 This is Think Tech Hawaii, the Trinity Matters here. Bingo, four o'clock, rock, Think Tech Hawaii. Wow, this is our energy show, Hawaii the State of Clean Energy, which is supported by the Hawaii Energy Policy Forum. And today, we have two distinguished guests. One is my co-host, that's Veronica Rocha. She's renewable energy program manager at the Hawaii State Energy Office. She's from the government and she's here to help us. Thank you, thanks for having me. I'm really excited to be here today. Thank you, Veronica. Okay, and Rodney Chang, our distinguished guest, Renewable Acquisition Manager. Renewable Acquisition Manager, boy, that has huge prospects from Hawaii Electric Company. Welcome to the show, Rodney. Thank you, nice to be here. So, we have four questions. And we're gonna begin with those questions now to explore renewable, renewable. Because she's renewable, you're renewable, we're all renewable, it's a good thing and always has good connotations. So, why don't you ask the first question, Veronica? Wow, okay. So, this show is really focused on utility scale. So, larger renewable energy projects. So, my very first question is, we have this goal of achieving 100% renewable energy in the electricity sector by 2045. So, Rodney, where are we with regards to achieving that RPS? Yeah, thank you. So, you know, we're at about 26 and a half percent as a date, and so each year we keep getting closer and closer to the goal. So, the next milestone goal is in 2020 where we have to hit 30%. So, we think... That's according to the PSIP. Yeah, well, and it's according to statute too. Oh, statute, okay, okay. Yeah. So, the PSIP, you know, it has a plan for us to hopefully exceed that goal if we can. But the minimum is 30% by 2020. So, we feel that given where we are today in 2017, we're about 26% that we're on track for that. Oh, you'll have it easy, right? Yeah, hopefully. You heard it here on ThinkSec. Yeah, exactly. So... How are you gonna do it? So, you know, we're making steady progress and, you know, what you may have heard of recently is a recent approval by the commission for three projects for Oahu, fairly large project. Altogether, they're about 110 megawatts. So, some of you may remember about a year ago, Sun Edison had the three projects. They had some financial problems. Oh, yeah. The PPA got terminated. But NRG, they picked up the projects through the bankruptcy process and they approached us and we were able to negotiate a new PPA all at lower pricing. Lower pricing. Lower pricing. So, actually the consumer benefited on all that deal. Yeah, in the end it did. They did. Fortunately, we were able to get those signed and recently the commission approved those. So, those projects, you know, hopefully they'll be placed into service in the next few years and they'll add, I think, Altogether, about 3% to the RPS. Wow. So now you're at 29% of something. Yeah, yeah. So, we'll be at that. We justify those three projects alone. And the RPS does grow with other aspects such as, you know, rooftop key and other projects that are talked about in the PSIP as well. So, you know, we are looking to get more and, you know, we'll keep that number. What I hear you saying, you know, you can agree or you'll disagree, but is that big project is a big part of reaching these goals. And that's sort of a policy decision going forward. Maybe it's in the PSIP, but in any event, that's the fact. And we can expect to see more big projects to reach these goals going forward, right? That's true, that's true. But we cannot forget rooftop TV, although they're all small individually and aggregate, they make up a huge chunk of the RPS as well. But big projects, you know, each transaction is a bigger they are than, you know, the more it contributes to the RPS. Of course, each project has a different profile. You know, you've got solar, you've got wind, you've got other technologies. And so some, you know, contribute more to the RPS than others, but we're looking, as stated in the PSIP, we're looking at all technologies. Ah, so it's all, it's all, it's not just solar and it's not just wind, it's anything that works. And you recognize that there might be a different pricing on different possibilities, but you want the diversity, is that it? Yes, we want diversity, you know, we want it to be as cost-effective as possible. So, you know, those have to be considered when evaluating this project. Do you have any, are there any wind projects that are either proposed or under development that are under Hawaiian Electric jurisdiction? So, the one that people know about publicly is one that the next wind project is going to be on the North Shore than the Puma County project. So- On Oahu. On Oahu, yes. And so, that's the one that most people know about. We did do a wind expression of interest for Oahu later, last, in the part of last year. So, we're still working through that. So, we'll see what comes out of that. What does that mean, a wind expression of interest? Tell us more. I've heard RAPs or requested proposals, but not quite that terminology. Yeah. So, you know, what the intention then is, and a lot of people know this, but, you know, the federal tax credit, they're expiring faster for wind as opposed to- Oh, too bad, yeah. Because when they expire these days, you have no assurance they're gonna be renewed these days. Exactly. In this special administration. That's right. Yeah, that's right. And so, this was something that we felt we had to look at and it's not a fool-blown RAP, but