 Okay, we're back. We're live with energy. Wow, energy for the 4 p.m. on a given Wednesday. This is Hawaii, the state of clean energy. And we have Peter Rossick and we have James McKay and they're both going to talk about their respective areas of interest today. The first thing is the hot news from the press release about Project Footprint. Peter, what is that? Well, Project Footprint is an effort to involve our customers more in the overall challenges of what we have to do. You know, we always say if we're going to have clean energy, if we're going to get off oil, if we're going to reduce emissions and reduce our carbon footprint, it involves everybody. It's not just us. It involves everybody. And I think by now people are kind of coming around to that. So Project Footprint is a way to kind of remind people of that. We've always tried to have a relationship with our customers around energy efficiency and conservation. Since long before there was Hawaii Energy, which is the PUC organization that does that. And so what it is, is you sign up and you get a couple little freebies, a bag and some other stuff. And if you do certain things, you get other little awards. And you know, as we say, the small print while supplies last, but don't worry. We got plenty. So, and there'll be more of these as we go forward. Right now there are four basic things. Electronic billing, automatic payment, because that will help reduce the number of trees that we have to kill to get money, get your money, which we still have to do. But you know, that's one thing pretty much everybody can do. And a lot more people could benefit. And you get some little awards. If you buy an electric vehicle, if you put solar on your roof, there's other awards, you know, not huge, but then there, but they're substantial. And they're just one more little incentive. They're incentives. We're talking about incentives to make people conscious of what's going on and the benefits that are available. And to incentivize them to do certain conduct like electric vehicles. Exactly. And the other part of it is, you know, you'll see, you'll begin to see people with Project Footprint logo on their stuff. And you'll know, these are people that have taken that step. And that's important. You know, if you drive certain kinds of electric vehicles, everybody knows you're driving an electric vehicle, because it's a little different than the others. If you have solar on your roof at home, your neighbors can see you have solar, but nobody else knows that you're actually making a meaningful contribution. So now, you know, you'll have a little bit of swag, I guess you'd say. To show people, you know, and show them in other circumstances. And, you know, it's not a huge reward. We know that, but it's a small award. And it's a thank you. It's a little incentive. And it's a reminder. And as we go forward, we're going to have other activities, other behaviors going to be added that you can get awards for. You know, some people respond to that. Some people do it just because it's the right thing to do or it's the cool thing to do. But so all kinds of different people have different reasons. And the basic premise is, you know, when you were a little kid, you didn't have a very big footprint. And you should continue to try to have the smallest possible footprint. And you get it, you know, you got it. And, you know, it's just one other way for the electric company. We're not just, we're in the course of the business of supplying electricity and getting paid for it. But we've had a long tradition of interaction with our customers. You know, whether it's recipes in the newspaper or the old electric kitchen, we turn out volunteers for community activities. We donate to community activities. You know, we're every single one of us who works for the Hawaiian electric companies on Oahu Maui, Molochaila Nai, and the Big Island. We all live here. We're not, you know, attached to somebody else. It's our community. And we've always tried to be more than just a, you know, some company that sends you electricity and a bill every month. I've seen you. I go down to these, you know, things like the Boy Scouts Onazuka event every year. And you guys are there in force. All volunteers too. It's quite nice. Yeah, thousands. We tally it up at the end of the year. And, you know, tens of thousands of hours of volunteers, the employees themselves, their families, their kids. It's turned into a fun outing. We've gone and dug up lorries on some Hawaiian, you know, property. And we've, I was one of my proudest accomplishments was like the Tom Sawyer. I helped to paint the fence at the Hawaii Humane Society. I remember that. So I did. I did. I have, I probably have still have the t-shirt with the paint on it. So, you know, we're in the community. We are actively engaged with our friends and neighbors and family. And this project footprint is just a small way to spread that out. You know, we still have Hawaii Energy, which is working. They give you a rebate if you do certain kinds of things and they're promoting energy efficiency and just came out with a new deal that if you, if you put a fast charger in your multifamily dwelling or in your workplace, they'll give you an incentive, a rebate working with all the ponos. So they're very active on some things, but we are still where people look for energy information. We're still where the, you know, the trusted source, I think, for people to say, you know, well, what is Hawaiian Electric? Is this a good deal? Is this work? Is this meaningful? So we're still functioning like that. And this is just part of that in the community. Hawaiian Electric Company's Hawaii's Electric Company. Since what, 1910 or something? 