 Okay, here we are, ThinkTech, and we have Meena Marko and me on Monday about energy, as we like to do every second Monday. And we have them both on the phone from their respective corners of the state. Meena from Kauai, Meena Marina from Kauai, former chair of the PUC, and now an energy consultant under Energy Dynamics. Welcome to the show, Meena. Thanks. It seems like it's been quite a while since I've talked to both of you. You can run, Meena, but you can't hide, we'll find you. And Marko Mangostorf, who travels everywhere, and in fact is now in what, in California, Marko Mangostorf, a Provision Solar in Hilo. Welcome back to the show, Marko. Well, much aloha, you too. It's always a treat to get the magnificent trio back on the same show, again, that happened. It's fantastic to be back with you. Okay. Well, it is an interesting week for energy, and that is we're going to have the Maui Energy Conference in a couple of days from now. So Meena, you're going to be speaking there at the Maui Energy. Could you talk about what's happening at the Maui Energy Conference? Yeah. The theme of the conference is the business of carbon. And the panel that I'm on is called the Limits of Hawai'i Clean Energy Initiative. So it's a review of the Hawai'i Clean Energy Initiative since it's celebrating its 10th anniversary this year, kind of a look back and look forward of HCEI and joining me on the panel. The panel is moderated by William Geist, the Executive Director of the Hawai'i Solar Energy Association. And I'm on the panel with Alan Oshima, the CEO of Hawaiian Rector Company. And Gerald Sumida, who for quite a while served as the chair of the steering committee of HCEI. What are you going to talk about? For me, just the origins of HCEI and as I saw it through my involvement. And I take the title of the panel very serious, the limit, so basically touching on what I saw as some of the challenges of HCEI and why it's sort of, from my point of view, kind of fallen off the table and doesn't seem as significant, doesn't seem to have been playing a significant role in the last, at least five years or so. Yeah, HCEI at the outset in 2008 when it first got started, it was really more a concept than an organization. And it was all around, this fellow came over his name, who was from the Federal Department of Energy who came around and offered money. It was me, well it was Bill Parks, and Bill Parks was, right, from the Department of Energy. And you know, the onset of HCEI was a really good alignment of various parties and partnership. So you had this convergence of state, federal, private sector, from the administration, the legislature, Office of Energy, University of Hawaii, sort of aligned and moving in one direction. Yeah, but you're right, it hasn't been, it's been in declining activity I would say over the past few years. So maybe this will reinvigorate the program because of your panel. Well I think one of the points that I want to bring up that has always been a concern of mine, especially as a legislator, is that what we're trying to do in Hawaii is transform. And you cannot transform based on election or political cycle. How do you have this continuity for a transformation that is going to take more than a decade? Well let me put that question to Marco, Mina. I think that is always the question of the day. And right now, you know, we're in another, in my view we're in a period where we need to focus on transformation, but we don't know exactly how to do it. So Marco, what do we need to do to get things going again? Well I think I would dispute the notion that we haven't really, that we've been stuck all that much. I mean the amount of renewable energy going into our islands, grids have been increasing significantly in various paces over the past 10 years since the Hawaii Clean Energy Initiative was announced gosh and already 10 years ago or so, October I think it was 2008. So by what metric should we measure progress? I mean there's the 100% renewable energy by such and such a date, but I mean that's going to take a considerable time, more time and effort to get there. So it begs the question, but what metric should we use to judge our progress on a different island? Well we don't have a metric per se and I'm thinking that one of the points we need to discuss today is a metric. And that is the amount of, and you follow this closely all the time, the amount of solar that is being installed on rooftops in the state, and in fact you wrote a piece for the Star Advertiser last week indicating that surprise, the amount of the permits and the solar being installed in what the big island has dramatically increased. So can you talk about that and can you talk about why? Sure, be happy to. Well a little background first, last year in 2017, if you look at the total number of photovoltaic system permits issued by the four counties of our state, Kauai, Citing County of Honolulu, Maui County of the big island, we had the lowest number of PV permits issued in the past 10 years, in the past 10 years back in 2017. So the solar coaster had slowed considerably from the healthy on days of 2011, 2012, 2013 when things were going like gangbusters. So in the sense we kind of have nowhere to go what up, hopefully at this point, and the permits number is one of the easiest and kind of in real time data minable metrics out there in terms of the activity in the solar