 We're back. We're live. Who are we? Who am I? Who's with me? This is Marco Mangostorf, Energy 808, The Cutting Edge, and I'm back with PUC Commissioner Jennifer Potter. It's just Jenny and I doing solo today. Jay had something that, doing the show today. Jay had something that he needed to attend to, so I am just so pleased to have Jennifer back with us. She's been a frequent contributor to Think Tech Hawaii, and thank you so much for joining us and Think Tech on this noon day, Monday, October 4th. Thanks so much, Jenny. It's a pleasure to be here with you, Marco. Thank you. So let's, no shortage of juicy stuff, of course, to dive into the Hawaii energy world. How about we start something topical? There has been some news last week at the Hawaii State Senate. Senator Glenn McKay and others were talking to, I think it was your former boss at some point, Rick Rochello at HNA, good Rick. Yeah, you know, a guy I've known on and off for many years myself as well. And he was briefing McKay and a number of other senators, I believe, on kind of what's going on with AES in terms of life after AES or transmogrification of AES. And McKay noted explicitly his concern about once AES stops burning coal, which they are absolutely definitively going to do from what I understand no later than September of next year. And McKay is voicing his concern about a so-called tight reserve margin, which as I understand it means that you always want to have supply of utility generation here and demand here and never the other way around, right? That's right. And the utility always needs to have a certain percentage of here versus here. And that as you lose generation, obviously that gap shrinks. So how concerned are you and the commission in general about this tight reserve margin impacting Hawaiian electric operations in generation with, you know, they never want to get and we never want to see the O word as an P O word, power outages. So how concerned are you about this? So thank you. Thanks for the question, Marco. You're right. This is really timely. It's hot off the press kind of that we've been working with here. Actually, we opened a docket back and so we opened a docket that was intending to explore the interconnection challenges that, you know, utility-scaled projects might face in doing a business with the utility. And so we wanted to explore what those challenges were and how we could find solutions to that. In the process of that, almost at the same time, we started looking at the whole landscape of how are we going to get to 2045 with renewable energy and maintain and start to retire these fossil units and take them offline and yet maintain power and power quality to the customers in Hawaii. And this is not exclusive to Oahu. But what we found is there was a pretty significant gap in the energy reserve margin and demand or I'm sorry, not a gap. There was a there was actually a very tight reserve margin between the in 2022 in the Oahu service territory and that of demand. And that would begin in 2022 after the retirement of the AES coal plant. And so we started asking some questions about how quickly we could bring some of these projects online and could we accelerate the GCOD, the guaranteed commercial operation date, if we could accelerate those up so that we could start making sure that we still had adequate adequacy of supply. And that energy reserve margin for the for all of the islands except for Malachi and Lanai is 30%. So we need to have 30% more of generated capacity than we do of demand, which is on the customer side. So in looking at that sort of landscape of what was available to come online, we said, you know, we probably need to start looking at some additional contingency plans. So the commission is very concerned. And so what we did is we created some projects that are more focused on how we can get energy from customers and the customer side and so the distribution system and feed that back to serve load throughout the distribution system. So in we created, we encouraged the utility to create a program called the scheduled dispatch program. And with input from the solar parties and other entities, we created some parameters around that. So, you know, there's a there's a upfront incentive, but customers need to agree to provide power for the next two years at between the peak hours of six and eight PM. And that is an active recruitment right now. But we're that still doesn't necessarily guarantee that we filled the the gap, if you will, which is kind of the opposite of a gap, right, that we've increased the reserve margin, because we don't know how the turnout is going to be from customers that are deciding to make investments that would help us kind of keep the keep the lights on. And so we really are calling this a keep the lights on program. And so without a lot of additional, you know, accelerated schedules for the utility scale programs, we're not quite clear on how how that energy reserve margin is going to pan out at the end of next year. And we are very concerned about it, but we are taking action where we can. Let's let's kind of play a worst case scenario because I mean the utility has to engage in such scenarios because they would be unwise not to. Let's say the utility scale plus storage plants that people were hoping would go online by September, October of next year, they do not go online. Let's assume that this figure 50 megawatts of behind the meter storage, which has been going live. Let's