 This is ThinkTech Energy 808 the cutting edge I'm Jay Fidel and we have Jay Griffin who is the chair of the PUC and Marco Mangelsdorf with us they both join us by zoom and we're excited to have this discussion to check up on the PUC and on energy in general in the state of Hawaii very important discussion Marco can you please introduce Jay Griffin I'd be more than happy to Jay Jay Fidel Jay Griffin is someone I know I've known for quite a number of years now well not that long but we're kind of different we're brothers from a different mother in a sense and I think very very highly of Jay he's he's not only one of the smartest guys I know but he's also got a great heart and he there's nobody I would want to see other than Jay Griffin Dr. Jay Griffin is head of the PUC during these challenging times and it's always a great treat for me to be on with my JJ brothers together again and I mean we could go on for hours and hours and hours but we have a shorter period of time together than hours and hours so we'll do the best we can so again thank you so much Jay Griffin for being with us today and great to be back with you as well my my brother from another different mother Jay Fidel so with that intro I just wanted to ask you Jay to kind of get things started where where do you find yourself or how how is this COVID stuff I mean it's changed our lives dramatically both in the micro and the macro and how has it affected you personally as your stewardship of the of the commission has necessarily had to to to adapt to very very different conditions how are you doing personally through all this first off it's great to see both you Aloha good to see you're here and healthy after that intro I may just drop off it's hard to follow with anything so I appreciate it Marco okay how are we doing so the the the word I and those of my staff that watch this will know they've heard this word consistently through all this is perseverance so our organization has been able to adapt through the need we pretty quickly went to all electronic filings and that was driven by the the desire to close our door to the public as quickly as we could not because we didn't want the public in there but we we wanted to protect everyone's health as quickly as we could and the you know there's a definite risk of every day we have people coming in and dropping off their filings we have people submitting applications so we saw quickly that sooner we could do as much of that online the sooner we could have everyone safer than our organization so within about a week we're able to update our processes move to a basic or most of our processes online and send almost all of our staff home and they've been working remotely almost entirely since mid-march so that you know that was an incredible transition our our staff put in I mean did things that we didn't think were possible or we're going to take years but under the circumstances were necessary and so it was really rewarding to watch everyone contribute and do and work towards that it's been a challenge as everyone is going through you know working from home is obviously has its ups and downs and managing a large team in that environment some things are easier some other things become more challenging it's it's nice just to be able to walk into a room and talk sometimes uh but again there we the perseverance has been the the buzzword I keep saying it every time we feel challenged by the events before us and that we've been through hard times before and and we continue to survive and thrive as best as we can you asked about me and that's been kind of my own I tell myself the same thing um though we have a young family and fortunate to spend the time together at home um but you know it's challenging times for everyone you know I've I've been working at home Jay and I find I'm working harder I put in more hours at home than I did in the studio before uh and I think it's because uh I'm comfortable with working at home and that I'd rather do that than anything else how about you uh I guess I'll say it this way um we put in long hours no matter what um in any of these environments just given the workload I would say that the intensity is changed we have it may given just the need to do things extremely quickly sometimes and kind of the the risk that you're facing and so you know that was with our transition with the office but we definitely have some matters triggered by these events you know that have risen to a crisis level and you know that we're asked to help resolve so I think the workload has always been hard but the intensity and the the consequences the risks are definitely amplified for us so you know we we've been through a number of phases the first phase was the denial in Washington and and that slowed down any any response and then and then we realized we the whole country realized we had to do something so we did something and we ultimately locked down as and you responded to that in you know in March and and then and then now we reopened after that this I mean this is like uh it keeps going back and forth and I think it will continue that way um then we reopened and everybody was a little hesitant about actually reopening and finally not not as a surprise it's a fairly predictable um that the reopening would generate other cases and we'd have to retrench on the reopening some places they call it a pause in any event uh you know where are you on that continuum you're still locked down essentially you haven't reopened I take it and no need for you to do that I guess and you haven't gone through the reopening and the pause of the reopening right you're still the same way you