we recognize there's a need to try and see if there's some projects that are able to, you know, take advantage of tax credit. So, we did, you know, I'll put a request out there and say, hey, is anybody able to meet these, you know, take advantage of these tax credits and do a project there in Oahu? So, that's what we're working through and I can't speak too much more about that. No, but could you answer this question? Where an RFP needs to have the approval of the Public Utilities Commission, does a request for interest, does that require approval also? No, it does and any PPA requires approval from that team. Oh, but the question is, when you send out the request for expression of interest, does that require PUC approval? No, so the way we couch that was... Is that a good thing, Veronica? I actually have the same question, Jay, so... You see we're on the same wavelength there. Yeah, exactly. Yeah, absolutely. So, ultimately what the request will have to be if anything comes out of this is that it'll have to go to the commission. Oh, definitely. Yes, and say, you know, we like to ask for a waiver from the competitive bidding framework because this was something that was asked of outside of an RFP. And so we have to give all the reasons justifications why this should be a waiver. And it's almost, it's similar to what we did a few years ago with the Invitational Waiver Project as you recall. So again, that was one where, back in 2016, as you recall, or prior to 2016, the tax credit was going to expire in the 2016. So we felt that we need to... How to move to RFP? Exactly. And so we felt we didn't have time to do approval in RFP and so forth. So we did this Invitational Waiver Project. You know, technically it was a waiver that went through. We will go down the questions, but I just had one other thing, it just occurred to me that I wanted to ask you about. And that is, you know, from the beginning of the Clean Energy Initiative, I don't want to say 2008 or so, and you know, when Lingalingu, Ted Lu, made it happen, there was this whole notion that you would have third parties, that the utility would have third parties doing, you know, the design and construction and on contract, on PPA, right? Yes. But is there any change in that now? Do you see, for example, a future in which the utility itself, in its own name and its own ownership, will do these projects? Yeah, and a good example is the recent Westlock PD project that was approved by the Commission. And so that's the 20 May Watt PD project that's on Navy Land. And so that was one that was recently approved and you know, it's different structurally that it's a utility-owned project versus a third party. But my recollection is, you know, the equivalent PPA price, if it was a third party, it equates to about nine and a half. So that was a great price. Wow, yeah. And so you can do it. No, you can do it cheap, too, see? Yeah. So our view is that whatever is good for the customer. And so whether it's the third party or the utility-owned, it should be whatever makes you. All those possibilities are on the table. That's right. I have a follow-up question for you. So we talked about PSIP. And for the audience that maybe is not completely familiar with this alphabet soup and energy that we talk about, Power Supply Improvement Plan or PSIP. So this wind expression of interest, was that incorporated into the latest PSIP? Not verbatim, but the PSIP, incorporated some placeholder resources, future resources. So if you look at it, it contemplated, okay, we'll get about 30 megawatts of wind, 180 megawatts of PV, I'm thinking about Oahu. So that was the assumption that went into the analysis and the modeling that gave the results that people see in the PSIP. So the PSIP recognized and contemplated that there's gonna be solicitations thereafter to get these resources. It may be 180 megawatts of PV and 30 megawatts, so it may not be. And so it was based on purely an assumption at the time and the assumptions include what the pricing would be. So, they've said in many parts of the PSIP saying that, hey, this is just a plan and what really happens might be different. And it should be based on what the market dictates when we do a solicitation. If the prices come in way cheaper for this instead of this, then we should pick this if it makes better sense for the customer. So we just have to be scanning on new possibilities and better pricing and... A good example is if you look at the PSIP, there wasn't much discussion about, I call it hybrid projects, but PV coupled with storage. Sure. But that's kind of the hot thing right now. Just over the past six months plus, and you look at KIUC, they signed a PPA with... Tesla. Tesla and after that AES for hybrid projects. So what the trend seems to be is where developers are coupling batteries with PV so that you can apply the tax credits to the batteries as well. So in some cases, that makes sense. And I'm guessing, I'm anticipating when we do a solicitation, we'll get projects like that as well. So these projects that you talked about, like Westlock and the project, the wind project in Kahe, the waiver projects, NRG projects, do any of those utilize storage or are they pure just renewable generators? Right, so NRG, Westlock, I'll talk about those too. Those are pure PV projects currently. But the commission recently said in order saying, hey, we encourage you to consider storage. Storage, yes. Don't we agree to that? I mean, seems to me, how can you build a PV project without