 This is Think Tech Hawaii, Community Matters here. Welcome back on a given Monday. This is Think Tech Hawaii, and in fact, this is Hawaii the state of clean energy. We're going to special show today because Marco Mangelsdorf, who is our contributor every two weeks with Meena Morita, is now here in the studio. This is a real treat. Say hello, Marco. Hello, Marco. Very nicely done. Now, we have a special guest. That's Jay Griffin. He's a PUC commissioner, and Marco, as my co-host in this matter, could you please introduce Jay properly? Well, first, I want to say that I have fantasized about this possibility of being with Jay and Jay and Marco, at least since I've come to know Dr. Jay Griffin in his involvement of many years in the energy field here in Hawaii. So it truly is a great pleasure for me to be with both of you and from one PhD to another. Great to see you here, and great to have you. I'm going to give a PhD. Great to have you on the show. I have a PhD here on ThinkTech anyway. Well, I'm happy to award that to you anytime you need it. So it's great to be here with you guys. So Jay, welcome to the show. Thank you so much for coming down. Thanks for having me again. Pleased to be here, and good to be in both of your company. So win, win, win. I have the PUC here to have you here, and congratulations on your confirmation a couple of weeks ago. Thank you. Appreciate it, and the relief to get that part of things over with and focus on our job. So we're calling the show Energy Challenges for Hawaii, and all of that falls directly or indirectly on the desk of the PUC. So we'd like to ask you a bunch of questions about it. I suppose, well, why don't we start with you, Marco? You have questions. Can you ask a question about challenges? Sure. What do you feel to be the biggest energy challenges facing the state right now, which is of course a very broad question, and it could go on for days. We could have a little colloquium, I'm sure, on that. But given the time constraints, what would you say to that? Sure. Well, I think we're moving forward on a number of fronts. I think since the last time I was here was about three months ago. We've issued a number of major decisions and orders, accepting the Hawaiian Electric Company's power supply improvement plans. So a major challenge going forward is implementing those plans, and that's going to take, you know, there's a lot of very near-term actions, but the near-term scope of that's about five years. That's going to be a major endeavor for all the stakeholders here in the state. We've approved a number of different power purchase agreements. So those are a bunch of the near-term actions. But as I look in the very immediate future, there's a number of major issues of great importance to the state, individual customers out there before the commission, particularly there's a number of pending decisions on new customer programs, those filings are coming in or before the commission now. And I know we're committed to devoting the attention to that and putting those programs in place in a timely way. We have another round of renewable procurement that's anticipated to get underway, so that's another, you know, the next 18 months or so. There'll be a lot of commission involvement oversight in that. And, you know, some, again, a lot of bigger topics that not necessarily everyone's involved in, but really affect everyone. We have a number of rate cases before the commission, both currently. So these are, you know, we review and set acceptable levels of cost that ultimately roll up into customer rates. Those are, you know, that's the stuff that's on my desk every day. You know, it's the complexity and the impact on people is significant. So we take that very seriously, but this is what we signed up to do. And it's an exciting business at times, potentially challenging. There are three of you. You, you're good for six years from the time you took office. Actually five. Five. The term starts from, it was July 1st of last year. So my term's till June 30, 2022. Okay. And Randy Iwasi, the chair, what's his, what's his scope on this? Till June 30, 2020. When he came down to talk to us, he said he wasn't going to go for another term. That's, oh, I, my Randy's enjoying his time, but as he always put it, he came out of retirement to take on this position. So. And Lorraine, when is her term? Her term is until the middle of next year, June 30, 2018. So it's, it's kind of in process and, and David, he gave will be governor at the time range term is up. So he'll be the one to appoint the next successor. He has a few options available. And to my, I mean, I have no idea what the thinking is there. Okay. But he could reappoint her, somebody else or, or let him hold it over. Yeah. Exciting. This makes it, it's more moving parts, isn't it? Well, I guess that said, I would like to think with the Senate's decision on my position, it's, it's taken some of the uncertainty off of the commission. The three of us are there for, you know, yeah, the time there. And we've been working together. We've worked together well and are, are focused on the business before us. Yeah. Exciting. So what, you know, talking about challenges to Hawaii, what about challenges to the commission in terms of resources, in terms of procedure, in terms of, oh, I don't know, carving new ways to do things, maybe faster ways. What do you see the challenges to the commission? Well, and