 It's 11 a.m. It's Think Tech. It's a given Tuesday. And Peter Rosseg, a spokesman for Hawaiian Electric, and I were just discussing the meaning of the word kauna, which is an important word to understand, you know, the cultural inside of the Hawaiian culture. Can you define it, Peter? Well, kauna usually is described as the hidden meaning behind a word or a phrase or an idea. It's a sexual or, you know, relationship term, I think. But very often, I think it comes up in other meanings. The story you hear, you know, it's like a fairy tale has a surface meaning that children understand and another meaning that adults understand. And the kauna is the unspoken meaning of the fairy tale, I think. Should I always be listening? You have to always be listening because, you know, we all think in different ways. And you have to be sure that what you're hearing when you're listening is what the other side is saying. And sometimes, you know, especially I think I shouldn't be opining on this. But in an island culture, you know, you tend not to be very direct and blunt. So you tend to, you know, it's like the classic air kiss where you kiss your friend on the cheek while you're making a nasty face. So I think, you know, in island cultures, Bob Krauss always used to talk about this at the advertiser. You know, people will not be so direct, they'll be circumspect, because if you insult somebody today, you're going to see them again tomorrow. And it might not go your way tomorrow. It's a small town. Yeah, very small town. It's a great thing about Hawaii, you know, that is a small town. It is. So Peter, thanks for coming down in Election Day. It's an important day. It's a stark day. We'll see you later. In the meantime, you know, I think it's very important to talk about the poll agreement and how the poll agreement has changed. You should tell them what the poll agreement is. You mean the one between the Czechoslovakians and the polls? No, no, no, that's that point. So Hawaiian Electric and Hawaiian Telecom have come to an agreement which has been approved by the Public Utilities Commission. There are about 120,000 polls across the islands, not counting Kauai, that are jointly owned. And they've been jointly owned or we've jointly owned polls for almost 100 years. But this was getting increasingly complicated and there's more and more things on polls. And so we started talking to them some time ago about us taking the ownership interest we call it or taking over the ownership of the joint polls. What does the poll agreement say? It said basically that in order not to have a telephone poll and an electric poll sitting side by side and then a third poll for whoever came along next, that we would have a joint poll and the top wires almost always are the electric company wires. The next wires down below are the phone wires and then over time cable wires and other things have been added there, street lights and so forth. So what was a fairly simple straightforward system got more and more complicated. And when somebody has, when there's an accident, the television calls up and says there's a poll out and we have to look in the book and say, oh no, that's not our poll, that's their poll and vice versa. There are a lot of complications that go with that, not least of which that in going into the future, there's going to be more things possibly on polls, new technology, 5G network connections and so forth. 5G nodes and go on the polls. On the polls, right. So it would be a lot simpler for everybody if there was one company that owned all the polls and was the one stop and you could always call them and it's not perfect. The White Tuck, I'm still owns about 20,000 polls on their own or whatever the situation on Kauai is. City and county also have some joint ownership through their street lights. We're going to work on that next. But by getting this all into one house, we're going to, we're solving a lot of things and for most people, I think the primary thing is when you drive around the islands, you see these big poll and then a stump called a double poll. And what's happened is that for some reason the electric wires were moved from the original poll over to the new poll. And then the top was cut off that stump because the other wires, whether it's cable wires or telecommunication wires or whatever, were not moved yet. And sometimes they stay there for unfortunately a long time. There are about 14,000 of them around the islands. And they're bound up. The two polls are bound together. Sometimes they're bound together. Sometimes not. Sometimes they've had to reinforce the older poll. They're not attractive and they're not useful and they just create two polls to hit with your car instead of one. So we're going to be able to, over the course of the 10 years coming, we're going to be able to get rid of those joint polls. It's going to clean up the environment. It's going to clean up the neighborhoods and make everything better looking. But more importantly, it will streamline things and it will make things less expensive, we believe, over the long run. And now you have to have two companies come and pull up a truck and do this and that. Maybe the first company has to come back and finish or whatever. Now we're eventually going to get to the point that one company will get out there and will manage everything. And Hawaii and Telcom and other providers will have agreements to put things on the polls, but we'll own them. We'll