 back to ThinkTech, I'm Jay Fidel. This is Energy 808, The Cutting Edge. Talk about Molokai Energy News. News about energy from Molokai. And my co-host in the matter is Marco Mangelstorf and our guest today is Ali Andrews. But we don't know Ali yet. So Marco, will you undertake to introduce Ali Andrews? Absolutely. First of all, greetings meet our mono from a different Madre, Jay Fidel. It's always a treat to be back sharing screen time with my dear friend, Jay. So yeah, I'm so pleased, so very pleased to be able to introduce and welcome Ali Andrews to our gathering today. Molokai is, of course, how we set a very near and dear place for my heart for G's five, six or so of my life. So to be able to talk to someone who has an equal affinity and love for the friendly aisle is really quite a treat. So thank you so much, Ali. So for Ali's intro, Ali Andrews is the CEO of Shake Energy Collaborative, a woman-owned public benefit corporation also known as the V-Corp, developing renewable energy projects that are designed and owned by the communities that host them. Shake was born out of research for her master's in design impact at Stanford University down the street from Isle Stomping Grounds in which Ali and her team explored designs for more meaningful bi-directional community engagement in the energy industry. Shake is currently partnering with historically disinvested communities in the San Joaquin Valley in California and in Hawaii, including the newly found Hohahu Energy Cooperative Molokai. Ali has a background in climate research and environmental storytelling. I like that environmental storytelling a lot. Working on projects for NOAA, the State of Hawaii and the Polynesian Voyaging Center and all Ninoas, Ninoa Thompson's gathering. She has an MS in engineering design impact and a BA in physics and environmental non-fiction writing also from Stanford, I assume. No. Okay. Where was your BA from? Little School in Vermont called Middlebury College. I know Middlebury. My beloved Auntie Charlotte went to Middlebury long, long ago. So great school. So with that, again, I'm so pleased to have you here with us, Ali. So that was kind of the official intro. I would really appreciate to lead off understanding. I'd really like to understand, how is it that your head and your heart drew you to the special island of Molokai? Mm-hmm. That's a great question. I think I was drawn first to the idea of community engagement in the energy industry, living and working in Hawaii and seeing various projects run up against communities and seeing their struggle against projects that didn't fit with their values and also that piece about environmental storytelling in my professional background was getting to interview communities about how they're adapting to climate change, how they're seeing sea level rise and really seeing the power in that. So I was doing research from my master's in Honolulu summer of 2018 around community engagement. That's when Marco, you and I first met over a cream puff at Lillian Hub. And I was lucky enough to meet Emilia Nordhoek who was also very involved in energy and creating energy literacy and providing opportunities for energy sovereignty, the beginnings of energy sovereignty as I see it on Molokai. Got to volunteer as a grad student with a project that she was working on in partnership with the developer Groundswell. I got to be sort of a behind the scenes volunteer with some of my classmates also from design at Stanford. Just really learned and loved a lot. So when I graduated and started this company and the opportunity arose to continue working with these guys on Molokai, I jumped at it. That's asking for a challenge, isn't it? You've lived here, you know Molokai is special on all the islands. They call it the friendly island. However, sometimes to developers, it's not friendly. Community engagement is important. What kind of welcome have you found there? So initial skepticism for sure about me and who I am, where did I come from? What am I doing here? I remember getting that question a lot. What are you doing here? What are you getting out of it? And I remember the first time I got that question, I answered, oh, I'm getting nothing. I'm just a student. I'm just here for nothing. And that answer was not sufficient. I think the true answer to that was I was getting a lot out of it even though I wasn't getting paid technically. I was learning a lot. I was bringing those learnings back to Stanford. I was gaining experience that then turned into this company that does make me money now. So I think I learned a lot through getting those hard questions and being able to answer them and then coming back as a company and being able to say the first workshop that I hosted as the CEO of this company. Somebody asked me that same question. I was able to say, this is my business model. If we're successful here in our partnership on developing a community energy project, then I will derive a developer's fee off of that and that will be transparent and we will negotiate that, which is sort of where we're at actually now in our development process, which is fun. So have you been universally accepted or are there holdouts? Oh, I think there's a lot of love and trust in our relationship right now, but I have certainly been told by some that they're monitoring the situation. It's a