 This is Stink Tech Hawaii, Community Matters here. One, okay, we're back, we're live. Hmm, my goodness, it's Monday. Woo, it's not the first show Monday, it's the second show Monday. It's a very important show. It's Meena Marko and Me on Mondays about energy. And Marko is on travel, so it's Meena and Me on Monday about energy. Hi Meena, welcome back to the show, your show. There you are. Hi Jay, thanks for having me. Absolutely. We have such interesting discussions. And so, alone at last. How do we fill up this hour? Let's talk about a couple of things today. I mean, we entitled this show Planning Everywhere, but what about execution? And that relates to infrastructure in Hawaii requires both planning and execution. But let's warm up and I'll tell you a little about our trip, our Think Tech trip, only last week to Maui and Molokai. And I wanna just raise one of the things that came up in Molokai. We're gonna make OC16 movies about, we are making OC16 movies about both islands of what we saw and learned there. But one of the interesting things, which I know that you follow is this whole thing about entitlements. And so you have a project in Molokai, it's the Half Moon Project. And it's a big solar and battery, high-tech battery installation. It was going on before with, I think it was called Princeton Energy out of the West Coast. And they couldn't finish it. I guess they had a little trouble with public acceptance, among other things. And they sold their position to Half Moon. Now Half Moon is gonna finish it. In fact, we had a show two weeks ago with, I think his name is Mike Hastings and he's the CEO of the Half Moon Company that's supposed to do it. And while we were on Molokai on this trip, there was a lot of discussion about it. And one of the most interesting discussions was with a woman named Amelia. She has a Dutch last name and she is the principal of Sustainable Molokai. And they're in discussions with Half Moon and they would like certain entitlements for this project. They would like to have a percentage of stock of equity in the company and they'd like to have a kind of royalty, talking about 1% off the top, as I understand it. Now this is really important as a pace-setting development. It's not dissimilar from other similar negotiations and demands in the past. When you provide certain entitlements, quid pro quo, community benefits, sometimes millions of dollars of community benefits and then I'll be your friend and then I won't oppose your project. Something that's a little chilling about that and I think that approach has busted a lot of projects and here it raises its head again and maybe it'll work. Maybe they'll negotiate some solution where the community, that is the Sustainable Molokai community, will get some stock or royalties or something out of this and then they will agree to it. But there are ripple effects, there are implications of this as there have been we've seen in the past in Linai about the wind in Linai. We've seen it certainly in the TMT-30 meter telescope issue and various other projects around the state where activist groups who oppose the project would be willing to agree to the project if only you gave them a new gymnasium or maybe some kind of monetary consideration. Your thoughts, Mina, please. Yeah, well I think it all boils down to the power purchase agreement and first of all, the power purchase agreement has to be a competitive pricing. So if they can give the utility a competitive price while offering all of these benefits to the communities, good on them. But one shouldn't be looking at the power purchase agreement to subsidize these kinds of community entitlements or extractments, extractions or benefits or whatever you wanna call them. I think that's the main thing that the power purchase agreement is competitive and not something that's subsidized. Then the developer can do whatever he likes with his profits in sharing the developer side profits with the community. So I think that's the main point that has to be looked at. Yeah, well if you were a queen for a day or a year and you had total control over this, would you prefer it to be not, would you prefer it to outlaw it to say no, no, no? You purchase power agreement, that's fine, but we don't want you to promise activist groups because they're not identical to the rate payer or to the population, the electorate if you will. They're just a group that can speak loudly and make public statements and all. Would you say, no, we don't want this, we're not going to permit you to do this? Just give us the straight economics here? Yeah, well I think there's a really fine line between working towards the overall benefit of the community and what may, could be, I wanna say blackmailing quotes that you can't even consider the project unless you give us something and to get our support. I mean, we have to be really careful about this and especially if we're driving towards lower electricity prices for the community as a whole, that's a larger benefit than trying to grab a piece of that to developers high. So there's some really careful balancing that needs to go on here. I mean, somebody pays, nothing's free, but as a former regulator, what I wanna make sure is the rate pair is not paying for this. Already Molokai prices are being subsidized by the Maui rate pair and we wanna move away from subsidized rates to something more actual rates. So again, we need to be really, really careful in how we approach these kinds of discussions. Yeah, just a thought about it is that you said this, that if you add in to the price of doing the cost of doing the project, the cost of these entitlements, well