanted to put renewable energy on the grid. That was my, my terminology and under my watch, which is what we did between 1991 and 2008. So that culminated in a purchase power agreement in 2008 2013. So that was approved by the Public Utilities Commission was not opposed. And then between 2013 and 2013 and 2017, there were some issues that came up and the purchase power agreement was amended and restated. And with what we have today in 2017 part of that restated and amended 2017 purchase power agreement says, okay, you got a purchase power agreement now. We want you to finish the plan. I don't want to see you again. You know what, you know what, I mean, I know you're giving us the short version. In fact, there's a lot more here I was telling you before the show I, I have a serious case of ice train looking at just what comes up on Google over who. But let me go back to my question, who is the owner, who is put in this 400 and almost $500 million. The owner is a primary owner. After 2008, going back to your question. A new owner came in and about a new investor came in. I guess it's about the 20, 20, 16 time frame and said, okay, we can get this thing going, I will invest more money. He's the Johnson family. And then you have the other investors that had retained stakes in the, in the ownership. Where are they? Where is Johnson here? There's a lot of Johnson's in the islands. Yeah, yeah, that's why, you know, Mr. Johnson. No, they're from West Coast on the West Coast. What's the name of his organization? Is it a trust? I mean, what I just, you know, it's quite remarkable that any energy company could raise that much money. As a matter of fact, I would say, I'm sure you'll agree. And you have a lot of years and energy in the state of Hawaii that nobody has invested that much money in a given private project. Am I right? I think money is who invests the money, whether it's a financing company or a third party financing like normally is done through a utility does it, or it's an individual person really makes no difference. But the individual is committed to renewable energy and to see this project through. What Johnson was this and where? This is out of California, San Francisco barrier. Jenny Johnson. Now, was there a change of ownership in there somewhere? You mentioned that the was it was reinvestment or reorganization. And I know there was additional money put in with the last few years, in order to do the construction and so forth. But has there been a change of ownership from the time this thing started and what did you say it was 2008 or before? Well, I wouldn't say there's a change in ownership. The ownership is still owned by the company, which is who know bioenergy just that the major primary investor has changed. Okay. The investor I assume would be a substantial member of the LLC. Right. We're talking about talking about the, the entity, I think Delaware LLC that owns. Change in ownership in the Delaware company. Yeah, well that's where it's registered. Yeah, has there been a change in ownership in the Delaware company? Not that I, not that I know. But I'm talking about since the beginning. Yeah, I'm not sure about that. Okay, but as long as you've been associated, which is what 2017 or so December of 2017, he might have retirement. This is one interesting retirement war. Okay, so then we got, we got a bunch of law firms involved because this is getting very intensely legal here. I don't know when they all came in, but boy, you've had some very interesting proceedings. I can't think, maybe you can help me on that. I can't think of another energy project, which has had as much legal action as this one. There have been some, I mean, for example, the attempted acquisition of one electric a few years ago by, you know, what was it called? The next era, that a lot of legal action there, but mostly from the PUC. This one has multiple, multiple events. I counted three firms. Am I wrong? Are there other firms involved? Which three you counted, maybe. I counted the Dean Yamamoto firm, Yamamoto and Caliboso. Yeah, Yamamoto and Caliboso. Let's see, what is it? Bruce Voss's firm. And I counted Damon, Damon firm. The other firm I think you referred to is the Bronster firm. They represented us in the appeal to the state Supreme Court. Oh, right. Okay, but they're not involved anymore. Well, they may be. Too shamed, too shamed. No mainland firms. I think outside of Uno Oro, they may have been in a mainland firm before BW, before Warren was involved, that handled the part of the proceedings in reaching a settlement agreement with the Hawaiian, with Helco Hawaiian Electric on the, between the 23rd and 17th timeframe. Yeah. Okay, let's, the other thing I could think of is the state energy office, you know, under this administration at the time of COVID, they are charged with, you know, making jobs, making jobs in energy. And that, that would seem to comport with what you're doing. You know, you're making, I forget how many and construction of which is mostly already done, but in the operation of the who will know a plan. You're talking about at least 60 jobs in various aspects of the, of the production cycle. And the state energy office is supposed to be encouraging jobs. Is it encouraging you which side of the ball game is on is the state energy office on. Well, you know, we haven't heard too much from the state energy office in all of the since the motion for reconsideration was since the action since the order was filed, I should say, and since subsequently, you know, for the motion for reconsideration, but I think you're absolutely right. And what I understand the