trust, but if the situation changes, I reserve the right to say, I don't support what we're doing here anymore. I don't support you doing that, which I think is fair. It keeps me on my toes. We're having fun, but I also need to make sure I don't have unconditional trust to run the ship how I want to run the ship. We're running it together. Yeah, so it's not just meet and greet. It's an ongoing engagement throughout the course of the project, am I right? Yes, yeah, on a weekly, if not more than that, since almost a year now over Zoom, which is wild. So from a business point of view, you have to have predictability, reliability. You have to be able to tell your investors, it's okay to put money into this because we have a fair shot. We can moderate the risk, we can make this work. But if you're involved in a constant engagement and people have the right to, I mean, and you grant them the right to say no at any point along the way, what do you tell your investors about the prospect of the risk? And because the return has to be moderated by the prospect of the risk, what do you tell them? I think that's a great question. And I think there's a lot of risk that comes in to energy development. There are a lot of things that could go wrong at any step in the way. Do we only have half an hour, Ellie? But I honestly think that the biggest risk that I'm seeing in energy development in Hawaii right now is the community opposition. And I think that my investment in time early on in this development process, I feel like I'm in a less risky situation than other energy developers are. I think it's time well spent, it's money well spent for me. And there are other, I'm honestly more worried about other risks of when is the RFP finally gonna drop and is it gonna have new terms in it that are still favorable to this project? And if we go for new market tax credits or opportunities on funding, are those policies still gonna be live by the time that we want to seek funding? Those risks feel riskier to me than the trust with the community that I feel like we have now. So of course it's clean energy, it's solar. And what's the status of solar on the whole economy? Marco, is that a hand in that? How much progress has been made? And is the progress that has been made appropriate to the need, appropriate to the opportunities? Well, given the smallness of the grid there, there's only one single MECO power plant outside of Kanaka Kai that has 10 or so generators that they always run at least two, at least as far as I recall, a minimum of two at once, because if one of them were to go down, it wouldn't take the whole island down. And to circle back to your question, Jay, so what's the status of solar on Molokai? Well, Molokai along with Lanai essentially got solar saturated several years ago in terms of rooftop solar, nothing in terms of a very little in terms of commercial, no utility scale on Molokai. So it's been a challenge for those of us in the trenches in the solar contracting business, because I've had a number of projects on Molokai over the past X number of years, but essentially the grid has been all but saturated up until recently. So you say saturated, but I remember seeing a substantial diesel facility there. I also saw the battery installation pretty close to that. And there is a container of batteries at the power plant there, but it is not per se for storing excess renewables, although they may be something of an ancillary benefit. It was for other reasons. And if I'm not mistaken, I think Miko essentially got it for free from Hawaii Natural Energy Institute, HNEI. Now, more specifically to what Allie's doing, a little bit of background. So 2015, my Senator friend, Mike Gabbard, was instrumental in getting a bill passed and signed into law, known as Community-Based Renewable Energy, or CBRE for short. And this is something that over the past, almost six years now, since the governor signed it into law, to my knowledge, there's not a single CBRE project that is across the Hawaiian Electric Territories, Service Territories, Three Utilities, Five Violence, that is actually producing power today. Now, it could be mistaken. One could have recently come back online. But CBRE, I think everybody would agree, has been a long gestation, a very long, too long gestation. And why? But why? My friend Jay, I think that question is probably better posed to our friends than to Hawaiian Electric Company, rather than me, O'Pine on that. I think I'll leave it to them to explain that the answer to that very, very good question. So specifically for Molokai, if I'm not mistaken, Allie, this is where your company comes in and is interested in pursuing a CBRE project on Molokai. Now, let's kind of take a step back for our viewers. And maybe you could first explain what CBRE is about in terms of how it actually works in the real world. And two, why it is a benefit to, in this case, the people of the friendly aisle. Absolutely, I would be happy to take a stab at that. So community-based renewable energy, a lot of other states call it community solar. I really appreciate actually the name and hoity for it because I think it really draws on the community-based aspect, the fact that it should be designed and owned and sort of localized, which a lot of community solar isn't necessarily. The idea behind it is that for folks