then the cost of doing the project is greater. And then when I go to the utility for the purchase power agreement or I go to the PUC for approval, I disclose I have to pay X millions off the top and it costs me more and therefore my rate has to be higher and that's a legitimate statement. It's a legitimate argument. The problem is that you're paying some people and the result is you have a higher rate applying to all people. So a smaller group is benefiting, the larger group is paying for it. But it seems clear, the economics to me seem clear about that. And so either the utilities- Now, especially for energy pricing and clean energy pricing, we need to move to a more economic-based model and there was a time where the policy was we would subsidize clean energy. And we did it through tax credits, we did it through some subsidized power purchase agreements. But the economics have changed and what we really need is some relief for the rate payer right now. And so what we really should be focusing on is we want the most competitively priced clean energy projects available to us. Right, this would be the wrong direction. And to me that's beautiful. This would actually increase rates to the consumer, wouldn't it? Yeah. So I just wonder going forward, if we have this deal, which is a momentous deal, this is gonna have a huge effect on Molochai, it's gonna be a third or more of the power that right now Molochai is mostly diesel. Got a nice plant there, got a battery system, all that, but it's mostly diesel. And this will change things in Molochai, it'll be a significant impact if you will to the energy picture on Molochai. But what troubles me is that if this happens, it will set a standard, don't you think? It will be sort of an approved methodology where the community gets the entitlement, the extraction if you will, and then it goes forward on that basis. There'll be other projects where people might be inclined to oppose them, object to them, I mean, so easy to object these days. And this is how you buy them off. And so it could get to be de rigueur, you know, it could get to be the way things work all the time, the normal, doesn't that concern you? Yeah, it does concern me and that's why we need to be careful on how we approach these issues. And especially Molochai is a really special situation because right now they have too much solar during the day and not enough demand. So it's one of the reasons why batteries appear to be attractive as a way to resolve some of these issues because they can only back those diesel generators down so much without compromising reliability. Yeah. And so institutions like the Hawaii Natural Energy Institute and Hawaii Electric are working in partnership to look at these kinds of technical challenges for Molochai right now. So the basic problem, these numbers aren't, I haven't looked at them recently, but two years ago when I kind of looked at this issue, the net metering, the customers with net metering on Molochai accounted only for about 10% of the customer base and but they were causing the most impact to the grid. You know, in jeopardizing, like I said, so much, you can only send back so much energy to the grid without jeopardizing reliability. So, you know, how do you serve the other 90% of customers on Molochai without access to clean energy without access to solar yet making it the very electricity costs more affordable for them rather than increasing their costs. Yeah, that's especially relevant on Molochai because Molochai people are economically, a lot of people are economically disadvantaged, there's not a lot of jobs there, there's not a lot of money there, not a lot of investment there. And so we need to keep the prices as low as we can from Molochai is one of the highest rates in the state, isn't it? I think it's between Molochai and Lanai. And again, you know, the challenge of Molochai is you have a long island with, you know, transmission from one end to the other end. And then you have really small isolated communities like Kalalpapa, but the transmission and distribution is the bulk of the cost of Molochai, not so much a generation, but yeah, it's, you know, the transmission distribution contributes a lot to that high cost of electricity on Molochai. Well, you know, more and more, we realized that the low hanging fruit in terms of moving to renewables has been picked. And we realized that we have to invent systems that to deal with the need for infrastructure. We're at a point where we have technology that's coming down the pike that can help us. We have demands that require new infrastructure. We have the complications, complexities of the grid going forward, and it's all about infrastructure. And that means it's all about investment. So we have to manage the investment, manage the infrastructure, and manage all the purchase power agreements going forward in order to resolve those problems and provide that infrastructure. And we're going to take a short break. Meena Merida. Meena Merida is the principle of energy dynamics from a chair of the PUC. When we come back, Meena, I'd like to talk to you about infrastructure and how we deal with it, how we manage it, how we obtain the capital for it in order to move ahead properly at this point in the trajectory of our move to clean energy. We'll be right back after this short break. This is Think Tech Hawaii, raising public awareness. Aloha. I'm Arvi Kelly, host of Out of the Comfort Zone. And Think Tech is important to our community because it gives us a chance to learn more. We get to learn more, we get to give more, we get to grow more. Now, for the first time, Think Tech Hawaii is participating