 here on a given Monday, exciting another week of ThinkTech, another week of great stuff. So welcome to Meena Marko and me on Energy on ThinkTech. I'm your host, Jay Fiedel. Our show today is called Lots of Energy News. We're going to talk about how the excitement is picking up. We're going to address the issue, whether we could be coming out finally, coming out of the post-next era daldrums. If you want to ask a question or participate in a discussion, you can tweet us at ThinkTech HI or call us at 415-871-2474. Our guests for this show are, no surprise, Meena Morita and Marko Mangelsdorf. Some very newsworthy events this week, the swearing in of Jay Griffin at the PUC, the effect of Trump's withdrawal from the Paris Accord, how that affects Hawaii, Hiko's application for a triumvirate of 100 megawatts on Oahu, and is the community solar and are the community solar and gems programs DOA. Welcome to the show again, you guys. Meena Morita and Marko Mangelsdorf. Aloha this morning. Good afternoon, Jay. It was close. In the words of my dear friend, Mr. Rogers, it's a beautiful day in the neighborhood. Thank you, too, for being my neighbors in Energy Matters, big and small. You sound just like him, Marko. You can sing the way he used to sing. Anyway, so let's talk first about Jay Griffin. Meena, you know Jay Griffin. You hired Jay Griffin way back when. Can you give us a short synopsis of his bio and where he's coming from and now that he's been sworn in this very day, this very morning? I think, you know, first of all, we have somebody that is highly qualified for the job. You know, he has multiple advanced degrees in economics, environmental policy and political science and I forget what he has a doctorate in, but you know. And then plus his experience at HNEI and, you know, this is somebody that really understands the electrical grid, the technology and the economics of getting there and understands policy. So, yeah, there's no doubt that he's highly qualified for the job. That's great. What kind of a person is he? I think very thoughtful, you know, really, he has this ability to take come issues and not only be able to translate it into layman's terms, yeah, so he brings a real wide depth, but you know, the ability to think through complex issues from a multiple perspective rather than, you know, just unfortunately what has been our downfall in the past is by taking just linear kinds of steps. Is he going to be an independent thinker? Is he going to be the kind of person who would say, no, I don't agree with the other guys. I'm going to write a dissent on this issue. I think that's the challenge right now. I believe, you know, the politicians are looking for the Senate in this position process is looking for somebody that is independent. And has good leadership skills. So how does this change the mix of the commission from the time when Mike Champley was there? Or for that matter, when Tom Gorak was there, although it was short lived. You know, how will this differ? How does he differ from Gorak and Champley? You know, I think that remains to be, he would have to prove himself that he can be independent. And I think, you know, it's a very difficult situation at the PUC right now. They have to regain a reputation or rebuild their reputation for being independent. But the interesting thing is come 2018, you will hopefully, I hope that the Senate can act as soon as possible on his nomination. Because I still think there's a problem with the process on the nomination process. Right. Right. And that needs to be cleared up as soon as possible. But, you know, basically you're looking at another nomination coming up in 2018. And whether Lorraine Akiva will be reappointed or not for another six-year term. Well, you know, it seems to me the governor would be well advised to put his name in for confirmation at the outset of the session. In the past session, he waited until the very last minute before he put Tom Gorak's name. And I didn't fully understand why he did that. But in the case of, in the case of Jay Griffin, he ought to put the name in right away, don't you think? Well, yeah, I mean, I personally feel that if there's going to be any type of special session or any type of convening of the Senate for judicial appointments, you know, this should piggyback on it. And so that there is no doubt that, you know, that the governor's nominee has received Senate advice and consent. And we can get off this whole issue of process. Yes. You know, somebody operating under a cloud, you know. So yeah, you know, my advice is to take it up as soon as possible. Yes. Well, Markle, how much of what Mina said do you agree with? Well, I strongly feel that Jay Griffin was a fantastic choice by the governor. He's someone who comes from, kind of put it a more pure energy background rather than the law or rather than from a political background. So I think from those perspectives and others, Jay was a fantastic choice by Governor E. Gaye. And I agree with Mina that the sooner the interim part of his title can be removed, the better. Some inside baseball stuff, as I understand it, as it has been explained to me, if there were to be a special session where the Senate were to be called back into session, his appointment could not be taken up. This is assuming the governor were to submit his name as a nominee to the Senate. But his appointment could not be taken up in a special session that was to deal with either possible veto overrides. And we don't have that list yet from the governor in terms of what bills he's thinking about vetoing or judicial nominations. In other words, it has to be a special session that is not a special session considering judicial nominations or potential veto overrides. I don't think that's correct. I mean, I think