 We're back. We're live. This is Think Tech. I'm Jay Fidel. It's Monday, and we are starting a very interesting week. This is Marco Amina and me on Monday. I'm your host, Jay Fidel. Our show today is called Remarkable Energy Apocalypse in the 2017 session. Now what? And we're going to talk about lots of contention in the closing days. We're going to address the issue of whether this was not a good year for energy in the legislature. If you want to ask a question about this bad discussion, you can reach us at Think Tech H.I. and Twitter or call us at 415-871-2474. Our guests for the show, of course, are Marco Mangelsdorf from Provision Solar and Helo, and Meena Morita, former chair of the PUC and now operating energy dynamics. Now two interesting things happened in the 2017 session. The failure of a lot of energy bills, important ones, and the failure to confirm Tom Gorak as a commissioner of the PUC pursuant to the appointment made by David Ige. Oh, back in June, I think. So welcome to the show, Marco and Meena. Great to have you here. Hi, Jay. How are you doing? Better since I saw you last Wednesday. Meena was on not one, but two energy shows Wednesday afternoon. It becomes an official co-host. I thought you'd be tired of my voice by now. And Marco, how are you? Well, greetings and comradely salutations from the great Republic of California. Hopefully someday to become the People's Republic of California, Oregon, Washington and Hawaii once we split off from the United States and form a more perfect union of like-minded states. I'll be right after the earthquake, you know. Well, let's talk about the 2017 session. A lot of disappointment from a lot of quarters. We've talked to a number of people about their, you know, their areas of interest and the bills they were following and, you know, and what happened there. But energy, we haven't really talked to you guys about energy and what happened in the session. We talked to some extent, I guess, Meena. We talked to you on Wednesday about it. But let's talk about two separate things. The first thing is, and it's really important, is what happened to the bills? What bills were pending and what happened to them, especially the battery bill? Well, I'm most familiar with what started out as House Bill 1593, if I'm not mistaken, 1593. That was a bill that would have done a couple of important things that would have modified and I believe ramped down the renewable energy tax credit over time. And it would also provided state support for battery storage, for energy storage. And there were differences in the House Bill and what was modified in the Senate. So you had the conference committee at the end of the session, led by the Chris Lee on the House side, Meena's successor in the House Energy and Environment Committee. And I believe it was Ross Baker, was Ross Baker, Senator Ross Baker or Senator Lorraine Inouye on the Senate side. And unfortunately, for the second year in a row, there was, you know, meltdown on the conference committee that didn't allow any energy bills to see the light of day. So rather disappointing, I'd say to folks in my line of business who are helping for some additional state support in the form of maybe taking some of the money out of the GEMS fund, which has been underwhelming in terms of the benefit to debt. A hundred plus million dollars is done. But at any rate, it's debt for this session, the session is over. And it's one of these 12. Wait again until next year. Meena, you agree with that? And would you add anything to that? It strikes me that there's no good reason for not passing that bill. There's plenty of good reasons for not passing the bill. The GEMS money was never meant to be a rebate program. It's a loan program, a revolving loan program. And so I don't think the rate pair of money should be used to support projects which benefit behind the meter. I mean, those are individual investments made only to right now, because we don't have the right rate design, benefit the customer side of the meter. So I don't I think it was appropriate for GEMS money to be used as a rebate. Yeah, I was not intended for that. Yeah, I see what you mean. Secondly, on energy storage, you know, again, we have, you know, that's that's again another form of subsidization. And, you know, there's always there's already the current renewable energy income tax credit already allows for storage, you know, and and I think a bill that's not properly fixed, you're going to have the same people getting subsidized over and over and over again. So, you know, again, these are really important money issues that affect rate payers and taxpayers. You know, the tax credit comes out of the general fund. And, you know, the information coming forth about the impact to the general fund has been slow in coming. You know, there's like a two to three year lag to really look at the impact on the general fund and understand the impact. Yeah, but was this was the failure? I was talking specifically about the storage bill. Was the failure of that bill due to policy considerations? Was it due to the, you know, the kinds of concerns you just expressed, Mina? Or was it due to the fact they just couldn't get together? They couldn't get friendly? They couldn't make a deal? They couldn't work it out. And so for reasons that are not necessarily related to policy, the bill failed. Which one which one was in play here? I think it was both. I think, you know, hard policy decisions have to be made. And then, you know, the really decisive issue becomes the state budget and the impact on the state budget. Well, I remember reading