19, yeah, 1876. Oh, in Princess Kay through the switch. You're close. Don't, don't, don't put in for your, your exam, your oral exam on Hawaiian. History just yet, but King Kalakaua, he electrified Hawaii, the Iolani Palace, a renewable energy originally. He was getting, there was a dynamo down by Nuwara Stream. And after that, he, you know, it's a bunch of businessmen got together and he gave them their, his blessing and he encouraged them and they formed the Hawaiian Electric Company. Ta-da, we've been here ever since, 120 to 60 years ago. He used to term engagement a minute ago and I really think that's important because we had a show earlier today on news and the priorities of news items. As a spokesman, you know, I'm sure you're sensitive that, you know, sometimes, you know, you have, you have a point of news, a point of consciousness that sort of rides down and you have to bring it up every now and then. Right, exactly. You have to make it top of mind for people. And they may not, you know, on a daily basis, there are hundreds of things that come at us and sometimes we forget the important things. And one of the important things is we live in a renewable energy community. We have goals and targets. We have an industry that cares about this and a government that cares about it. So we have to be reminded. And I think the program you described, the footprint program, as a side effect has, has that kind of benefit that people are reminded that we live here. We live in the world of renewable energy, Hawaii, the state of clean energy and all that. And that's what, you know, aside from all the benefits and incentives, it reminds them of where that issue is on the priorities. Absolutely. I think everybody, you know, you see a commercial or you hear a program and you say, you know, I'm going to turn off the lights every time I leave the room. There's no reason for all those lights to be on. And that last week, maybe two weeks and one thing and another. So, you know, the hardest thing to change about people is behavior. And so this is, as you say, another reminder, another thing that this is, you know, part of a busy life and it's important. And, you know, we got to do it and got to keep doing it. And got to remind ourselves every so often to go to the gym, turn off the lights. And, you know, all those things that we're supposed to do. So you're exactly right. Yeah. And we're going to turn off the lights now for just a moment. We're going to have a short break, Peter. And we're going to break the James McKay. And then when you come back, I will have disappeared. Thank you, Jay. I appreciate the chance to talk. Always nice to have you. Nice to see you. Aloha. Bye. Hey, Aloha. 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. Hi, I'm Rusty Komori, host of Beyond the Lines on ThinkTech Hawaii. My show is based on my book also titled Beyond the Lines, and it's about creating a superior culture of excellence, leadership, and finding greatness. I interview guests who are successful in business, sports, and life, which is sure to inspire you in finding your greatness. Join me every Monday as we go Beyond the Lines at 11 a.m. Aloha. All right. We're back. We're live. I'm Jay Fiedel. The fellow you can't see anymore is Peter Rossek from Hawaiian Electric. The fellow you can see is James McKay from Amoresco. James, thanks for coming down. Pleasure. We want to know everything about Amoresco. Amoresco is into building efficiency, building energy efficiency, mostly, and you have a place in Pacific Guardian Tower. We made a movie about that for OC16 not too long ago. We want to find out more from you about the changes in Amoresco. It's a rival, full force, and what it's doing. Full force in Hawaii. Well, yeah, we've actually been in the Hawaii market for a little while, maybe six or seven years. But predominantly, we're an East Coast company. Like all good things from America, I guess have been spreading West. They've gone as far as they can go. My head office is out of the Seattle area. And so my bosses are up there, Portland and Seattle. I took over the region here about a year and a half ago. And really, we're focusing on just like Peter discussed, the energy efficiency side is critical. My professional background in Hawaii was commercial solar. And the most important part of solar is actually energy efficiency, which sounds counterintuitive. But if you really think about it, generation, which is also what Amoresco does, is a very expensive way to create energy. So the tagline is you always want to reduce before you produce. So the energy efficiency side is critical because the cheaper measures, just like we talked about, turning off the light. That behavioral stuff is very important. But like Peter said, behavior is hard and you can't make a business case depending on people's behavior that's going to vary. So what we do, we specialize core bread and butter business is something called an energy services performance contracting model, or ESPC. Success contracts, isn't it? It is, it's a guaranteed success contract. I hate to use the term no-brainer contract because it's actually a very complicated mechanism, but it's used nationally. Hawaii actually leads the states in all of these contracts per capita and I think per dollar