who can't put rooftop solar on their own home because they rent or they live in an apartment or they have a very shady house, shady trees, not shady sketchy. And we build a shared solar facility that is maybe on the order of half a megawatt, a quarter of a megawatt, 2.75 megawatts, for example, lovely size. And then residential and commercial customers get to sign up. They pay a monthly fee or maybe an upfront fee to subscribe to a share of that output. And then they get credit on their utility bill, much like you would have a credit on your utility bill if you had rooftop solar, for whatever solar your rooftop panel's produced, you get the credit for what your share of the community solar or the CBE project benefit. So it's sort of like a three transaction process between the utility, a community solar project or what in Hawai'i is called a subscriber organization is what the developer of that project is called, and then rate payers. Just like a co-op. Yeah, yeah, I think it fits itself very well for a co-op, which is I think why the project that we are working on on Moloka'i that I'm working on in partnership with this community group who is now as of last Friday is officially incorporated as a consumer cooperative in the state of Hawai'i. The Ho'ahu Energy Cooperative Moloka'i is the full name or Hechem is the acronym. They have realized this opportunity and realized that CBE really fits what their goals are for community owned and locally decided energy. So it's a pretty natural partnership for us. Well, that's very modern frontier, pioneer kind of stuff. One of the things that I learned about what's her name, Amelia over there is that she had a desire working with some of your predecessor developers to have a piece of the action for the benefit of the community. So that the community, you referred to energy sovereignty a minute ago, I'm not sure what that covers, but I remember her talking about the notion of allowing a piece of the project and a piece of the profits to go to the community. And I wonder if that has come up as that party project and in any event, what is energy sovereignty and what's the relationship? I would say, okay, so backing up a little bit, energy sovereignty to me anyways is the idea of decision making over energy resources, decision making power over where energy infrastructure goes. What does it look like? Where did the financial benefits flow? There are all sorts of decisions that can be made about our renewable energy infrastructure that right now are held pretty closely by a small group of organizations. And to answer your question about, is that a piece of our project? I would say that is the entirety of our project. I think it's a pretty unconventional relationship that we have that I as the developer am really more of like the implementation arm. They are the brains behind the project. They make all the decisions. We make it together, but we hold Zoom meetings around site selection and screen share and Zoom over different parcels. And they, the community members know way more than I do about historical land use, current land ownership, what areas are going to be flooded, at what times of year versus other areas, where are we more likely to run into cultural sites that we wouldn't want to disturb versus other parcels. So it is very much an exported decision-making process down to who subscribes. We talked this past weekend over our Zoom workshop about where do we want to get our money from? I mean, where do we want to get our money from? We don't exactly get to pick, but we do get to pick who we ask. And they are a part of all of those conversations. This will be formalized in the sense that the community, the members of the community who are part of the what we call sovereignty management, let's call it that. Are they going to be baked in? Are they going to be directors? Are they going to have a say on an ongoing basis in the management of the property project? Absolutely. So the plan right now is to the extent possible, they will be a partial owner in the project in year one. If we can raise money for their co-op through grants and crowdfunding and particular loans that are aimed at community ownership of energy assets. So they will be a partial owner, if not in year one, then certainly in year seven, year 10, that is the whole reason why we are doing this is to enable community ownership, which comes with it the ability to decide certain things about, how does it get decommissioned? In particular, I would also say that the co-op will be a really important entity in the subscriber management part of the project. As you might imagine, if we build a 2.75 megawatt project, we need to recruit a whole boatload of residential and some commercial and maybe some government subscribers. And right now they're defining, what are our goals for that? Who do we want to recruit? How are we going to recruit them? Who gets to benefit? Does everyone benefit equally? Or do we benefit some more than others, depending on need or depending on certain other metrics? Well, you're not living in Hawaii now, but you probably have to come back plenty to monitor this through to a completion. You're going to need all the skills you've got at Middlebury and Stanford and everywhere. In order to make this happen, this is a very challenging operation you've described. I wonder