 Okay, it's me and Marco and me on a Monday. I'm so happy to be here with Marco. Marco joins us by remote from the Big Island Provision Solar, and we're going to talk about a bunch of things having to do with energy in Hawaii. Hi, Marco. Well, in the immortal words of that one-time female band, the Bengals, it's just another marvelous Monday. Whoa, whoa. I wish it were a fun day, which it is, to be with you again, Jay. Thank you. With the emphasis being on, whoa, whoa, whoa, whoa. Well, we've got a bunch of things that's happening. This is an easy agenda here in terms of finding the news. So let's talk about Virg. You were here last week for Virg. You spoke at Virg. We need to hear about Virg. What happened at Virg? Briefly correct the record, Your Honor. I was not a speaker at Virg. I attended various sessions. I lurked in the hallway. I low potentates. I sat in a Toyota Mirage, which is one of the first fuel cell vehicles, which will be introduced to our beautiful island chain very soon by our friends at Servco Pacific. My overall impression with these various conferences, Jay, at these conferences and the real world of those of us in the solar trenches who toil away in the sun and in our offices year after year, putting in rooftop solar, putting in utility scale solar, and everything in between in terms of medium-sized solar, that there is, we are experiencing what the state is experiencing day to day, month to month, week to week, the tendency to speak in rather than hopeful terms about hitting various benchmarks in 2045, which I am to remind people is, you know, that's 27 years away. And of course, you know, like Bill Clinton and his 1992 campaign, Don't Stop, thinking about tomorrow using the Fleetwood Mac song of the 1970s, yes, it's important to think about tomorrow. Also, 27 years from now mean a lot less to me than the tomorrow of the next six 12 to 24 months. So I feel that these conferences don't really focus enough on kind of real world day to day and more kind of tend towards the more what's happening or what will happen, what should happen years and years from now. Yeah, I agree. Remember too that Verge is a D-bed conference, and that means this is, you know, organized around government. You know, it always has the agenda of telling you they're doing great things. And so if you find they're talking about things 27 years away, the implication, at least to me, is there's not a whole lot of great things happening right now, because they're not talking about that. And so what I have, you know, I have found over the years that you've got to be careful about who you listen to, you've got to be careful about mixing the immediate with the aspirational. And there's a lot of aspirational that takes place at Verge. But can you talk about what were some of the sessions that you liked? Some of the, if you will, some of the aspirational things that came out? Some of the hopeful, wishful kinds of technologies and possibilities? You know, I'm not the best person to talk about that, Jay. I appreciate the invitation. Let me kind of go in a little bit, perhaps, different direction in terms of, and I do want to make the point that while, you know, from my perspective, it may be that I won't be less than satisfied with the content. Oftentimes, what I do find it very important is to see and speak with and reconnect with others. You know, to some extent, I'll call it a, it's kind of a C and B scene. It's one of a very small number of energy conferences where you'll see most of the usual suspects, you know, myself included. And part of the value, a big part of the value for me is just to reconnect with other fellow warriors and warrior at these familiar faces. And, you know, the Hawaiian Electric has usually a sizable contingent. So I saw a number of my HIKO helco friends, which is valuable. And it's interesting to see who ponies up money to have displays there in the foyer, you know, right outside a number of the conference room. So find is valuable in and of itself to reconnect with people because, you know, emails, fine textings, fine phones, fine. But there is something to be said for seeing someone face to face and spending some time talking with them. So I don't want to give that plug. Well, I agree absolutely. You know, and I would say that it's, especially here in Hawaii, and it's, you know, it's a culture point. And if you know somebody and have a guan chi with someone, that's what you do at conferences like Verge. You develop guan chi, you see them, you say hi. That is a facilitator for making deals. If the individual is from far away and you don't know him, you don't have any personal relationship with him, it's just a little harder to make the deal. So as far as I'm concerned, that is the biggest single benefit of any of these conferences is the rubbing shoulders thing. And it helps us, or at least it should help us, facilitate coming together as a community, making energy deals. That's how we build the industry. One of the early sessions on Tuesday morning was, I think to me it was the most kind of impactful. It was heavily attended by a number of the major players, Scott Sue, who is one of the senior VP's for HECO, who I've known on offer for a number of