storage anymore? Because you have to have storage somewhere in the system for it to be useful. No, right. So what the PSIP said was, it did contemplate a lot of storage in the near future, but not immediately. But again, everything has to be looked at with fresh eyes. And if bids come in and it shows that, hey, having some PV with storage makes better sense then we'll have to justify it anyway. Do you foresee a time when you'll have all these non-storage facilities out there, non-storage PPAs, and one great big battery in the middle? Yeah, you know, I believe, and it's kind of talked about in the PSIP that there will be large batteries around the grid that will help to enable more integration renewables, right? Because as you know, storage helps you to shift energy during different times of the day. As you know, we have overabundance of PV during the middle of the day. So using batteries to take advantage of that, as well as provide some grid stability as well. So along those lines, Rodney, a few years ago, if my memory serves me right, there was a procurement that the companies issued to procure, how much was it, like 200 megawatts of storage? Was it, is that right? I forget the number. But what's the latest with that? Is that something that's being procured, or is the idea more to couple that with future procurements of large-scale utility projects? Yeah, I don't know the details on that, but I know that process is still in play. And I think that was still a plan. And the procurement for that was a, they call it a contingency battery, it's not necessarily load shift battery, but there was a solicitation for that. And I don't know the specifics on that, but I understand that's still going through the process. Well, we're getting better at this, aren't we? We're getting better at sizing up our needs and creating, you know, PPAs and facilities and working together on it. It seems like it's happening easier now with less fits and fewer fits and starts and all that. And you're doing a great job, by the way. Did I mention that? Yeah. Mr. Veronica Rocha. Thank you. Okay, and Roddy Chong, Hawaiian Electric Companies. We're gonna take a short break, we're gonna regroup, we're gonna come back in one minute, and we're gonna go on to more, more of the four questions. We've only got one so far, we'll be right back. Okay. This is Think Tech Hawaii, raising public awareness. Some say scuba divers are the poor man's astronaut. At DiveHeart, we believe that to be true. We say, forget the moon. DiveHeart can help children, adults, and veterans of all abilities escape gravity right here on Earth. Search DiveHeart.org and imagine the possibilities in your life. Dude. Okay, wow, we're back. You know, if you hadn't noticed, this is a hot show, honestly. Rodney Chong from Hawaiian Electric Company and Veronica Rocha, my co-host for the show. She's the Renewable Energy Program Manager for Hawaii State Energy Office. So this is like utility renewables meeting state energy office renewables. It's all about renewables. We're finding some very interesting things. So, let's look forward. You had a question about looking forward, Veronica. Yes, and you referenced four questions. We've actually covered two already. The second one is not a mystery question. It was really about recent procurements. Right, so this has been covered. Mystery question, that's a good idea, yeah. So the third question is, okay, Rodney, now that the Power Supply Improvement Plan, or PSIP, has been approved by the Public Utilities Commission, or PUC, what can we expect next in terms of procurements, future procurements from the utility? No, yeah, so, yes, the PUC recently accepted the PSIP, so that's great. And, you know, we were reading the order and it was clear that the next step is for them to open the dock. It's start the process to allow us to do the RFPs. So that's something that we anticipated. Logically, you approve the plan, then you go out and get the stuff, right? So that's what we're waiting for and we're getting ready for that. And, you know, some of the things that we've been working on in preparation for it is, and it wasn't something maybe you wanted to bring up, but you know, we did a land RFI earlier this year. Yeah, please talk about that. Okay, and so, you know, over my years in this department, there were times where landowners called me or developers called me. How long have you been in the department? Seven years. Okay, just checking. Yeah. Okay, so landowners called you? Yeah, and they said, you know, so-and-so developer called me, are they good? Or developer calls, hey, I need some land, who should I talk to? So, obviously, it's not something that we can just, you know, answer that question. No, I saw a press release on this very thing. No, exactly. We talked to Peter Rossick of Hawaiian Electric about this very- That's right, and he helped us get the information out. And so, it was a way to get landowners connected with developers. So, you know, we asked landowners who were interested, hey, if you want to offer your lands for future renewable projects, send us information. And we took that information, overlaid it with our system information, some transmission lines, so that we can provide that to developers. Very valuable. That's right. To facilitate or in exchange, that's right. It'll make it happen kind of person. I called it match.com. I liked it, match.com, there you go. But, you know, it was a way to help facilitate that process. And, you know, we'll see how that