that the Constitution is pretty broad in the governor's authority to call back a special session. I don't think there's any limitation. Is it clear to both of you that there could be a special session only on one issue and it could be skinny down to one issue and, for example, the rail funding and exclude all other issues? I think that's more a political decision that you don't want to open up a session to renegotiate every single issue. So in the past, special sessions have been really narrowly tailored and that was by choice. But I think in the Constitution, you know, there's kind of pretty broad authority. Well, I mean, the only thing I can say is that this came in the form of an explanation which I requested from one of the attorneys in the legislature who was giving their analysis in response to this exact question in terms of under what conditions and can, let's say, a nomination to a board or commission under what conditions could be taken up in a special session. So, you know, I'm not a specialist. You served in legislature, of course, for years and years, but I'm just recounting what I've been told recently. Yeah, I should mention at this point that Mina was 13 years the chair of the Energy Committee in the House. She was also the chair of the PUC for four years. And also, Marco has been the CEO of Provision Solar in Hilo for something close to 300 years now. And he's really getting good at it. Appreciate it. You're welcome. Anyway, let's move on to our second topic. And our second topic is a big, you know, international news. It's Donald Trump's rejection or attempt at rejecting the Paris Accord, pulling the United States out of it. Something that doesn't actually take effect until just after the inauguration of the next president, whoever that may be. And the effect of it has been felt worldwide, even though, you know, it may or may not come true within that period. But what do you guys think about that? Does that affect Hawaii? Does that affect energy? I think in the larger scheme of things, and especially in the electricity sector, there's already a trajectory. And that trajectory is mainly economic issues, driving, you know, the move towards cleaner fuels, more stable fuels going forward, cheaper fuels going forward. So, yeah, I think in the larger scheme of things, you know, we're already on track, but diplomatically, in terms of our relationship with the rest of the world, I think it's damaged. I think he damaged America's position as a leader and our ability to, you know, participate in a global challenge and that needs global solutions. Yeah, taking together all the other things he's done, including his impolitical remarks that he made when he was traveling in Europe, especially. Marco, what do you think? Is it going to have an effect on Hawaii? Mind you now, he's also cutting expenses for energy, funding, and he's cutting, you know, funding for environmental issues as well. Is that taking all that together, including the Paris Accord and the reduction in funding? Is that going to have a long-term effect on Hawaii? Well, it's important to note, Jay, that the proposed budget from the Trump administration, of course, will be modified, more like changed rather dramatically. By the legislature of that, I have no doubt, but I think it's probably likely that, yes, EPA, Environmental Protection Agency, and other such programs will suffer painful cuts. I mean, this decision was made, announced on Thursday, and I was teaching that afternoon at my course from wrapping up at University of California, Santa Cruz, and I thought, I had to address it to my class because, of course, it was so topical, and I told them that it's really pretty much difficult, if not impossible, to come up with any kind of positive spin on this particular decision. But that said, I gained some sense of solace and hope that Governor Jerry Brown here in California came out very forcefully against the decision, and made it clear that California was going to stay right on track in California, along with Hawaii, and places like Washington State and New York State. There's going to be a growing cooperation and pooling of resources, I hope, more and more states, I hope, and communities across the country that will be going full speed ahead and doing whatever they can in terms of energy efficiency, renewable energy, reducing greenhouse gases, and so forth. So if there's any silver lining, it's the fact that progressive states like Hawaii and California and others will be going, continue to go full speed ahead. And also, the fact that as per the Accords themselves, if a country seeks to pull out, as President Trump announced he's going to do for the United States, it's essentially a three plus year process before he can actually pull out. And a lot can happen in the next three years that may mitigate that painful, fateful, absolutely wrong decision that he made last week. I'd like to offer one thought, though. These things do have a long throw on them. They do damage, as Mina said. And the damage may or may not be completely reversible. I mean, we look like—we don't look so good. And that may stick with us for a long time, whatever happens in the rest of this administration or the next. It won't be that easy to recover our credibility and environmental things. And so even if we are later able to politically reverse that position, the position that he's taken, we are no longer a leader in this area. I'm not sure that we were before either. We never ratified the Kyoto protocol either. But bottom line is whatever happens now, and it won't happen right away, I think we've lost our primacy on this kind of issue, and other countries will step in, such as China. Whether they deserve it or not, they'll step into the vacuum. Well, I think what's