years. He's a really great guy. He was there as part of a panel discussion along with Dean Nishina, who I also feel very, you know, have a lot of respect and confidence in. He's the consumer advocate for the state. And there was a fellow there from the Boston Consulting London Economics, and they're the folks who got the close to one million dollars in state money a year ago to look at utility ownership models, and we will be getting their report to the 2019 opening of the 2019 legislature, which I'll certainly be interested in seeing what they come up with. And part of that discussion had to do with the really hot topic du jour, kind of the pretty shiny bubble, which comes and goes over time, where various bubbles come and go over time, which is this thing called performance-based rate-making or performance-based regulation, which our Public Utilities Commission is now taking up along with 11 wannabe interveners or participants, assuming the commission gives entree to all 11 petitioners and then the Hawaiian Electric Companies, the commission themselves, so the consumer advocates. So a total of 14 parties, most likely will be sitting at round table, so to speak, in the months to come, looking at this relatively new fangled thing called Pacific-based regulation, or excuse me, performance-based regulation. And let me take a moment just to react to that. So Pacific performance-based rate-making is one thing. That's a limited part of regulation. But if you say performance-based regulation, you're talking about the whole enchilada. You're talking about everything. You're talking about a, oh, I don't know, a change of mindset. It's a change of the way to look at it. It's a change, really, of everything having to do with regulating energy in Hawaii. And that's very significant. And then you talk about having a meeting with some people and stakeholders and whatnot. It seems to me that's only phase one. That's just a very, very beginning. And this is going to require an ongoing conversation, not just one group, one meeting, not just one time, one period of time, one year, but on and on and on. Because this is brand new material, a brand new way of thinking, a brand new culture, regulatory culture. And so this has got huge implications. But continuing implications is my point. Well, I couldn't agree more, and you're absolutely right. In fact, the decision by the commission, gosh, it goes back to April. I believe it was to open this docket on PBR. I mean, it's really a fascinating document to read. I've read it over a couple of times trying to get some nuance there. And only one of the presenters from the consulting group who were one of the sponsors of the conference did a number of slides, which was very well attended. And the implication of the slide was, well, a whole bunch of other utilities have already embarked down the path of PBR, including utility in the UK, utilities in different parts of the US. And I saw that, that particular slide, and when there was a Q&A afterwards, I piped up and I said, please correct me if I'm wrong. But it's my understanding that very few, if any, utilities, at least in the United States, had completely embarked down the PBR path, let alone having operationalized it to any significant degree. So I took issue with this characterization that, well, this utility is done, and that utility is done, and you see all these little pins, so to speak, on a map of the continental US, the mainland US, and someone who didn't know better would have the impression that, gee, here in Hawaii, we're just kind of following suit with what others have done on the mainland already. And I took pretty strong exception to that. And the fellow from London Economics, the president there, I forget his name, he was one of the participants, he kind of pushed back at me, but he didn't really give, to me, a very strong explanation. In other words, as I've said a number of times, and I really believe this, I'm not saying it just for the hell of it, is that we are sailing into uncharted waters with this PBR. And it was good to hear that both Scott Hsu and especially Dean Nishina, and it was like Dean Nishina who spoke not just of the so-called unintended consequences of going down this path, but the pernicious, using the P word, the pernicious possible consequences of going down this path. And Scott Hsu noted in an open public forum that Hawaiian Electric, AGI, is already a BBB minus for one or more of the credit agencies, either FISH, Standard and Poor, or Moody's. So when you start dealing with moving from a cost of service or COS, which is the current regime and has been for decades, to PBR, you are going into areas that the investor class and the Wall Street folks are only now kind of getting up to speed on. And the possible pernicious consequences are what's it going to do, going this direction to rape payers? What's it gonna do in terms of shareholders who own stock of not a small number of people in the state own stock in HEI? So now this is not an argument why we should say, well, let's not do it. No, I'm not making that argument by any means, but I thought it was really telling that both Scott and Dean in that public forum said, you know, this is stuff that we've