 Welcome to ThinkTech. We have Hawaii, the state of clean energy, and we have Mina and Marco and me on Mondays at 12 noon all to talk about energy here on this network here, the ThinkTech network. And we are delighted, and more than delighted, we are ecstatic with this show. First, Marco Mangelsdorf joins us by Skype Audio from Provision Solar and Hila, welcome Marco. Greetings, J&J, and I have a special quote of the day I wanted to share with you, which goes, in this world you must be oh so smart or oh so pleasant. Well for years I was smart. I recommend pleasant. And that was from one L. Wood P. Dowd, who was the star character in the movie Harvey, played wonderfully by Jimmy Stewart. So I can't tell you how happy I am to be with two incredibly pleasant dudes such as you two. Well let's introduce the second J. Jay Griffin just recently appointed by David E. Gay as the third commissioner on the Public Utilities Commission. It turns out to be a really important job right now and a really important appointment for all of us. And we are ecstatic that he was appointed and that he's sitting right now on the PUCJ. Welcome to the show. Thank you. Thanks for having me and good to see you on the screen and hear from you Marco. Yeah. So let's talk about you know the background of it all. You were appointed a what couple months ago I guess? In May and became effective June 5th. Yeah okay and your interim appointments awaiting confirmation by the Senate. How does that work? And you're sitting right now. This is you know fabulous. Yes. Sitting interim commissioner. Been there for a little over three weeks and we've had a couple of big orders that I'll talk about in a second or relatively big important things. And as you said I still have to have to go through confirmation. I've been talking with senators and getting to know them. Giving them a chance to get to know me and we'll see whether this comes up during a special session or is taken up during the regular session. What makes you different Che? Why do you think why do you think David E. Gay appointed you? Oh well you have to ask him on the show someday. Okay I will. No what I told him when I had a chance to talk to him. I've always been a strong supporter of the state's vision clean energy goals and having the opportunity to contribute to the transformation that's ongoing I think is a remarkable remarkable opportunity that I was thrilled to have an opportunity when he asked. I've spent a lot of time working the energy policy and some of the renewable technologies I think that I bring some of that focus to the position as well as spending four years of the commission as the chief of policy and research been deeply engaged a lot of the key dockets that we have going on and ongoing transformation. That's perfect you've been in policy for the most critical four years of our history on energy that's for sure. You've seen you've seen the most incredible things happen you've seen for example the next era process that was mind-blower. I like to say the best is still yet to come and that was part of what was intriguing about this position the ability to help see that through. Yeah well let's take a moment to go through your bio in terms of training your arrival on these shores your what you did for HNEI what you did for the PUC before and you know generally what you bring to the table. Sure I actually first arrived in Hawaii in 2000 and worked for a non-profit on Kauai. I was fortunate to meet your other host Meena Merida at the time and get to know her and her family. She likes you a lot by the way just to add that. She did hire me offer a job at that point to come work on her staff when she was in the chair of the energy committee in the house and worked with her and helped that session we helped pass the net energy metering law and at the time where they're noble portfolio goals and that experience working with her particularly in that session really you know brought my interest to the energy energy issue and I went back to graduate school and worked on a PhD focused on energy policy and modeling of energy systems and came back it was fortunate to come back to Hawaii and offered a job at the Hawaii Natural Energy Institute and started in 2009. Spent several years working on different grid integration studies and demonstration projects and the chair in 2012 asked if I would take a leave to come work at the commission as the chief of policy and research. It was supposed to be two years and ended up four years so I went back to HNAI for about 10 months until the governor called a few weeks ago. All right then you know it's so interesting was it a surprise by the way because you were in the policy arena for a long time you know there are a few people who have been so intensely involved in policy for such a long period in their careers. Were it surprised to get the phone call? Yes it's always a surprise I mean you you as part of the reason is I talked to my wife you never you may never get that phone call again. So yeah I mean it's you never know until person's on the other end of the line says do you want to do this. From the time you decided to study energy and policy and energy which is I mean that was a really proficient decision and a wonderful decision in these times you know you were you were futuristic you knew I think what was going to happen. How has your view of it changed if at all? I mean are you involved in a dynamic where you become more passionate, more interested, more infused you know with with the subject. That's a great question I think part of it Hawaii has really always been on a leading edge you know with the great wealth of renewable opportunities that we have here and you know what we've seen is technology is only continuing to improve and what we thought was nearly impossible a while back we continue to