figures now. So we have more ESPC contracts going and they're performed by what we are, an energy services company, an ESCO, ESCO. So you hear other names around, ours is embedded in the names, so you can't forget what we do. But we're probably the most smaller nimble ESCO company in that we can do renewables and these ESPC contracts. Well, you talk about renewables and efficiency and it seems like it's a non-secretary, but it both, the underlying point is it's smart. It's smart energy. And so you come to me, I'm a building owner, I always wanted to be a building owner. You might regret that, but yeah. And you say to me, look, we're going to make you, first we're going to make you efficient and then we're going to give you renewables to power what's left. Exactly. And the bottom line is everybody wins. We save money, the tenants always derivatively save money, the state is better off because the state is using solar power. And we're being smart about it. Exactly. There's been, over the years, I'm sure you can comment on this, over the years there's been a lot of waste in big buildings about the use of energy because we didn't have smart systems. Now Amoresco is a specialist in smart systems. Can you talk about that? Yeah, so it's not just the smart system, it's also the smart financing really. And that's critical to where the state is today. A big issue that facility managers and building owners would be very familiar with is deferred maintenance. So the standard procurement model is actually what's left Hawaii very behind in that if you are owning or operating a bunch of buildings, they generally go to ask the CFO, chief financial officer, or the legislature in our case for public buildings, we need $2 million to upgrade all these air conditioners and widgets and gadgets. And the CFO says, well, I've only got half a million, so I'll give you 250 now to do one, two, three. And 20 years later, they're still asking for the same widget to be replaced. So that leaves us with a lot of archaic broken widgets or widgets that are just ticking by and they're working would be the kind of operating guy that your air condition is working either too hard or not hard enough, but it's an old air condition that's using a ton of energy to do what it's doing. So the smartness, you're right, the energy world has rapidly become very integrated, the worlds of efficiency renewables, but the internet of things in the energy space has come up very rapidly. So the interconnectivity of all these widgets and gadgets, I won't use their real terms, but everything to work properly is very important, not just for our customer, but also for the utility here, because we don't want to have all these spikes of demands and loads all over the utilities grid. So increasingly, we're a key partner to the utility as well, because we have to integrate all our work with the grid side of it as well, because it does impact one another and that can impact the neighborhood. So it's become a very interesting space and incredibly dynamic. Yeah, I always said that energy is technology. I mean, it used to be not so, but or at least not so much so, now it's turned into technology. And if you see those new inverters on the solar systems, you see the connections among the grid elements and with storage, big technology and storage. Yeah, storage is coming up. Technology in many, many different ways that goes into that. And efficiencies, energy efficiency, that's technology too. Absolutely. You guys are into technology and I went to see this program you had that Pacific Guardian, which is kind of like your home-based downtown a couple blocks away. And you had an engineer there. And I must say, and the room was full of building engineers and building owners, I suppose, from downtown who were interested in what was going on at Pacific Guardian and with Amoresco. And he was talking a language that was so far over my head. It was really, it was all technology. Efficiency is technology. But before it would be, turn off the lights. Oh no, it's much more than that. Exactly. And that's why the, for me, the company we acquired was previously known as Chelsea Group. That came about just because I was so impressed with the team there. They're young, very intelligent, cutting edge, and really focused on quality. And that's what we're about. We're focusing on delivering the solution for the customer as a long-term partner in this space. Because the building management is very hectic and busy and you're putting out fires all the time. Energy management requires a different way of looking through a different lens at the building and making strategic investments in that building infrastructure that have a long term, not just energy result, but here in Hawaii, energy is money. So, you know, the boss of the building loves our work, but a building manager rarely is a good energy manager and a good building manager. They're slightly different skill sets. And slowly the industry has realized this and that's why we have these ESCO companies and the ESPC financing models that can really help a building owner become a lot more successful. And, you know, for me personally, like in Hawaii, it's very expensive to do business. So, if a building owner isn't thinking about the rates that they're just passing through to their tenants, it's not really a long-term sustainable vision for an owner to think that way. In my view, if I was a billionaire and I owned a building, I'd make it as efficient as possible so I could make