got to be very careful about as we proceed. And my impression, Jay, is that this commission with Randy Wasseh's chair, with a Jay Griffin and soon to be with Jenny Potter, who I had a chance to spend some really great time with talking to her while I was there. And we've had her on the show now a couple times. I think that we couldn't ask for a better lineup with Randy, Jay, and Jenny as they look over this stuff, which is really, really cutting edge and super important to get it right. I totally agree, Marco, totally. And, you know, I think we have to be mindful of how a Hawaiian Electric does in Wall Street and the markets. And I think we have to be kind in dealing, you know, there's a history, it goes back to before next era, beating up on the utility. And we had a culture of so many, quote, stakeholders beating up on the utility in every way they could. And I think Wall Street noticed that, of course. And Wall Street noticed, of course, how we dealt with next era, which was not kind. And I think if we want to avoid, Wall Street sort of putting all of that together in one bowl of porridge and saying Hawaii is unkind to utilities, this is going to be an opportunity to be unkind to utilities. Therefore, ho, ho, ho, better watch out. I think, you know, I think we have to show, we meaning everyone, we have to show Wall Street that no, we can be kind, we understand. We understand that this is an opportunity to do great work for everyone, all sides of the fence, for the stakeholders to come together with the utility to come together with the commission and find a new way. And, you know, up till now I've really begun to question or I had begun to question whether we were the leader we thought we were. Everybody says, oh, you know, Hawaii is a leader in renewable energy and I began to question that. But now, I think with performance-based regulation, I think we can become a leader in a more profound way. Not only in building renewables, but in building a new model that'll work for everybody. If we do it right, not only will Wall Street, you know, respect us and respect the credit rating of the utility, as it should, but also Wall Street and the public and energy in general around the world will say, wow, that Hawaii, Hawaii's really innovative and understanding of the future, you know, and sort of, you know, future-looking. This is a big opportunity for us on multiple levels and we cannot forget that. We cannot be mean to each other. We have to be kind and we have to be visionary. Don't you agree? Oh, completely and the way it's been laid out in the order by the commission a couple months ago is that phase one will take about nine months and I imagine things will really start to move more quickly once Jenny becomes the next commissioner and that happens officially on Monday, July 2nd. I mean, her term would have started on July 1st as a Sunday, so she will be sworn in officially Monday, which my goodness, is two weeks from today. She will be the next commissioner taking the place of our friend, Lorraine Akiba. So I think things will ramp up at that point on of course that docket and others and it'll really be something to behold, I think, Jay, over the next month, these 11 interveners slash participants and how the commission and how the utility company and how the CA, all 14 of them, play together as far as there will be IRs flying information requests, flying in multiple directions on all kinds of topics and essentially the commission and the staff will be the ringmasters trying to keep it on track and not go off in too many fanciful, wild and crazy directions and it'll be very interesting to see after nine or so months, after the end of phase one, how that's synthesized down to some type of plans in terms of moving forward. So this is gonna take somewhere easily in the two to three plus year range when it comes to moving from cost of services base, which again, the utilities have been, IOUs, investor on utilities have been operating under for decades to something very dramatically different in my opinion. I think everybody from Dean Sheena to the commissioners, to the staff, to the people at HIKO, Helco, MIKO, to folks like you and I, I think hopefully most of us get it in terms of just how important this is and how this is an opportunity, like you said, for Hawaii to be a leader, which you know, and oftentimes we're followers and that's okay, you know? But this is an example I think to show hopefully the rest of the country, if we get it right, which I believe we can, that we can do marvelous things here with what we're blessed with in terms of renewable energy and with a new regulatory regime, which hopefully will move us in a more better direction. Yeah, Marco, absolutely true. And you and I, on this show, we have to follow it on a regular basis. We have to look at everything that happens and inform the public, but also make our own commentaries and statements about how it's going. So let's take a short break. I only wanna add one thing before we take the break, Marco, is that there was a significant problem at Verge and that is that you were not a speaker. You should have been a speaker. Silly guys, they didn't make you a speaker. Okay, we can take a short