not too long ago and, Marco, you may remember the dollars involved, but the total cost of energy credits, you know, just the solar credits over the past few years has been in the hundreds of millions. And I think maybe that makes some of the legislators, especially the moneychairs concerned about continuing to spend big money on it. Do you remember the numbers? And am I right to assume that? Yeah, my recollection is, Jay, without having it right in front of me is that in 2012, 2013, 2014, so three year period, the Renewable Energy Tax Credit ended up adding up to, for those three years, to close to half a billion dollars, somewhere in the 500 million range. It's a lot of money. And I remember back, I'm sure we all remember, back to Act 221, you know, which went down and prematurely in 2010. There was, it was a sore point for a lot of legislators. It was, you know, of great concern that we spent so much money in incentivizing the technology industry. And in that case, I think the total amount of money was a lot less. It was more like 150 million. So this must have, this must have bothered the moneychairs simply by the size of the amount already spent. But, you know, query, Marco, was that the reason you think? Or was it other things? Well, kind of leads me to a question I was going to post to me now, which is, you know, looking from the political perspective, Mina, of course, was a chair of the House Energy and Environment Committee to eat for a number of years. And she, I would think, Mina, you interacted at least semi-regularly during the session with your counterpart on the Senate side, which, gosh, it was a Mike Gabbard amongst others, I think. And I was going to ask you how important you think it is that the Energy and Environment Committee chair in the House and the Energy chair on the Senate that they have regular contact and that they get along? Well, you know, I worked with, when I was chair of the House Energy and Environmental Protection Committee, I worked with several senators that came in and wrote that were my counterparts in the Senate side. You know, I believe I started off with Senator Inouye. And yes, Senator Lorraine Inouye, and then Senator Kalani English, and then Senator Mike Gabbard. I believe those are the three that I worked with. And then also, when he was consumer protection chair, he's now a councilman, but at that time, Senator Ron Manor. And, you know, we worked quite well together. You know, we always looked for common ground. And we did our homework prior to the session starting where, you know, we had a really good idea of what we wanted to accomplish during the section. So it was a lot of discussion on bills and massaging the bills as we went through along with the money committees to really understand budget impact, how much we could affect the budget as we moved through. Well, we had a kind of a reflection of that in the relationship after you left, the relationship between Chris Lee and Mike Gabbard, as chair of the House and Senate Energy Committees. But I mean, I'm interested in your thought about how it changed after you left and how it changed this year especially. Yeah, you know, I think part of it is the issues are more difficult, definitely. And it takes a lot more work to really look at the impact on the system. We're no longer looking at early adoption kinds of policy. They're working on issues that are really, really complex. And so, you know, there's some concern on whether they should be dealing with a lot of issues in the legislature. Should it be going to the agency so there can be more analysis done? So, you know, I kind of posed the question. Are we really working on things that the legislature that should be done in that arena? Yes. Well, one question I would put to you both is, what do you think is going to happen next year? I mean, the two bills we've been focusing on here in the last few minutes has been the one that would extend the credits to, I guess, it's newly installed battery facilities and equipment. And the other is, what about gems and using gems as a finance tool going forward? And I'm wondering what you think about those bills for the next year. You think it's an election year? Will they come back? What are their chances? What are the chances that the, you know, the problems that existed in the session, this session, you know, will remain next session? You know, Jay, I think what the arena just said to me makes for a very strong case of just how critically important it is to have legislators working cooperatively together. And the fact that she had collaborative, cooperative, friendly, according to what I think I just heard, relationships with these various, these various energy committee chairs on the center side allowed for progress and movement to take place. And from what I can tell, and maybe me to come in on this as well, that type of, shall we say, energy is perhaps not as present as we would wish it to be between the current chair of the Environmental Energy and Environmental Protection Committee, Chris Lee, and Senator Lorraine Inouye from my island. And I think one can make the argument that if that in fact is the case, that kind of all of us end up suffering from a relative lack of a good strong, friendly working relationship between two important, obviously critically important individuals on the energy scene in our state. What would you add to that, Mina? I'm sorry, I didn't get what you said. What strikes me is that you guys don't necessarily agree on the substance of the bills, and especially on the storage bill. However, I think, you know, we need a way