goes, hopefully it's useful. That's a good one. Yeah. And so, you know, that, because, you know, if you ask developers and landowners, it takes time for them to engage each other and talk about things before they can actually put a project together. So we're hopeful that, you know, this process is easier by us doing that. And we'll want to keep enhancing and maybe do that again. So we'll see. And in the meantime, we're, you know, anticipating, you know, what we think the RFP will be structured, the process, you know, we are bound by the competitive bidding framework. So we want to make sure that, you know, unless told otherwise by the commission that we're following the steps required in that. Why don't you just go out there and make 57 RFPs and just wait and see what happens and then seek approval of the ones you like and get to 100% by 2018. Sorry. Yeah. Yeah. Yeah. Yeah. Well, that's one way we're going about it, but then there's the PUC, I guess, way of doing things, right? So please clarify for me. Who opens this docket to allow for the RFP to take place? Is it the companies or is it the PUC? So we initiated by, we actually sent letters over the past year asking for, you know, requests to open the dockets to do the RFPs. So, you know, we sent that and, you know, we wait for the commission to open the docket. And so, you know, typically, if you follow a company framework, there might be an independent observer assigned to that to each RFP and so we'll meet with that person and go over what we think is the structure and the process of the RFP itself. Can you talk about the independent observer for a minute? What is that? Who is that? Can Veronica be one? Can I be one? I don't think so. I'm not like a studio staff here. Can they be one? Well, I think they have to be answering qualifications, but yeah, you know, they are people who, you know, are the eyes and ears for the commission. And so, they work with us to make sure that we're following, you know, whatever the commission might have stated when they open the docket or following the intent of the compid framework. So they, at some points, they'll issue reports on what they believe is their view of things. And so, you know, we've went through this before more recently with the geothermal RFP. Prior to that, there was one in 2008, I think, for Renewal RFP. So that's what's written in the compid framework. And so, you know, if an IO independent observer is assigned, that's how we work with them. And, you know, one of the reasons, too, if there's an RFP where the utility is also bidding, you know, obviously we have to have some firewalls. Possibility of conflict, yeah. Exactly, so they keep an eye out for that, make sure that everything is right, so. So let's see, PUC opens the docket. In response to approving the PCEP and in response to your letter asking for that docket to be opened, then you submit, is it your final RFP or is there a draft? It's a draft. And is there opportunity for public comment? Who gets to comment? Actually, is it the public or who gets to comment? Is it interveners, how does that work? Yeah, no, so good question is the process, you know, the docket gets opened, we have a draft RFP, so it's technically a draft. And we issue that. Of course, we'll have the IO look at it first and, you know, if it looks good, we'll issue the draft and it's a public document that people can see. And, you know, we solicit comments and, you know, more than likely we'll have a, it's called a technical conference by I view it as a bidder's conference where we talk about it, answer questions and we gotta run it a certain way so that everybody has access to the answers we give. You know, the public may participate in it, they'll see it anyway. And so they may issue comments as well. So we take all the comments in, review it, we try and incorporate it into our proposed final RFP. And once we've done that, we will issue that to the PUC. And if we don't hear anything, I think for 30 days then it's deemed final and we can go ahead and issue the RFP. You guys are so nice. I mean, you know, I doubt this happened when you were first building power plants in the early part of the 20th century. And you've gotten around to being transparent about everything, inviting everybody, total inclusivity. I remember in the RFP process, there were like 86, you know, stakeholders involved and that took years and it didn't work because so many voices, you know? I mean, so my question is, you know, doesn't some of this transparency type bureaucracy stand in the way of moving to goals that Veronica is asking about? Yeah, I mean, that's reality, it is. But, you know, there has to be a balance to, from transparency, letting people comment on things, but also us trying our best to meet the goals at our law. So we have to do that and... Our hearts go out to you. Yeah, thank you, I appreciate it. This actually takes me to the fourth question. Okay, the fourth question. Fourth question. So Rodney, how are the companies preparing the general community and also developers for these upcoming procurements? And so just to put some scale around the procurements, we're not talking about like 10 megawatts, right? How much are we talking about and how are you preparing general community and developers for the type of procurement scale that you're looking at? No, good question. This has been a hot topic because we do have this goal for the state, but people realize that there's gonna be a lot of big projects all over the island. And what