see breakthroughs that make it far more problem you know probable lower cost and nearer time frames than then we had thought even when I started studying these things 10 years ago or so even a few years ago some of these technologies. Yeah Marco your turn what do you want to know about Jay Griffin. So Jay you've been you've been in the big chair now for three or so weeks what has surprised you the most as you've ascended to one of the three big chairs there? Sure well a couple of maybe one observation you know when I started in 2012 one of the tasks or goals that Mina gave me was to help oversee rehiring and reform of the policy and research section and so when I compare the staff we have now to that time frame as part of the reason I was interested in coming back there's just been substantial increase in the capacity and professional expertise and it's really exciting to work with the people that we have at the commission makes our job as commissioners easier can trust their judgment and really dig into the issues that we have so that's a not so much a surprise but that's been really good that I knew that or I thought that would be the case and it's been the case so far maybe a surprise we spend far more time dealing with non-energy related matters than even I had anticipated because I was a little less involved in some of those things so a little more time signing motor carrier related orders but we so that that that was probably the biggest surprise so far had a good working relationship with with Chair Oase and Commissioner Akiba known them for a while now so I'm actually thrilled to be back and have been enjoying it very much yeah and and last Friday you signed an order yep is that the first one you signed no no we've been actually like I said there's 10 15 orders a day with some of these other matters so there's been quite a few but yeah I wanted to talk about uh hasn't kind of gone out in the news yet but it was posted on our document management system the commission approved the 20 megawatt solar project this is one that the point electric companies asked for that they would build on and operate themselves it's been the first of that kind in a while uh it's it came in at relatively good pricing at nine and a half cents a kilowatt hour the commission that's pretty good it's it's an improvement from it's a steady progression and improvement um each iteration of these projects and you know the commission's been trying to help facilitate the ones that you know is the the downward trend and pricing continues we approved it um within the timelines that the parties had asked for and one one thing I was talking to Jay about as we started there was one element uh the approval that is relatively new we've we've asked the companies to come back with what we call a shared saving incentive mechanism what is that the way this works there the companies have gotten bids for what they think it'll cost to build this project but until they go out and get the final bidding and build it we don't actually know we've just said that you can go forward uh build the project and certain costs are capped but this gives them an incentive to go out and be really aggressive in lowering the cost from what they received their estimates you know we know that PV costs are going down so we'd expect that from the time they got the first bids the construction there may be opportunities for savings and so if the utilities can come in with a lower number they have the potential to share some of that savings partly with customers partly with their investors and so we think this we we hope that this will give them good incentive to go out and be really aggressive as they do the the final bidding a national construction of the project so there's a new thing I could follow up just on that exact subject my friends Jay and Jay it would be for for you Jay Griffin do you think there's still a justification for preferential pricing to be justified in terms of renewable energy projects feeding into the grid or are we really in a place where that essentially those days have come and gone and it really is the focus on the lowest cost-effective renewable energy pricing we can get so I'm gonna I'm gonna have to duck on that question a little bit Marco I think as you know we have a proposal before us that is seeking a decision on that very partly on that question I mean there is language and statute giving giving the commission the ability to consider preferential rates and to review these projects we've had a prior decision related to Maui County on this so I I'm gonna have to duck on this one good choice excellent response sorry I know it's I mean it I'll go back to what I was saying I mean I think from from the commission standpoint reviewing all of these projects going forward the expectation is that costs are going to continue to decline we've seen that trend with a lot of the with solar projects with wind projects and particularly with the inclusion of battery storage why is that why are they declining that way you have a handle on that sure I think there's a it's been a few trends you know partly going on here in Hawaii but but largely it's just been the growth of of that industry globally has driven down the cost of producing a lot of the key components so that the solar panels inverters a lot of the key core components energy storage technologies cost are declining rapidly so we're seeing you know declining prices across the board I think there's also been a lot more local experience and commercial expertise developed in developing these projects so we're we're bearing the benefits of all these things going on and I think you know our viewpoint is that we from the perspective of reviewing the projects we expect to see continue declines right now you now you've got a handle on the trend and if I could