the rates as low as possible for my tenants. So, they're buildings, you know, we have long-term tenancy and productive, constructive businesses that are hiring people for a long-term in Hawaii. That's kind of the long-term goal. Well, I think it's very important. You know, there's a, what do you want to call it? Sort of commitments of the great of good involved in all of this because the building owner could pass the electrical cost, electricity costs on to the tenants. And, you know, you send them a sheet in January. This is what it is. Enjoy. Pay it. Yep. Kind of thing. And that was the old model. But the new model is, and I don't think it's so much the tenants as it is the owners and managers. They want to do right by the tenants. This is something that they will attract, use to attract tenants to their building. They say, we care about renewables. We care about good rates. We don't, we want to make it cheap for you. Yep. We don't want to, you know, goose you with high electrical rates. So, we go into efficiency and we go into renewables and it benefits the tenants because the landlord is passing it through anyway. So, this is a very, what do you call it, community-minded kind of approach when you do this sort of thing. Absolutely, sir. And I hope the tenants appreciate it. I hope you tell them about it so they know the benefit they're getting out of this. Because in the end of the day, they're paying less. Yeah, they'll pay less and actually the other benefit is actually the improvement in performance is greater. So, you know, the lighting upgrades with LEDs and customized lighting, you can actually have different color. You know, depending on what you're actually working on, you can optimize the lighting performance and how the criteria works for that kind of job category. Air conditioning, obviously, you know, that classic here at movie theaters, right? How often do you go there and just end up freezing within 10 minutes that you walk in? Because everyone's in, you know, shorts, tee-shops, flip-flops here and then you walk in thinking, oh yeah, I forgot again. Yeah, we can do better than that. Yeah, so there's a lot of things that we do need to change and it costs a lot by not changing them. So, yeah. What about the role of the building engineer? You know, back in the day, the building engineer would, you know, do very few technical things. Mostly he was there for band-aids. Yeah, yeah. And now it's different. Yeah, well, there's a lot of older building engineers that are still in their jobs because, you know, familiarity, they like, they well like by all the talents, the owners, they can trust them. But a lot of them don't keep up with the latest technology and skill sets. So, and it's not easy. Like, this stuff changes pretty quickly. And, you know, we're just adopting a new energy code now, too. So, that's all going to be changed. We've got plenty of shows about that. Yeah, exactly. So, you know, how it's always on that. So, it's going to kind of, either they upgrade their skill sets or they have to partner with someone to adopt this stuff now. So, I think, you know, the state has to do this stuff to get to the energy goals it has to get to. So, we don't really have a choice. It's just how we get there. So, effectively, it's retraining a workforce of engineers. Absolutely, absolutely. Even if they have an engineering degree, which a lot of them don't, they need to be retrained in the latest stuff. And, the conference I saw and filmed a few weeks ago involved a talk by an Amoresco engineer through building engineers in the local downtown community. And, you know, they were writing it down. They were taking notes because those concepts and that equipment he was talking about, you know, will help them do their jobs. So, it's a raising all boats kind of experience when you have this. So, the question is, you know, how much penetration do you have? You know, that was Pacific Guardian Center. There are other big buildings like that. Are they all getting a word? Are they all doing this? Or is this, you know, a slower process? I think it's a slower process, obviously, than what I'd like to see. I think, you know, for me, it's the sooner the better for either generation or efficiencies. And the problem is really, in what I've experienced so far, it really is that procurement method of the financial driving what they can afford to do and looking at it from like a business procedural procurement method where the last gateway is your financial guy who's not an energy manager and not a facilities manager and just looks at it on a spreadsheet and says, wow, two million dollars for a big air conditioner or something? What is that about? There's always a CFO in the wing somewhere, you know. So, yeah. So, that's why it's something like, you know, the solar power purchase agreement people are probably familiar with in Hawaii where there's no cash down, no money down, all these kind of things that sound too good to be true. In the energy services performance contracting, it's a guaranteed energy savings model to the client. It's a very complicated spreadsheet of what's called energy conservation measures, which are the upgrades of all the widgets around the facilities. And it's basically a spreadsheet of old widget, if replaced by new widget, saves us this much energy, which was this much money. And then our company would fund all the investment upgrades. So, the CFO sees a zero. All they have to do is commit to doing the project. We upgrade