break, we'll be right back. Dave Stevens, the host of Cyber Underground every Friday here at 1 p.m. on thinktechhawaii.com and then every episode is uploaded to the Cyber Underground, that library of shows that you can see of mine on youtube.com and I hope you'll join us here every Friday, we have some topical discussions about why security matters and what could scare the absolute bejesus out of you if you just try to watch my show all the way through. Hope to see you next time on Cyber Underground. Stay safe. Hi, I'm Pete McGinnis-Mark and every Monday at one o'clock, I'm the host of thinktechhawaii's research in Munna. And at that program, we bring to you a whole range of new scientific results from the university ranging from everything from exploring the solar system to looking at the earth from space, going under water, talking about earthquakes and volcanoes and other things which have a direct relevance not only to Hawaii, but also to our economy. So please try and join me one o'clock on a Monday afternoon to thinktechhawaii's research in Munna and see you then. Okay, we're back, we're live with Marco Mangelstorff joining us by Voip from Provision Solar and Hilo is only a few miles, what, maybe 20 miles, 30 miles away from the eruption. Are you affected? I think to some extent, everybody on the island is to varying degrees. Jay, I mean, I felt a heightened sense of anxiety since May 3rd is when the first fisher popped up and of course, little did we know the extent to which fishers one, two, three, 10 and now we're up to, I think, 24 would do what they've done in terms of destroying Kapoho and the Green Lake, which was the largest, I learned the largest freshwater lake. It had been around for about 400 years with a depth of up to 200 feet and that lake was evaporated in less than a handful of hours, Jay. I don't know if you ever heard that story, but the lava inundated the crater caused the water to evaporate in three to four hours, which is just words cannot express, but I mean, from my house, I'm gonna live a little bit, Malca, above Hilo, close to the hospital. I can see the fountain 20 miles in the distance at night and not only the fountain, as it's illuminating the clouds in the distance, but you can see the clouds being illuminated to the left of the fountain, the big one, the one that's been most active all the way as the lava flows in molten form down to the ocean. So it's really, it's unmistakable. It's, three or four weeks ago, I could barely make out a glow. Well, the barely part, forget it. I mean, it's very, very visible and as far as how it's gonna affect energy, on this island, it already has. I mean, Pune Geothermal Venture, which had been operating for 25 years since 93, is offline, whether it's gonna be permanent or just temporary, of course, when it's offline, that means that the utility here, Helco, is more dependent upon imported fuel, which means that the renewable percentage, which hit 57% last year in terms of all the power that was consumed across HelcoGrid was 57%, principally from geothermal wind and solar and hydro, that that number is more or less half in the 28, 29% range with PGV going down. And as we consume more petroleum product for that shortfall from PGV, that essentially means higher bills. Because Helco actually brought fossil fuel generating stations back online. Well, I was told by one of my Helco friends that what they have done is effectively ramped up output in the two biggest of the airport. That's about 80 megawatts. Keep in mind our peak consumption here during this time of year is around 150. So that has a peak output of 80. And then the second largest plan in terms of output is Hamakua Energy, which also used to be called Hamakua Energy Partners when it was owned by Arclight Capital. But that new HCI subsidiary called Pacific Energy, I think it's Pacific Currents, they formed a new subsidiary unregulated to purchase HGP from Arclight. And that is now owned by Hawaiian electric industry through a subsidiary. So that's 60 megawatts. So what I've been told is that they ramped up the output for Hamakua Energy and for Keahole. So we're not having blackouts or brownouts or shortages or anything like that? No, no, they've made clear repeatedly in the press at least, and I have no reason not to believe them, that there's plenty of margin. Once we get into the winter months, typically December, January is when we have higher peaks, you know, as high as 180 plus megawatt range. So I don't know, there's been no talk of rolling blackouts, but I guess on the positive side is that according to a piece in the Hilo-Hawaii Tribune Herald over the weekend is that both the Public Utilities Commission and also Hawaiian Electric and Helco are, what can we do in the short term and the near term here on the silent with the loss of PGV? So that's, you know, it's an unfolding story as to what they're gonna do. That's the question, and I'm afraid to say that the other question, that is whether PGV will ever come back, the answer seems to me anyway, obvious that it won't come back, it's done. I mean, first of all, there's the business aspect of it. It was never all that profitable, and it always had a glass ceiling of 38 megawatts, and