maintain them and so forth. You have to pay anything for this? Yeah. Nothing's free. No actual cash changed hands, but about $48 million in credit goes from Hawaii and Telcom that for past expenses and for future, they're sort of future rent on the polls. I don't know the details of how long that lasts or whatever, but basically nothing's going to move right away. So they're going to pay like any other provider will pay. And that lets them concentrate on their core business, which is the communications increasingly wireless, but there's still wires involved and phone and so forth. And for Hawaii Electric, it's going to save our customers money, we believe, and we see it as a way to, as these 5G things come in, that it's perhaps a source of income that we can use to reduce electric bills. Because at the end of the day, that's what we need to do. We need to reduce bills for our customers. So this is a very good deal. A PUC said, wow, this is great. Both of us, of course, are regulated utilities. So they had to approve and we've been in negotiations a long time. You'd think it would be simple, but nothing is simple. And we had to talk to the other telecommunications people that are on our polls and say, here's what our plan is and you will or won't be affected and so forth. But I think it's, it's going to be fairly invisible, but to most people, but in the long run, it's going to be a good deal for everybody. I imagine it's a good deal for Hawaiian Telecom, because A, they could use the money. Right. And B, their, what do you call it, their dial tone is less than it was, because people are relying more on their phones. Their business is changing and it just didn't make sense for both companies to have this fairly expensive vested interest in these polls. And now they have a new owner, of course, and we, you know, we hope that that's the end of their financial difficulties, but it has been a struggle because of different priorities, I guess, between the two companies. And, you know, very frankly, most people when they see a poll they're unhappy with, they call it Hawaiian Electric. And, you know, we don't like to say, oh, but that's their poll. So this removes all that. We're responsible and we're going to take that responsibility seriously. And as I said, over, you know, it's not going to happen tomorrow, God knows, but over the course of the next 10 years, we're in the process of an audit and of all these roughly 14,000, what we call double polls. This is on three islands. On three islands, right. And every place but Kauai actually. So five islands, not Kauai, there's a different utility there, you know. So we're doing this audit and we're going to figure out, you know, which polls are unsafe right now. We're going to do those first, which polls are older. We're going to get to those sooner rather than later. You know, where older polls also means that our customers have been staring, looking at them for a long time. And so we want to try to solve that for the people who's, you know, been looking out their window and seeing this, you know, not very sightly looking at them. Well, are we, does this put us closer to underground? Is there a plan there? Is this part of, you know, the deal? It's, no, not really. You know, undergrounding or overhead is still a basic question that has to be answered. I think we'll see increasingly undergrounding, especially in new construction and certainly in areas in Waikiki and the capital district and so forth. It's still a financial decision. Undergrounding is very expensive right at the beginning. And yeah, there's some sense that over the 50 or so years of the service life of the wires that there's less maintenance. But you know, we got flooding in Kakako and a lot of places these days. So even undergrounding is no, you know, long-term guarantee. Putting up a poll is not cheap, but it's not that expensive in the, you know, in the short term, cash flow and so forth. And over the course of the life, it probably is a little more susceptible to wind and rain and all of the kinds of damage. So the end result, we've studied this a number of times because people are always asking. And the conclusion is that they both cost about the same over the course of 50 years. But the question is, when do you want to pay the money? When does the 50 years begin? Yeah, when does it begin? And that's the other thing. You know, if we were to start to, first of all, it would take a, if we were going to try to underground everything, it would not be a Hawaiian electric decision. It would be, you know, a legislature governor. It would be a public policy decision. And then somebody would have to say, the first guy is to get their wires undergrounded is you. And the last guy to get their wires undergrounded is you. It's a problem. And I'm not happy about that because I could be paying a tax or, you know, whatever it's going to cost to do this. And it would be billions of dollars. I'm going to be paying it for 50 years before they get around to my neighborhood. So you got to ask, you know, is that the best use of the money in a high expense area like Hawaii? Is that the way you want to spend the money? And how do you do it equitably? I think most people would agree that, you know, the beauty spots and Waikiki and things like that, the coast lines ought to be, you know, among the first places. But heck, you know, if I have a poll in front of my house, I'm going to want it to be undergrounded