their facilities at our cost. And it's a 20 year or 25 year partnership between us and the facilities, which is paid back over the guaranteed energy savings for the lifetime of the project. And then the facilities probably, who knows what they're in state in 25 years, they've probably got other things going. But usually the payback period is very impressive. And it relies on that partnership of, you know, the facilities managers, if they're not going to get the funding to do it and they're not going to do it themselves some other way, that's the only option right now, really. They can get this work done. Yeah. Well, you mentioned, I mean, this is really, it's a financing arrangement at the end of the day. It is, yes. Because the cost of upgrading the building and Morisco was bearing that cost. But then the, I guess what happens is, it will recover that cost over time by virtue of the guaranteed success feature in the contract. And so that's hard to underwrite. Especially talking about a 25-year term, you got to look into the future and figure out not only what the expectations of the building are, you know, the demands, but also what the technology is going to be changing going forward. This is really a pretty hard thing to do. It's really interesting. If you do that, James? I definitely don't. I kind of keep it on how far I can see on the end of my arm. So that works for Hawaii. So we know we're going to have amazing technologies coming down the pipeline. So, you know, everyone's talked about, you know, solar windows and solar roadways, all this incredible stuff, right, that you never see. But there will be some game changes for sure, but the key thing is that to do something today and start getting those savings are bankable day one. The moment the upgrades are done, you start saving immediately. If you have a groundbreaking technology in whatever aspect of the building, you can incorporate that later. It's only going to mean you save more. It doesn't mean that you can't do it. And that's, you know, what we build into these things aren't fixed by any means. You can revise it as you go down the pike. You revise it on a cash flow and performance positive partnership. We're trying to tune it, make it perfect. Yeah. Well, tuning is another part of it. So these things don't just sit aside without maintenance here. We need people employed as technology, engineers, O&M, the operations are maintenance side of it. It's just as important. It's like a bicycle. You got to keep moving the chain and keep the tires going round. Otherwise, especially in our climate, it's going to start rushing out. There's no choice about that. You have to change with the times. Yeah. So we need the maintenance side of it, but also the verification, just seeing what else is out there doesn't make sense to upgrade it. And then through the savings, the client might be able to fund a special, like the UH have started, this green Revolving Loan Fund where they take the savings out of those projects, put them into a special account, and that account buys new things to save more energy. So that's a very similar kind of creative financial method that's a really good idea. We are learning, aren't we? All right. Every day. Every day. MRS is a great entry into the marketplace here, a great player, because it brings new wisdom to us, new techniques, new best practices, maybe that we weren't aware of before. Yeah. One last question. I wanted to ask, you're a solar guy, or at least your background is in solar. And I wonder how important solar is in building efficiency and in building renewable sources. Because the footprints on some of these big buildings, with current solar technology, is not all that big. Yeah. So how do you play that? How do you play solar? Yeah, that's a tough one. Yeah, definitely. It's always site-specific. Solar is directly powered by the sun, so you can't have shading. Rainfall is an issue. Clouds, just that general lack of solar radiation drops performance, which is your direct financial return on investment. So I'm very excited by the Community-Based Renewal Energy Program that's just started now. Sure. So I've been looking a bit into that, and I think that's got great potential going forward in the bigger phase where it really ramps up. So that'll be a lot of the really utility solar that's going to do it, because we can't power all the skyscrapers in Kakako and Waikiki from solar. It's going to rely on an intercombined grid that's going to get clean energy somewhere else and then basically wheel it to those other customers. How about batteries? Are batteries included in the kind of setups that you create? Yeah. Pretty well mandatory now. Yeah, it's hard to find a grid that's not solar saturated as the term. You know, again, the amount of solar saturation on the grid does cause some problems to the utility. So the batteries provide a short-term storage point all the way around the grid, then more and more in different projects we'll see we'll be installing batteries nearly on everyone, which is a whole new, interesting, exciting technology line, which is going to be pretty interesting too. Very interesting to talk to you, James. Thank you for coming down. Pleasure, Jay. Good to see you. Really appreciate it. I want to hear more about Amoresco going forward on its new adventures and projects and ideas we won't want to share. Yeah. Thank you so much, James McKay. Look forward to it. I know you were a shy child. Very. I was actually. Making up for it now.