just momentarily uh channel uh chairman randy awase he spoke at the verge conference uh gave a presentation which I have read with great interest that our friend Henry Curtis posted on his blog and what I'll quote to you is the following we have internal criteria the downward trajectory for energy cost as we look at projects as we look at dockets at that level we're going to lead at that level we're going to make the decision so I would I mean I guess my argument would be that there certainly was a time when renewable energy needed a boost up needed incentives because I've been at this a very very long time and I certainly very much appreciate those subsidies and incentives but I think we are largely past that time where you know there there have been such rich cost reductions especially with solar pv that there needs to be a focus on what's the best bang for the rate payer what's going to do what's going to be the best path to be able to drive down rate costs and and people's electric utility bills so comment I'll look forward with eagerness to see how the commission decides on that particular socket regarding uh who knew him the no more comments what do I get out of this though is this some interesting groundbreaking things happening here number one is the utility itself is involved invested in this in this project the one you mentioned at the navy yeah it'll they'll they'll own and operate this one that's unusual that hasn't happened very much well the most recent one a few years ago the commission denied yeah okay but yeah and they made a policy choice back in 2008 that they weren't going to be a proprietor the utility didn't want to actually be the owner but they seem to have softened on that idea there's been and there was another recent project the school field barric power plant is another project that the commission approved that is a new partially biofueled energy source so I mean well it seems to be changing and it's interesting that it's changing only for these military installations it's reviewed project by project there's been you know kind of no clear across the board policy decision yeah yeah but I mean but they're coming at you though and it's changing from the utility point of view I think they want to do this yeah they want to do it and again getting back to the specific decision I mean I think on most of the criteria particularly some of the ones that Marco mentioned you know this this ticked all the boxes and you know again we tried to look at ways that we could further keep you know bringing costs down with these projects and align that that incentive what with what the utilities as they go forward and and bid and do the construction it's all good that so that was you know that was an exciting one to be a part of and I think we're talking before the show also we'd receive the draft of the utilities grid minorization strategy just last last week just last Friday also something that the commission had asked for as a part of a prior order dismissing the the earlier iteration of this and you know that's come in came in on Friday I think the utilities have done a much broader effort with community engagement customer engagement and that that shows them what they've submitted and they think they plan to spend another two months or so soliciting feedback and submitting a final plan to the commission by the end of August yeah and this and the period of this draft consideration is that they want to open it up for review and comment by constituents by by the public I suppose yeah and I think they wanted to give it enough time where they could both get the comment and have a legitimate amount of time to go incorporating that feedback and make revisions yeah it was and it's not too long a period I mean when always is concerned when things take a long time a two-wit the psip is seven months I don't know if you're working at that or looking at if you have any feelings about the speed at which the commission should move the well having been there for four years um sure it's something that um sorry I mean the staff that weighs on us heavily at times certainly the people's criticism saying that we're dragging some of these things on too long too long um so I think there's a balance there I mean the commission does have a job in reviewing reviewing carefully a lot of the things that are before it it's been a pretty complicated time I mean the the kind of the particularly these larger plans far more complicated than they used to be in the past so I can say it was one of my reasons for wanting to come back was to help us do our job it's not always quicker is better but I think a lot of a lot of cases we can move these things faster again why I wanted to reiterate on our our last order we have hit the timelines that people have requested for some of these you know modestized projects let's take a short break Marco J will be right back after that to talk more about what happened at verge I'd like to know some of the initiatives and some of the things you see as the priorities going forward would be right there living in this crazy world so far up in the confusion nothing is making sense for me and there's got to be solution how to make a part of today we're back we're live we're here with Jay Griffin and also Marco Mangostorf and we're talking about Jay's recent appointment and his being seated he's actually seated now on the PUC it is complete and that's great so congratulations again Jay Marco you had a question you were burning with a question let's go to that for Dr. Griffin you know one of the biggest things that's happened energy wise in our state over the past several years was the attempt of next year energy in Florida to purchase Hawaiian electric industries without the bank in other words purchase the utility companies and I saw you there day in day out