really important, what we lost sight of, is giving businesses certainty. And so, especially with the Clean Power Plan, it gave businesses certainty on targets, emission reduction targets that they needed to hit. Now without that, you know, there's so much uncertainty on which way to go now. And what we're lacking here is, again, the ability for the United States to be innovative, work on the technology, and export that technology to other countries, especially developing countries, to leapfrog over, you know, the kinds of emissions levels that we had. They can do it. They can grow their economy much cleaner than what we've done in the past. Yeah. It's great to see these states getting together. They're not only on the West Coast, the states that are pushing back. It's really a number of states all over the country. On the other hand, you know, without a unifying leadership, without, you know, a clearly cohesive force, they may or may not be successful, and the devil really will be in the detail. But let's take a short break, you guys. That's me and Marina and Marco Mangelsdorf, and we'll come back in one minute and discuss the remaining two issues, namely about the 100 megawatts on Oahu and about, gee whiz, the community solar and gems they did on arrival will be right back. Hi. I'm Carol Cox. I'm the new host on Eyes on Hawaii. Make sure you stay in the know on Hawaii. Join us on Tuesdays at 12 noon. We will see you then. Aloha. You're watching Think Tech Hawaii, 25 talk shows by 25 dedicated hosts every week, helping us to explore and understand the issues and events in and affecting our state. Great content for Hawaii. Okay, we're back. We're live here on a Monday at the 12 o'clock block, and we have Mina Morita, former chair of the PUC and former legislator and Marco Mangelsdorf, a businessman who has been running Provision Solar and it was also the chief executive of HIEC, the Hawaii Island Energy Co-op. So let's talk about the third issue on our little agenda and that is the 100 megawatts that was reported on Oahu. There are three, I guess there are RFP proposals that are being considered by the PUC in one docket and they together would yield 100 megawatts. What does this look like and what are the chances of success and how will it affect prices of energy in Oahu anyway? Thoughts? Well, Jay, just a small and quick correction. I'm not the chief executive of HIEC. I'm a director. I'm a lowly secretary, so I don't want to have a title that I'm not due to, but to address your question about 100 megawatts. Just to go back a little bit in time, this was in response to a request for proposals that the Hawaiian Electric Company did for Utility Scale Solar on Oahu. And a company by the name of Sun Edison won those particular bids to develop somewhere around 100 megawatts of utility scale portable take on Oahu in three separate projects. And Sun Edison, one of the biggest players in the PV game, went under last year, filed for bankruptcy and has been in the process of essentially being parted out and dissolved. And these three projects were essentially purchased more or less in bankruptcy court by NRG, which is a large mainland-based energy corporation based in Texas, to move forward with these three projects. And according and thanks to Henry Curtis' blog earlier today, it apparently there is some doubt just how smooth or possible it's going to be to get regulatory approval from the commission with Jay Griffin as a third member for these particular PPAs. And one of the things that caught my eye in Henry's blog is that apparently there's some type of non-transferability clause that it's not just a slam dunk, apparently, that even though it was Sun Edison that closed the deal under a non-competitive process to some extent and Mina can clear that up, but that simply having NRG step in and develop these projects is apparently not the slam dunk that NRG thought it might be or that HECO thought it might be. That's my understanding. My understanding is it's a matter of the waivers. Waivers are granted by the PUC on these projects. And the question is whether those waivers are transferable. By the terms of the waivers, they're not transferable. I think that's Henry's point. But at the same time, remember, these trans have remained in the context of a bankruptcy. And just as a general matter, I'm no expert in bankruptcy law, but as a general matter, if the bankruptcy court says we allow this transfer, consent may not be an obstacle because it's federal and it's exemption. And bankruptcy law in general allows for the transfer with or without consent. So, Mina, what do you think? Well, I think first of all, I think the biggest challenge here is prices are dropping significantly. And I didn't read Henry's article just what Marco sent, but Henry makes a good point about the Kauai contracts were negotiated with a storage component at a lesser price. And just last week, there was an announcement about Tucson Energy Power signing a power purchase agreement for solar power with an all-in cost of less than four and a half cents a kilowatt hour over 20 years. And the company developing that project is Nextera Energy. And so, granted, given the cost of business in Hawaii, the land cost is a little bit higher. But these solar plus storage contracts are significantly lower than what HIKO is negotiating right now. Oh, interesting. How does that play? How will that affect things? That's pretty low. I hadn't heard that, Mina. So you're saying the four cents or so a kilowatt hour over 20 years that includes dispatchable storage? Yeah, all in. It's a 100-megawatt solar array and a 30-megawatt battery. I think the battery is 120-megawatt hours. And, you know, the cost includes the tax credits and stuff. But, you know, that's... You know, it may