in an online web-based fundraising campaign to raise $40,000. Give thanks to Think Tech. We'll run only during the month of November, and you can help. Please donate what you can so that Think Tech Hawaii can continue to raise public awareness and promote civic engagement through free programming like mine. I've already made my donation, and I look forward to yours. Please send in your tax-deductible contribution by going to this website. Thanks for Think Tech.CauseVox.com. On behalf of the community enriched by Think Tech Hawaii's 30-plus weekly shows, mahalo for your generosity. Okay, we're back, we're live with Mina Marina here on Marco, Mina, Marco and me on Mondays about energy, and today it's Mina and me, and we're talking about our principal topic is planning. Planning everywhere, but what about implementation and execution? What about, you know, and in order to have infrastructure which we absolutely need for energy and so many other things in the state and country, I might add, we have to have planning. You really can't do infrastructure. You can't deal with it as an asset, depreciate it and replace it as an asset unless you have planning. And query, do we have the planning? And if we have the planning, how collaborative is that? Is it how coordinated is, or do we have 57 silos of planning, none of them talking to the other where nothing ever gets done. So do we have the planning? Well, what's your thought about that, Mina Marina? Well, I think, you know, one of the most, one of the most, how can I describe it? Most underestimated or undervalued, one of the most undervalued offices within our state government is Office of Planning which at one time, especially during the Yoshi administration handled coordination between departments and counties on a statewide basis. And there was some kind of constitutional kerfuffle. Kerfuffle, right? It said that it was unconstitutional to have any type of permanent offices under the governor's office. The Office of Planning was moved to, eventually they ended up in deep end, Department of Business, Economic Development and Tourism. But over the years, they've been undervalued. And I remember, I think it was at the Hawaii Energy Policy forums in Energy Day, the person speaking for Office of Planning said that the state's functional plans have not had a general update, coordinated update since 1992. And so now with our infrastructure aging and not only our electrical grid, but our water infrastructure, our telecom infrastructure, road systems, one of the most important efforts that we can focus on is looking at our state functional plans and really updating, not all of these plans have been updated recently, but updating with a thought to how to coordinate our infrastructure to get the maximum benefits and how to incorporate issues like resiliency, adaptation, carbon reduction, greater efficiency, sustainability. So, how do we look at the intersection of all these issues while we're updating the functional plans? Yeah, I think intersection is a magic word because I'm not acquainted with all the agencies and government that do planning. I imagine that most agencies do planning and they have their own little plan or big plan. So you have the state plan coming out of, I guess, the Office of Planning. You have the PSIP. That is the, what is it? What does that stand for? It's part of the electricity, part of the utilities. It's the utility. Operating resource planning, so the Power Systems Improvement Plan. Yeah, Power Systems Improvement Plan, which is a major plan of hundreds, thousands of pages provided to the PUC at its request. It took a while to put that together. It took a long time to get a plan together. Now it's a plan that's been approved, but there's a lot of other agencies that have a lot of other plans. And correct me if I'm wrong, but I don't think there's any agency that says we're gonna look at all the plans. We're gonna somehow, we're gonna integrate all the plans. We're gonna find the common points. We're gonna find the points of conflict and we're gonna work it out so there's one great big plan and we're not moving down the wrong road here and the right road there. We're gonna move down consistent roads and have consistent integrated plan. Is there anybody, do you know if anybody is doing that, putting the plans together, Mina? Well, I think people always point to Oregon as and having innovative planning efforts there. And yeah, there are areas that you can probably point to, but I think one is developing the mindset within the agency, within the staff of all of the issues that are emerging that we should be focused on and that planning should be done in looking at how to get multiple benefits from certain actions rather than real linear thinking that you're gonna build this project and this is gonna happen. We have to move away from that and think about it more as a system. And this is really important because we're spending billions of dollars in upgrading our critical infrastructure. The electrical grid for one, our telecommunication systems, our fuel infrastructure with reinvestments in the refinery, millions, hundreds of millions of dollars will be spent in these efforts. And the critical aspect of planning is we need some certainty while we're making these kinds of investments. And the planning cannot be politically focused. At the same time, the plans have to evolve too because the world changes, the technology changes. Plans have to evolve and plans have to avoid the kind of political uncertainties. Yeah, especially if you're an investor. Because big investments are going to be needed. Right, if you're an