were back in March I close what I've been saying we're we're reopening slowly and carefully we we transition quickly um and part of that was based on my wife's brother their family lives in Singapore um and so early on they had a second wave and a third wave actually of they'd locked down watch their cases drop off and then did a wave I mean kind of two successive waves after that so could see that you know that was going to be a definite risk and certainly in a state where we're so travel dependent you know we're just as prone to it but I kind of entered into this knowing that that kind of risk was always going to be there and so as people look to reopen and other state agencies been roped reopening we made a deliberate choice to go slowly because we were working productively at home people are safe um and so we've I mean on the range we have um we're kind of slowly reintegrating certain basic functions um but we haven't kind of set sent large groups of people back into the office and that was primarily based on sitting in a lot of discussions with other state agencies and as you start to work through the complexities of I mean everything that's necessary to well one our space won't really handle anywhere near the number of people that we had before but just having enough sanitary supplies available working through the protocols and certainly reopening to the public you know raises things to another threshold so we've been going slowly on purpose and the main intent is that you know we're trying to stay as productive as we can during this and stay safe and my biggest concern continuing has been if we had a series of infections a cluster in our office I mean how devastating would that be and you know it's just those are you don't want to make those phone calls to people's family members saying this happened and you know we didn't know what we we could have done about it and so yeah I think we're just we're trying to be deliberately safe but I think we haven't had much of a tradeoff in how it's affected our operations you know a lot of people we've talked to Jay they they've learned things they've learned maybe things they didn't have to do or that they could do these things a different way they've learned how to be you know a necessity is a mother of invention they've learned they've invented new things new systems new ways of doing business and communicating that they find are really attractive and they've kind of decided on a tentative basis to keep on doing that no matter what happens going forward kind of a you know an improvement based on the adversity of the circumstances what kinds of things have you found fit in that category for the PUC I think the one that we move to quickly by necessity was I mean the the greater a lot you know almost the entire reliance now on electronic filing we're able to do that by relaxing well basically suspending our rules during the emergency on requirements for hard copy filings and so you know for those that do a lot of business for our commission there's a stream of people that come in and drop off hard copies of filings that we have a what means of processing those but they're all at the same time they generally be sending us electronic versions and so that was a lot of traffic you know in and out of the office and time and effort and you know these are sometimes several thousand page filings and they need to make multiple copies so sometimes we'd have vans show up with you know piles of paper and people coming into the office to which all of that is then scanned and put up online digitally so I think you know that's a we'll figure out which part of that is still necessary because we have certain you know certain requirements particularly a lot of the motor carriers come before us still prefer to send in hard copies and so we'll look at the best way to you know provide the range of services but I think that's the that was the step that people thought was going to be very hard to the transition past and you know we did it in that week and certainly those that work before us a lot you know that's a big time and cost that saved them so I think that's it's been one lesson we've had others but that I think that's that's what's allowed us to move into this environment and still be fair I mean maintain our productivity. Okay since the beginning of the year or since the lockdown March April May June June four months for lockdown period what what kind of to the extent you can talk about it what kind of substantive decisions changes in you know in in dockets in the rules have come out of the PUC how have you engaged with the energy community in that period? Yeah thanks Jay into the dive into the substance I think probably one of the we tried to move pretty quickly to you know sustain a lot of the work that was going on you know there was a I don't I don't think anyone can say that they could avoid disruption entirely so we definitely had a few week phase where we were focused on making transition and getting people settled but fairly early on the commission issued our our kind of statement and priorities during this emergency and you know focus was on one the core essentials of utility regulation safe reliable affordable service continued to meet our our work towards our clean energy goals and promote recovery and so that was just a way for us to you know articulate our priorities and we also in the course of that tried to solicit people's ideas and proposals to meet those and just again articulate what our priorities were and so I think that was a helpful exercise internally and for the commissioners we definitely did receive other ideas that came in through