industry in terms of rooftop solar. So yes, last month in February, marked the fourth straight month that November, December, January, February, where the number of PV permits was higher than the same month a year before. So that's the beginning of at least the mini trend, I mean four months of data and four months of increases. And what that's due to, I think these part of it is that battery storage is now becoming more routine and more of a norm as far as new systems going in, the larger and larger percentage of them having and requiring battery storage. So I think some of the kinks and challenges, both for permitting and also regulatory approval as well as approval from the utility company, the kinks have been worked out to some extent. It was the learning curve and now we've kind of gotten over the hump in a way and we're beginning to see batteries deployed on the customer side of the meter as more and more of a normal and not so unusual event. Yeah, well now and now we have some action in the legislature and Mina, I'm sure you're aware of this and in the Maui conference you'll undoubtedly run into Ross Baker, Senator Ross Baker from Maui who is advancing bills for tax credits, including tax credits for storage, including tax credits for separate storage, add-on storage, which has really been a kind of problem. So that will undoubtedly increase the amount of rooftop solar we have, won't it, Mina? Well, it could, but again, you have reduced demand out there too. I think one of the problems that we are faced with is, the majority of the population of the majority of electricity customers still really haven't benefited from this focus on renewable energy. And I think this is one of the challenges of the Hawaii Clean Energy Initiative and Hawaii's energy policies that we're not taking a total system look at how moving forward, you know, who exactly is benefiting from this. You know, you still have at least 70% of the electricity customer base reliant on the electric utility, but, you know, the electric utility is burdened with increased costs and trying to modernize the system and rebuild the system to become more renewable. I mean, so I have, you know, when we're looking at building permit, it's a snapshot of the total system. And I'm not sure if it's going to get us there in an equitable fashion. Yeah. Well, yes, the question is whether these bills are going to pass and whether they're going to have an effect on the process that Marco was talking about. Marco, do you have any thoughts? I mean, what exactly do the bills provide and how likely is it they're going to pass here in 2018? So the only one that I am closely tracking, which is most will be most impactful to to the portable take PV industry in Hawaii and also to storage is Senate Bill 2100, which was introduced by my friend, Senator Lorraine Inouye, as well as a number of other supporters back in the beginning of the session and SB 2100 passed the Senate last week after getting through Lorraine's committee, the energy and transportation committee, and then the WAM, the Ways and Means Committee, and is now in the hands of the House and has been referred to Chris Lee's committee, which was mean as old committee, the energy and environment committee in the House and then assuming it gets out of Chris Lee's committee would go to the finance committee and then go to a floor vote. So there's still, of course, the reasonable possibility that it will change in the House. And right now, the bill would do two, two big and important things. Number one, it would ramp down over time, the state renewable energy tax credit, which is something that's various parties in the ledge have been trying to do over the past several years, but failed last session or failed the session before that. So it ramped down 35% tax credit over time to a smaller percentage. And second, it would also establish a separate state tax credit to add energy storage batteries to existing renewable energy systems. And the way the bill is came out of the Senate would be 25% or $5,000, whichever is less for, let's say, a homeowner who has an existing net energy meter system to add storage to their home. And I happen to believe that storage on both sides of the meter, both excited at customers' homes and businesses, as well as over time, utility-scale storage at power plants and substations makes sense and is worth supporting in terms of tax dollars. I believe Meena and I have a friendly difference of opinion on that, but then she can certainly speak to herself. But I happen to believe that what batteries do provide and will provide even more so over time is a public good that is worth supporting on a modest level. And that's what I think SB 2100 would do. Well, we're going to talk about that issue right after the break. But let me ask you, $5,000, and the max would be $5,000 on this additional storage, that's not going to pay for storage for most homeowners. That's just not enough money to pay for the average storage installation. So I guess the intention on that bill is to support it, but not cover its entire cost. Am I right? Well, let me add one more thing that's really important, Jay, which is Friday, March 2nd, the IRS issued what's known as a private letter ruling or PLR that specifically for this one particular taxpayer would specifically allow for the addition of battery storage to an existing portable take