 Okay, we're back for a live four o'clock rock. I'm Jay Fiedel. That's Ray Starling We're co-hosting this program called Hawaii State of Clean Energy. It's our Wednesday energy flagship program on behalf of the Hawaii Energy Policy Forum And today we're entitling our episode. What does the consumer advocate do? And we're calling this the core of consumer advocacy in Hawaii featuring Dean Nishina, Executive Director of the Division of Consumer Advocacy of the State of Hawaii Welcome Dean. Thank you for having me. Nice to have you. You know You know If we we didn't notice it right away Soon enough Ray and I especially have I think observed all the players on the ball field We noticed that things change they do change and if you wait around long enough you see You know swirling initiatives that come and go you see Organizations that come and go you see leadership that disappears and comes and goes You see industrial players that come and go. It's like, you know Just when you thought things were settling down it always reminds you that Things are always in change to la mem to such a That means things are the same, but things are always changing and one of the changes of note Is that Jeff? Oh, no who was a consumer advocate for what five years or something about six? Yes six? Well, yeah, but who's counting yeah, okay is gone and went back to private practice. Yeah And Dean Nishina is now the executive director and what that really means is he is what is Customarily called what we in the trade called the consumer advocate. Yeah. Yes, that's what he is Okay, so we take the first 15 minutes of our show to discuss, you know exactly What is the office of consumer advocate? How is it organized? What it does? What is mission and resources are? Why don't you take the lead on this on these on these questions, Ray? Okay? Dean it's nice to have you with us and I know you've been around for a long time and So the way here you're a good choice. I think for the next consumer advocate but there are a lot of people out there that don't really know what the consumer advocate is all about and And I may even have some misconceptions about it So could you kind of give us an outline of what the office does how it? It's reporting hierarchy goes are you are you at the top of the heap? Or are there others that sort of engage on behalf of the consumer advocate? So what there are a lot of questions there So let me see if I can manage to answer most of your objective if you want Compound I should have brought my attorney to object on my behalf But let's see first of all the division is an agency within the Department of Commerce and Consumer Affairs I think I was mentioning a little while ago at one point our division was part of the public utilities Commission But it was determined that because we were part of the Commission There was a concern that we might have The ability to unduly influence the Commission's decisions when we're a part of the Commission's agency So we're separated out and that occurred back in the late 70s I believe so since then we've been a separate idea is you're supposed to be separate right independent Exercising independent judgment on these things right well Independent well, we're supposed to be representing the consumer's interest and then the Commission is really supposed to be the Independent agency that is the decision-maker was the judicial right because I did you the issue and so they would take into consideration Say the requested relief by the utility company and then our recommendations as to whether or not that request is reasonable or not from the consumer's perspectives so Again answering some of your questions Organizationally we are supposed to be able to have about 25 staff right now. We we have 19 incumbents You're looking we are looking we are looking we've been looking for a long time, you know One of the issues we've had for a long time. I've been with the division since 1992 Has been to find wait a minute 1992 yeah, let me just do the math on that. It's almost 25 years give or take. Oh, you're not as young as you looked in Thank you. I think it is a compliment. Yeah. Thank you. I think well again the way here But yes since 92 at one point our staff was down to 11 It's hard to find people who are interested in working for our office because there's a lot of work to be done and Depending on the application we're working on you have to be an expert witness and get cross-examined by Opposing console so you just don't go in there and present a position you have to Subject yourself to cross-examination right right and not all witnesses I excuse me not all people look forward to being a witness I'm sure so again finding people who are willing to be a part of our staff Can be a challenge at times, but I think we've been really lucky. We've been able to find a good core of people Right now to do the work who's willing to do the work We're very good at it and it's really going to help us as we go through some of the the issues We're dealing with right now What kind of experts you talking about it experts in engineering so yeah to sort of get back to raise original question within our division the the head cheese so to speak of the division is the executive director and then there are Four branches Let's see if I get this right. There's the the legal branch where we have Three attorney positions as well as our office services staff. We have our research analysis branch we have our rates analysis branch and we have our engineering branch and One of the things that we've found made it easier for us to find employees is We've converted our research analysis branches our exempt positions Which gives us a little more flexibility in terms of finding people to who might be interested in that means not civil service Right not civil service They can come and go or they do come and go because they don't have a lock-in career, right? Okay, so we have engineers. They have a research guys or lawyers or what no actually on the people We have there's one person who has a law degree that in our research analysis branch But then the chief of our research analysis branch has a PhD in