that but it's helped again it's also helped us prioritize where we put our time and effort and so if we look at where that is we've had a lot of emergency requests either do it in the beginning where utility operate utilities modify their operations to lower the risk to their customers and to their operations so we had a lot of really short turnaround requests for that that we need to jump on to we've had we tried to as best as we can maintain the momentum and the priority for our high profile high impact dockets so the performance based regulation a lot of the different procurement activities another major decision that we issued that aligns with all of these was to open up and expand the phase two of the community renewable program we've had requests from is that marco's aware the distribute energy resource parties to simplify and speed up the interconnection process was their main ask to help with the recovery so those are that's a snapshot so we've tried to maintain the the momentum as best as we can with the high priority items that we already had but also be very attentive to the quick emerging needs that come up and be aware that that that's going to be unfortunately that's kind of going to be the environment that we're in that utilities both operationally and increasingly now the financially you know are finding themselves in trouble and we need to be able to act and figure out a path forward yeah so this isn't really business as usual we're in a we're in a time of may I say crisis and so that's that'd be the top priority have you have you issued any particular ruling decisions of note in this period anything you want to mention in that connection uh yeah I mean I think the big the one I mean a few of them are not finally yet a few are I think the community renewable ones was major we're trying to kickstart the market in that program the first phase has been it's not the response that we've wanted so I know that was a priorities coming into this we're continuing to monitor and you don't see it as much publicly but we engage independent observers to help monitor monitor and and provide a level playing field for the bidding processes uh so that's a huge time and resource effort from our commission and so that continues but I think probably I mean the big ones that you know the stuff that makes the front page of the news has been young brothers um we've we've I've personally spent a lot of time working with other agencies on the path forward on that we don't have a final solution but as we're sitting here um working with the other agencies on proposed legislative changes that are up for hearing this afternoon so we're we're yet to issue a final decision on that but we've had to adapt going along as they've found themselves in a worse financial uh situation than they started the year and we fully understand how important that service is particularly to the to the state and to the neighbor islands and so that's it's been a big time uh time time commitment for us to figure out a solution there you said the hearing is the hearing on uh on remote or is the hearing in person uh that is a hearing in the finance committee this afternoon at two o'clock uh they're hearing a bill part uh first sections would uh potentially offer means for financial assistance and then we're looking at how we potentially transfer oversight uh for that company to department of transportation and the best means to do that so I've been working closely with other state agencies and the legislative leadership on what the path forward is there well that's pretty important Marco you must have some questions about some of the uh issues that are pending uh some of the dockets yes please thank you Jay so I mean uh emergency requests urgency I mean that seems to be what's screaming out these days that everybody wants expedited treatment and like you said Jay I mean the news is covering stuff like young brothers young brothers if I'm not mistaken is asking for essentially 25 million dollars from in public assistance right call it what it is and the commission is obviously an integral part of that discussion let's look at hawaiian electric as another example of a company that's a vital infrastructure in the state covers five islands their sales are down somewhere in the double digits range similar to k i u c because of the loss of tourism and uh hotel rooms that are empty and so forth and they're not going as far as I know they're not coming to the commission they're not coming to the state for for money but they're hurting they're hurting in terms of lost sales they're hurting in terms of substantially less revenue what means do they have as as the means have already been constituted to seek some type of relief from their financial pain of of this not only current loss but the loss of the last month and the prospective losses of month after month after month as tourist numbers are going to be considerably down for an unknown period of time what kind of relief do they have open to them given the options available right now and and what kind of timeline are we talking about or can you can you give us an idea of uh when conceivably they could get some relief uh no so marco the the I think the one aspect of this is the question of loss sales and impact is cutting across all the companies that we deal with um but young brother is one example but electric utilities gas utilities um the water I mean everyone that has seen a drop certainly and and if your customer base uh was a higher proportion commercial industrial particularly hotel districts you know you've seen a really big hit uh so our electric utilities fortunately knock