we've heard loud and clear from communities is that they want more visibility because the way it's been done in the past is obviously for reasons of confidentiality, when we sign nondisclosure agreements with the developer we're negotiating with, we can't speak publicly about it unless they want to themselves. And so often the project's not made public until we actually have to file it to the commission for approval. That's when people hear about it. Some developers though, they may choose to do community outreach beforehand, but that's up to them. But what we're looking at is trying to integrate into the RFP process a way to get the developers out there earlier before we execute PPAs. So what we're looking to do is propose in the process a requirement that the developer does some community outreach prior to executing a PPA. And we gotta work out the details on that. Again, that would be our proposal. It's gonna be subject to comment by people who are stakeholders in the RFP process. It's gonna be subject to the PC approving our process. But that's the way we're looking at it. We're hearing loud and clear the community wants transparency and they don't wanna hear about it like we lead in the game. So that's what we're looking at doing. Strikes me though that earlier in the game, say going back to 2008 and a few years after that, actually it was after the blush. The blush was in 2000, everybody was on board, but maybe by 2010 or so there was little pushback. People said, oh, not in my backyard. You guys can do that but somewhere else, not here. My guess is, and I really like your thoughts on this, my guess is that that's so often that people are not so nimby today as they used to be, am I right? You can just say no. Yeah, it depends. And I think like certain communities feel like a lot of these types of project, they'll call it infrastructure projects seem to always be in their area. So obviously that doesn't sit well with some of those communities. So I don't wanna generalize saying that it's not an issue. So we're trying to address it, regardless what community, just wanna be consistent. And you can see that kind of playing out, there was recently an ordinance passed with the city council for future wind projects. So any wind projects proposed in ag or county lands, instead of a minor CUP now has to go through a major. So that requires more community engagement. So I think people are beginning to realize that they want to have more of a voice and more of a say in these projects and I see that happening. And so yeah, I don't think that's true for all parts of the state. Yeah, I wanna add to this part of the conversation. So in my experience, I agree with Ronnie, it does depend, but I feel that there is a thirst for not just being part of the decision-making process, but for seeing direct benefits to communities that are impacted in some way by these renewable energy projects. So to that end, I'm really happy to see that HECO's starting to take steps towards that direction of further really helping to engage the developers with the community and be part of the process. What is direct benefits, Veronica? For example, being able to purchase part of the power plant. Being able to have direct revenue derived for the community, for like the revenues that the developer would get. And to be honest, these are just examples because ultimately the types of benefits that matter are the benefits that the community is looking for and that they deem fair for whatever it is that they're giving up. The entitlements, you're talking about entitlements? I'm not sure you mean by entitlements. Well, build the gym for the kids. That could be it. Improve the high school, what have you. Spend some money in the local community. That could be part of it. And you know, so the last show of this series in September, so September 27th, I'm hoping if I can get a guest to talk about what they are doing with regards to this subject on a very local level. So this is something that folks are interested in. I highly recommend that they tune into that show. I wanna be there. Yeah, well, you know. Okay, Veronica, we're out of time. I am so sorry we're out of time, Rodney. There's much more to discuss here. I personally had my own four questions, but that's what the next time you're on the show. So it's time for you to summarize or at least make a point for takeaway and leave our viewers with some really profound thought. Ready, go. Shoot, so I don't know about the profound thoughts, but we have a very, we're the only state in the nation that has the goal of 100% renewal portfolio standard in the electricity sector by the year 2045. Towards that end, HECO has already procured quite a bit of utility-scale projects. We're currently at 26% RPAs. They continue to procure projects of energy, three projects are examples of that. Moving into the future, now that the Power Supply Improvement Plan has been approved by the Public Utilities Commission, we're gonna be looking to procure a lot more renewables and as part of that portfolio, of course, utility-scale renewables are gonna be a big part of that. So with that, I really thank Rodney for participating in this conversation today and also Jay for having me participate as the co-host. So thank you so much. We want you back. So Rodney, honestly, just one last thing. What do you think of Veronica's performance today? Awesome. Awesome. Awesome, Veronica. Very polished. Thank you, Rodney. Hello, how are you guys? Thank you, everybody. Appreciate it.