Jay even though I wasn't at the hearings each and every day I was there enough to see you in the background there over by the windows and my question to you is what are your principal takeaways of that process and more importantly what's your takeaway your takeaways as far as the decision that was made to to turn down next year as a bid without prejudice what what are kind of the principal lessons that you got out of that long 17 or so months the 18 19 months the journey good question so a few things as you noted I was one of the kind of the key staff on the core team involved in in well really only almost every aspect of the commission's work on this so let me take this in a few parts I think so I think one of the lessons I learned you know process rule that I mean this was the biggest case that I think had ever come before the commission and we looked at all of each other and said probably possibly ever in our careers and understood the importance to the state and so the process was was critically important and you know there has been some criticism of the commission taking too long but I think it was important we did an island wide public listening session or sessions that were I mean remarkably well attended in almost every every location that we went to so we went you know anyone in the public could show up provide their comments you know this was before well before we started the evidentiary hearing you know we had a very well laid out you know process for the parties for filing all of their briefs and replies before the case we also accepted every party who made a petition to intervene we gave at least we gave people participant status so we tried to be inclusive and and get the feedback from all the different perspectives that were here in the state as you noted we had a 22 day evidentiary hearing some of the reasons for that taking so long were I mean the commission gave the opportunity for everybody to question each other parties didn't have to question certain witnesses so I think some of that was was in the within applicants control on how long they wanted that to take but they they chose to question everyone that had been a formal witness um you know and then we made our deliberations and or you know as staff we looked over and reviewed things but the commissioners made their decision which was well known I think you know the main takeaways I think were partly in the attachment to that order or you know the order itself was very long gave the reasoning for the decision itself but some of the takeaways to me were also if you know others looking at this process in the future we gave the commission gave guidance on some key elements to take into account and I think you know again I go back to process was important here from the commission standpoint you know so there's an expectation there but as well as you know how another party may want to go about that in the future and and build possible support among among a broad constituency and instead of people that are all affected by a proposal of that nature yeah so those are takeaways I mean I again I I think my view it was a it may was an extraordinary opportunity to take apart take part of uh something like that part of why I felt like I could be prepared to be a commissioner having kind of seen that the broad feedback that we got from people throughout the state and get an understanding of the different few points um but you know we'll see you know what what the future holds yeah so Jay as you were sitting there as you were sitting in the background there did it ever ever cross your mind that you might be sitting in one of the three big chairs at some point actually no because um I at the time I think I said it earlier I was on during my whole time as staff at the commission I was on leave from the university and that was renewed on a annual basis and you know after four years they started asking you know you're starting to look like somebody else's staff and not a university faculty member um so you know kind of towards the tail end we were already planning basically that I was gonna at some point I was going to go back to the university and you know the commitment I made to the chair was to help take through from the staff standpoint kind of our our final role in the process and that at that point I had to go back to the university and so you know my planning was on you know what I was going to do next when I went to the university not that I was going to be up on the the stage at some point Marco you wanted to ask about um you know the the one company initiative at Hawaiian Electric why don't you ask that that question now sure do you I'm sure you're aware Jay that Alan Oshima is one of his big pushes since he's been taking the big share at Hawaiian Electric is his one company initiative and that may be with an I at some point to having let's say a single electric rate structure for all five of their service territories all five of their islands that they serve and I was wondering if you'd had a chance to think about that at all as to the desirability or feasibility of that type of approach well okay so which part the well okay let me let me take the first part the kind of console I mean yeah I've I've been briefed on their one company approach and actually I think it goes back several years the thought of of going through that and in my understanding is they've diggled certain core functions of the company they've tried to consolidate um try and reduce some of the um overlap that they had get consistency in certain procurement of engineering practices across the different companies so I think you know that from a just kind of getting gaining efficiencies across the company standpoint uh sure it makes a lot of sense as far as the they'll move towards single rates across the companies I know this has