economics We also have another person who was an engineering background There is an attorney within the research analysis branch. There's a person who has She actually worked for a Department of Health for a while So, you know her interest we have a wide range of experience and knowledge in that branch, which is we find is very helpful Wait, I just I wonder You know at the end of the day Are you called on to take positions on everything the PUC is considering? I would expect that they would like to hear from you. I'm bloody everything. No But by statute we are parties to every Proceeding before the public utilities commission Over time we have filed what's called a statement of non-participation for certain dockets that perhaps aren't as critical as others But otherwise we do try to take a position in every proceeding I like to say that we do a lot of the heavy lifting in the dockets within a docket There's an either Started by an application by a utility company or when the commission files an order opening an investigation We conduct what's called discovery where we issue information requests to help flesh out the record in the docket Most of the times We're doing the heavy lifting in terms of trying to flesh out the record and nobody else is doing that. Yeah, well The PUC itself issues subpoenas and and gather information that way Or do they rely on you to do that for the most part? I think they rely on our information request, but I will say that the like you were mentioning change the commission recently Within the last few years has been issuing more information requests Whereas in the past Information requests from the commission was very very rare when you say the last few years You mean the last year with Randy Iwasi? Not not he's kind of an activist doesn't he? I mean he's my right. He is pretty active You heard it here on Think Tech. Yeah, he is pretty active, but even with the the staff under Chair marita as well as chair Caliboso to some degree there there were Some irs coming up. It's just the number has increased within say the last couple years Interesting. So there's a dynamic here Do you ever have sort of a conflict within your own group as to who which consumer are you representing and some have Would like for you to go this way and some might want you to go that way How do you resolve that internally that that is a really great question great because you know We are the consumer advocate and as you're as you're noting there are different consumer groups and I Hate to pick on this issue But you know one potential issue we could talk about is the net energy metering issue where there are certain customers who want you know Wanted them to continue and then the we're pointing out that there's a potential cost subsidization occurring by the non-participants and so we were making certain recommendations trying to balance the interest of all consumers and Even in our traditional rate Cases that that's like our bread butter type of thing when a utility company comes in and say we want to have a 10% rate increase Even within there we have to balance consumer interest because let's say the company justifies a 10% increase of that increase How much should be allocated to say residential customers versus commercial customers versus industrial customers? So there's always a lot of balance and what we try to do is provide Analysis on all of the interests of the consumers and then we basically leave it up to the commission to kind of decide what they believe Is reasonable as a decision-maker? We do try to where we can Perhaps Ensure that the smaller residential customers have some benefit Benefit of our representation because some of the larger players such as you know department of the They hire their own consultant exactly so they have representation. Yeah, exactly So from that perspective, it's the smaller customers that usually don't have the resources for that And and so we I wouldn't say we necessarily Bias our positions for the residential customers, but they're certainly in our mind as we make our recommendations. Do you ever go into that? Kind of background when you file some kind of filing with the PUC or whether you when you appear or testify to say well You know, we have multiple positions among our constituents among our the people we represent We have a group who wants to do this with the group who wants to do that And but we have evaluated all of that and we kind of lean over here And these are the reasons we lean over what we want you to know PUC that it's not Monolithic out there that there are various viewpoints. You tell them that there have been some applications within which our Analysis did have that type of presentation That's an interesting spot to be it is very challenging to get managed you when you don't buy them For the most part you can never make everybody happy Okay, well, I can make Ray and you happy for a moment for one minute. I have the power to do that watch this Hello, and aloha My name is Raya Salter and I am the host of power of Hawaii where Hawaii comes together To figure out how we're going to work towards a clean and renewable energy future We have exciting conversations with all kinds of stakeholders Everyone who needs to come together to talk about renewable energy be they engineers advocates lawyers utility executives Musicians or artists to see how we can come together to make a renewable future Tuesdays at 1 p.m. Aloha, my name is Reg Baker, and I'm the host of business in Hawaii with Reg Baker We broadcast live every Thursday at 2 o'clock We highlight businesses and individuals that are successful in Hawaii, and we learn their secrets to their success I hope you can join us and listen in because we always have a pack of information on Successful stories in Hawaii. Aloha Bingo, we're back. I was happy for that one moment. Were you happy? It made me happy. Okay. Good Ray How about following up? Okay? question for me You know a lot of change has taken place over the last Two or three years and maybe going back five or six years Lots of things have changed and it's impacted consumer advocacy. It's impacted the PUC and so forth