to do good policy in the legislature and, you know, to clear away, you know, all the things that detract from our ability to think about policy. And, you know, the word is that for the last couple of years, we haven't had the kinds of relationships between the Senate and the Energy, the Senate Energy and House Energy Committees that would yield a kind of good, hard, civil look at policy. And I guess the question is, is that going to change? Or are we going to have that going forward? Because whatever you think about the policy that comes out of it, you want to be relatively confident that the policy is well processed, and that the process is likely to lead to the best policy, don't you think? Well, you know, the thing is, we have a lot of good policies in place already. Right now, I think we're lacking leadership from from the very top in directing where we're where we're headed. I mean, that's not clear right now. I mean, all we have is the sound bite 100% renewable energy. But I, you know, I think the focus is on critical infrastructure grid modernization. And, you know, we don't have a cohesive strategy. There's not so much policy. It's the strategy, it's the implementation, and the leadership that can take us there. You know, I know between myself and Jay, we've talked about this a lot, you know, what the, what the state is lacking right now is some key infrastructure and modernization of some key infrastructure, one being the fuel infrastructure, another being telecommunications, and the third one being the electric grid modernization. So, you know, it's not about making policies or the small fixes or the small projects in the legislature. It's the fundamental foundational stuff that will get us to a clean energy future. Amen. That's at stake right now. Amen to that. I mean, I would offer this thought before our break. And that is if we have trouble making little policy, we are likely to have trouble even more trouble making big policy. We're going to take a short break. We'll be right back with Mina Marina and Marco Mangelsdorf for discussion of what happened in energy in the 2017 session. Some call it an apocalypse. We'll be right back. Of Hawaii is my mainland every Friday at 3pm on Think Tech Hawaii. We talk about things of interest to those of us who live here. And my past blogs can be found at kawelukas.com. Okay, I didn't listen. Match Day is no ordinary day. The pitch hallowed ground for players and supporters alike. Excitement builds. Game plans are made with responsibility in mind. Celebrations are underway. Ready for kickoff. MLS clubs and our supporters rise to the challenge. We make responsible decisions while we cheer on our heroes and toast their success. Elevate your Match Day experience. If you drink, never drive. It's Marco Mina and me. Energy Apocalypse in 2017. Now what? And it's Marco Mangelsdorf, a provisional solar, Mina Marina of Energy Dynamics, formerly a legislator for many years, decades, and the chair of the PUC for the years after that. So I guess the real interesting, if not dramatic aspect of energy in the 2017 session is this really interesting failure refusal of the Senate to confirm Tom Gorak, an appointment made at the expiration of Mike Champley's term back last June, July, whenever it was. And it has waited until the end of the 2017 session for action by the legislature and surprise of surprises. It was declined. He didn't get confirmed. So the first question I put to you guys is, what happened? What happened? One word, Jay, start for the P. Pay back. Pay back. So there's a really important issue here, you know, that there is a statue. And there are two previous Attorney General opinions, which have stood for close to 40 years, regarding holdover position. And because the governor failed to timely submit a nominee during the legislative session, even though Mike Champley's term ended on June 30, he was in a holdover position, because PUC statue, I believe it's 269-2, states that the incumbent commissioner, the commissioner whose term expired, is held over until the nominee is appointed, I believe the word they use is appointed and qualified. And I believe the term appointed and qualified means Senate confirmation, so the Senate's ability for advice and consent. So what happened was governor didn't send down a timely name during the last legislative session. June 30th came around. And I believe he unlawfully removed Champley and installed Gorak. And just to mention that you have a lawsuit around these issues, which is pending and unresolved. And I realize you have to work carefully in discussing the details of that suit. Right. So right now, the court ruled in Gorak's favor, the lower court, the circuit court ruled, right now we have an appeal in the Intermediate Court of Appeals. The state's answering brief was due, was filed on May 2nd, and we have 10 days to file a reply. And that's where it stands right now. I'm sorry, what was that? That's where it stands right now. Yeah. And so I think during the break, Marco had asked, you know, why isn't this moot? And so there's some argument about mootness in the brief. And we believe that the issue is not moot when Gorak was not reappointed, because this affects the appointments, overall nominations and appointments to the, to all boards and commissions. So not only the PUC is affected, but all boards and commissions are affected by how the governor changed the process. So I mean, in fact, Tom Gorak is no longer on the table. In fact, his appointment, you know, is, is over. Later on Thursday, I believe. Say it again. He, he, since he did, he was not