come up in in a couple different proposals in the past um yeah I I mean I think to the extent I mean we're we're always going to be supportive of where you can find efficiencies you know without kind of sacrificing some of the the operations but as far as you know where I see that potentially headed I would have to see a specific proposal that the companies would put forward um just going to the uh we only have a minute or two left you spoke about what fast it goes fast tell you that's why it's come back uh you talked about three you know principle um issues uh trends uh events uh that you thought were important what what are those three sure thanks jit and I've talked to Marco a little bit this in the past yeah I we have a lot of different proposals or proposals and dockets before the commission and I've been asked whatever what do I see as the priorities by many people as I step in this role and to categorize uh looking at the next round of procurement of utility scale renewables the companies have asked to start up bidding on every island going to be a major new round of purchasing and you know as we talked about earlier the expectation is that we're going to continue to realize you know declines in cost for these projects uh we have a number of different dockets related to the ongoing reform of distributed energy resources and developing new customer choice options um and they're in various stages but I think you know one of my areas of priority focus will be you know bringing forward some of these reforms more quickly and helping stabilize you know what I know it's been a challenging period for that market as well as develop new options and then things I talked to earlier ongoing reform of the utilities business model and some of the regulatory practices overseeing that the chairs talked a couple times in the past about commission's intent and open a performance-based rate making docket I think that'll be a a large comprehensive effort but we're shared savings like in that deal with the navy exact and so those are some some elements of that what that whole structure could look like and you know I did want to focus on that proposal because I also wanted a lesson is that has been that we have a lot of discrete opportunities where we can implement our testimony's ideas and not just have to wait for some some large comprehensive docket to come to resolution over several years I think we're going to use that approach where we see appropriate as we try and resolve this in across all these different topics how do you see the tension between you know solar on the on the utility side of the line and solar on the rooftop side of the line because we've watched solar and scholars you know decline and Marco has kept close notes on that the past about two years and more where's that going to go I mean it you know to me it seems to be that there's the utility side of the line is growing in terms of the size and scope of solar installations how do you see it unfolding in the future great I think we're going to need all these resources to meet the state's energy goals given our current you know relatively high cost and we're we're going to see a lot of interest in customer choice by technology so I guess I try not to see it so much as a the tension between the two that we're going to try and set policies in place to find a balance so well one other thing is you know going forward you know we've had a kind of cloud over us for that 19 month period in which next era was that issue and then you know we and then we kind of we're still reeling I think we I mean the whole community still reeling for a few months after that but it seems to me and you were there you spoke in fact all the commissioners spoke at the verge conference just last week and it seems to me that there's a there's a there's a light somehow at the end of the tunnel and the cloud is coming off somehow do you agree with that and what role does the commission have you know in in taking the next steps if you will going forward and sort of speeding up the process toward a hundred percent so what yeah I think there was the question of how the merger would be dealt with was a big cloud just very of uncertainty and then I think the next one is how the commission's going to rule on some of these larger dockets and setting forth some of these procurement processes or kind of the new programs and tariffs that you resource are going to that customers will be involved in I know there's a lot of interest in how we're going to work on those in the next few months and that's why I've listed them as my priorities I I see that you know where we're kind of these regulatory decisions are the layer of uncertainty right now and clarifying those sooner I think we'll bring I just I see a lot of great opportunity across all these fronts in the next few years and so our our path is to help make some of these decisions we'll do the best job that we can I think as we bring more clarity then there'll be great opportunities across the board great Marco it's time for us to summarize and close and I I want to leave that to you well it's hard for me to follow in the footsteps of J and J over there but I think it's been a great first gathering of the three of us hopefully mean I can join us the next time because I mean we could go on for considerably lower than considerably longer than our a lot of time and I just think it's great to be on with the two of you and I hope we can continue the conversation as we go boldly where few island chains have gone before well I want to thank both of you for having me on and as I said to J earlier I hope to come back with many reports of good progress in the coming years great thank you so much Dave Griffin thank you Marco thank you guys great to have you guys on I hope we can do it again soon likewise hello