I was asked this during my confirmation hearing. I don't think anyone, I think everyone would always like to see things happen faster at the commission. We're always balancing the need to be timely with the due process for the decisions and particularly the more complex or controversial that tends to slow things down. But we have been trying to look at ways to help foster more compromise on positions before they get to the commission or at least more dialogue among the parties to narrow the scope of the decision making before the commission. So we've been, I think, I mean, I, again, I go back to what I said in the beginning, probably the biggest challenge is the scope, the impact and the number of major decisions before us. Our staff is, I said this in my confirmation hearing also, in my time at the commission, which is now, sorry, it's actually almost exactly five years, just about five years from the staff and moving on as a commissioner now. My view to me, we have the professionalism, the expertise of the staff, is as good as it's ever been. We've hired up, so our resources are better, but the breadth of, I mean, on top of that, we have, I think, more work than we've ever had. Just the number of things that I talked about, I also don't want to miss. We do have another merger before us that will be occupying time and attention and a lot of other matters that don't necessarily get the spotlight. We have a lot of water and private sewer rate cases before us, those types of things. So just trying to stay on top of all that is definitely, continues to be our biggest challenge. I think it should be skinning down, so you deal only with energy, not trucks. Let's see, my, I think I talked about this before. I think it's worth a revisit on the scope of the commission's jurisdiction. And there's a management audit underway. Oh, really? And I know this is one of the topics that they'll be looking at. As I understand, they're looking at both the kind of the management process for how we deal with these dockets, but also considering the scope of the entities and activities before us. Yeah. Which I think we'll be looking closely at their recommendations. And the commission actually itself has the ability to look at that, I suppose, and also make recommendations to the legislature. Yes, ultimately, I understand, I mean ultimately not to be a call to the legislature, what's defined in our scope of activities to regulate, yeah. Marco, your turn. So you arrived here when? Che, when did you come from the mainland to move here? Oh, in the summer of 2000. So you've been in the energy arena one form or another for a long time, 17 years here. And you've been part and parcel to the regulatory process. You've been involved with UH, HNEI, and so forth. So one can only get so much of a sense of what it's really like to be a commissioner from the outside. And then you become a commissioner, as you have been for a number of months now. So my question is, what has surprised you the most compared to your expectations or assumptions prior to sitting in the big chair? Sure. Well, I think on the nice part is I compared to when I was on staff, I actually have more time and freedom to read and really delve into the details of the filings that are before us. And I don't have significant kind of staff management responsibilities like I had before. So that's definitely the upside. And for me, that's the fun part. These are topics that I'm just intrinsically interested in, but also know the importance to people here in Hawaii of our decision. So I get the time to really dig in and understand what we're working on. I mean, the weight of the decisions. Before you, as on staff, I would think about it, I would lose sleep at night. I'd say, I spend more of those waking and non-waking hours, supposed to be sleeping hours, thinking about these things. And the weight of it is a little different. Now, is it greater now, because it is your signature? It's your signature. And you need to be able to stand and be responsible for your actions as an individual commissioner. Do you sometimes wake up at 2, 3 o'clock in the morning, cogitating over a decision? Oh, yeah. I also have a two-year-old daughter. So being awake in the middle of the night is... Does she cogitate over the decisions? No, no, no. She's very decisive. I want this. I don't want that, or I don't like what you did. That's good. So yeah, so being, I mean, joking aside. Sure, yeah. I mean, absolutely. And I honestly, and that happened until I can feel comfortable. To me, that's part of the gut part of making decisions. If I feel like I can go back to bed after I think about it, that's been part of how I process these things. Yeah, that's the sherry quasi-judicial mantle that you wear. And it's a lonely spot sometimes, yeah. I share it. But like I said, it is your signature when we make these final decisions, so that's critical. You said something before. I just want to follow quickly. And that is that you try to limit the scope of what has to be decided by the commission by getting the parties to come together and agree, or at least state what they can agree on. How do you do that? What are the mechanics of doing that to you? Getting a room and bang their heads together? How do you work that? Well, it starts, I think, usually in some of the most recent examples, I can think of a couple. So when we've set up the schedule of the docket, we've asked for