state energy office is supposed to be the facilitator the coordinator for bringing in all the state energies. Agencies to make things happen, primarily for economic development. Yeah, of not only energy but energy related projects and ancillary businesses. And jobs it's all about reopening and recovering the economy. They've been they've been instructed to do that. And I assume they would try to do that wherever a job appears. But if they haven't spoken what about consumer advocate as a consumer advocate, you know, taking a position on motion on your, you know, in your project and put it that way. Well, because my advocate in the our motion for reconsideration. My understanding is that the basically are not supporting our motion for reconsideration. Okay. And the governor is legal factors. Environmental considerations. The governor, the governor, the governor, you know, I didn't I read somewhere where the governor was supporting your project. He's still supporting your project. I hope so. State policy, state policy to be off of fossil fuels by 2045 J. I mean, specifically where he talked about you. Didn't he didn't he say that he liked this project for years ago he said that. Not recently, but at least a few years ago in his inauguration of speech in December of 2018, he did mention who know specifically projects like these need to be completed. Yeah. But he hasn't waited on the current motion practice. Not that I know. Okay. All right, I want to go to the second part that I wanted to talk to you about one. And that is where we stand. Let me let me frame it in my own mind that you tell me how right or wrong I am. Okay, so you had the purchase power agreement. It was revised a few years ago. And let's see and the PUC approved the project. But Henry Curtis and life of the land appealed that said you hadn't complied or the state that somebody had to comply with the thing about emissions carbon emissions. And it's a pretty good thing. Yes. Say it again. Greenhouse gas emissions greenhouse gas. I'm sorry greenhouse gas. You're right. It's that specific term greenhouse gases which is in the statute. Okay, I went to the Supreme Court and they said yeah. There isn't a finding on greenhouse gases and we are remanding it back to the PUC to make to give us further information about greenhouse gases. So let's decide here in the Supreme Court, whether that part of the statute calling for evaluation of greenhouse gases has been satisfied. Am I right. Well some mostly correct, but let me just add that the, what the Supreme Court ruled was that based on the decision and order that was written by the public utilities commission in 2017, it did not explicitly say a greenhouse gas study was done. Whereas in fact, what the parties argued other than life of the land was that the greenhouse gas analysis was done and was in the record and documented, but not in the decision and order. So in other words, that decision and order was flawed. So the Supreme Court ruled was that go ahead, do the remand. I'm going on the remand. Do the greenhouse gas study, give participants like life of the land and a chance to participate and also hold an evidentiary hearing. That's basically what the order said. Okay, so now the order is entered. This has got to be several months a year ago. The order is the Supreme Court. Oh, that was in March of 2018, I think. Okay, now it goes back to the PUC, because it's been remanded. And that and at the PUC, they determine that the waiver is no longer appropriate. And therefore, what they don't have to get to the question of greenhouse gases. Tell me what happened. Oh, a little more than that. So it's been 14 months, right? Remember, we only have half an hour more. We have an hour, maybe two hours. Okay, well, tell me, tell me briefly what happened. So in March of 2018, the Supreme Court remanded this back to the PUC. And 14 months later, the PUC issues and order say, we're going to deny the waiver. Therefore, this whole situation is moved. So what happened in this 14 months between the remand and July 9 with the PUC? The PUC came up with a procedural schedule on what we call evident for the process. So in the procedural schedule that they published, there was hard deadlines on when do you submit, to submit the greenhouse gas studies, submit IRs, interrogatories, and supplemental interrogatories. And we also did what we call pre-hearing testimony. Now during this period, we were asking, when is the evidentiary hearing going to be scheduled? And there were hard schedules for all this pre-hearing work, which was done in March by March of 2019. And we always got to be determined to be determined. So then all of a sudden on July 9, we get this saying, we determined that we don't need an evidentiary hearing because we're denying your waiver. And that's a short version. Was that issue litigated? That whether the waiver should be denied? When the waiver was denied? Well, was that issue litigated in front of the PUC? That is whether the waiver should be denied? That issue was never discussed. And it was, by the way, it was never discussed in the remand in the state supreme court. So that wasn't the waiver was never an issue before the state supreme court and part of the remand. Okay. Okay. I think I'll be so before the PUC. Rejected the waiver. There had been no discussion of it. That was the first time it came up in these PUC proceedings. There was no interrogatories by the public utilities commission or anybody else. Any arguments about it? Nope. It came out of the left field. Okay. And then I think you guys, through council, you filed a motion for reconsideration. A very