 Hello and welcome to Power Up Hawaii where Hawaii comes together to walk towards a clean, renewable and just energy future. I am your host, Raya Salter. I'm an energy attorney, clean energy advocate and community outreach specialist. I'm also the principal attorney of Imagine Power LLC. Today we're going to take a look at some important energy and utility news from Hawaii around the country and the world as reported in the last week. First, let's take a look at some recent developments in clean energy and clean energy policy here in the islands. Here we've got some big, big, big stories developing about energy storage projects in the islands. What we've got is what could very well be the beginning of the first or maybe the ongoing storage wars as companies compete to show what they can do around the world with a big focus on the island. So we've got two stories coming up, one about Tesla and then another about a big new project on the big island that's using blue planet energy. So the first one, Tesla. Tesla's dispatchable solar plus storage project here has been brought online. Tesla announced this week it had completed its fully dispatchable storage plus solar project on the island of Kauai installing a 13 megawatt, 52 megawatt hour project that will help boost the amount of renewables on the system. Under the terms of a 20 year contract, Kauai Island Utility Cooperative will pay Tesla 13 cents, about 14 cents kilowatt hour, less than the current cost of oil according to the utility. Power companies in Hawaii continue to push the limits on green energy technology and are now looking to deliver solar energy even when the sun isn't shining. KIUC and Tesla said that the Kapaiya project, which utilizes Tesla's power pack, lithium ion storage systems is now online. The project attracted national attention when it was first announced nearly in the end of 2015 as the first fully dispatchable solar plus storage project in the United States. The projects sprang out of a request for proposals to solve problems that too much solar energy posed to its grid. By solving that issue, KIUC hoped to integrate more solar onto the grid, avoid curtailing solar at midday and boost customer savings while weaning itself off of its resilience on imported oil to generate for electricity. So here we go, and I think it's really important that folks here understand. I moved here from New York City just over a year ago precisely because the issues happening here for energy and for islands are red hot. Everyone knows that the next step for renewable energy is storage. It is the key to 100% renewable energy goal in Hawaii and the further development of renewable energy period, at least where we stand now. The cost of storage technology has begun to come down and become more competitive and become starting to make more and more financial sense in particular projects. And so many say that storage is really right now at a place where rooftop PV and PV was, say, five to ten years ago, about to usher forth in a big new way. And islands are the key. So we've got Tesla. Now let's talk about blue-planted energy and developers that are doing some work on the Big Island. As reported by Pacific Business News, Hawaii developer Brian Anderson plans to develop a 410-home project along the Big Island's Gold Coast that would become the first off-grid community of this magnitude, so says Mr. Anderson, or so he said this week. Anderson's JPL LLC is developing the Anamalu Project, which includes detached single-family homes and the Wakaloa Resort community. With 350 homes and 60 condominiums, it's one of the first projects to offer this type of housing. Prices for the three and four bedroom homes, ranging from 1,625 square feet to 2,800 square feet, on 15,000 square foot lots, are expected to start at $750,000. Residents will also have access to Anamalu Beach Club that includes a pool, water slide, food concessions, and other amenities. The zoning of the project allows for vacation rentals as well. So JPL has struck a deal with Kaloa Energy on the project, which will include rooftop solar energy systems and blue-planted energy's blue-ion battery storage system. Blue-planted energy was co-founded by serial Hawaii entrepreneur Hank Rogers. Each home will also include energy-efficient appliances. Now, Wakaloa gets less than 11 inches of rain each year, making it one of the driest spots in the state. And because of Hawaii's proximity to the equator, it is one of the best places to harness solar energy for power use. Anderson said that to ensure energy security, Anamalu's microgrid has been designed with an additional large community energy storage system. All utilities, both gas and electric, will also be built underground. If an individual homeowner's needs exceed what his or her home produces, additional power is available from the community storage for a fee lower than current utility rates. The community will also be tied into a central backup supply to make sure homeowners never go without power. So here we go. What we are seeing and experiencing at new and beginning and maybe currently what seems like small-scaled is absolutely at the vanguard of renewable energy development in this country. We've got Tesla working with Kauai on some really exciting new battery systems. And now, let's talk a little bit about why this project with JPL and Kaloa energy and blue-planted energy is so exciting and so interesting. So what they're proposing to do is really create a whole development of about 450 homes that does not need or want the utility grid or at least the traditional utility HECO as we know it at all. So the idea is