 This is Think Tech Hawaii, Community Matters here. I'm so happy to be with George Benda, hi George. This is Think Tech Hawaii of course, I'm Jay Fidel. We're talking about the state of energy in Hawaii, the state of clean energy. And today our title is Clean Energy in 2018, since we just started 2018, and since George is a past master of clean energy. George is the CEO of Chelsea Group Limited, and he lives in Molokai and I always wanted to visit your operation there, but one of these days I will. I was there three weeks ago, maybe a month ago, with Fred Riddell, who was the Maui Energy Commissioner. We looked at all the energy facilities in Molokai, and we're making a movie of it. It'll play this Sunday as a matter of fact on cable. So we're here to talk about energy in general, but before we do that, George has told me he's been busy. He's written not one, not two, but three novels, okay? Most recent one, The River, if you can get that, The River by George Benda, okay? And then that came out in December, I like the style of the book, the city, okay? And the edge and all these are novels, which means we need to find out what is common points are and what kind of novel you're writing these days, George. Well, they're fun. A lot of it is based on my life. And so these first three are set in the Chicago area, where I grew up, and they're in the 1970s and run through a lot of the things that were happening then, which are surprisingly relevant to today. And in fact, the topic that we're working today, I'm working on the fourth book right now, which is going to be called The Farm. And central to that book is my role in Illinois as the investment officer for the Illinois Energy Bond Fund, which invested in demonstrating solar, wind, and other technologies in the 1970s. I told you George has been around, yeah. Well, 40 plus years of doing this stuff, so. Good, good. So this is, I would call this a series, the The series, because each title begins with the word The. It's okay. It's memorable. That's fine. That's fine. If it's The series, that's a great thing to say, because then it's the only one you need to know about. It's easy to find. Where can I find them? Can I find them on Amazon? On Amazon, yeah. Amazon. That's great. And the city is only in E-Reader, but the other two were, I was able to publish print on demand, so they're available in print in the format that you're seeing here. Oh, okay. So do both. I'm going to do that with the city probably shortly. So forgive me for this, but I always ask guests who have written books to turn to a page, whatever page you like, and read a paragraph so we can get the smell, the taste of the grease paint, and the roar of the crowd, you know? Oh, good. The roar of the grease paint and the smell of the crowd. Yeah. Well, that I don't know. I hadn't prepared for this, which is really inexcusable as an author, but there is a page that I think is particularly funny, but why don't I just start at the very beginning? The old rowboat scraped on the rocks, hitting the solid limestone of the Moments Ledge. Elmer, get that damn boat all the way to the front of the ledge, Jonah expelled in a deep grumble. The loud whisper carried across the water to the 18 riflemen hiding in the dark under the moon shadow of the old mill. The flat smell of the mill race drifted up with the mist rising off the water wheel. Hold your fire, said Homer, hushed tones. Wait for a clear shot at the dynamite. Late August, 1928, sleepy little town of Moments, Illinois, water low exposing the limestone ledge that created a natural dam in the Kankake River, nine gun-toting Hoosiers, three in each boat towing a fourth rowboat full of dynamite, thinking if they blew the ledge, they'd be able to farm right up to the banks of the river or the ditch, as they prefer to call it in Indiana. You think them suckers knows we here, Jonah? Asked Jonah's cousin Elmer. Elmer, up to his knees in fast flowing waters near the ledge, rifle in hand, looking around, worried. Elmer, we've done this in secret. Nobody knows we're here, Jonah hissed, not thinking how the sounds carried across the water. These suckers from Illinois smiled up and down their rifle line, each taking a bead on the invading Hoosier force. Farmers from across the border in Indiana, one in all. Six of the nine Hoosiers were in water, waiting to the dynamite boat wedged against the rocks on the downstream end of the ledge. Rifles down, fighting the current to stay upright on the slippery river bottom. The six men picked up bundles of dynamite to set into the rocks on the ledge. The rowers kept the little wooden boat steady while the six men struggled to set the charge. Elmer, acknowledged leader of the Illinois rifleman, stood. He moved to the light of the solitary gas lamp at the far end of the mill causeway. You Hoosiers, better pack up your things and start rowing upstream. Elmer spoke from his gut, loud, deep, clear enunciation echoed across the divide. We outnumber you, we outgun you, and we got the high ground. If you turn around now, we'll hold our fire, just leave that dynamite boat where it is. Attention, George. Does this have an audio file that I can buy with the book? No, I'm sorry. You could make the audio file. You'd be a great voice for the original guy, the author himself. Thank you. It's a nice compliment. Thank you, Jay. Well, okay. I'm really enticed by that. Let's shift to energy for a minute. Gee, we've had a lot of energy news today. Today the headline was, and we don't need to talk about it, but this auditor's report wrote up the state energy offices is really going to, it's going to have effect. It's