 and welcome back to Hawaii, the state of clean energy on Think Tech Hawaii. I'm your host, Stephen. Today on our show, we have two guests, Shannon Tanganon from Hawaii Electric and Benson Medina from Sustainability Partners. So first of all, I'm gonna go to you, Shannon. And let's tell our audience about the moratorium on disconnecting for non-payments. I think you guys have some news on that, correct? Yes, the moratorium is ending on May 31st, but I think the main message that Hawaiian Electric wants to send is that come June 1st, it's not gonna be thousands of disconnection. We just wanna make sure that our customers know that we want them to stay connected. So what we want them to do in the meantime is to set up payment plans so that when you're on a payment plan, you're not subject to disconnection. You stay on the payment plan and keep current with the payment plan. You're not subject to any kind of collection activity. So that's what we wanna make sure customers know. Okay, and how can they set up a payment plan? To submit a request, go to hawainoelectric.com slash payment arrangement. If you need assistance, financial assistance, we have links to programs that are available. We don't administer the programs, but there are many out there that folks are able to utilize. And if you wanna look at what's available, go to hawainoelectric.com slash COVID-19. So there's a bunch of resources on that webpage for folks who just might need a little help with utility payment. We just wanna make sure people know that resources are available as well. Well, just a quick, I'm just a question because I don't know. Are there any other vehicles for people that are really hurting, available to get money? Are there loans available or is there help from other agencies that can help them pay their bills? Yeah, there are various programs out there for those who qualify. There's LIHEAP. LIHEAP applications are taken from June 1st through, I believe the end of, like, all for June. So that is available to those with a certain level of income. There's a lot with the county programs. They have rent and utility assistance available right now. With Honolulu, City and County of Honolulu, I believe their application process will open again, I believe June 7th. So they take a certain number of applications, close the program and allow for their administrators to go through the applications and make the awards and then they open it up inside. I believe it's once every month that they open it up. Sorry, as Hawaiian Electric gonna have information on the website for people to be able to organize. Sorry, yeah, we definitely have those links available on the webpage. And then we also wanna let folks know for those who don't contact Hawaiian Electric to get on a payment plan, you know, have a pass-to-valent and that we've not been able to contact you. What happens is we'll put those folks on a automatic 12 month payment plan so that they avoid disconnection. So starting in July, those who qualify or meet the threshold for disconnection, we haven't contacted us, we're gonna put you on an automatic 12 month payment plan. And that's just to like a stop gap to make sure that you don't get disconnect. That's sort of like a fail-safe. We just encourage folks. So there are programs available that go longer than the 12 month. So if you wanna take advantage of that, I highly encourage you to go to the website. We have applications and flyers available in eight different languages. So we just wanna make sure folks know that there's, you know, 18 month program, 18 month plan, 12 months, four months if you need only four months, it varies. But we're gonna work with our customers. Yeah, that's great. So is there anything else that you wanna say at this time or is that pretty well the message? That's the message. We just want to make sure everyone stays connected. We're doing all we can to make sure folks know that there's help available and payment plans available. Thank you very much for having us today. Hey, thanks for appearing, Shannon. This is great information for our audience. Thank you so much and Aloha. And now it's my pleasure to welcome Benson Medina from Sustainability Partners, Aloha Benson. Hey, how's it going, Max? Thanks for having me today. Hey, it's great having you. You're coming to us all the way from Hilo. I understand through the magic of the electrons. Benson, just introduce yourself to the audience. What's your background? Where are you from? How did you get involved with Sustainability Partners? Okay. They're one minute elevator pitch. Okay, great. So I was born in Oahu, went to Kamehameha Schools, was educated on the main line in Oregon, came back and had a very varied career that went through airline, manufacturing, electrical maintenance, started in with Sustainability Partners about five years ago when they brought this concept to Hawaii. So it's taken us really about five years to sort of spread that message and explain how our program works. And luckily we've been able to take the foothold now. I live in Hilo. My