if everybody else is, and I don't want to wait 20 or 30 or 40 years. So it is not a simple problem. Couple of thoughts about that. I mean, I take your point about how this is not just a utility issue because there's so much money involved. It's very expensive to dig the trench, to put everything in there, to insulate it somehow, and then cover it up. And I guess, I don't know the answer, but I guess there are legal issues involved in that, you know, in terms of who owns the land and whether the utility easement covers that. It would be, you know, on all fronts, both on the technical front and on the physical front and on the legal front, it would be a huge undertaking. And don't forget, there's still going to be street lights. So there's still going to be poles that go up and have street lights on them. They're still going to be, you know, traffic lights and all that sort of thing. So you're not going to ever have a terrain totally free of poles. But, and, you know, I, my thing, my guess is, and I read this in a book somewhere, you know, for most people, if the pole is straight and everything is pretty neat, you kind of, you know. It's an aesthetic question. Yeah, you don't quite notice it. If the pole is leaning and there's 12,000 things hanging off of it and a lot of junk, of course, you notice it. So I don't know, I know there are certainly people who are very interested in having poles underground or the wires underground and then the poles gone. But I think the majority of people, if you said, you know, is it that important to you? And some things could never, you know, we have massive 138 KV lines that go across the mountains and are held up by big, very strong now, you know, we strengthen these structures. You're never going to underground across the coal allowance. You're never going to, I've never meaning, you know, within the foreseeable future. Balance of equities is not worth it. Yeah. So, you know, it's always going to be a compromise. And I think the present situation where some districts are required, Capital District, as I said, and Waikiki and other places, new construction, it's usually built into the cost of the development that the developer says, we're going to put these underground. We're going to have to dig anyway. So we're going to dig for that. And if any neighborhood really, really wants to do this, they can come to us if they can find some funding or they can, you know, if it's worth it to them to underground in an area, we will talk to them and we'll tell them what's involved. And we, you know, we don't have any, we don't care in a general policy way. So if, and there have been a few small neighborhoods called the SACs and so forth, where the owners of the properties all got together and said, let's figure out what this would cost. We figured it out. We figured out where the money was going to come from a little bit from the utility, a little bit from them and so forth. And I don't know, I think there used to be some federal money that you could get for certain kinds of things. So, you know, we're not, we're never closing the door, but each decision is kind of, you know, has to be made on the basis of what makes the most sense to us, since the Public Utilities Commission, because they have to, if we're going to spend money, customers money on this, they have to say it's okay. And the consumer advocate has to say, this is fair to everybody, not just, you know, a good deal for these folks. You know, there was a, we're bound for extreme weather. Yeah. No question about that. And there was a piece in the paper this morning on inundation. It was very scary. You know, all the low-lying areas were going to be covered. Yeah. And so I, you know, I want to follow up on your point about, you know, flooding and the fact that underground poles can be inundated. So, you get two, you get two possibilities there. One is, if it's close to the inundation area or in the inundation area, I think I'd rather have the pole than the underground, because I want, I want power to be restored quickly. Right. The other is, well, if we're going to have a windstorm, I think I'd rather have the underground than the pole. Right. Any thoughts? My thought is, you know, I'd rather have the electricity on than off. And I think, you know, it is exactly that decision, that kind of, you know, six of one half dozen of another. And, you know, depending on the location and how well it can be protected, if it's underground, how well it can be protected from flooding, you know, what kind of drainage. And, you know, those, it's also very difficult work. I mean, climbing up a pole in the rain to fix an electric wire is no picnic. But getting down in a, well, I guess we have to call them person holes in the dark, you know, water up to your knees and so forth to fix an electric connection is also very challenging. And, you know, so, as I said, we don't have a strong stake either way. We're trying to do what makes the most sense. Right. Certain areas, I think you're right. It would be unwise, I think, to do too much undergrounding right now in Kakako. It would be, you know, just kind of asking for trouble. But, you know, on the other hand, new developers go in, they want to do that. If they can create, you know, there are ways to make sure the drainage in these, in these underground areas is good. But it all adds to the cost of undertaking the job. I think your point is like everything else in energy, you