it was never really gonna get by that because of political, cultural resistance and considerations, and so it was never really making a lot of money, but the cost of putting it back, putting Humpty back together again at this point seems to me to be really high, and it's not gonna pencil out, better to find other sources, other renewable sources on the Big Island, those are obvious and they're everywhere, really. The other thing is that, there's cultural resistance to putting it back online. Aside from the cultural resistance we had from way back in the 90s and Millie Lonnie Trask and all that, there would be huge cultural resistance to putting it back online now because they'd be afraid. I mean, some people blame the eruption on the violation of Pellet. The eruption would not have happened except that we somehow aggravated Pellet, and so I think that would surface again, literally, and people are not gonna support this. I think it's over, don't you? My first response has to be, it's too early to tell until the eruptions subside and where now I just counted recently, I just counted earlier today, third of May, so there are 31 days in May, right? So that, 28 days in May it was erupting, plus we're now day 18, so 31, now 28 plus 18, by my math, that comes out to 46, so we're in day 46 of the eruption, and prior, in decades gone by, it erupted from 28 plus days to, I think the last one was 88 days, so does that serve as any guide as to how long this one's gonna go? Not really. I mean, it could go on, it could stop tomorrow, it could go on for weeks or months, right? So until the eruptions subside, we don't have really complete information until we kind of take stock, but I've publicly stated that I'm not anti-geothermal, but I am pro-reality check, and as a political observer, Jay, I cannot make a credible analysis and argument as to there being, when it does stop, assuming that the place isn't erased from the earth with lava and inundation across the entire facility, right now it's bracketed on three sides by lava, and there's one land path to get to it from the east, east northeast, but there are no roads to be able to get to it, so I mean, if it gets erased from the planet, as Kapoho did, I think 100% to 1,000%, you're absolutely right. Geothermal, at least in Puna, is dead for our lifetimes. If it somehow remains intact after the eruptions subside as a more or less neutral, adequate, popular support and public, popular support and political will to bring it back. I know my friend, Senator Russell Ruderman, who represents that area, he was against geothermal back then, in the 80s and 90s, he's against it now. I just can't see that there would be a path to bringing it back online. I can't make that, but other people, you know, in good conscience and good, you know, with good motivation, they can disagree with that, but I just can't make that, I can't make that leap in my mind that there would be the popular support or political will to bring it back. Yeah, let me add that. I just got back from Iceland, Marco. And in Iceland, they have volcanoes and their eruptions are, you know, one thing in all teaches us, the eruptions don't last forever. There's always an end date for an eruption. It may last for, you know, weeks or months, but it's always gonna end. And this one'll end, just as the ones in Iceland always end. But then you can have another one later. And the risk is, you know, that you thought you were home free after the first one. Well, turn around, you have another one. And that's what happened a few years ago. They had one in, I think, 2010. And a year later, they had another one in 2011 or 12. And the second one was much worse than the first one. And the material went up into the air of 12 miles high. And it obstructed flight operations all over Europe. I remember that. That's how thick it was, both times. And so that's what comes with volcanoes. On the other hand, people in Iceland, they like geothermal. They like being in a seismic area this way. They make all their hot water out of geothermal. You see in the middle of Reykjavik, you see geothermal facilities heating the water. In big housing projects, in big office projects, the water is heated by geothermally. See it right there. And it's apparently not far below the surface. And in fact, most of the energy, aside from vehicular fossil fuel, and there's some of that, most of the energy in Iceland is from geothermal. So I think they're very comfortable with it. It's part of their landscape. It's part of their environment. They don't have any cultural bias against it. And they're gonna wanna continue it no matter what happens. And it's part of the way they get energy. We don't have the same cultural view of it. And I'm afraid we have other alternatives that are much more appealing to the public. Anyway, we're out of time. So I wanna thank you again, Marco, for this great discussion. And I'll tell you how much I look forward to another such follow-up two weeks from hence. So much is happening in energy and it's so great to talk to you about it. Well, welcome back, Jay, and thank you as always for having me. It's like reconnecting with old and dear friend every time we talk. Thank you. Thank you, Marco.