if you could compare and contrast it to K-I-U-C in Hawaii, everybody seems to agree that K-I-U-C is very well-managed as a co-op and it demonstrates the benefits of co-op energy. So how is this like or how is it contrasted with K-I-U-C? I think I'll answer a little bit and then I might bop that to Marco who has a greater vision of the history of cooperatives in Hawaii. But I would say that from what I, the co-op and I have talked about, I think the co-op's larger vision is to grow into that role of a utility cooperative building capacity over time. And there have been movements on Moloka'i in the past towards cooperative ownership. And I think owning and managing a CBRE project is a perfect step in that direction. But there are certainly other differences. Marco, what do you think about how this effort compares to K-I-U-C? I think before I go there, I wanted to go back to CBRE because of the, you know, it's focused on Moloka'i. So, you know, just to be clear, as I understand CBRE in this case, it is not fractional ownership of the actual assets of the actual generating solar plant. It's essentially fractional receipt of the output of the plant, right? And the draw or the, what's the motivation for someone on Moloka'i to become a subscriber? And, you know, there are two that I see, at least two. Most people are motivated, or a lot of people are motivated by the notion it's going to reduce their overall electric bill, right? Because Moloka'i has got some of the highest, or if not the highest electric cost in the state, typically. So, I would assume that a subscriber would get a, be paying a lower rate for that fractional output from this two plus something megawatt CBRE project. So, they would see a reduction in their bill. Everybody likes to see that. And then second, this is the way that they are able to tangibly support the island becoming more green, more renewable in terms of burning less fossil fuel, producing more indigenous power there on the island. Am I leaving anything out there, Allie? I don't think so. Well, I would maybe add that particularly in the context of the Hohahu Energy Cooperative Moloka'i owning this project, they're supporting a step towards local ownership. This is one of the first projects that is even proposing that. And I think there's a lot of like social will around local ownership and the emotional experience of becoming part of a cooperative and growing towards something together. Well, I mean, as Marco has suggested, there are two levels of community contact here. One is the cooperative where members of the community can be members of the cooperative and sort of like KIUC. And the other is the community-based solar, which is a very refreshing and promising model where individuals can simply share in the product of the facility. They could buy it. Instead of buying it from utility, they buy it from the community-based solar. So there's two ways that the people in Moloka'i can participate. That's very interesting. So do you expect that the same individuals would be at two levels? What's the difference between the community that would be active in the cooperative and the community that would be active as consumers? I think that's a great question. And as I alluded to before, we're in the middle of that dialogue about what does it mean to be a subscriber? Who are we recruiting? Are subscribers the same as cooperative members? Are they different? I think when we incorporated through their discussions, there are potentially multiple levels of cooperative membership. And there are people on the island who are not eligible to become a subscriber of CBRE because they're off-grid or they have rooftop solar already, which excludes them from being a CBRE subscriber. But they still want to be part of the club because it's a cool club to be a part of and we have a lot of fun together. So cooperative membership and CBRE subscribership are not necessarily the same, but they're probably a large overlap, I would guess. And I will also note that when Hohahu Energy Cooperative Moloka'i structured their organization, they're a non-stock co-op. So you don't have to have $10,000 to buy into the co-op to be a member. It's, they're much more focused on equitable access to membership and so there might be a subscriber, a membership fee, but there are other ways to benefit from being a part of that. You don't have to be an investor. I guess that's the way it works at KIUC and I guess that's what you have in mind for the Hawaii Island co-op, Marko. But let me ask you, Marko, you mentioned before that part of this is premised on the notion that this community-based solar would actually be cheaper to subscribers than what they have now buying directly from the utility. Why do you say that? Has that been shown and proven? How does it pencil out? What is the magic sauce? The special sauce that could make it cheaper? Well, I mean, Ali's more into the weeds and depths of her particular project than I am, certainly. And I mean, I think it's just common sense, Jay, that you're gonna get that small sliver of people of first adopters who will be willing to pay, let's say, a small premium for green energy compared to more dirty energy from a combustion power plant. But the reality is, I mean, especially in Moloka where you have a substantially high level of poverty, people living