know, the technology is changing. Maybe somebody will come up with some solution that's less expensive, more effective. And speaking of more effective, we're going to take a one minute break. We're going to get effective after this one minute. We're going to come back when we talk about the new solar initiative with seven utility-scale solar farms. We'll be right back. Great. Hey, loha. My name is Andrew Lanning. I'm the host of Security Matters Hawaii airing every Wednesday here on ThinkTech Hawaii, live from the studios. I'll bring you guests. I'll bring you information about the things in security that matter to keeping you safe, your co-workers safe, your family safe, to keep our community safe. We want to teach you about those things in our industry that, you know, may be a little outside of your experience. So please join me because Security Matters. Aloha. And Aloha. My name is Calvin Griffin, host of Hawaiian Uniform. And every Friday at 11 o'clock here on ThinkTech Hawaii, we bring you the latest on what's happening within the military community. And we also invite your response to things that's happening here. For those of you who haven't seen the program before, again, we invite your participation. We're here to give information, not disinformation. And we always enjoy response from the public. But join us here, Hawaiian Uniform, Fridays, 11 a.m. here on ThinkTech Hawaii. Aloha. We are delighted to be here with Peter Rasek, a spokesman for Hawaiian Electric. During the break, we talked about life, lifelong learning, okay? Giving me goosebumps. I mean every word. So we have a sign here, says lifelong learning lives here. We also say truth lives here. That's the way it is at ThinkTech. And, you know, I just want to say that when I finished 70 years of graduate school, I said to myself, that's it. I'm not going back to school. I did all my learning. I'm not doing it again. But I changed my mind. Yeah. Maybe we all have. I saw a quote that said, you know, in the future illiteracy will not be the inability to read. It will be the inability to learn new things. Everything, I mean, the world is incredibly changing and for good and bad. As we know today on election day, we are hoping for the best. But, you know, the new technologies, I had to go and look up what 5G is. So for our discussion about polls, I, you know, I've heard the term 100 times, but I never, I never knew what the G stood for. So it's generation of, you know, internet connections. So wireless connections. So, you know, if you're not learning, if you're not open to new thoughts, you're, you're, you must be dead. So. Especially now. Yeah. Now more than ever. I mean, how different our lives are from what they were 20 years ago, from what our parents lives were 50 years ago. Incredible. It's just, I mean, it's exciting. In most cases, it's very, very invigorating. Yeah. But you gave me an idea for a new sign we have to have now more than ever. Now more than ever. Okay. Well, let's talk about utility scale solar. You know, I just felt years ago, years ago, when you and I first met, I felt that the future was in utility scale solar. And that the most efficient way to do solar was in large blocks and do it well. And so what's happening with the seven utility scale solar farms you guys are working on? Well, about last February, we actually put out a request for proposal said we were looking for renewables, mostly solar for on all of the islands we serve. And more than 20 applications came in and we picked the seven best that were in the final stages of negotiation. So we're going to have seven new solar farms, we believe, assuming the Public Utilities Commission agrees and we believe they will. Three on Oahu, two on Maui, two on on Hawaii Island. And first of all, you know, the headline is biggest infusion of new solar in the history of Hawaiian electric companies. 265 megawatts. 265 megawatts. Right. But the really important thing is two things. First of all, the prices are very good. They are very attractive and especially on Hawaii Island and Maui, those are going to be very helpful in bringing down their high energy costs. Well, it would seem that the cost of doing this on Oahu or Maui or the big island, it's all the same. Am I right? It's basically a very similar land cost, shipment costs. You know, there's some small differences, but basically, you know, the cost of a panel from China is the cost of a panel, getting it here, getting it installed. Once it's installed, it's very low maintenance, very cheap moving parts and so forth. So yeah, it is a very, in that sense, it's very attractive. And the costs for homes, as we know, and for grid scale projects has been coming down. So the price is very attractive. And the final thing really is most important for all three islands. Each of these projects will have a battery, will have energy storage. So during the noon time, middle of the day, when solar is strongest, it will collect energy. And if it's not needed immediately in the grid, it will be stored. And it will be available at five o'clock in the evening when the sun has gone down, but most energy is needed. So from five to roughly nine o'clock, most of these things will have about four hours of storage. So they will be able to transfer. The holy grail of renewables is getting renewables from when they're plentiful to when they're needed. And this is going to make a huge step in that direction. Increasingly, every renewable project