parties to try and file stipulations, which is a word for some. Stipulations of facts. Stipulations of. Well, really, some sort of global stipulation. Basically, global agreement. All the parties have gotten together and said, we agree on all these things. And this is what we think the commission should approve it. A lot of cases, we don't. So if you got to that point, that would narrow it down. Because then we would say, well, we either agree with that exactly or in parts. But the reality is that there's a lot of complexity in competing positions. So what happens is what has happened is it's narrowed the scope of difference. And we're left to render decisions on that. In another case, we've actually asked parties to come up with. So this is the case of the Community Renovables Program. Prior to filing at the commission, try and get together and work out the details of the programs that are acceptable to the parties. And there we, in that case, again, it didn't come together all the way. But I think that's been an approach. We're trying to narrow the scope of things at that point, rather than starting from a total clean slate. Yeah. Well, it saves you time. Well, there's probably going to be some people may give. Even in these cases, these things are still before us. But that's been the intent, was to try and drive to not only just narrow the scope, but have the parties who have the means that are directly affected that are implementing these programs on the ground, have them inform the details of the programs from the beginning. So that's. But you may or may not accept that. You may accept the stipulation. You may modify the stipulation. You may see it a different way from the parties stipulated. Each case is a little bit different. But I think, again, the intent is the same. I think we understand, recognize, that maybe we want to see these things move forward also. The other thing I wanted to ask along the same lines is policy. Because, like it or not, you guys are a policy-making organization. At the end of the day, there's few organizations that are as directly involved in making the short-stroke policy that will carry the clean energy initiative forward. Where can I find those policies, those statements of policy? Is there books up? No. Unfortunately, it's not always that clean cut. They're usually, well, it's either embedded in various decisions. In my time, we've definitely attached. We've had exhibits in attachments. Inclinations. Inclinations was probably the best example in recent time. The other one I can think of for the demand response programs, one of those orders in 2014 contained, actually, the whole order itself was a policy statement on demand response programs. It's great to have that. Because then it becomes a starry decisive, kind of a precedent sort of thing. And everybody can see that, read it, and you say, here's our policy. People know that. We're trying to give more guidance and direction to all the parties. Again, this is consistent with what I was talking about before. So that we, I think, hopefully we get programs more in line with those statements. Without asking you to divulge or get into private conversations that you have with your other commissioners, I'm just kind of curious in terms of process, do you guys meet on a regular basis to discuss open dockets in person once or twice a week, or is it through email or interoffice communication all of the above? All of the above. I think another thing I'll add, maybe not as well known to everyone, actually, in the middle of all this, the commission has moved our offices, moved from the lobby level of our building down into the basement for now, as we're doing. They put you in the basement. Well, our hearing room was in the basement. But in the past few years, they've knocked all the offices down and rebuilt it. So we have a new office in the basement. The reason I bring this up is one of the facts out that our offices are now all immediately next to each other. Is this a better thing? I mean, when we're all in the office, I mean, there's just the ongoing informal interaction between the commissioners. But to get back to your earlier question, there's no formal set meetings every week. But it is partly the reality of people's different schedules. But there's ongoing, well, just that very fact that we're all next to each other. But particularly, for all of our biggest decisions, recent time, we've had various forms of one-on-one communication between each other, but also sitting down together, generally with drafts of the decisions before us. Where's your hearing room now, then? Is it placed out? We have no, well, unfortunately, we don't have anything that requires that stature at the moment. So they're renovating the upstairs. And ultimately, when all the work's done, as I understand it, the hearing room will be upstairs, which is where it was historically. At the moment, we don't have one. We've been using, actually, as I understand it, the Ninth Circuit of Court of Appeals has chambers over in Hawaii Energy's office. So at times, we've used that for a couple of meetings or wherever we can find available space. Jay, I want to make it clear that you can always meet here. We can always have meetings here and broadcast at the same time. There's enough room for all of you. We'll take that under consideration. Let's take a short break to cogitate on that possibility. That's Jay Griffin of PUC