on wood um have have maintained a solid financial position what we've seen throughout the industry is people going out and basically taking on additional lines of credit to shore up their liquidity their cash position because they expect they're going to get less payments in the near term so they still need to cover their costs um so you've seen that reaction we have existing we have existing regulatory mechanisms and then people are asking uh for some additional tools to help ride out the crisis and so what I mean by that is as I think I know marco is aware the utility are uh horn electric companies have a decoupling mechanism uh that that literally decouples their annual revenues from their level of sales and so as they they file with us every year what they're what's called target revenues um and expected level of sales and if they deviate we threw that up in a subsequent time period and so in this event that helps insulate the utility from a in this case decline in sales um but I think is you're aware that at some point um you need to make up for the lost revenues in that time period and so there'll be uh the expectation is they will have to they will look to collect that in the future and the idea is that this is to help support or help to collect enough money to cover their roughly their fixed costs um and so that's one mechanism a second which a lot of these utilities most have asked for is some what you call regulatory accounting for costs of thing that they incur uh clearly attributed to this crisis so they have to go out and buy out buy new protective equipment um they've had to modify their operations and their shifts of people uh so they've set up accounts to track those costs ask to uh take those off their books and held in a separate regulatory account and then at a later time we review those and adjudicate how much of those costs are prudent um it's a every state is doing some form of this and the idea is that you know these and again how do you that was every company's going through this they've seen lost in sales lost in revenues and they have to figure out a way to ride this out um I think the argument for public utilities is they're being asked to provide an essential public service um they don't have a choice to close the doors if they find they you know needed to and so they ask for some support through these kinds of tools by the government to help ride out their current costs so they can sustain their service and jay when you say true up after the end of a certain period of time uh then there's an amount of money determined right and that amount of money I would think I mean it comes it would come from the rate pairs right I mean you can't just print money to make make up for that truth it comes from rate pairs and the squeeze being correct me if I'm wrong please the squeeze being you've got a rate pair base it's already been squeezed so to speak by economic misfortune right and lost jobs and so forth and people having a difficult time paying their utility bills so here you've got our vital infrastructure that is in need of some relief between what was expected and what they actually received in a given period of time and it's supposed to come from somewhere and it's going to come from somewhere being the rate pair base that has also been struggling as well I mean I've been characterizing that correctly well what the first is yes I can't print money so that part's correct well and the legislature is having you know a 2.3 budget shortfall this year so far um and so it's it's hard to say the legislature can it can support the the shortfall and you know no and there I mean that's not where they're asking I mean so the your points correct that it's the that shortfall would be made up by customers in subsequent time periods and so this I mean a few points are important this is why cost management at all times is key that you know your our job is to try and make sure that you know this level of fixed costs are prudent and are there to try and sustain service through all cases um the other part and it's not a entirely offsetting but we've seen the decline in oil prices which is the other significant part of the bill uh drop significant you know a lot I mean to record low levels to the point of having uh negative spot market prices in certain oil markets for a little while in the beginning so there's been relief on that side that oil prices are down so the fuel cost part of the bill is down um but making up the expected revenues with declining sales you know the money does come from us at one point or another you know I was I was really curious Che about your view of this at the 50 000 foot level to see energy in the state and so we've been talking about and uh trying trying so hard over the past what 10 or 15 years to move to renewables to make these renewable projects to move ahead there's a there's a dynamic there's a target out there and uh takes a lot of effort there's some footfalls of course uh there are all kinds of things that have to happen for a given project to go ahead and some of those things are you know a challenge in the time of COVID and my guess would be but I don't know my guess would be a lot of these things have to be slower in the time of COVID and that projects that we might have moved ahead on you know in ordinary times are um they're under duress but tell us how is the the movement the dynamic in energy doing these days how is the the effort to get to 100 renewable for example how is it doing how has COVID affected that um so I think we talked about this a little bit before we came on I have a few few areas few topics to respond so the first um if