say little to know of that 50 megawatts goes online either. So that in Q4 of next year, there's little to nothing in terms of actual behind the meter storage available. There is little to nothing as far as utility scale solar and storage available. How I guess a leading question how concerned if you were living on a Wahoo and hooked up to Hawaiian Electric, which 400,000 or so repairs are if I'm not mistaken, how concerned would you be about how to get. Yeah, this is a real concern. I mean, one thing to recognize is the probability of there being an event, a power outage, right, an event that occurs on the island, it would most likely be less than an hour in duration. But there there is a potential and a possibility that it could be island wide. So the likelihood of that occurring is obviously much higher without these resources online. And so, but it's not as though it's a one in 10 chance or even a one in 20 chance. It's something more like a one in 100 type chance that there's going to be a power outage. But this is assuming that all of the fossil fuel units that are online, that we're deferring maintenance on those as well. So there's some there's some moving parts and pieces here of how likely the situation could come to pass. But I would be very concerned. Yeah. Yeah. Yeah, I don't want to neither of us want to be much of a Cassandra or any penny the sky is falling, right. And at the same time, I mean, I don't live on the big island. I mean, I mean, excuse me, I live in the big island, I live in Oahu, but at the same time, I mean, it's just it's a concern. I'm concerned, you know, and I don't even live on the island. So let's let's get in our canoe and paddle over wiki wiki over to the big island for my next topic. You know, we've spoken quite a bit about who who knew who who knew us till it continues on and one form or another. And could you procedurally give us kind of give us a quick update in terms of there's going to be an evidentiary hearing which is called for by Hawaii Supreme Court ruling number months ago. And when is that going to be and I know you folks at the commission, you know, never want to get too crystal ballish in terms of a D&O is going to come at such and such a date. But when if I could get you to kind of opine as far as when a D&O decision in order on who who may come out in terms of a time range timeframe after the evidentiary hearing. I can definitely give you a shot that letting with the caveat that you mentioned is may happen. So so right now we have a lot of activity with the pre hearing briefs that have been filed most recently. And they are available, you know, to the public at under 20. It's 2017 dash one to zero one to two. So zero one to two. And so people can can log on to there and see what those pre hearing briefs state. There's going to be a lot of dialogue happening back and forth between the parties through information request and some supplemental information request. And then finally we're going to get to the point of the pre hearing statements of position, which will happen in December and December 9 of 2021. And then we start really gearing up for that evidentiary hearing. The plan is to hold it on July or I'm sorry in the week of January 10th ish. So we're hoping and aiming for that. Usually we do pretty good and hitting those goals. And then after that, there'll be post hearing briefs that are filed. And those are those need to be filed three weeks after the completion of the of the evidentiary hearing. So then subsequent to that would be the decision in order. And so that would probably put us in a timeframe around June ish. And that's that's my my best guess. And hopefully we can beat that timeline. But, you know, I think reasonably for the work that's going, you know, that our team and our staff are going to have to go through to really dig through a record that's very, very thick and dense. It's going to take some time for us to come up with a ruling that's that's fair, just and reasonable and in the public interest. So so evidentiary hearings in January, three weeks post Texas in the February, the post evidentiary hearing kind of the the the summation to the jury, so to speak, right, the jury being you, Jay and Leo and the staff there, you get that by sometime, I don't know, February ish and several months of deliberations internally, write a dno of some kind. So sometime May, June, the dno sounds sounds like I was looking at my Marco crystal ball, probably, I think you got it. Yep. Yep. So yeah, this is a lengthy process. It really is sometimes I get surprised that, you know, I've learned so much of this job in terms of, and when we do have these evidentiary hearings, how much preparation is required. And you know, and I told my colleague and friend, Jay, a chair Griffin, I said, this is an evidentiary hearing that we have to prepare for starting now, you know, even though it's occurring in January, because it really just takes all hands, you know, and these important and critical proceedings to be prepared. So yeah. You know, this is a question I was thinking of asking you at the get go and I'm glad I thought of it because it's such a juicy question I love to ask it to you, is you've been a PUC commissioner for three plus years, if I still have my mask goes down, right, July 1, 2018, right, so three plus years, you're a little more than halfway through a six year term, your first six year term, right. And what what a surprise, what continues