Are we do we still have all the tools we need to get the job done or are there changes in terms of procedures or? Representations and so forth that that we might need to look at to continue this this March towards renewable energy at a hundred percent Well, I'm gonna limit I will limit my response as it relates to perhaps the regulatory arena because when you ask about whether we have the proper tools I'd offer to some degree. I believe the Commission and our office does have the proper tools to move for that being said You know, we do have to look at whether or not changes might be appropriate and necessary to realize the end goal of 100% renewable energy in Hawaii and what I mean by that is the the Commission really teed it up in terms of whether or Not the current utility model is appropriate or will allow us to get there but also in terms of just how the The costs associated with that transition who will incur it How will it be recovered from the participants and non-participants? Those are some of the issues that we need to look at right now. I know the Commission has teed up in the most recent Hawaii electric light company rate case whether or not performance based type of rate making might be appropriate as opposed to the traditional cost of service regulation So when you ask whether or not we have the right tools I would offer I think we do But it will require us to step back a little bit and see how we might expand the box a little You know the big tension and as far as I've been following it from 2008 on forward is clean versus cheap And you know me and Marita said early on in her role as chair of the PUC that she was trying to protect the Consumer from paying a penny too much on the other hand on the other hand in my view you can I'd like you to agree or disagree We haven't moved fast enough. We're never going to get there at this rate. We are distracted with so many things We are a veritable picture of distraction every time you look we're distracted by something else And when I say distraction, I mean it slows us down. It gets in the way it makes it impossible for us to actually move forward in a With alacrity to get this done And so you know what you have is is the the notion of cheap gets in the way of the notion of clean My own view is I don't care about cheap. I want to get the job done at the end of the day We're gonna be sorry if we don't get the job done for so many reasons. I'd like to know you a philosophy about that I'd like to know how your office treats that issue because I don't think every single Consumer advocate feels the same way about that issue, right? So, you know, the one thing I would point out is generally the most Common complaint or comment that we receive from customers is that our utility bill is too high It's not that we don't have enough green energy. It's our utility bill is too high So one of the things we're trying to do is balance in terms of the proper path moving forward We could certainly achieve 100% renewable energy much earlier I always joke about it in our office, you know, if we don't care what the price is we could just find the sufficient source of biofuel and Just burn it in in the the units we have right now and we'd be there But our utility bills would increase Five six times just because of the difference between the fuels that they're burning now versus biofuel Is that the right path? I don't think so because if customers can't afford to pay the bill Then we're gonna have a different issue and we will have The customer revolt in terms of whether or not, you know, they're satisfied with utility service so I think one of the things we're trying to do in our office is to do a deeper dive into some of the potential alternatives to evaluate the cost and see I know Meena always I should say always but she often made the comment of trying to make no regrets decision And I don't think I can ever make a no regrets decision just by my by virtue of my nature I will always have regrets about any decision I make but I think we can make least Regrets decisions in terms of if we do the proper analysis and evaluate the support for it as we move forward We've minimized the regrets we might have on a going forward basis I certainly agree that the pace could have been faster, but by the same token I don't want us to be rushing into something where at the end of the day customers are saying I can't afford to pay my utility bill anymore because it's just too high. Do you remember the famous remark made by Joshua? He was counsel for the PUC. What was his name? Strickler? Strickler He came to one of our programs at the Plaza Club and he had this whole allegory about a salad I don't know if anybody was there, but it was it was stuck in your brain forever And he said hmm, we can't have a salad that has a worm in it Because the worm will ultimately, you know scare away the diner the person in the restaurant so we must exclude all the worms and and a worm is an issue that Hasn't been resolved that undermines, you know, whatever position you want to take And a worm is something to be afraid of the worm is something to make a very conservative decision And his point in all of that was we have to be very conservative all the time when in doubt don't do anything When in doubt hold back Because if you have one mistake you're going to get busted for it and all that stuff I might personally don't believe in that I think we have to move forward and take a certain risk about it because this is new territory This is new technology. This is a transformation of our economy. It can't be perfect by death by logical You know it can't how do you feel about that? I think we might be in the same boat or at least we might be eating the same salad I don't think Waiting for the perfect salad is the answer because as you've indicated if we were waiting for that perfect salad We may never get to eat And I kind of like to eat so Again, my idea is if we can do the proper analysis so we minimize the risk moving forward I think we'll all get to eat and hopefully we'll enjoy the salad Hopefully we won't have too many worms or they won't be worms that'll be too off-putting