substantial motion I might add for reconsideration. Asking the PUC to reconsider its decision. It's just its decision terminating the waiver. And I guess it's decision about having an evidentiary hearing over greenhouse gases. All right about that. Well, the motion for reconsideration. And that was quite lengthy because what we did was based on the order that the PUC issue, in which they described what was the concerns they had other than the waiver on the testimony and the pricing and everything else we said, you got to look at this, you got to do future analysis, and this is what would have come up with the evidentiary hearing process. But now you're denying us that due process. Okay, so you, okay file a motion for reconsideration. And I suppose that's pending. Has that been acted on granted denied as a, as a hearing been set at the PUC on that motion. It's pending. And so all I can say, if it's pending, there's no decision based on our motion for reconsideration. Okay, so now. And so, now put all what we talked about about the parties, the principles, the activists, the state agencies, the politicians put them all aside. And Lord knows they have plenty to say, but what really counts is, you know, is the legal aspect I firmly believe that that's why I would like to talk to you about that. First of all, are you a little concerned talking about these things as a president, while there's pending, you know, you could never get the PUC to discuss this right now, because they would say, you know, this is an action pending. The paper went to you and you talked freely about it. But the PUC cannot squasi traditional organization. Are you concerned about going public the way you have. That's why I'm talking to you, Jay, so that you can make the public and understand what the issues really are. And that's why we've done a lot of advertising or infomercials, so to speak. Yeah, this is what is happening. You should be concerned because this involves the future of what happens on the island of Hawaii relative to having renewable firm energy, because firm energy is needed. So it is to reap and the firm energy we have, which is biomass replaces fossil fuel. So how is that against state policy, and also by the fact that the utility acknowledges this otherwise they wouldn't have entered into a purchase power agreement. And the utility has supported. Am I right about this utility has supported your position on going ahead with the project right. In fact, they're still supporting us, seeing that we should have this evidentiary hearing and close this out. So, okay, put it. Oh, there's a question somebody. Okay. This is a little bit off the point. Forgive me, but I don't want to get all the questions and anybody has a question. Are the trees after initial harvest going to be grown in Hawaii and if so, what arrangements have been made. I guess that that came up in your in your papers I know and it was discussed in, I think it was discussed in Megan Fernandez article. So the question is, where are you going to get the trees for the, you know, as a fuel for the project. Yeah, well, you know, the trees that are now growing on the Amakua coast. And in co other replacement crop for sugar. When sugar went out of business, the last plantation closed in 1994. Eucalyptus after years of study by since you're an old guy, you probably remember him back buyers said, we need to look at an alternate crop to keep the economy going over here. So what had happened is that they planted Eucalyptus trees as a replacement crop. And this is the sea brewer the sea brewer land in Pahala there. See Brewer land in Pahala and on the Amakua coast, Amakua sugar land also. Okay. So you know, there's, and I don't need to tell you this, but there's a big island, Hawaii Island is a very big island. The seven major islands in the state of Hawaii could fit into 50% of that land mass. Do you have control of the land, do you have control of the land so you know you'll be able to get a supply of trees that are grown only. We don't own any land, except the land that where the plant exists, the power plant in Peppa Q. The other lands that we have we're either on the with forest or either lease or we have a license. So the whole idea of what we have is that we are commitment is to grow local product to be sustainable. The feedstock. And that can be done several ways. One is, if you have a lease, and you cut the tree, the tree will generally copies. You know, shoot up other shoots will come up from the stump, or if the stump does not copies or create shoots, then you, you plant another tree. Now there are also other lands that we could be planting trees on, but we don't have the control of the land yet. Now also let me tell you is that our plan is not only to burn eucalyptus from manage forest, but is to dispose of invasive species that can become available, such as the albisio, such as gunpowder, such as strawberry guava, such as the problem that there is on the mountain and monarchy of course, although ironwood, that's in the pasture. So we are not only. That'll be positive. How about reforestation? Are you committed to reforestation? Definitely. Definitely. So it's a, the eucalyptus is a seven year crop. And we're also in discussions with others. And I'm going to say who at this time, but if we take your invasive species, or we take the eucalyptus, perhaps there is, you would want to replace with something other than eucalyptus. And it could be something like sandalwood, koa, you know, the tree is a tree. I mean it's local varieties though. Native Hawaiian species basically. Yeah, yeah, yeah. Let me go back to the