going to have effect in the legislature and in the community and the energy industry for sure. Well, I just heard the story myself this morning, so I don't know the details of it. I haven't yet read the report. But the goals have been set very freehand in a very political way over the years. And the notion of 100% conversion to renewable energy is admirable, but a very, very, very high bar. And I think probably not well conceived when you look at it. And I've dealt with this as a technical matter for years. I also work in indoor environments. And one of the politicians, when mold was a big issue in the United States, was in a meeting in Denver, and he was in the news recently, Connors, the guy who represented Detroit, stood up and his senior staff guy had written it as if you could control mold like tobacco smoke, and that the only acceptable answer for mold was zero tolerance. I'm like, good luck living, there's so much mold on you right now, you wouldn't believe it. With you, it's not something introduced here. Well, it's the same way when you set these kinds of high bars on technical goals. You have so many fuel types, you have so many fuel uses, you have so many complex needs in the energy arena. You can convert a very large portion of what we do to electricity, and that's going to be the easiest way to do it. But you're still facing the challenge of things that really require liquid fuels and require other means of developing energy and just sheer thermal use that you can do better ways than with photovoltaics. So I understand why the Energy Office would be having a difficult time, but it's a difficult place to be. But on the other hand, in my years here, I've not been that excited about the work that they've accomplished. Yeah, me neither. And I've never seen an audit report about a government agency this critical. That's why I say there'll be shoes dropping on this one. And I don't think that D-Bed or the State Energy Office is going to come out whole. This is going to be scandalous, and people are going to be looking at every corner. The report itself, by the way, and I'm talking to our listeners here at this moment, is available online. You can read the report. And it's not as exciting as the river, the novel, but it gets close. This is really edgy stuff and worth reading. Well, in 1979 through 83, I was the Director of Energy Programs for the State of Illinois. So I know those shoes. And they are very tough shoes. And at that time, we were in the second oil embargo, the second oil crisis. We had bomb threats against our building every day. My joke to the guy who ran the fuel allocation program was, you know, we could spare all these bomb threats. We'll just handcuff you to the parking meters out front and let them with a big sign. This guy runs the allocation program. He didn't think it was that funny, and really I didn't either. But it was one way to lighten the mood. The guys in the Energy Office are going to feel much the same way right now. They're going to feel like people are lobbing hand grenades at them. Yeah, and some of them will be deserved, by the way. So let's talk about you, Chelsea Group, your current iteration in energy. What's it like? Well, Chelsea Group really focuses on the infrastructure of existing buildings. And we've been doing that for a very long time. I've been doing that kind of work for 40 years. Much of that is driven by energy conservation, but a lot of it is driven by other issues like indoor air quality, mold, moisture management, but also fundamental economics of a building. You have a building. It ages. It doesn't maintain its value unless you invest in the infrastructure in that building and keep the building vibrant and living. And so we're doing that right now. We're working at Queen's Medical Center. We've been there for five years rebuilding the infrastructure in the air handlers in the patient floors and rebuilding big chunks of their central plant. It's very exciting work as an engineer. It's very gratifying. We're reducing their energy use. By the time we're done, we'll have cut about 20% out of the energy use at Queen's Medical Center. That's great. Well, you're to the benefit not only of Queen's, but to the community in general. Exactly. And my point on all of this stuff, the energy office, I think, doesn't get the point across well enough. And I think it's often ignored by those who promote solar and other things. The first thing you have to do is reduce your energy use. And the technologies that have evolved are just fascinating and really outstanding. And so we did a project at Pearl Ridge. The upper Pearl Ridge replaced some air conditioning systems, the great big chillers on the roof. A 52% reduction in energy use as a result of the change in technology. It's huge. Think of the savings. Exactly. We just did the... American money. It's fabulous. Yeah. And the central plant at Restaurant Row, Waterfront Plaza, we finished that last year. And the documented savings, 19% on their total energy bill, which means that the plant has, of course, much more savings than that, but 19% on their total energy bill. Are you the only company doing this in Hawaii, or do you have competition? We have competition. Yeah. I won't tell you who they are. No, I don't have to notice. I didn't ask. Yeah. But we do other kinds of things as well, and we've been out at Campbell Square, for example. My first assignment out there was in 2008, and we've solved water intrusion problems and now we're doing something called continuous commissioning and helping them straighten out all their operating systems, got them their LEED certification. And