we look at the big picture with energy particularly for the electricity utilities and I give them credit you know the knock on wood the lights have stayed on and you know at a time where we're working from home and our family security depends on you know having reliable service that's a a credit to the work that they do um and so that's positive and that it you know especially in the beginning for all utilities all critical infrastructure operators are watching closely how potential infections would affect crews of their workers and concern that that would threaten their operational capabilities and we saw some of that with the utility in New York and you know fingers crossed you know with as we've seen infection spread in other parts of the country they're not going to see similar things so you know they've managed through that challenge it wasn't perfect but I think everyone tried to take extra precautions to make sure that we wouldn't see um kind of devastating impacts on the on operate on the utility employees what we've seen since then are some of the other operational changes the financial impacts that we talked about and that's going to take longer to sort out um one thing we haven't talked about yet but you know is a pressing matter before us is our refinery has taken a financial hit and they're looking to raise their costs that they charge to selling for selling oil to wire electric so we have an emergency request to address that um and so you know there's you know when you follow the complicated your kind of inter relations here one you know basically the big drop in demand across the board has all these follow-on effects that we're dealing with in a variety of different ways so that's a constant juggling act and we've got to keep focused on again what I we talked about is one of our first priorities is safe reliable and affordable basic services so we go back to that and help us prioritize as far as clean energy initiative I think it is helped in some respects kind of redouble people's focus on you know this is one of the bright spots of today in the future we're closely monitoring the progress of the projects we have in the pipeline and continue to ask questions you know where do things stand how events affected their ability to meet existing timelines and I think the general answer is certainly it's going to have an effect but we're continuing to see progress um and I would also like to say we've been working close we're trying to coordinate closely with our state energy office where recovery using renewable energy clean energy industry is a strategy for recovery is one of the tasks that they're taking on and so it's kept our focus on that industry and definitely the projects that we have in the pipeline thank you Jay well Marco we're pretty much out of time and I wonder if you could take a minute and summarize and sort of put this put this in a a summary going forward because we do want to have Jay come back right Jay you're going to come back right Jay and uh and we're going to track on it going forward but what what would your summary of this discussion be oh my my mind bursts with summary Jay I mean there's kind of where where do I where do I take where do I go with this we barely scratched the surface and there's so much more to cover but I mean there's such a sense of uh a virginity with so many of these matters whether it's young brothers whether it's par petroleum whether it's going electric whether it's filmed the blank film the blank film blank and I don't know what I would do if I was sitting in Jay's chair I would probably be cowering in the corner far too much of the time but uh I'm I'm so glad that you've got so we've got Jay and Jenny Potter and Leo Asensio and the fantastic staff there to to tackle this because uh I mean it's got to be done you know we've got to keep the lights on we've got to keep the barges going in our island and hopefully not too many containers tumbling off into the ocean like Kevin last week uh it's kind of mind-blowing so I just have a you know a deep good of a deep feeling of gratitude towards you Jay and the whole staff there for for persevering using the p-word persevering you know through thick and thin over and over and over again and I wanted to ask Jay maybe we'll I'll see that for for next time you know as far as I know Jay I recall you've got two years and one day left in your current terms right who's counting uh I wasn't thinking about that but that is an accurate count well no before we get on that I you asked what are you and doing my shoes uh you get the best team you have around you and fortunate I mean you named it but that's what keeps us going and I try to thank them as as best as I can every day and that has been that is what keeps us going one person can only do one thing but we have an effective team you know you it's rewarding to see what you can do well I I'll I'll make my summary too largely uh you know same as Marco but I I want to say that I really appreciate the effort you guys have been putting in because it's more than normal this is abnormal these are abnormal times and you're you're you're meeting those times by working harder and looking over the energy field and I and I feel that the fact that the lights are on of course I think of the utilities but I also think of you Jay thank you very much for being conscious you know conscientious about that and making that happen and looking over it for us thank you Jay Griffin chair of the PUC Marco Mangelsdorf of provision solar and helos thank you so much I hope we can do this again so Aloha you're here Aloha good to see you both and look forward to the next time