investor, you need to have that certainty. But let me move it to another problem that I see. So, and maybe this is because the various planning organizations and plans are in different puke's, different silos. It works this way, but there is very little actual implementation of these plans. What I mean is you have a plan and more than likely than not, it's not even actually published. It goes maybe around some government agencies but there's not a lot of transparency in it because it just winds up on a shelf. Nobody takes it seriously, least of all the legislature who in the first analysis may have even asked for the plan and now the legislature doesn't implement the plan that it called for. Or a plan that's a very good plan theoretically that is worthy of implementation but nothing happens, it goes on the shelf and gathers dust. And I think that's the public perception too. You hear about the plans, you don't hear anything else. But, and so I think that's why, you know, it's really important, you know, when you start looking at these, especially civil service positions within our various agencies, that these are, you know, these are the professionals that you count on for execution. You know, these are the guys that are going to facilitate execution for the private sector. So, you know, how much we in fact invest in these professionals who should be continually aware of. I think, you know, right now, you look at what's happening on the federal level and the uncertainty that's happening there and especially with the agencies that regulate, regulate health and safety. You know, the key people that keep these organizations going that do the planning, do the execution that we rely on for our health and safety, you know, they're being disregarded. I think what we're seeing is really the dismantling of, you know, some key agencies. I, you know, this is kind of an aside. What's his name? Michael Lewis who wrote Moneyball. He had an article recently, I think it was in Vanity Fair about what's happening within the Department of Energy and Department of Agriculture. I'm really concerned because, you know, within the Department of Agriculture, we in Hawaii rely a lot on the Rural Development Funds and, you know, systematically those kinds of programs are being affected and those are the kinds of programs that do a lot of planning for especially our rural communities in dealing with financing for critical infrastructure. Yeah, that raises the interesting question. You know, suppose you find, I mean, I'm not saying that's so here with the Agriculture Department, but suppose you find an agency or program that should be retired. Well, you don't do that ad hoc. You don't do it because you woke up one morning and, you know, figured out you didn't like it. You do it according to a plan also. So you grow and you evolve and you change things all according to some kind of plan where you take into account the ripple effects and the way it affects other agencies and other parts of the government and the society and unfortunately in the federal government in this administration, we're not doing anything like that. But likewise, in the state of Hawaii, we should be expanding, evolving, changing, improving and also in some cases reducing government programs according to a plan. Some kind of a plan is generally agreed. So this all takes me to the fact that this conversation between you and me is not in a vacuum and that there are other people talking about this, particularly at the Hawaii Energy Policy Forum and in fact there's a plan to address this whole issue about infrastructure and resilience and sustainability and energy and planning and finding the funds for infrastructure and coming together on these things in the legislative briefing scheduled for, I guess it's the first week of January in the Capitol Auditorium as we always have a program around that time to brief the legislature. Can you talk about that program and how it is shaping up at this point? Well, I think we're still in the preliminary stages right now but my understanding is that we are going to partner, the forum is going to partner with Office of Planning during this briefing. So I hope that we can get some really good provocative speakers to sort of just open up our minds as to the importance of this issue as we move forward to be a, to have effective governance. And planning is so key in resolving conflicts. If we all understand the objective that objectives and goals that we are trying to reach, sometimes you can approach those objectives and goals from different avenues. It doesn't have to be one road. And so when you're able to do that, you can build the constituency over these kinds of common goals and objectives even though the approach might be a little different. But I think that way you get bigger buy-in. So that's another reason why planning is so important to help resolve conflicts. Yeah, this is a very important question and we've only touched on the very surface of it. There's all kinds of questions about how you do the planning and how you collaborate on the planning and how you avoid conflict between the agencies and how you ultimately implement the planning. But I think it'd be a very worthwhile program. So everybody pencil in the first week in January for the legislative briefing by the YNC Policy Forum and the Office of Planning. That'll be a great program. Well, anyway, thank you, Meena-Marita. I love covering provocative issues and we've done that here today. So I look forward to seeing you again, two weeks hence for more discussion on Meena-Marita with me on Monday on energy and related issues. Thank you so much, Meena.