main thread because we only have a few minutes left. I'm sorry. I didn't want to get too far down that path. Okay, so right now we have this motion for reconsideration pending. And you're asking them to have a hearing. You're asking them to reconsider their decision on the waiver issue, whether you can go without competitive bidding and so on. And the Supreme Court is out there waiting because I don't know what would happen. I suppose, are there interveners in this PUC? There must be a lot of interveners. So it's like everybody is weighing in about everything. And so if they rule against you, I think I heard you say you go to the Supreme Court. You'll ask the Supreme Court to reconsider all these things at its level. And so the more litigation there, and I don't know if an intervener can appeal, but certainly the interveners would jump on one side of the other and file a meek eye briefs in the Supreme Court too. And then you have all this legal activity. And my question to you and who knows how that'll work out in the night. I wouldn't ask you to make a prediction about what the PUC will do. Well, maybe I would, but what do you think they're going to do, Warren? Well, I think if they do what they said they were going to do, Jay, that will be okay. And what they said they were going to do, if I recall correctly, on earlier production of think that the commissioner, the chair, the chair of the commission said, we will do an evidential hearing that we are, we've got the remand, we understand that it wasn't explicit in the, our DNO wasn't explicit. So we accept the remand, we're going to do the greenhouse gas study, and we're going to have evidential hearings when as soon as possible, where I'm not sure either Honolulu or maybe on the Hawaii Island. So I would think that you would take those words, the commission would take those words to heart and let's complete this due process. So you think you're going to, you're going to be prevail they're going to grant your motion for reconsideration. Well, it depends on how they weigh. I mean, obviously something happened, which we don't know what happened for them to change that direction. And that is the baffling part about it. So that's what an evidential hearing would hopefully. Take care of their concerns, you know. Yeah, yeah. So okay, if you lose the motion for reconsideration you would appeal if you win it and you go back, then, then it has to go back to the Supreme Court anyway because they said they wanted to consider the greenhouse gas information that is gathered by the PUC so that they could make a ruling as to whether the statute was satisfied, am I right? That's what I understand. I'm not an attorney, but that's what I understand. Well, I gave up my practice a long time ago. Okay, so the real, you know, I see delay in this. I mean, all litigation is delay, right? Multiple proceedings every time we turn around, several months or a year goes by. Even in this case, you've been trying to get this project organized. I say you and your predecessors for 12 years. And, and here we are with a, you know, a string of fights ahead of us. So the question is, what can be done to resolve this? Have you thought about what alternatives are possible? How you could satisfy those who oppose the project? Is there a solution here? Or is this just going to be batting heads till the end of time? Well, as you mentioned, there's many parties involved, whether it be the legal parties or the regulatory parties, the community, the minority community. You know, we have talked to them over the period of time. Some of them have visited our plans during an open house. We see they don't like our answers. They ask about water quality, ocean water. They ask about air emissions. We give them the answers. And other than that, you know, we're not going to give them an answer that I guess what they're easiest way to say is all the answers we give them is not to their liking. But let me also say is that besides the Public Utilities Commission, there's a lot of regulatory bodies involved like the Department of Health. There are the ones that do the air permitting, the water permitting, etc. And these are professional registered engineers. Some of them have been in the job a very long time. They're very proficient. They're very professional. And they are reviewing all our applications. And in some cases, most cases we have permits and we are moving forward. I don't know how do you resolve this in people's mind, but hopefully there's a way to do it. But everybody got to be willing to sit down and say, let's discuss this because ultimately at the end, going back to your question about what is the state energy office doing. This is jobs. This is the economy. This is diversification. This is sustainability. This is renewable energy. This is renewable energy with a new plan with best available control technology to minimize the impact on the environment and also carbon neutral and maybe even carbon negative. Meaning we should question more carbon at the end of the day than we emit because the trees are not going to grow forever. Please release me with two questions. Partly you've already answered it. Number one is, gee whiz, if you lose this after having spent $474 million in total, that's not all construction costs, but you're total. That's what I read in the paper. You're going to be looking to someone to compensate you for that loss. Who would you look to? Well, we would look to perhaps, first of all, the ones that gave us the approval and told us to construct this plan expeditiously. But that's a government agency. You can go after a government agency