to surprise you with anything, as far as your tenure there at the commission, whatever you may have thought of prior to becoming a commissioner, this is what a commissioner does or what a commissioner doesn't do. Well, what's it been like for you to to be in this, I can come up with lots of C words here, cauldron, crucible, kettle, although kettle starts with a K, but what's it been like, you know, what have you learned, what surprised you? Marco, you know, I was thinking about this interview this morning, and I was thinking there is the further along I get in this job, the more work there is to do. And I don't know if it's like at the beginning, I just didn't know what was happening. And so I was kind of willy nilly. But now it's, you know, there's there's no way to catch up. There's just such a tremendous amount of work. And every time you're like, Oh, I'm going to focus on this and check this box off. There's another crisis that comes up. And if it's it's something like, you know, the retirement of the AES coal plant, and how do we respond to that? And we need to do this quickly. And quick is a very strange word in the regulatory realm, you know, quick is nice. And I mean, that quick is like four months, right? So so we'll work diligently on something, check that box off. And then the next thing comes up. And so the fact that I'm consistently overwhelmed, I think is something that I've learned. And I think of my colleague, Chair Griffin, and imagine, you know, he's been with the Commission for 10 years. So I can only imagine how much he feels that, you know, that this is this is just a really busy job that you're really occupied. The other thing I would say is that, you know, not being an attorney, as a commissioner has been an incredible challenge. There's, you know, I've had to lean on the legal staff, just to ask really basic questions that are, you know, very basic for them. But I don't know, you know, how to proceed. But we are a quasi judicial branch. And so that responsibility as a commissioner, I need need to have those those laws intact and down. And so there's a lot of preparation. And like I mentioned, for an evidentiary hearing to understand the laws and the regulations and, you know, whether it's the constitution, state constitution, or if it's even just federal law, it's mind blowing. You know, the imagery that comes up to anyone, you say that is an inbox, which is up to here. Okay. And then the outbox is here. And you're never able to really shrink the gap to get equilibrium, right? Because the stuff from the inbox just keeps on piling, piling, and you're just working as fast as you can to get stuff, you know, outbox, outbox, get it off the plate, checkmark. And then if you look over your shoulder, more stuff has come in. Exactly. Yeah. Absolutely. So the Jenny Potter of October 2021 could give just several points of really juicy, incisive advice to the Jenny Potter coming into the job on July 1st. What would the Jenny now tell the Jenny then? Read the administrative rules for PUC and then also read the statute for the PUC. And reread it and reread it to ensure that you know where to look when these issues come up and then what our legal strategies can be in dealing with some very difficult negotiations, if you will, or decisions so that I would certainly start there. And that's something I didn't do, not when I first started. Nobody told me to, so to figure that out the hard way. That kind of brings to mind, you know, Christians will typically, they fall back on the Bible, the Word of God, as they understand it, Muslims fall back on the Koran. Buddhists fall back on the teachings of the Buddha. So in this case, it's fall back on administrative regs and rules of the PUC as your kind of nighttime bedstand reading, oh, it's two o'clock in the morning, I can't sleep. I would go to chapter three verse two and bone up. That's right. That's right. Yes. Well, just as kind of a sidebar note, you know, the, as you probably know, the California PUC has five members and the chair who is a woman whose name is keeping you right now. Do you happen to remember her name? Mary Bell Baxter. You got, thank you. She apparently is retiring and, you know, the PUC, and Gavin Newsom, of course, as governor Newsom survived the recall last month by a whomping margin two to one. People did not want him to leave. I'm very relieved by that, by the way. And now, you know, who's going to replace the chair of the California PUC? And of course, one of the big dynamics in the state, not only now, but over the years, decades has been how the PUC handles specific gas and electric, which is one of the most powerful, largest service territories in all of all America, you know, electric utilities. And, you know, there's kind of the populist sentiment, which is nobody can rain P, PG&E in, you know, they've, they've admitted responsibility for a big gas explosion in San Bruno years ago. They've admitted responsibility for the Paradise Fire, which killed dozens of people. They're spending billions for, for abatement in terms of, you know, threats to their lines, transmission lines, distribution lines. And it just, you know, reminded me of just how, how big the stakes are, not of course here in California, just in California, but also in Hawaii, not only in energy, of course, but transportation, communication, water. And I mean, energy gets a lot of, a lot of play, a lot of media play, but it's, you know, that's just the part