that they're going to have this community that's going to have a microgrid, it's going to have solar plus storage, storage like I said that now newly competitive piece of the puzzle that can bring the whole rest of the renewable energy picture into focus. And so it will have solar plus storage in addition to having a community, another community backup. Now another thing that is extremely critical is that this concept of a home that may not produce as much as it needs required. And so having another piece of backup generation to provide that supply. What we are talking about in this situation is a complete rewriting of the rules of the game away from the traditional utility model towards an independent model where the developer of a housing project works with energy companies to become independent of the grid, have its own generation that can serve as backup. We'll see if there needs to be another arrangement with the utility or someone else to have a backup for the backup. In addition, the resiliency piece is critical. So they're talking about undergrounding lines and this is extremely important. And something that as an advocate I've worked as an advocate on the mainland, I worked in several jurisdictions to talk with utilities about the issue of what if you are looking at building new equipment onto the system or building out the grid or providing resiliency to the grid, what is the sea level going to be 20 years from now, 30 years from now, 50 years from now? Are you using the most accurate and up-to-date estimations of sea level rise that also include what the potentially catastrophic effects of climate change can be? So you've got to look at where those lines are going to be, where's the best place for them to be, oftentimes that could be underground, sea level rise. And then also how will that equipment function in rising temperatures? So you've got some good thinking here happening on this project. You're sort of rewriting the rules of the game with that key of battery storage and seeing an entire community, a resort community, 450 homes that will be independent of the traditional utility. So that's an exciting story on its own, as is what is setting up to be some serious competition between companies like Blue Planet Energy and Tesla. This is something important to keep our eyes on, folks, and you know here at Power Up Hawaii we will continue to do so. Moving right along with more important news happening in Hawaii, Yahoo! reports that Oh Free Energy has partnered with Revolu Sun Smart Home on solar here in the islands. This will be a residential solar fund that will act to provide financing for multiple projects here on the islands. The contractor, Revolu Sun Smart Home, based here in Honolulu, is an industry leader, according to their press release, in residential solar construction. This strategic relationship between the two companies will focus on long-term financing for a portfolio of residential solar installations. The fund was formed in conjunction with Divya Capital Ventures, an alternative investments group. We've got a quote from the folks putting together the fund. We are excited about the new opportunity in relationship with Revolu Sun, as well as our further expansion into Hawaii, said Brad Stutzman of Oh Free Energy. The future seems very bright, working together to finance more installations and help each other build a stronger portfolio. Oh Free Energy also anticipates offering financing for residential energy storage through the same funding mechanism in the coming months. So here we go again. I have to say, things are stepping up and moving forward with renewable energy in the islands. I think this is an interesting to hear about development, that we've got Hawaii-based developer Revolu Sun seeking to leverage external financing on a long-term basis. So why is this important? It means that companies like Revolu Sun must have increased confidence in their market, in the market here. They think they can do it. They think they can grow. And having financing to start aggregating, having more projects, having more projects that are financed over time is something that can add value. So that is interesting and exciting. I think we're going to see more investors from the mainland who are going to be interested in helping expand the energy market here. And again, I think you're the renewable energy market here. And again, I think you are witnessing the power of battery storage costs coming down. It's also interesting. I know that there has been talk in the Hawaii State Legislature of some type of battery rebate to help push that along. Query whether or not that type of rebate, which would again be aimed at industry and primarily middle- to high-income residents, should go that way. Let's see. We'll see. And we're about to take a break. And when we come back, we've got even more exciting news about what's happening with energy here on the islands with the power of Hawaii. Good afternoon, Howard Wiig, coldgreenthinktechhawaii.com. I appear on Mondays at 3 o'clock, and my gig is energy efficiency doing more with less. It's the most cost-effective way that we in Hawaii are going to achieve 100% clean energy by the year 2045. I look forward to being with you. Aloha. Looking to energize your Friday afternoon? Tune in to stand the energy man at 12 noon. Aloha Friday here on Think Tech Hawaii. Aloha. My name is Mark Shklav. I am the host of Law Across the Sea. Please join me every other Monday to hear lawyers from Hawaii discussing ways to reach across the sea and help people and bring people together. Aloha. Welcome back to Power Up Hawaii, where Hawaii comes