wife's retired now from the National Park, but we got a lot of kids and grandkids who were busy. That's great. You don't look old enough to have any grandkids. I got great grandkids. Don't kidding. Wow. Yeah, really. They're right behind this door. I'll let them in here in a minute. So what's the problem? What's the problem that we're Sustainability Partners is trying to solve? Well, basically, every municipality, our markets are really municipalities, universities, schools, and hospitals. And it's basically infrastructure. Like in the state of Hawaii, most of our infrastructure was put in between 75 and 50 years ago, post World War II. And before that, when Hawaii became a territory, we started putting in phone lines, water lines, all that kind of stuff, bridges. But no concessions were made at that time to replace those when they reached the end of their service life. And a lot of them are way past their service life. They're double their service life. We have water pipes in there that are 100 years old. So that's a big problem. And we don't even know where they are. Yeah. Well, the problem is that they need to be replaced. And then the bigger problem, of course, that it's a very, very expensive solution to do that. So Hawaii's infrastructure, basically, when there was an independent study done by civil engineers, civil engineer association, and Hawaii came out, when you look at airports, coastlines, you can see in that graphic there are waste water facilities, solid waste. Our grade came out to D plus. And it came out to D plus simply because the state of repair that they're in, the state of the amount of deferred maintenance is going to get them up to speed in terms of being well-functional. We're way behind. And the Hawaii Executives Association put out a report about two years ago that said to resolve Hawaii's infrastructure problem, it's about an $88 billion problem. Well, it's kind of considerably since then. So I sort of just kind of estimated out to be about a $100 billion issue. And that's a lot of money. It is a lot of money. So tell us a little bit more about deferred infrastructure. I mean, what does it, I mean deferred maintenance, what does it actually mean? And what's, get into a few more of the details of why this is not a good thing to do. Well, deferred maintenance basically is exactly what it sounds like. You know, it's like you, you know, you're supposed to change the oil in your car, but you said, I'll put it onto the next 5,000 miles and the next 5,000 miles and the next 5,000 miles. I mean, we've gone into one agency of our state that told us that they had 500 million, a half a billion dollars worth of deferred maintenance. And you know, they won't solve that because there's no $500 million solution that's gonna basically show up and resolve all of that. So all of the roof fixes and the water leaks and the pipes that need to be replaced and the light bulbs that could be put in that will make it more energy efficient. Those are just maintenance projects that get deferred because they simply don't have the budget to do it. So they get kicked down the road, so to speak. And so it's the next year and the next year and the next year. And so that is a problem that unless, you know, some type of outside entity can come in to help that problem, it's just something that, you know, it's gonna be very, very difficult to solve. And I understand there's not even enough money in the feds to address this problem. Well, I mean, I think it's great, you know, President Biden's putting through infrastructure bill, you know, a couple of trillion dollars. When it filters down actually to Hawaii, to what Hawaii we'll probably get, we'll probably get maybe $7 billion, $8 billion. And that's a lot of money and it's gonna solve a lot of problems, gonna fix some bridges, it's gonna take care of some problems that we have. But if our problem is $100 billion and we get $7 billion or $8 billion, then that means, you know, we still have over 90% of the problems still left to solve. So here's the $100 billion question. What's the solution? Well, there's the solution in our mind. So our company, Sustainability Partners is a capital placement company. So we're not a car company or a water company. We're basically a company that takes funds and invest them into infrastructure projects. And basically our market is what we call the Mush Market, M-U-S-H. It's municipalities, universities, schools and hospitals. And what we do basically is we take, you know, we take a capital expense, like if you're gonna build a new building and we turn that into an operating expense by basically converting it down to a user fee where we would basically buy the assets. So let's just take a brand new electric bus, okay? So a 40-foot electric bus now costs you about a million dollars. So what we would do is we would buy that bus with our funds, okay, we'd own the bus. We would pay for all the infrastructure, the electrical charging infrastructure. It would take to operate that bus and all the associated costs like Hawaii County wants