system. And as long as that battery storage was charged 100% by solar, in this case, 100% by solar, then the addition of that battery storage to existing PV system will, in fact, qualify for the investment tax credit, the federal investment tax credit of 30%. So if you take, let's say, the addition of a Tesla powerwall, for example, at, let's say, $10,000, $12,000, let's just make the math really easy. Let's say it's $10,000, and you have a 30% tax credit possible from the Fed, says 3,000, plus a $2,500 tax credit from the state, assuming that SB 2100 goes into law, that comes out to $5,500 off of $10,000, which reduces the cost by more than half. So you're in the business market. Was this going to increase the installation of rooftop solar? I think it would dramatically increase the addition of retrofitting battery storage to many of the 80,000 plus net energy needed customers across our Hawaiian islands. Okay, all right, there you have it. We're going to take a break and we're going to come back and we're going to let Mina talk about the policy issue over these tax credits and incentives. We'll take a minute. We'll be right back with Mina Morita and Marco Manglestorff. Hello, everyone, I'm DeSoto Brown, the co-host of Human Humane Architecture, which is seen on Think Tech, Hawaii every other Tuesday at 4 p.m. And with the show's host, Martin Desbang, we discuss architecture here in the Hawaiian Islands and how it not only affects the way we live, but other aspects of our life, not only here in Hawaii, but internationally as well. So join us for Human Humane Architecture every other Tuesday at 4 p.m. on Think Tech, Hawaii. Aloha, I'm Keeley Ikeena and I'm here every other week on Mondays at 2 o'clock p.m. on Think Tech, Hawaii's Hawaii Together. In Hawaii Together, we talk with some of the most fascinating people in the islands about working together, working together for a better economy, government and society. So I invite you into our conversation every other Monday at 2 p.m. on Think Tech, Hawaii Broadcast Network. Join us for Hawaii Together. I'm Keeley Ikeena. Aloha. Okay, Mina Marco and me, we have Mina Marina on the phone from Kauai. We have Marco Mangelsdorf on the phone from California. And we're talking about energy in Hawaii. We've been talking about a bunch of stuff, but I guess most recently about tax credits and a letter ruling from the Internal Revenue Service just a few days ago on the credits for installation of storage, which is an important issue. So, but we have a policy point here. We have a policy point about how much do we want to encourage and incentivize storage either at the homeowner level or at the utility level. And Marco spoke about your views, Mina, and we have left it to you to articulate those views now on this policy point. Go for it. Yeah, so I am concerned about the use of taxpayer money, rate payer money to subsidize individual home units. And part of that concern is a lot of these homes have already benefited through existing tax credit. And it's less the net energy metering care for many years. So it's like giving the same people another set of breaks, subsidization breaks by a separate storage tax credit. I support storage. I think it's one of the many tools in our kit to get us closer to a low carbon future. But to me, the major issues here are the grid modernization and getting help for the majority of rate payers through not only cleaner energy, but stabilizing costs. So which one do you prefer? Do you prefer rooftop storage for residents or do you prefer government or rather utility storage? I'd rather see it subsidized on the utility side and should someone want to install storage, they should be looking at the GEMS fund and through lower interest loans to help incentivize a storage system. A footnote to that is the GEMS fund is disappearing rapidly. $50 million was sliced off last year and I think another $50 million be sliced off this year and we finished, there'll be only $50 million left. Starting from $150 million, we're now going to have $50 million. I mean, assuming these bills pass. But Marco, what do you think? What's your view of this policy point? I look to places like Puerto Rico that six months after Hurricane Maria, there are still an estimated 30 to 40% of Puerto Rico residents who are without regular stable power. And if someone had told people of Puerto Rico a month, which would be August last year, that a hurricane was going to come along and wipe out their infrastructure, their electrical infrastructure for six months to a year to longer. Of course, people would have kind of said, well, we live with that probably won't happen. So I happen to see a, well, I certainly understand or appreciate Mina's perspective on that in terms of that you have people with PV systems who have been subsidized generously through net energy metering. I'm one of them. I'm one of them as well as state and federal tax credits. Again, I'm one of them, both my business and as an individual. So there's a selfish parochial interest, of course, and the part of companies like mine to want to open up a new market segment in terms of adding storage to existing systems. Absolutely. I fully copy that. But I think the argument can also be made honestly and legitimately that adding storage, both utility scale and micro storage behind the meter at people's homes and businesses provides a resiliency, a