together to walk towards a clean, renewable, and just energy future. I am your host, Raya Salter. We've been having a fascinating discussion about what I think are explosive on-the-ground moving developments in Hawaii in terms of, in particular, energy storage, energy storage projects, and also financing for renewable energy. Market is heating up here, and the competition is on. Now another story, another story. We all know what happened when Nextera came in and became a suitor to buy Hiko, our utility here. We all know that they came in as a suitor. We all know how that worked out. It didn't work out well, at least not for Nextera. And now there is another suitor, another company that reportedly is still interested in perhaps a marriage with our utility. So the Washington, DC-based 21st century utilities, which had shown interest in possibly buying a Hawaiian electric company after the Honolulu-based utility's $4.3 billion deal fell through last year with Florida's Nextera Energy Inc. as apparently still showing interest in being a suitor of Hawaii's largest utility. A source close to the situation told Pacific Business News that 21st century utility officials have had recent meetings with energy industry stakeholders in the state. Rhodes Alderson, spokesperson for 21st century utilities, told Pacific Business News that the company is actively in the market for regulated utilities that it can help transform into customer-centric networks of clean, low-cost, universally accessible energy. They are, however, in a quote from the company, not able to comment on or speculate about specific opportunities at this time. Cliff Chen, manager of investor relations for Hawaiian Electric parent, Hawaiian Electric Industries Inc., told Pacific Business News that, as a matter of policy, the company does not comment on rumor or speculation. Nextera Energy's exit last July opened the door to several other possibilities and suitors, including the billionaire businessman Warren Buffett's energy company, 21st century utilities, and possibly even bigger names such as Google. Those are the names of some of the company's sources say that have the capability or have even shown an interest in buying Hawaii's largest utility. There have been a number of, quote again, another number of folks testing the waters who've been around for the last six months. Perhaps an anticipation that the next day or a deal would be denied. State Representative Chris Lee, a Democrat from Kailua, Waimanalo, and Chairman of the House Committee on Energy Environmental Protection previously told Pacific Business News. He thinks, right now, everyone's taking a pause trying to figure out what actually comes next and what this means for the grid going forward. Hawaiian Electric, which wasn't for sale when Nextera Energy came knocking, isn't for sale now. Although, if a bonafide offer came its way, its board has a fiduciary responsibility to take a look at that offer according to Chen. So here we go. And then, just for folks, just a quick recap. So they talk about, so how come we've got this utility and it sort of seems to be batted about. People show up and decide they want to take over and take control. How does that happen? Well, in the shark infested waters in the world of utility mergers and acquisitions, that's exactly how it's done. Sometimes a takeover is friendly, sometimes it is hostile, and now we've got several other potential weddings or suitors who would like to see a wedding with the utility here. It is extremely interesting. I know that 21st century utilities has an interesting new business model. I think people aren't 100% sure whether or not they are fully financed at the level that will enable them to buy HECO. And I think people aren't 100% sure if the model that they offer is really, if a full purchase of HECO is required in order to make it happen. But they were in the game. They've been talking to folks and there's a lot of openness here to new ways to run the utility. So we've got names like that. That's a boutique sort of new fangled 21st century utilities. And then we've got companies like Google or like Warren Buffet. Now let's also say why, why this little utility here in the islands? I'll explain part of why is the stories that we talked about earlier today, being on the cutting edge of developing solutions, showing what can be done and potentially making a sweet little profit at the same time. I think there are a lot of lessons that we can learn from the next era merger. And I think one just at the outset is about public feeling, public appetite. I don't think that people feel super comfortable with the idea of being an experiment. I don't think people here feel super comfortable with the idea of having one of the state's most important employers and one of the important industries run by people who are not from here and who may not understand how folks want things done here. And I think that a lot of that is a part of some of the bumps in the road that the next era merger experience. So it'll be really interesting to see exactly what goes forward or perhaps all of this talk of new marriages and sharks in the water coming after the utility may make the utility think that they should start moving in some new directions. So just really incredible, exciting, cutting edge news from Hawaii in the energy sector. Well, I think we've got one more story about Hawaii that I think is pretty cool. Energy manager today reports that the Hawaii food bank expects to save about $2.1 million over the next 25 years on its newly installed rooftop solar energy system. This is something reported by Pacific Business