Commissioner and Marco Mangelsdorf, my co-host and informed citizen and president of Provision Solar. We're going to take a short break. We'll be right back. This is Think Tech Hawaii, raising public awareness. Hi, I'm Ethan Allen, host of A Likeable Science on Think Tech Hawaii. Every Friday afternoon at 2 PM, I hope you'll join me for a likeable science, where we'll dig into science, dig into the meat of science, dig into the joy and delight of science. We'll discover why science is indeed fun, why science is interesting, why people should care about science, and care about the research that's being done out there. It's all great. It's all entertaining. It's all educational. So I hope to join me for a likeable science. Crazy world, so caught up in the confusion. Nothing is making sense. Actus is Think Tech. This is Hawaii the state of clean energy. We have Jay Griffin. He's a PUC commissioner, recently confirmed, and Marko Mangostore for president of Provision Solar. So I want to talk about who he's with. Sure, and I realize this so much that Jay is likely going to be able to discuss in terms of the details. But let me kind of go after this one on a more broad philosophical level. If you look at what's been going on on the US mainland for the past decades, utilities have been often getting out of generation, going to more transmission distribution, selling generating assets, generation assets, and buying power cheaper from those who would propose long-term power purchase agreements. That's kind of been an overall trend. Do you believe that that's something that should be also kind of the law of the land or of a high priority here in this state that in other words, utilities should overall get out of power generation and leave it to the marketplace to be able to put out bids out there, generally speaking, for lower costs of power? So wait, you're just saying you're seeing who or no one versus HEP decision, I think was the utilities proposal. Yes, I'm sorry. You're absolutely right. That's Hamakua energy partners. Yeah, Hamakua energy partners, yes. Excuse me for... Well, you're asking a broader question. Correct. Couple of answers. And I think in the inclinations which you brought up earlier, there were statements in there raising the question, posing the question whether the policy should basically direct utilities to divest from generation. And the concern that's been raised in a variety of ways is that there's a potentially hard to distinguish between true reliability concerns, utilities, self-interest, both in the dispatch of generation and procurement of new generation. So that was a statement put out in 2014. I think it was meant to provoke discussion. And I think reflected a lot of concerns at the time. And what we've seen in the decisions of the commission since that time have gone in a couple of directions. As you know, the commission did, and this was one that was prior to my time, commission denied proposal from White Electric Light Company to buy out the IPP contract from Hamakua energy partners. We did deny a proposal from a couple of years ago from White Electric to build a solar planet Cahe. We have approved a couple of proposals. One to build solar project here on Oahu and as well as the Schofield Barracks generation plant. So my answer is that we're still, it's on a case-by-case basis. And we're ultimately going to look at what's in the best interest of customers. And the ones that we've approved, there were both the West Fox Solar one. It was generally the lowest cost solar, the lowest cost solar on this island so far. Schofield Barracks was a little different consideration with the relationship with the military, the interest in energy security and locating generation outside of all these low-lying areas. I know I wasn't on the commission at the time for the Hamakua decision, but I know one of the concerns was acquiring this long-term asset. A stranded asset is possibility. Well, one state policy is saying to move away from fossil fuels and just you looked at the projected use of that plant was going to decline over time. So there is a, as you point out, there's not only a cost difference, but kind of a difference in risk profile for an IPP generator versus utility owns. One of the benefits to customers is when that term is up for the contracts, you can say we're not going to renew it and the risk of that stranded asset is on that third-party developer, not the utility and its customer base. So if I could put you on the spot a little bit here, Jay, would you have voted with your fellow commissioners? If you were on the commission at the time of the HEP, the Hamakua Energy Partners decision, would you have voted with them to deny Helco's attempt to purchase from Mark Light that power plant? Yeah, I don't think I can speculate. I don't think they may have heard, well, I'm going to leave it at that. Okay, I can't speculate. Well, but it's fair to say from all this that price is not the only thing, that there are other factors that may override price in the given target. Yes, I mean, that's correct. It's a very important, it's a principal consideration, but it's also tied up with other things. In this case, I think part of it was the risk. So it's hard to disentangle price and risk. In this case, one of the big ones was risk over time of adding this asset into the rate base and who's going to carry that? Is it, are we going to leave it with a third-party