Wi-Fi on their buses. So we would put all of that together. So we take all of that cost and it's basically a simple amount and we divide it over the service life of the asset and in this case, the bus it's 12 years or 500,000 miles. And then we just divide it per mile and we just give you a per mile charge. So let's just say, I don't know, it's a buck 50. So the bus goes a thousand miles a month or something and you pay us a thousand miles times a buck 50. So it's a very simple process because when it saves a ton of money because the county or the state doesn't have to put on a million dollars for the bus, we take care of the maintenance because it's our asset. And then it gets reduced out to just a user fee. So you only pay for what you use. I know that's kind of a commercial cliche but that's basically how it works. So talk a little bit more about maintaining the buses. We'll use the bus example and also best available technology. We talked about that before we started the show. Right. So the maintenance of buses, let's kind of stay on buses. It's super, super expensive. And there are some in some of the counties there are buses that are there that are basically just dead because the county doesn't have the money to fix them to get the parts to fix them or to pay the mechanics to repair them. So it's actually cheaper because most of the buses are purchased with FDA or Federal Transportation Administration funds. They actually, it's easier to just buy another bus and just leave that dead bus out there. But in our system, because we only get paid if the bus is rolling, that would never happen because as soon as something happened to the bus we would want to get in there either replace it, fix it get it rolling because we only get paid if the asset is working. So yeah, so in terms of deferred maintenance that gets taken completely out of the equation which is a great thing. So would you buy, so you're going out to bed you're going to buy the buses. Would you buy the cheapest bus or is there other evaluation criteria that come into your selection of the bus? Yeah, that's a great question. Thanks for that softball. It's terrific. So typically in the state's procurement process, right? It's always the lowest bidder. Now inherently there's some problems with the lowest bidder, right? But in our case, since we've already we've gone through state procurement we've already won the procurement for electrification and transportation that we're going to try to basically get the asset that's going to last the longest. For example, we just delivered 44 cars to the Department of Transportation the highways division. And when we put out all the choices that we had because we can buy in any one of them it actually worked out that Tesla model wise were basically the best bang for the buck because of the longevity, the low maintenance of it the warranty of it, it made more sense for us to buy that than a less expensive model. So in our model it's completely reversed. We're going to buy the asset that has the most longevity, the best quality as opposed to just the cheapest one. I remember the reaction when you roll back to Teslas people were like on you saying, what are you doing buying the Tesla? I mean, that's the most expensive car, blah, blah, blah. Yeah, it was crazy. And I got to hand it to Ed Sniffin Deputy Director of Transportation for the highways division because it was his department that cut those cars. And so he's immediately called on the carpet but they had done their homework when they just put the graph up there and it showed all the different models the initial cost, the charging infrastructure installation of it, the warranty, the amount of maintenance we were going to put in over the service life of the car it actually wasn't even close. So, but we have to tell that story. We have to explain it because people don't like the optics of that the state workers driving around a Tesla Model Y. So, let's talk a little bit about the maintenance. It's great to have the bright shiny object but you still have to keep it maintained. So, we have a lot of people that are already maintained buses and do that kind of stuff. So, how do you do the maintenance and what's the service you provide there? Well, you know, it comes, you know, basically we depend a lot on the manufacturer comes in basically we do training especially if it's going to be a new item like an electric bus. Obviously people need to be retrained to service those. The servicing of course is a lot less complicated because you go down just in a vehicle you go down from 2,500 moving parts to less than 20. So, a lot of the maintenance has been contained because of that. But, you know, we're emerging into a new industry. So, people are beginning to see especially people that service regular internal combustion engines are starting to see the tide turn in. And I tell you the game changer, the game changer Mitch is the Ford F-150. So, as you know, the Ford F-150 is the largest selling vehicle in the history of the planet. So, when they put out an electric