will have to have some kind of storage, but for solar especially, because it's so abundant in the middle of the day from 10 to two or so, and then it tapers up, tapers off. But that creates a lot of problems for our system, not just for customers and what they pay, but about three in the afternoon, all of a sudden as the solar goes down, the amount of energy we have to produce goes up, call it ramping. And it goes up in a radical way much more quickly than most of our generators are designed to move. Most of our generators are going to go inching up and then inching down. Then all of a sudden we have these incredible ramps that we have to deal with. Is the peaking plant play into this? Yeah, peaking, peaking plant is what you turn on to deal with the ramping in a traditional way. But if you have this energy in the batteries, you're going to be able to control that ramping and we're going to be able to avoid, you know, there are three kinds of plants, base load on all the time, cycling which you turn on, you know, which you increase and lower, and peaking which you turn on at the very height of your demand. That's the most quick response. Quick response, but also the most expensive. That is very expensive energy. It has to start up quickly. You have to have, you know, the fuel and so forth. So if we can avoid that, and we can avoid ramping our cycling plants in such a fast way, I mean, they're meant, you know, if you drive your car normally, you increase the speed and decrease the speed. If you start revving it up and going, you know, from one to 60 in 10 seconds, your engine's going to be gone before you know it, right? And these are big engines. And if we have to continually ramp them in this radical way, it takes the life out of there, out of the minute, you know, avoids the warranty and all those bad things. So this will be a terrific asset for all the three islands and the price is great. So on the big island, on Hawaii Island, where they have paid very high rates because their wind farms are still on contracts from avoided cost of oil. We don't do that anymore, but those contracts are still in force. All of a sudden, we're going to get a large infusion about 60 megawatts on Hawaii Island of solar at a very reasonable rate and we'll be able to move the fraction of what it was before. It's probably among the best prices we've seen for grid-scale renewables. So that's very exciting. It's exactly the fruition of what we have been trying to do and leading up to in the 10 years or so, since we really got serious about this. And one more thing, we originally put out the RFP in February, I believe, and then came May or so, the lava, the eruptions on the big island and Pune Geothermal Venture, a 38 megawatt firm renewable energy plant, had to close because the lava surrounded it. Also on avoided cost, aren't they? Partly, part of it. They're more expensive. Yeah, they're more expensive, but their more recent contracts have been, have avoided, avoided cost. But at any rate, they're a very reliable partner and they tell us they're going to reopen and they've kept their staff on salary and they're flying people by helicopter to do maintenance and so forth. But in the meanwhile, we're not getting that renewable energy into the system. And so this and other plants that are being built on the big island will help to alleviate whatever happens with Pune Geothermal Venture. We hope they'll come back and they said they will and that's what we're looking forward to. But we don't know when and they don't know. So this is going to be a big help on the big island and the Public Utilities Commission, we went back to them after the lava erupted and said, you know, can we modify our request for proposals? And it's a lot of legalese, but basically, we got to do more for the big island because of this situation. They said, yeah, let's do it and, you know, let's move it along and let's expedite this so that we can get these very attractive prices. And one of the reasons the prices are attractive is there is a federal tax credit. If the deal expires in a year or so. Yeah, it starts to decline actually at the end of this year. So that's why we want to get these contracts signed, sealed, and delivered so that they can take advantage of that. That's part of the secret for getting these good prices. And you know, I think what most people do not know and that is Hawaiian Electric doesn't take a markup or on electricity we buy from a solar farm from a third company. So whatever we can get in terms of a good deal is what the customers pay. Pass it through. And you know, that's what the Public Utilities Commission wants us to do. That's what the CA wants us to do. And that's what we want to do. I mean, we're all paying, we're all customers of Hawaiian Electric. Well, it addresses that old issue of democratization because if I have the money to put it on the top of my house, it doesn't help the guy next door. Right. A utility scale solar farm helps everyone. Every single person, including the people with solar on their roof. And we're, you know, we're very happy, you know, we're, the 80,000 some customers have solar on their roofs, more power to them. We have just, speaking of batteries as we were, we have just formulated a new program. So somebody that has in them, Net Energy Metering Agreement with our company, they want to add their own storage or they want to add some panels depending on the size and the shape and so