or, you know, because utility makes that acquisition generally they're going to want to hold it for decades. But risk is an economic factor too. Yeah, so it's hard to, in that case, to disentangle. But it, I mean, it's, they're important. Can we go to transportation for a minute? Transportation, we had a, you know, Hawaii Clean Energy Day program a couple of weeks ago. And we wrestled, this is the Hawaii Energy Policy Forum. We wrestled with that that day as we have wrestled the last couple of years with this issue. And it's very hard, but it's entangled with energy. It's also entangled with planning, design, zoning. Any number of, it's like, what was that game they used to play? Wacomall? Sim City, Wacomall too. Where you have to sort of reinvent the whole enchilada when you're dealing with transportation. And yet, this is also on your plate, Jay. Got any thoughts about transportation and where the intersection is? That's not a pun. Where the intersection is about energy and transportation for the commission? Sure, yeah, I think, well, did I just step back a little bit and you're right that, I mean, the going back to the inception of the Clean Energy Agreement, right? Transportation was one of the, I mean, there was a focus on renewable electricity, energy efficiency, but the hope was also to drive significant change in the transportation sector. And my understanding of the facts and the data, we are making good progress. I think per capita we have some of the highest rates of EV adoption and usage, but it's, we're falling short of what the goals were 10 years ago. And I think it's a more complicated area that's really driven by, well, a number of different things, but ultimately by individual customer choice on how we use vehicles, where we choose to live. And so that's a tougher, I was making, well, prior to our conversation here, that some of the easiest stuff is when you have a regulated utility and state, the legislature and the commission can just direct certain actions to happen. It's far harder on this topic, but for the commission, I think there's a number of things right before us now. I think it's a, I mean, we understand, I think the cross sector effects, but a lot of these topics with electric vehicle usage, the pricing programs, opportunities for the utility to invest in some of the infrastructure. I think that the commission has generally been supportive and actually been trying to push further and faster on particularly on how we can price the use of electric vehicles to support integration of renewables. I basically trying to make cheap daytime rates available for electric vehicles to utilize a lot of the solar that we have. So your primary focus as the commission is on the utility, what the utility can do or not do in terms of its efforts to push renewable transportation, but could the PUC also say, look, we think there needs to be a statutory incentive right there and I can see it, I can see it in the text in your decision and order. We think there should be an incentive and we are urging the legislature to adopt an incentive or disincentive as the case may be in order to advance clean energy and transportation. Is this something you could do or might do or have you done that? Well, I think I go back to what I think we have been trying to, if you look at some of the evolution of the electric vehicle rates, we have tried to push that ball a little further and I know some of the earlier proposals didn't think about or they were a little limited in the lower daytime rates for electricity. So I think our focus been for now on these pragmatic things on exactly the types of decisions and incentives available for customers. Yeah, I mean, you can't walk the halls of the legislature in January and tell them what to do, but you can write it, you can write a decision in order to that regular recommendation, one agency to another, so to speak. They make the final call, of course. Marco? So one of the things I've been teaching my students in my energy politics courses over the years is my belief that there's really no such thing as a level playing field when it comes to energy, whether local, state, national or global, because there's just too much at stake, there are too many vested interests, too much money involved, and when you have that much money involved and that much power, you have these players seeking access, right, and influence. Do you believe that, do you believe that as well? That it's difficult and impossible to establish a level playing field when it comes to energy? Well, okay, so our, I mean, when I look specifically at our agency, I mean, where all of our practices and procedures are established to try and set up both clarity and transparency in the decision making and limit all of those types of influences. But you're right, I mean, these are, the energy industry as a self globally is one of the largest, most influential sectors. I think we have the good fortune here of, economics aligning with what the state policy goals are. I mean, we're seeing a significant push broadly accepted for renewables here, and that's shared by both the policy decision makers, myself and colleagues on the commission. So we're, I mean, I think we're moving, we're trying to move in all the right directions as quickly as we can. And I mean, again, we focus on our rules of practice to try and limit that influence. Let me ask a appointed political question, which