redundancy and a greater security against an inherently vulnerable electric grid island to island to island that is subject to at any given time a hurricane and Niki type of experience that could have a devastating impact. And I believe that those benefits outweigh the counterargument saying, well, we shouldn't continue to subsidize those who've already been subsidized before. I think there are goods and benefits that accrue to the collective of everybody hooked up to the grid by deploying storage faster than slower. I don't think we have a disagreement about building a system for resiliency. The big question is who pays and who benefits and what I'm saying is when you have a limited part of public funds those funds should be used to the best way possible to go to the greater public good which is probably storage on the utility side storage on public buildings where there's more access readiness for hospitals, shelters areas where resiliency is critical rather than subsidizing individual homes where there is no public or minimal public benefits. So am I right to say that you both feel that there ought to be incentives on both sides that is utility and private homes but Amina feels that there should be more incentive on the utility side and less on the public on the private homes and Marco feels there ought to be more incentive on the private homes and less on the utility. Is that a fair statement? For me we've got a limited cost of money here and the focus should be where there's the greatest public benefit and it's probably on the utility side and public facilities rather than individual homes. Well how does this conflict with the you might add in your comment Marco how this comports with the legislation while wending its way through the legislature this year? Well there is in fact there would be the current language in SB 2100 would also provide much larger amounts and gross sums in terms of subsidizing larger scale storage so it's not just 25% or 5,000 for residential it's also storage at a much larger scale let me kind of ask a cut to the chase of the ethical question, Amina. So Amina if you were back at your old job as chair of the Energy and Environment Committee and you got 2100 landed in your lap would it be your intention would you go ahead and essentially strike that portion of 2100 that would provide state tax credit support for individual residential storage would you do that? Yeah I do have a new tax credit because you know Hawaii for a long time already had a letter ruling where the existing tax credit includes energy storage so if you design your system correctly you would have already included energy storage. Go ahead go ahead Marco. Amina I'm sorry go ahead finish. Yeah so again having a separate tax credit for homes that have already benefited from the REITC to be able to take a separate tax credit I think it's and then plus on top of that has benefited through the NEM program I mean it's a triple dip for the staying people. So you would it sounds like you would in fact not pass out of your committee if it was your choice you would not pass out of your committee providing a new state tax credit to subsidize with state general fund dollars to subsidize the addition of storage to existing portable take systems you would not pass that out of your committee. I don't support it. Okay Marco would you support it I guess. I do I do. Well let me just go to one other point before we break and there are various bills pending about energy in the 2018 legislature but one of them seems to be a bill that has come and gone before without success and that is to make changes in the PUC any thoughts about that bill what are its provisions and what are its likelihood what's the likelihood of passage and do you support it. Yeah I haven't looked at the the most recent version of the bill and haven't been participating in it but you know I do believe in diversity of the PUC I do believe that the there needs to be support for the staff and the commissioners in dealing with these complex problems that this regulatory body takes up I a lot of it is dependent on the chair and how the chair administers the PUC and in looking at the current audit that came out a couple weeks ago it appears to me and this is my personal opinion that a lot of the policy decision has been picked to the executive director from the chair and that sort of bothers me because my understanding of the executive director's position is strictly administrative and not policy so some things that concern me was you know allowing the executive director to look at the strategic goals and objectives and formulate the strategic goals and objectives without any kind of real discussion we're almost out of time we're almost out of time I want to give Marco the last word on this if you have any comments on this bill Marco then we got to close candidly I don't know enough about it to really make much of a comment I can only kind of channel our friends to the public utilities commission and the idea of kind of being overhauled I can't imagine finds a whole lot of favor within the confines of that particular department I would think ok maybe we can discuss and go deeper into this if it's still alive in our next meeting two weeks from hence thank you so much Mina Morita and Marco Mangostore for this discussion Mina Morita and me on energy on Monday aloha and we'll see you soon take care