of your, your portfolio. What would, what would you estimate if you, if you could look at the, look at the big pie, the PUC pie, and you were to distribute it on the slices of the pie corresponding to the size of the portfolio from let's say, energy related, communications, transportation and water. I think I've covered all four of them, when I'm missing something in terms of what you guys regularly. Telecom. Yeah, com. Yeah. So you got, you got energy, telecom slash communications, transportation and water. How would you divvy up that pie? I would, I would definitely state that, that energy takes up probably 60% of the resources. So we spend a great deal. We have one attorney that's, that's almost, she's so well-versed and telecom and handles all of those that come through. But I would say that's probably 5% of our time because your HT of white telecom, it became partially unregulated in the last legislative session. So, but there's still, we, they still do need to file with us and, you know, and basically work with us for compliance and ensure that we're delivering service to areas that aren't, don't necessarily have service right now. So provider of last resort. Water also, we also have a, an auditor that's specifically engaged with most of our water activity, which is wastewater and water itself. That has, that is going, if you ask me, it's probably about five to 10% at this point, but it is not, but it will increase because we have water shortages and we're going to continue to see that because of climate change. And so it's going to be, start taking up a bigger piece of the pie as we work through some of the water issues on all of the islands. And then finally with transportation, and I'm going to throw young brothers into that pool as well as transportation. But as far as motor carriers, we have an entire division that deals with compliance and authorizing different types of tours and, and basically any type of ground transportation, excluding taxis and lifts and lift drivers and uvers. So they, they handle a huge part of our business. And then with young brothers, last year they took up about 40% of the time. And this year, I think they're, they're, they're probably down to about 5%. So we're not, we're, we're, we have just released a management audit on the young brothers. That was part of the agreement and, and their rate increase, their emergency rate increase that we authorized in 2020. A management audit was conducted and completed. And there were recommendations within that. And we're asking for party comments at this time to reflect upon that before we decide what to do in terms of a rate case or how, you know, different other filings that, that we, we would need to review it and post the emergency rate increase. So, so that, that is, you know, young brothers kind of hits the table hard when they do come in and then takes up some bandwidth for sure. Thank you. Thank you. That's very useful. I don't think I got to 100. More or less. Yeah. Rounding, you know, we can round up and round down. You know, near and dear to my heart is community based renewable energy, aka CBRE that Senator Mike Gavard pushed back in 2015, six plus years ago. We're going to have Mike on the show sometime in the not too distant future. I want to get his take on things. So it's been kind of slow on the CBRE docket 2015, 0389 of memory serves correctly. Could you bring us up to speed on where things are in terms of another go round, round two for proposed projects on Hawaii, Hawaiian Electric Service Territories? Sure. Absolutely. I, you know, you didn't bring up phase one, which is, which we've struggled with. I mean, bringing projects online has been an absolute challenge. And, and so we're working through some of the kinks of that. And hopefully we'll have those, a lot of those issues that we're running into in terms of like inter, inter interconnection requirement studies that we're addressing those within the RFP so that people can sort of think about how they're going to maneuver around that and what the, you know, and, and manage that with the companies. So what's happened as we've asked for several rounds of comments and feedbacks on the phase two RFPs for all of the islands, the Molokai RFP and the Manai RFP have not been suspended. They are moving forward. They have not been issued yet, but they are forthcoming in, in, in short time, you know, in short commission time. And then for the other islands, what ended up happening, which is really unique and sort of following suit from Molokai was we had a group from West Oahu reach out to the commission and ask to be for their voice to be heard. And so they said, you know, we're planning all this energy, you have sites that you've, you've sort of lined out and authorized for, you know, development of these large solar projects. But, but we want to have a voice at the table, we want to be able to contribute and talk, talk about, you know, why it is that we're being burdened often with a lot of these energy projects or, you know, waste to fuel projects. And, and, and really it's, it's time for us to have a seat at the table. And we thought, yeah, the other islands should have that opportunity as well. So we suspended the CBR for just, we didn't really suspend it, but we were holding it for 45 days for comments from community stakeholders on the RFP to, to basically either request meeting with the, with the companies and talk about negotiating the terms or any of the