for that loss. Government agencies and courts change their minds all the time. Based on fact or based on what? That's a question for the attorneys, right? Okay, okay. Just take Roe v. Wade. Okay, well, that's one thing. But who would you look to? The government? I guess that, you know, would you look to anyone else? I think primarily we'd look at where were we given the green light to move forward? And why are we not moving forward now? That's the question. And once you know who the answer is, that party, then that's where you would seek to say, why did you do this to us? Was it justified or not justified? So the other thing is, suppose somebody came to you with a checkbook and said, why don't look, you know, would you please stop the project or convert the project? You know, it'll cost money to convert it to something else that would be less objectionable to them, to the activist group. Is that a possible solution? I think that's something we would look at. If they came with their checkbook. Of course, this is probably a decision that I would have to put forward before the bar, bar, bar board of directors. Because, you know, I don't see that kind of thing happening in a very quick manner. Nothing happens quickly. You could go back and grow sugar and convert it back to a sugar processing. Is that what you're talking about? Is there another energy possibility that would be less objectionable to the environmental community? Well, I haven't heard anything from the environmental community other than shut it down. Don't let it operate. I might not shut it down. But what I get, Warren, and I want to offer you a minute here at the end of our time, is that, you know, of course there are the legal things. And as I'm sure you will agree, this is a rule of law question at the end of the day. It's what is the law? You know, as opposed for example to some of the people who have taken positions on TMT. It's a law. This is a rule of law question. But the fundamental argument underneath seems to me, you can agree or disagree as to whether this is an appropriate energy project for the big island, for the state of Hawaii. I'd like to offer you a minute or two here at the end of our show to deal with that, to answer, to respond to the people who say this is not an appropriate environmentally appropriate energy project. What is your answer to that? The answer is very simple. It is an appropriate project for the island of Hawaii. First of all, again, it's renewable energy. This is an issue about that, Warren. Isn't there is a statutory issue that renewable energy is not the same thing as what you're doing. Biomass is not the same thing as renewable energy. Am I right? No. Where did you get that from? Yes, one of the things I read that renewable energy does not include burning trees. No, it does. It's renewable energy by definition or determination by the Environmental Protection Agency and the state of Hawaii. Biomass is considered renewable. Sorry, I want to interrupt you. What people are saying is not renewable because you've got a tree, the tree grows back, or you plant another tree. It's a crop. It's renewable. It's just like lettuce. It's just like wongbok. It's just like sweet potatoes. It's a renewable project. As long as you plant it back. Yes, or it grows back by itself. All right, anyway, sorry, I interrupted. Go ahead. Anyway, it's important because it's not only that, it's jobs. It's renewable energy. It moves us towards a 2045 mandate as soon as possible so the utility can meet its renewable portfolio standards. That's policy, state policy that we're trying to help them implement. The other concerns about the impact on the environment, whether it be the marine environment. I mean, that's why you have regulatory agencies again like the Department of Health with professional engineers reviewing the project based on what based on the questions they ask us, we submit all the data, they look at it and say, is this harmful to the environment? And that's where it should be with the left, other than someone saying, you know, any tree cut is no good. I mean, what's going to happen? Eventually this island will be covered by the island state will be covered by invasive species. And that's again, our give it back to the community is helping to get rid of the invasive species, creating jobs, not only in the energy industry, but ancillary jobs like ranching, pasture. But back to the environmental thing for a minute, what I did not see anywhere, maybe I missed it. And you have to correct me if I did miss it, but was there ever an EIS on this on this project? Yes. There was an E went through environmental review. And this question comes up quite often, Jay, is that is the is the land use properly designated for the plan. And the question this one before the county planning department, which regulates land use. And we also because we're in the SMA, shoreline management approval. This was, it was rude that this land or property is designated as a proper use for industrial purposes for a power facility. So does that mean you filed a what amounts to an EIS statement? We didn't file that. We didn't file that. That was filed earlier, many years under the SMA came into effect. And HPC was already in operation. I've been, I've been told Warren that we gotta, we gotta stop now. There are other questions I would ask you. There are other questions I would ask you to express, you know, the general concern that Hawaii should have a reputation for following through on things and and respecting an investment, but we got to go now. Thank you so much, Warren, really appreciate your time. All the best.