you'll probably defer, but I'm gonna ask it anyway. Feel free to defer, Jay. So the past couple of years in the legislature, there were bills in 2015 and 2016, 2017 that made it to the very end of the session to the conference committee that would have established some type of state incentive, a tax credit rebate for energy storage, specifically for energy storage. And it didn't get out of conference committee on both occasions. Do you believe that this is something in principle where the details get to be worked out, something in principle that the state should at least consider doing in terms of some type of incentive program that would lower the cost for homeowners and business owners to put energy storage at their homes and facilities? So I don't, the commission has generally stayed out of testifying on those types of tax rebates and incentives, but I can say, I mean, these are exactly, we're trying to set up the programs that will enable people to sign up and install those different types of technologies and embedded in the terms and conditions of those programs will be, how lucrative that will be, but whether customers should receive a tax rebate or not. I stay away from that. I leave that to the legislature. Why's answer? You know, we were talking about this the other day and I want to mention it to you, talking about renewables as a group. Gary, there was at one point, and I think it was probably a PUC policy that we would take all commerce, that we wanted a diverse array of renewables, anything and everything. I mean, right down to wave energy to OTEC, I can hardly remember that term anymore, right? And all these things, oh, there was algae, okay? We had 10 things on the table and we included them all in the umbrella of, this is gonna be potentially renewable, a renewable source. We don't think like that. I mean, as a community, I don't think we think like that anymore. It's narrowed and I wonder about your reaction. For example, geothermal is not in the public conversation nearly as much as it was five years ago. Algae is kind of gone. OTEC is kind of gone. We're talking, and wind is much less in the public conversation. So arguably, wind is in the conversation to some extent still, but declined. Solar, of course, is always in the conversation and albiofuels is in the conversation. It's only a handful of things compared to all those diverse possibilities a few years ago. Is this the right direction? Is there still a policy to say that we wanna take all comers we wanted all of all these possible sources? So I think a couple of reactions to that. One, I mean, I think we, commission is articulated a few times, the value of diversity. I think when you cut to the chase of what we've seen in the past few years at the same time, we're reviewing the price and the terms of all these different. If these are utility scale projects, there's generally some long-term contracts, whether it's an IPP or long-term commitment if it's a utility-owned project. But anyway, it's a long-term commitment. You're looking at the cost of that. You're looking at the commercial terms for the developer, they need to finance these projects. So given all these factors, the set of technologies narrows pretty quickly for a variety of reasons, but just the commercial terms of those transactions. That said, we're seeing that scope expand in the sense that people are looking at adding storage to a lot of these projects now where that was not necessarily part of the discussion earlier. I think when we see this next round of RFPs go forward, we'll see possibly some different, I don't know, I mean, we'll see what emerges. I think it's pretty clear there'll be a lot of interest in solar, solar and storage depending on the island. I think there's certainly an abundance that there's still a high quality wind resources on a number of islands. So we'll see if those kinds of projects emerge. But you're reactive rather than proactive on this issue. In other words, somebody has to come to you with a suggestion, request, purchase power agreement, something. That's one step of it. The other step is that we do set a lot of the terms at the beginning of the bidding process. So we have a key role to play there. And then depending on the structure of it, there's an oversight role. So there is more involvement up front rather than just waiting until the power purchase, shows up, the power purchase agreement shows up on our doorstep. Marco, we only have a minute or two left and I wonder if you could ask some profound final question. It might be just a thought to ask Jay whether he thinks we are gonna be able to meet these goals we've set for ourselves. Jay, do you think we're gonna be able to meet these goals that we've set for ourselves? Look, I'm far more optimistic than I was even a few years ago. We're gonna keep pushing hard and see where we end up. But I think particularly in the next five years, I think we're probably gonna be surprised at how much further we can be than we thought. Okay, we're gonna check in with you. Okay. We're gonna find out, we're gonna take it one step at a time, find out how we're doing. Marco, we're really pretty much out of time. Can you make a closing statement on this? I have a feeling we're not in Kansas anymore, Toto, Jay and Jay, and that's okay. Because we'll find our way to Emerald City and make our way out with a balloon or not. Couldn't have said it better myself.