be more money. It may be more money. But at the same time, there's a part of me that says, let's move ahead. Let's get this done. We get stuck, as you mentioned before, Mina. We get stuck in process. We find ourselves all hamstrung by process. And sometimes we should just steam ahead. You know what you think? Well, I think the larger issue is the first on, you know, how these contracts are set up in the first place. I mean, we're stuck until the PPAs run out buying, you know, expensive renewables as we see prices drop. That will always be the case, though. Because hopefully, as we go into the future, we'll find better technology and the prices will drop. That doesn't mean we have to wait for the future. We have to act now, don't we think? Energy partners in Honoka, I think it's indicative, perhaps, of a trend. And I'd be really interested to hear Mina's opinion on this. The Discommission starting, more or less, with the decision on last July 15th to turn down the proposed acquisition of HCI Ben-Extera, that there's a greater and greater emphasis on public benefit, which, of course, can be somewhat ambiguous, but to what extent is signing 100 megawatts worth of solar PPAs at a price of X when, like Mina said, the price has been dropping pretty significantly and dramatically over time. Does it make sense from a public benefit standpoint to approve deals in the 12, 13 cents, and I don't have the numbers right in front of me, per kilowatt hour range with no battery storage when the folks at KIUC on Kauai, this last one with AES, with battery storage, I believe, clocks in as somewhere around 11 cents a kilowatt hour? So, you know, the bar of approval for these PPAs and these deals or selling or buying power plants, the bar seems to be getting higher and higher. I think your point, Jay, about, you know, if the bar is always moving, especially in the upward direction, then that's almost kind of an invitation to the perfect being the enemy of the good. Yep. Okay. Well, that's, you know, it's good. I mean, it's bad. I think that the fact that the PUC consolidated all these into one docket is a good idea and whose time should be coming. Because, you know, for example, right now the PSIP is still out there. It hasn't, it's been sitting there since December. There's been no word about it from the PUC and maybe they were short, they were short-handed and all that. But don't you think we need to hear from the, about the PSIP before we run ahead and do all these big projects? Wouldn't it be good to get our plan straightened out? Isn't that the first order of business? The first order of business really is, you know, how do you be adaptive and flexible in these really tidy and certain times moving forward? You don't want to make, you don't want to battle the rate pair with these high costs when things are moving so quickly. And so what we really need to do is identify what are the no-regret projects out there we can move forward with. Yeah, well, don't you think it's a good time for a meeting in a room somewhere or a mediation without having formal process over it where somebody says, wait a minute, you guys, this period is too long. You don't need this period to advertise your investment or this price is too high. Let's talk about the numbers and let's see if we can come to something that gives us greater comfort that we're serving the public good. Why don't they just have a conversation? Isn't that possible? Well, I think, you know, yeah, that's what needs to take place right now. I mean, you know, curtailment's going to be an issue. Like I've been talking about for a long while is that we're only looking at one side of the equation, the generation side here. You know, there are a lot of other investments that need to be made for grid modernization. Yes. And there are two key investments that we need to make regarding the base load generation or just the kind of generation needed to balance out the system. Yeah, and new technologies are coming in every day. That's hard to track on that and we have to keep our eyes wide open. So, Marco, why don't you try to summarize and conclude for us today? And mind you, the good news is we've had a great conversation. The bad news is we're going to have to put off the discussion of community solar and gems. Are they DOA? Until next time. But Marco, can you kind of summarize where are we today? What are your feelings about all these issues? Well, to circle back to what you just mentioned a few moments ago about the power supply improvement plan, that's a key kind of a key foundational component here because power supply improvement and that deals with the smart grid, reliability, lower generation costs from more renewable sources, all of the above. And that's going to establish the blueprint for the Hawaiian Electric Company is moving forward from multiple super critical directions from their perspective as in how much money is going to cost? Where are they going to get the money? What's going to be the cost of that money? How is it all going to play out in terms of cost to the rate payers? And then add in of course the rate case that's pending right now for Oahu and for the big island. And I don't have a particular date but I would think that Maui can't be, for Miko can't be too far either in terms of a rate case docket being open. So my lord, there's so much, so much, so much in play right now. And it's so fun, fun to be with two of my best energy buddies and wish we had hours and hours but we don't so thanks again, Jay. Yeah, we have to follow all of these things and all the things that come up along the way. That's Marco Mangelsdorf, me and Marina. I love you guys. Thank you so much for coming on the show. See you in two weeks, huh? Thank you, Jay. Thank you, Jay. Thank you both. Aloha.