forth. They can do that without voiding their original agreement. And that was, you know, the deal was if you come back, if you put on 10 panels and you want to put on two more, your old agreement gets thrown out. Well, that's not a very good deal. And now that storage is available in home, and so these customers, they're making their contribution to our available energy. So they're expanded by putting storage on. That's what they do. So they can do the same thing. They get the power in the middle of the day, and they can use it at 5 o'clock at night. Let me ask you this though, Peter. Going back to the whole scenario about extreme weather, whether that could tear power lines down, whether that could inundate, whatever, and cause blackouts, because it happens. Would I be better, wouldn't I be better off if I installed on my house with a battery than if I relied on a big solar farm? Well, you know, that's one of the advantages of having your own solar plant on your roof with energy storage. You, unless you have the energy storage, you can't use them. But if you do have energy storage in your home, these Tesla wall-mounted batteries or some other arrangement, you will be able to keep power going, maybe not every bit you need, but, you know, enough to keep much more comfortable. No question. If you can afford it, if you own a roof, if you can afford it, you know, lots and lots of people at Hawaiian Electric have solar on their roof, probably higher percentage of the general public, because, you know, that makes sense. If you can afford it, you have the home, you're in the right situation. But as you said, you know, the guy next door who can't afford it or who's a renter, or like me, I live in a con, you know, in a high-rise, I can't get solar on my roof. So I'm left out in the cold, and we are going to soon have community solar, which is going to help that a little bit. But that won't solve the problem you're talking about, you know, reliability in the case of really adverse weather. There's also a piece in the paper this morning about the Big Island, and there's been a reduction in permits, you know, building permits for solar installation on single-family homes. So I think a lot of people cannot afford it or are most interested in it, and it's not something that we can predict. We'll keep on climbing. No, I think you're right. And about a third of people who have single-family, own single-family homes, have solar now. And that's a huge chunk, you know, relative to a lot of things. So, you know, we don't expect, we had this incredible rapid growth for a few years. Energy prices were extraordinarily high because of the price of oil basically in the Asia-Pacific region, and panels were getting cheaper and cheaper. And there were a lot of companies here who were competing to install solar. And there was this kind of confluence of events that saw this very rapid rise. I think that's calmed down. And in any given month, you know, the permits may be up, the permits may be down. Over the, you know, over the course of time, we expect the long-range prognostication is for rooftop solar privately owned to continue to increase. Just not, you know, in a rocket ship, more, you know, more in a long haul. I'll tell you about a show we did. We were really out of time. But let me tell you about a show we did a month or two ago involving some agency that was watching this guy was in Washington. And he told us that they had made a study of Puerto Rico. And in Puerto Rico, there were utility-scale solar farms. Probably not the kind maybe that we would build, but they were there, at least two of them big ones. And what was really interesting is, is that they had one contractor build on this side, another contractor build on that side. And the fittings that were on this side were different than the fittings on that side. And when the winds came, this side was destroyed. The panels were ripped off the footings. They were completely inoperable. On that side, they still worked. And the lesson to me is you can build it this way or you can build it that way. Right, right, right. Now, you know, it is not a simple undertaking. And, you know, these companies that do it have to cost it out and so forth. But, you know, we're, our terms require, we don't pay a contractor a penny unless they deliver electricity. So, if they're going to build a system that's not going to withstand some wind, they're going to be out of luck. Not, you know, we're not holding the bag for that. So, that's part of the deal. We want the best possible system. But the crux is we're going to not pay more than a certain amount for the energy. And we're not going to pay anything if the energy doesn't come. So, it's the contractor's responsibility to do a good job. And I got to say, among the 20 or so who applied, we have chosen the most reliable, you know, some of the best companies to do this. Part of what you look at when you decide to do a contract is, have these guys done contracts before? What's their performance record? Are they backed up by, you know, a big company? Or are they, you know, working out of their garage? And so, I think the, I think we have a fairly good assurance that the companies we've chosen are going to do a very good job. It's in their interest and certainly in our interest, but ultimately the financial responsibility is with them. Thank you, Peter. Peter Russer, Spokesman for Hawaiian Electric. Oh, it's good to see you. Okay. Aloha.