so we do a lot of those kinds of things for folks. Well, I'd say, if it can be efficient, save the use of not use energy, that's the best saving of all. Absolutely. But on the other side of it, when we come back from this break, George, I'd like to ask you about your views on renewables in the state. Of course. What do we do to get there, assuming we can get there at all, and how we form up decision process and implement that process? I never promised you a rose garden, George. We'll be right back after this break. Okay, think tech. Coming back, I told you we'd come back, and we did come back. And here's George Bender of Chessie Group, and we're talking about energy in Hawaii. We talked about Chessie Group for a minute. Now we're going to talk about energy in general, and how to get to our renewable goals, however realistic or unrealistic they may be. Right. What do you think, George? Well, I think we can do tremendous things with renewable energy. And the example, I can take a very personal example. Over the time that I've lived in Hawaii, we built our house on Molokai. 2003, we occupied it. We designed it, built it. And at the time, it wasn't cost effective to put in PV. When PV became cost effective, it went in. And now we have an electric car, and we're in the process of figuring out how to put in a little more solar because the electric car gets used more than we thought it would. And so here's a transition. We have gone from about 70% non-renewable to about 90%, 95% renewable in our household. Now we use the net metering program, which I personally despise. I think that net metering was a cancer on our society. In what way? Tell me why. Well, net metering enables the homeowner to realize the full value of the energy that they've generated as if they had purchased it at their doorstep. And that's not really reasonable because... Without giving credit to the transmission system. Exactly. They're using that transmission system as a battery backup, whether they want to admit to it or not. That's true. What they're doing without that utility. It gets dark. They would be dark. The net metering allows the utility to deliver power to them, and they're netting out on that power that the utility is making. So it has the effect of undermining the finances of the public utility system. Now I know as an energy person working in energy conservation, this sounds like a heretic comment, we need a good utility. We need a solid public utility central system. And I can tell you, as someone who even loves the technology, I get darn tired of paying attention to every detail of how my house works. What I want is to go back to flip a switch and forget about it. Seamless, dispatchable, on demand. And the only way that works is with a good reliable central utility, a good distribution system. But there's no reason that those things need to conflict with a strong renewable future. The utility system can be more renewable. And with electric cars now coming on in a quality and reliability that we did not expect to happen this fast, honestly, as an energy professional. I was looking at another couple of decades before we would see things like the Tesla vehicles and the vehicle that we drive. Which is? Mercedes. Okay. But that energy, it's electric. It's electric. Yeah. 100% electric. Very nice. Battery charge. Yeah. It's funny because I've priced them all. And the MSR on the Mercedes was like within 100 bucks of the Nissan. I said, oh, well, I'm not going. It's easy. It's really easy. I know the net cost of ownership is higher, but that's okay. It's worth it. I understand the difference. But the electric cars are a huge opportunity for the utilities. But this all is being squandered. And I've actually had conversations with Connie Lau about these things. And explaining that they need to get into the storage. They need to get into the micro grids. They need to be the ones who are controlling that industry. And instead of letting all of these independent little things happen, which is where we're drifting, we need consolidation. The state needs the gumption to say, okay, we're going to have a strong grid. We're going to provide these services. We're going to have distributed energy generation. We're going to have smart micro grids. And we have to have at least one utility that manages this and can provide the services so that no matter how much of a hobbyist you are, after you put this stuff in, you get tired of it and you just want to flip that switch, utility is there and can do that. And so that we're serving the entire population, not just relatively wealthy people like me who can afford to buy all these gizmos and gadgets. I agree with you absolutely totally, yeah. And that's the key to moving ahead. It's not only economies of scale, it's economies of management. Absolutely. Yeah. So, but you wouldn't rule out distributed energy with solar and battery in a given residence? Absolutely not. And not only do I totally understand, I live with both solar PV and battery and I have thermal PV, so I live with these things every day. But you need connection also. But you need the connection. Yeah. So, let's skip to Molokai for a minute. Molokai is a very interesting place, but it runs mostly, or at least more than half anyway. And you might know the numbers on diesel energy in a historic legacy plant with new smoke stacks and batteries to smooth out the curve, but nevertheless, it's diesel. How are we doing? What do you see in the future? And where does Half Moon's project fit in, the successor to Princeton? I have a really hard time gauging the seriousness of any of the private sector projects. I