News on March 7th. The charity and its California-based installer, Rex Soar, celebrated at food banks Oahu's warehouse as the system went online. In its first year of operation, the nearly 300 kilowatt platform is predicted to save the non-profit agency $41,000 and $41 in energy costs equivalent to the purchase of more than 102,000 meals. The Honolulu-based food bank told the local news outlet, we've got a quote, this new technology will reduce our energy costs significantly and also will allow us to serve more hungry families while also contributing to a more sustainable environment on Oahu. Hawaii food bank CEO Gerald Shintaku said, according to Hawaii News Now, which also covered the celebration. The shift to clean energy is expected to reduce greenhouse gas emissions by about 10,000 tons. In 2011, the Maui Food Bank, an affiliate of the Hawaii Food Bank, installed a 103 kilowatt solar roof comprising 336 sunpower T5 solar roof tiles that were expected to cover 100% of the bank's energy needs and save $50,000 annually. Albuquerque, Houston and Hillside, New Jersey also have solar roofs on their local food bank facilities. So here is something that I think is also important and helpful to chat about a little bit. As the cost of renewable energy comes down, as the cost of PV comes down, as the cost of solar comes down, it begins to make incredible sense to start switching to using these solutions, especially for our social service providers and others who really, really just have to use every single dollar. So this is a tremendous amount of money to be saved by the food banks. We know there are a lot of hungry people here. There are a lot of homeless people here. And 100,000 meals can fill 100,000 bellies. So I think it's important that we connect the dots and that we continue to power forward on this renewable energy transition and really come out from under the burden of energy prices that are high because they are tied to the burning of oil. Moving on, I think which will be one of our last stories, they're in New York where utilities are bracing, or actually are not bracing, are actually experiencing a deluge of horrible winter weather. And hello everyone out there. I hope that you are warm. I hope that you are cozy. And I hope that your power stays on. But New York has issued new DER valuation, distributed energy resource valuation, in an order under the reforming the energy vision docket to transition from net metering. So the staff of the Public Service Commission there issued analysis on how to best integrate distributed resources into the grid. And today's order enacts that report. So the order establishes a methodology for determining a new value stack mechanism based on avoided utility costs and DER values, including components for wholesale energy values, distribution system values, and environmental values. The order directs utilities to file detailed schedules and work plans within 45 days to develop locational DER pricing that reflects the components of the value stack. After that, the commission will issue another order to improve the value stack and more precisely identify energy-related costs and values of DERs. And actually maybe that'll be enough that I'll talk about that particular article. But I wanted to add, when I was an advocate with the Natural Resources Defense Council in New York, I represented NRDC and also a low-income energy and housing coalition in that reforming the energy vision docket and in this valuation of DER proceeding. And while the wheels of administrative law turn slow, they do indeed turn. It is extremely important to watch what states like New York and others are doing with DER valuations. So stakeholders here I think no one understand that there's a distributed energy resource docket happening at the Hawaii Public Service Commission. And there are a number of challenges that exist to, you know, there's no direct, there's certainly not a direct comparison to what's happening in New York and what is happening here, although I think there are some principles that can be helpful in both situations. I'll talk briefly about what some of those principles are. So as the article got to and it was a little bit of a, you know, a knot of jargon, but the New York process is seeking to value distributed energy resources based on what is its avoided cost, what is and also what is the locational marginal price plus an additional factor that takes into account factors like what is the environmental value that is being added to the system by the use of that asset. So what in a market like New York, which has much less penetration of distributed energy resources and solar than we have here, and of course is much larger and has actually a number, it doesn't have that many more utilities, but it certainly has much larger utilities over a broader area. What they're talking about is can we actually price these resources based on what is the cost to produce those, to produce that energy and to have that energy at any particular place on the grid at any particular time. Now one of the things that has been a goal for rate designers in the energy industry for a long time is how can we have energy prices more closely reflect the cost that it actually makes it produce them. So it's an interesting concept to have valuation based on a location on location and on a temporal scale and also take into account the environmental value. And that's something we're trying to do here and a conversation that's happening in many states. And that brings us to the end of this week's Power Up Hawaii. I'm your host, Raya Salter. It's been a pleasure. Aloha and Mahalo.