confirmed. He, as soon as the legislature ended his term, interim term, supposedly ended. But, you know, the question still has been, has to be asked is whether he has been lawfully in that position to begin with. So I guess, yeah, and that could affect his participation in cases, I guess, and the validity of decisions made around that, theoretically. Well, so we have, you know, part of our title is what now? So what now with the PUC? What's going to happen here? This, this, now we have a two person PUC. The law says three. We have to have another appointment. It's likely to be an interim appointment and subject to confirmation next year in 2018. What's going to happen? Any ideas what David, you guys going to do? I think, you know, that's the question, that's a question that needs to be asked whether, whether Champlain is still lawfully what they call a de jure officer. That's somebody who's legally entitled to the position, you know, and until the court, until the court weighs in, that's still a question that needs to be asked. Very interesting question. But if you were David Igay, if you were David Igay, you're probably going to appoint somebody else, somebody new. Has there any sound that he undercurrents about who we might appoint? No, but if I would, this is my advice to the administration. I mean, because I don't think they can attract anybody who wants to weigh into this controversy and, and, you know, wait a year with uncertainty to see if the Senate's going to appoint them or not. So my suggestion is he should put forward a nominee and put them through the confirmation process. Ask the Senate to come back in special session and, and do advice and consent on his nominee. That's the cleanest way to do it. Do you think they would do that after David Igay declined to make a special session on rail? Well, they do it for judicial appointments. I mean, it's nothing new to come back for a day to do advice and consent on a nominee. Wouldn't that open up the whole rail thing, though, since they had a special, once you have a special session, it's like you have to handle everything that's, that's, that's in play, don't you? Well, this is, this is, you know, the Senate can come back on its own without the House. If they're going to deal with something like rail, both Houses have to come back and act. But with advice and consent, only the Senate needs to come back. So, Marco, you know, what, what now in terms of how this is going to affect energy, the, you know, our effort to reach 100% by 2045 or earlier, all the issues that are in play, you know, in the industry, all the questions that have to be resolved in the many dockets, how is this going to be affected by having, you know, this consternation at the PUC level? Well, I think, you know, without getting too graphic, we're somewhere, we're somewhere up the creek, Jay. And to what extent we have paddles to get down, downstream kind of is, is more problematic now because we're down to two commissioners, Randy Awase and Lorena Keeba. The third commissioner is a person unknown. What will that man or woman bring in terms of being able to hit the ground running, if not sprinting? And as we've talked about so many times, I mean, the, the, the breadth and depth of what's before the PUC right now is, is pretty broad and pretty deep. So it just gives me a concern that these decisions that have to be cranked out on these various critical dockets, to what extent are they going to be delayed? To what extent is the process kind of screwed up right now because of just two commissioners? I mean, obviously, Mina has, you know, been living and breathing, who was living and breathing being a commissioner, the commissioner for a number of years. I would put it to her, Mina, to what extent do you think that the commission is going to be kind of handicapped in the months to come doing what it needs to do? Handicapped, they can act with two commissioners. They just have to, they just have to agree on, on any decision in order. So, you know, commission can go on with two commissioners provided they come, come in with a unanimous agreement on, on an order. And, you know, for the most part, there's very little disagreement amongst the commissioners. So the real question is the commission staffing and whether the commission has staffed capacity to move forward on all of these issues. You know, I think that's, that's, that's, we had only eight justices last year. And somehow they managed through, on the other hand, when they, we couldn't reach, you know, a majority vote, they, they put it off, they put it over. And that's probably what'll happen when the two remaining commissioners can't reach agreement. They'll just put it over rather than have a, you know, one against one, one, one majority, one minority position. But anyway, we're out of time, you guys. I wish we had more time, but we are at the end of our show. We've enjoyed bringing it to you. I'm Jay Fidel. Our guests have been Marco Mangelsdorf and Meena Morita. We've been talking about remarkable things in the legislative session, addressing the issue of whether this was a good year or not for energy in the legislature. Thanks to our production engineer, Robert McLean, our floor manager, Ray Sangalang, and all the people who care and contribute to our ThinkTech productions. If you want to see this show again, go to ThinkTechHawaii.com and YouTube.com slash ThinkTechHawaii, where there'll be a link to more shows just like this. Thanks for watching. We'll see you next time. Aloha. And thanks, you guys. Thank you, Jay. Take care. Thank you. Thank you, Jay. Thanks, Jay.