RFP that, that may affect their community in a way that it may be a burst so that they're addressing those up front. And then we've, and then we've, we've also invited them to just make public comments about the, the CBR RFPs. So it's, it's about bringing people to the table right now. And that's really the idea of, of, before we move forward with this and end up in a situation where we're, we have a community that's unhappy with these types of energy projects that are being deployed. We really, and we want to ensure that we, that we give people a chance to speak their, their truth, if you will, at the table and help make modifications if necessary, if prudent to the RFP itself. And when you say West Oahu, are you talking why and I? Yes. Yeah. So I thought. Yeah. Good. So thank you for that. So last point of the day, or last topic. You know, equity, social equity, eco equity, social values, low, middle income folks who are not as affluent by definition, right? As others. Once you, if you could kind of talk a little bit about what kind of value, how does that, why is that something that you were interested in as your interposition as PC commissioner? Really, if we can begin by piggybacking on the conversation that we were just talking about with the CBRE RFP and why and I, and those communities on Malachi, you know, when we think about where we just decide to site a project, there can be environmental inequity, where people are, you know, they're, they're actually subjected to, you know, in many parts of the country to coal ash. And that's, you know, they have coal ash ponds in North Carolina and these belching, you know, facilities and low to moderate income customers are residents are living next to those facilities. And so part of the idea of its equity at the level of financial equity and its social equity and then also environmental equity. So that we're thinking about how we deliver energy in a way that has, is really thinking about all three of those components. And I think the one that I would like to see us execute and potentially introduce legislation this year, hopefully someone will think about that is, you know, several states already have like Colorado, California, Oregon, even Massachusetts have started have introduced legislation and passed legislation that looks at reducing the energy burden on customers. Because what we found is, you know, through COVID, in particular, is that people really struggled to pay their bills. And so they were placed, you know, they weren't disconnected at the time, and they were given extensions and off and offered payment plans. But some of in some of the even that being generous, if you know, to some degree, not disconnecting customers, there's still an energy burden when someone has to pay a past due amount plus a present amount, and that that can eat up 25% to 30% of their income. And that is really not acceptable. I mean, we shouldn't be living in a world where some people are, you know, getting electricity for free for solar panels on their roof. And then people are spending, you know, making decisions about whether to buy medicine, whether to buy milk, and or pay their electric bill. And so how can we introduce programs with the utilities that will help address some of that inequity. And that could be things, you know, as simple as a discounted rate for customers that qualify for LIHEAP or SNAP programs so that those are federal programs that identify customers that are low to mother income. So those are some reasons for this being so critical right now is that I think over the next couple of years, we're going to see some real volatility and the cost of energy. And so how can we help mitigate that getting in front of that, so that we're helping serve, you know, Hawaiian residents to to to a degree that they deserve without having to, you know, a Molokai there was an article in Civil Beat just recently that some customers don't even have electricity. They're not even customers. And the inequity across all of the islands is just it's appalling. And, you know, and even on big islands, there's there's challenges there. There's people that just do not have the energy burden is so great that it's very challenging for them to pay all of their bills and keep keep the lights on. Well, it's a very necessary, timely, critically important thing that you're doing that we all must be aware of. I mean, especially during this ongoing time, substantial economic dislocation, economic distortion because of COVID because the the engine of the state's economy is still over the years over the decades, so much tourist related in terms of revenue flow that it's still there's a lot of turbulence. So I'm very I'm I'm relieved that you and Jay and Leo and the staff there see this is the important critical issue and priority that it needs to be so I very much appreciate that. And with that, my friend Jennifer and Potter. Thank you so much. We need to wrap it up. Thank you so much for joining me and and Jay and spirit Jay Fidel. And we'll have you back on again soon. I'll reach out to Leo as well haven't seen him in a while nor nor my friend, Dr. Jay Griffin. So it's always such a great pleasure and thank you so very much at a grand time. But then again, I always do when you and I talk. So Mahalo Nui for your presence and for your great work. And we will pick up again sometime before too long. Thank you. Thank you so much, Marco. It was a pleasure to be here. Thank you everyone.