met with the Chicago people when they had that project, could tell immediately they were going nowhere. They didn't understand politics on Molokai, and that's very tough. It's not an easy thing at all. The plant manager at the Molokai utility has told me about their commitment to 100% renewable by 2020, and I frankly chuckled. That's pretty quick. Yeah, there's just no way. But on the other hand, it's really not that big of a challenge. I mean, you could, with a few good farm fields and some nice contemporary batteries, you could do it, but it's a big investment. My concern is that nobody has the gumption to do that. Now, if these guys, you call it the Half Moon project, let's hope it's not a half baked project. If they want to do it, there's land, there's plenty of sunshine, and the grid is rickety, but it can stand up to it. This is a small enough place in most universes it would be considered a microgrid. But the distribution system is, I would say, easily 50 years out of date. So there's an extra expense there. Yeah, and nobody's making that investment. And honestly, when I look at the economics, I don't see how a utility can recover their investment on Molokai under any circumstance. But the utility has said that it wants to make Molokai into a kind of laboratory and learn things about how to do a small grid that way and use those lessons in other places. And I admire them for that. I think it's the right approach. And it is a good laboratory, isn't it? It is an outstanding laboratory. And you have a population that's ready for that kind of experimentation. I can't think of any place I've been where a larger percentage of the population is willing to suffer a little bit in order to do better things and understands that you don't move forward without some friction. I grew up around Chicago, as I said, related to the books. And there's a very large 80% of the population. They don't want to hear about it. They don't want to know about it. They don't want anything to do with it. Just make it work. And on Molokai, everybody's kind of a backyard mechanic. That's true. Literally. Well, you kind of have to be. I mean, the guy from Sears comes over. We have our stuff warrantied under Sears. He calls my wife, the Sears Molokai repair person, because he just censor the parts. He doesn't even bother coming back anymore. He goes, looks, and answers the parts, and she fixes everything. And that's pretty much the way it has to be. Well, the thing about Molokai, I don't know. You're much more familiar than I am. But Molokai is a neighbor island. It wants to stay a neighbor island. It doesn't want to be connected very well. It doesn't want cruise ships or fishing boats or a lot of visits from Oahu or anywhere else. And it resists change, although my question to you, George, is how do people feel about change? Do they warmly welcome the notion of renewables on Molokai? Will they accept that change? And to what extent can we expect them to resist that change? I think change is not a universal. And if you ask me, overall, the people of Molokai willing this to accept change, I often describe a large segment of the Molokai population as having been stuck at age two, is the only word they know is no. But when it comes to renewable energy, that's a difference. Now, are they willing to let somebody come in and rip them off or do something that will destroy the land? No. Then absolutely, they're right back to that. But are they willing to accept logical change that will stop the flow of foreign oil onto arse oil and generational electricity there? Absolutely. It's part of the environmental credo that is related to that. So one last thing, and then we're going to be out of time, is when we were over there, we spoke to a woman named Amelia Nordhoek. She runs something called Sustainable Molokai, which is a grassroots organization. A lot of local people in Molokai support that, belong to it. And she is negotiating with, whether it's Half Moon or the utility, I don't know, but she's negotiating with somebody to have a piece of the action, call it a social hyphen economic hyphen business kind of laboratory in that regard. She intends to, well, she is asking for a percentage of the ownership and a royalty on their gross. And I wonder how you feel about that. Is that the kind of thing we want to see in the laboratory of our energy evolution? That's a very challenging question. As a business person, I don't like to see those kinds of things. And from a community perspective, I'm very supportive of it. And particularly, our Molokai and Sustainable Ina is a really interesting organization. And we buy much of our produce from them, and we support the farms and so forth. And there's essentially no way for them to be economic. So from the perspective of this isolated little island and the function of being a laboratory, if people are going to poke at you, when I was in graduate school, they would pay you to have parts of your body probed and cut off and sampled. And it's the same thing. I mean, if you're going to screw with us, pay for it. We'll tolerate it, but you've got to give us something back. And a lot of the fight over the windmills really came down to they want to take all of that energy from the windmills and ship it to Oahu and leave us stuck with oil and 50 cent-a-kilowatt-hour rates. Come on. And so if this changes that equation, great. We should watch Molokai. And we should talk to you again, George. Excellent. We will. My pleasure, Jay. You can run, but you can't hide. We'll find you, George. George Bender, Chelsea Group from Molokai. Thank you so much. Thank you, Jay. Aloha. A pleasure.