on the edge, I won't call them hunter-gatherers but they're certainly big into hunting and fishing their subsistence. So in my view, in order to gain a substantial amount of subscribers, you absolutely positively have to provide these potential subscribers with the benefit or the promised benefit, they're going to save money. They're gonna save money. Yeah, one last question, Ali, that is this. What stands between you and the realization of the vision right now? What has to happen before you can achieve what you want? Ooh, I think the biggest obstacle ahead that we are working towards, and it's not an obstacle, but it's a challenge, it's a race. There's an RFP that we will bid a project into. Actually, we're gonna bid two small-ish project or two projects of differing sizes into the same RFP. We will have some stiff competition in there. What we know right now is that we will be bidding against the Utilities Self-Build Team, which means that just as we would have done if they were not in the competition, we will be working really hard to find lower cost of installation, lower cost of capital, raising grants, there are a couple of grants in particular that we've got our eye on. I think, yeah, I think I'm making the numbers pencil now. I think we've got a lot of momentum around community support among the group of people that we work with. We've also committed to know that we need to expand that. There are obviously as many more people on Moloka-i than are currently in our Zoom workshops, and then we will continue to get the word out before we get our bid. Emily, excuse me, Ali, to be clear, when you mentioned you're bidding against a utility company, I assume you're talking about Pacific Current or Miko? No, the HECO's Self-Build Team, it's a different entity within HECO itself that are HECO employees that are working on a bid to develop a 2.5 megawatt CPE project. Okay, that's interesting to note. And do you know where the Pacific Current, which is an unregulated subsidiary under Hawaiian Electric Industries is also bidding on it because they certainly have taken a substantial dive into this particular development space across the state. Do you know if they're in the game as well? I do not know. We were in early talks with them when we were interviewing different development companies to partner with my company on the bid since I'm a newbie, what I need another company to partner with me, and they brought a company to the table and we were initially talking to them. We went with a different developer, so I don't know where they're at right now. Okay. Marco, we're almost out of time and of course I want to ask you to summarize and point us forward on this, but I also want to ask you to react. What is your impression here? You've followed energy in Molokai, especially renewables in Molokai for a lifetime and you're very familiar with the dynamics of that island. So, query, what are the prospects here as you see them? Oh, Jay, you have a knack for posing juicy questions. Yeah, I feel like I'm threading a needle here, Jay. I'll tell you why. One is because, as you mentioned, I've been in the energy arena on Molokai now for the past, what, 14, 15 years, very tangibly doing projects over there. And I know the difficulty, as well as anybody who's done projects there, on multiple levels of doing work on that island and doing work in the utility or the energy sphere. Challenges, great challenges. And at times there's some cynicism that I must admit in my older years. I feel some cynicism in terms of how difficult it is. And at the same time, I want to be encouraging to, I want to be supportive of what Ali and her group are doing because I was young too, believe it or not, as were you, Jay, long ago, right? In a galaxy far, far away. I don't know about you, Marco, but I'm still 16, yeah. You know, for some reason, that's not a surprise to me, Jay, but I appreciate you mentioning that. So thank you. So I want to be very encouraging of Ali and her efforts. And at the same time, I'm also somewhat battle-scarred in working on that island. So, you know, I think my number one takeaway or guidance to you, Ali, if you were to ask me for it, is I think you're doing whatever the most that you can do. You should do the most that you can to get community involvement, community support. That's a very difficult island at times to be able to rally the troops and to get behind a project of any kind that they perceive as coming from the outside. So I really appreciate your heart and commitment to that and I will, of course, wish you the best. Yeah, and I want to join in that, Ali. You know, welcome to the fray, so to speak, but also we need you. We need you to bring your vision here. We need you to plant the flag anywhere in these islands so to demonstrate how important these possibilities are to our future. So thank you for making this contribution. I know it'll be a while before you see time one, but I wish you well. We all wish you well. Won't you? Thank you so much. I'm very excited about where we're at and feel very lucky that I have the partnerships that I have with the Molokai community. And yeah, hope to spread that across the state if can. All right. Thank you, Ali. Ali Andrews and Marco Manglestor. Great discussion. And it really opens my eyes into the possibilities on Molokai. Thank you so much.