version of that and the lightning and once that starts to catch on and people start buying that that's probably the easiest way to transform people who are just driving regular internal combustion engines into electric vehicles. So, circling back to the maintenance of it. Yeah, we're in charge of the maintenance of that. We're gonna try to bring the best people in to maintain our asset because like I said before, asset doesn't go, we don't get paid. So, talking about keeping the wheels moving. So, talking to Riley Saydo, I understand that because you own the vehicles that if they're not being statistically I understand like vehicles in a government fleet may only be used like 33% or a third of the time because of holidays, vacation, work hours and all that. Talk to me about, you know, capitalization or using that capital for better effect by essentially I understand it renting out the vehicles to other people who might have it before. Yeah, we're working through that and trying to figure out a ways in which to do that we may deploy these cars through some kind of agency like enterprise, for example, that rents cars out because we're not in the rental car business. We want our asset to be used to keep rolling and then it is our hope actually at the end of the service life of these electric vehicles that we're working with now that we can filtrate them out into the community because part of what we'd like to do is bring community awareness to the electrification of transportation. And so the more that we can get these assets out there to be used and then to infiltrate them into the community, you know, the better for us better for the community, better for the company, you know, better for everybody. You're not going to run these vehicles into the ground like they tend to do now to the last gas. You're going to keep modern vehicle the technology updated all the time because it affects your bottom line. Yeah, and that's probably that's actually one of the one of the great things about using Tesla cars is that it's basically a computer that's on wheels, right? So the company is constantly just kind of like your iPhone, right? They're sending updates to the car all the time so their software is continually being updated. So that's a great thing for them. So for us, if there's like a new, a better technology I mean, we're fine taking something out that's supposed to last 10 years we're taking it out after five years and replacing it with a better technology. It's actually better for us to do that. So for example, you can buy off use Mirage now for like about $10,000 on the mainland and that's a $50,000, $60,000 car. Yeah. And say it introduces, you know it gets that technology flowing through the economy. So that's a good thing, yes, very marketable. So let's go on to the next slide because you have a lot of eligible infrastructures which have to be in the title of the slide. Yeah, yeah. So I'll just kind of roll through that real quick. So sustainability partners, we have a contract to do electrification of transportation but our job is to do any kind of infrastructure whether it's wastewater facility, broadband expansion, redoing lighting, all of that kind of stuff. Boilers, micro grids, all kinds of stuff. So we're not just restricted to doing transportation and our sweet spot actually is water and wastewater facilities. So we're hoping now that we'll be able to make an impact there, especially now all of the wastewater facilities in the state will have to upgrade their processing now wastewater because of the Hawaii Wildlife versus Maui County. Yeah, that verdict came down from the Supreme Court last year and that's gonna have a huge impact. What about the university? I mean, you know, I'm employed by a university. Yeah, there we go. Yeah. That's been an enormous backlog of my understanding and no money now, especially after this last legislative, thank you very much legislature for lacking $42 million out of our budget. That's really great. Yeah, well, we're excited. Yeah, we're excited to start working with the university system. So the two departments that stepped up right away was the Department of Public Safety. So we're gonna be replacing some of their police cars on campus with Tesla Model Ys. One of the community colleges reached out to us when we're community college on Oahu. And so we're gonna be replacing some of their vehicles. So what we're trying to do right now is basically get a meeting with the Fleet Services Division where they can just basically invite everybody and we can kind of explain the program. And then people can have the opportunity to participate if they want to work. We're doing that actually tomorrow with the DLNR. All of their departments are coming to one great big meeting where we're gonna basically explain the program and explain how they participate. But yeah, University of Hawaii, yeah, we'd love to have those guys. You're awesome. So where do you get all the money for this? Yeah, yeah, that's a pretty common question. Well, you know, there are basically what are called