Well, you know my big question here is the consumer advocate in on my view can statutorily, you know Take affirmative action to move things ahead I mean theoretically correct me if I'm wrong, but you could get up in front of the PUC and say Ladies gentlemen, we have to we have to do this We have to move ahead and the consumer advocate advises you that in our view You should do this this this and this and get it done So the consumer advocate can be an activist also So what where's your head about that where I where's your head on these specific issues that either could or maybe don't get it done Net energy metering. Where are you on that? Where are you on time? What do you call it time of use? Where are you on what do you call it self supply these issues? They're not yet controversial, but I predict they will be So where do you fit on that? I think they're already in that controversial bucket But I think in the past we haven't been as proactive as I think we'd like to be when I say we are agency Primarily because of resources, but I think now that we're fully staffed and again I think we've also been fortunate not only to have some good staff people join our agency But we've also developed good relationships with consultants who can help us. Hopefully we can be more proactive I think one of the really important things that we need to do to move forward with our clean energy transition is trying to establish better pricing signals NEM is a great example of where it was set up to Incent or encourage initial adopters and so the the pricing for that was to Get over that hump of where a person might be looking at it and think oh, that's too expensive for me NEM was supposed to help overcome that hump. It was never meant to be the final solution to Have in place for distributed generation if if you're KVAC for a system that can last 15 years give or take 15 to 20 years is Four to five years your your compensation level is too high And that's why our position in NEM was we need to step back and look at the cost-shifting that's occurring between Participants and non-participants right now before the Commission a lot of the the focus has been on the technical connection issues and Our office has been saying yes, let's not forget the technical Connection issues, but also let's start to ramp up our analysis of the underlying cost Aspects of those interconnection issues and what the value of the services that might come from VG and whatnot because right now If we continue to look at those old prices It's inefficient pricing signals and people are making poor decisions based on outdated or stale information There hasn't been enough interest Because it's difficult and certainly not enough effort in the in that area And that's one of the things we've been telling the Commission Commission We really need to start to bring up that aspect of analysis within the transition to 100% renewable energy You're probably impressed I am well I'm actually very happy to see that you've got Almost a full staff now because I think that's a critical factor, especially with so many different things going on Right and one question I had before we close Have you looked outside of Hawaii for other consumer advocate groups in other states that are Doing things that that we might learn From that because I I found that we can become a little bit insular here And it's good to get out and even go to the mainland to some conferences where a lot of people come together How are you guys in a position where you've got the money and so forth to go do that because I think it's very helpful to talk to other people that are doing the same thing in other areas, right? I Will say that we have looked at other jurisdictions Although I will say that we always take the perspective that it's informative But not necessarily instructional because where Hawaii is right now. It's it's really unique, right? And not only are we not interconnected with other systems, so that certainly changes one of the aspects of the review But we're we're much further ahead than most of the other states So what the other states may or may not be doing again can be informational But I wouldn't necessarily take it as you know, this is what we need to do in Hawaii When we use some of our consultants the consultants are generally from the mainland and that's where we rely on their Experience within dealing in other jurisdictions and bringing it to Hawaii and we try to vet it internally with our consultants As is this something that might be appropriate for Hawaii? We have had consultants sometimes they come and they propose something and it's basically what they did in Not to pick on a state, but say Minnesota or maybe Colorado And they say this is what you need to do in Hawaii But really again you need to step back and look at the differences and determine whether or not that is something that can't It might not even be feasible really So I mean that's usually one of the more interesting discussions We have our with our consultants because there are consultants and we'd like to think they're going to advance What we think is the best thing for Hawaii consumers isn't it a matter of building credibility with the Commission and the public for that, right? You have to satisfy All constituencies at least to some extent and you have to walk into the Public Utilities Commission and they have to accept a Fair chance that they will accept what you are offering and recommending. This is really important I'd like to think they always accept what we say, but you know, they don't know But you know, that's why we try to make sure we do the best job possible in terms of supporting whatever Recommendation we might offer. Yeah, we are impressed Dean We are happy that you are here. We are happy you are the consumer advocate now Well, hopefully you'll see the same thing in a few months or you know, even a couple years We'll have you back. It's really gonna come back. Yeah. Well, if you want to invite me, let me know Assuming the schedule allows. I'm always happy to come back and have this kind of discussion. You can run Dean, but you can't hide Yeah, you know where I work