global infrastructure funds and the guys who run our company, they came out of that world. And basically, you know, it's pension stuff where investors are looking really for a smaller investment over a long period of time. So where, you know, investors want, you know, the most money, double your money in a year, these type of investors will say, no, we'll make a few percent over 50 years. So there's an enormous amount of money, quadrillions of dollars that are out there to use for global infrastructure work. So what they're looking for is a long-term recurring revenue contract with a guaranteed return something safe. And that's why our market is basically it's municipalities, it's governments, right? Municipalities, universities, schools, hospitals. So that's getting us pretty close to the end here. So let's start wrapping up. I understand. I just want to, one last question on the transportation. So I understand that everything's wrapped into it. So of course I'm interested in hydrogen. I understand that you'll take care of the supply of my case of fuel. Is that, how's that gonna work? So basically what our contract is with the state and the state highways division basically put out an RFP at the end of 2019. And they did kind of a different type of procurement where they basically just put out an objective or a series of objectives that they wanted to achieve. We bid on those, we were awarded the contract and it was basically for electrification of transportation. So what that means is that what our contract enables us to do is to provide that for every state agency and every one of the counties. Now our program, although it sounds pretty simple, it's simple to me because I've been saying this for five years now, but we have to repeat it to people. It's simple and we just walk them through. It's an easy step. So people, hydrogen, right? So let's go to the hydrogen fuel cells, right? So hydrogen fuel cell can power an electric bus or an electric car, we're all over it. So we're looking at technologies. So anything in our contract, it's basically anything that has anything to do with the electrification of transportation, including like setting up micro grids for charging, like in Hawaii County's case, they park their buses overnight in places that don't have any electricity. So that would be a great opportunity for us to put a solar micro grid in there. That can help charge these buses overnight. So yeah, so we're looking forward to it. So essentially this allows Hawaii to really modernize all this infrastructure, all this transportation and really get with it. Whereas the current way of doing it is just not working, like you said, I mean, it's ridiculous. Well, in rebuilding infrastructure, it's not, I mean, we're coming in and we're answering a big piece of the puzzle, but there's really, really three big pieces, bitch. So first, I mean, we have to have leadership that's willing to take some action in it, right? So our mayor, governors, you know, Governor Ege did a big thing by just saying, hey, everybody on renewable energy by 2035, the legislature puts through a bunch of bills. If House Bill 552 passes, then it'll dictate that all state agency fleets have to be fully, fully electric by 2035. So the legislators, they're all coming, they're trying to help in this. And I think that the tide is really turning now. So leadership is one thing. The second are companies like us that are willing to come in and make the big investment to put millions and not just millions, but tens of millions, even billions of dollars in here to help solve some of these infrastructure issues. And then the third thing is just, is that we have to build some resiliency by basically adopting the best technology that can help us, the best practices that are out there. You know, people begin to see that, hey, man, we're on an island, we have to be more sustainable. And so that's kind of where we're at, sustainability partners is to work towards sustainability with as many people as we can partner with. One last question, quick one. Okay, okay. We're almost out of time. Federal agencies, do they qualify? Can you work with that federal agency? Yeah, we can work with a federal agency if we have a contract with them. Right now, the only contracts we have in the state of Hawaii are state and county. But yeah, we'd love to work on, yeah, help Pete Buttigieg to give me a call, hook him up. Okay, well look, thank you so much, Ben. So we're gonna have to leave it there. We're out of time. I told you we'd be fast. So thank you so much for coming on the show. Yeah, thanks, Mitch. Man, I really appreciate it. It's good to see you again. Thanks a lot. Such a great program. So we'll leave it there. You've been watching Hawaii, the state of clean energy on Think Tech Hawaii. Today we've been discussing sustainability partners, public-private partnerships with Benson Medina. Thank you very much. And thanks to our viewers for tuning in. I'm Mitch Ewan. We'll be back in two weeks with another edition of Hawaii, the state of clean energy, aloha.