 ThinkTech Hawaii, civil engagement lives here. Bingo, we're back. This is ThinkTech. This is Hawaii 808, Energy 808, Hawaii on the Edge. Marco, straighten me out. What's the title of this show? You caught me unaware, sir. We're going to look at energy 808, the cutting edge, which is Marco and me, and sometimes Mina Morita on Monday at noon. And welcome to the show, Marco. You're the co-host. So say hi. Say hi, Jay. Well, thank you for having me on from Wild and Wet and Willie and still a wainy hilo, but apparently the wetness is now migrated to the northern part of the island chain, and it looks like Hawaii is getting clovered. But we're still here. We're still bubbling along amongst moisture to cause your toes to web over, but always wonderful to be on with you, Jay. And great to have our guest today, which I'll let you introduce. Senior Vice President of Business Development for Hawaiian Electric Company. Wow. Welcome to the show, Shelly. Thank you for having me, Jay and Marco. So Marco, why don't you make more of a detailed introduction of Shelly so people will know exactly what she does over there on Hawaiian Electric. Well, one of the reasons we wanted to have Shelly on is so she could explain herself what she does exactly over there at Hawaiian Electric. Senior VP of Business Development and Strategic Planning, also known as Strategery. So I'd like to give Shelly a chance to introduce herself in terms of how long you've been at Hawaiian Electric and HEI, which led you to make this career choice. And explain a little bit about what you're doing now, please. Sure. You're one of the most important people in the state. No, I'm not. I'm not. Lots of more important people than me. But I like that title that you made up there, Marco, Strategery. That's much shorter than the title I have now. It would be much easier to say. So to answer the first question on what my job is right now, I'm actually Senior Vice President for Business Development and Strategic Planning. Strategic Planning relates to setting what we do is we set five-year strategy. So we have a rolling five-year strategy. We update it every year for any changes in circumstances or market. And we set metrics for ourselves and goals and we measure the entire company and we cascade those throughout our company to make sure we're staying on track. Business Development relates to any new business opportunities. So we look at our business in two parts. We have our core business of keeping the lights on, reliable, affordable, clean energy, and we have our new opportunities. And things in there can include demand response, our new advanced demand response that we're implementing, community-based renewable energy, which just got launched, electrification of transportation. We've also done some consulting work for other utilities. And we're looking at creating an online energy marketplace. And there's, you know, various other new business opportunities that we're doing our due diligence on and evaluating. All the new initiatives are on your desk. Not all, but many of them, many of them. And then I also have renewable acquisition. And that group is responsible for procuring all the utility scale resources. So we do the RFPs, the negotiations, and the contracting. And we maintain those contracts over the 20-plus-year life of the power purchase agreements. We're busy with that right now because we're right in the midst of an RFP, three-company RFP. And I have demand response, which I mentioned earlier. And I think that wraps it up. Those are major things. Exciting things. I think I have probably one of the funnest jobs. I can say that. I'm sure. You're right. You know, planning is always really important. You know, if we're talking about getting to 2045 or 2040, the case may be for renewables, 100%. You've got to be really central in that because that's all about planning and implementation of plans. Yeah. So my group works really closely with Colton Ching's group, which he's the senior vice president for planning and technology. So on my side, we do the business strategy, the corporate strategy that has to go hand in hand with the planning around our system. So we look at the generation planning. That was the power supply improvement plan, our grid modernization planning. And that's going to all come together soon in what we're now calling our integrated grid plan. It's a new company. Things continue to evolve. It's a new company because as we talk about these aspirational goals and 100% by 2045 and all that, all these really dramatic changes you're talking about, new initiatives that were really not even thought about five or ten years ago, not even thought about. So that means the company has changed dramatically in the last few years. Can you talk about that? Yeah. I mean, I think we're in a really exciting time for the utility. I think the whole industry is in a really exciting time. Hawaii in particular because of our 100% renewable goal and because we're an island state. And so we have to look at these challenges very differently than everybody else has to. So in 2014, we received, you know, four DNOs or decision and orders from our PUC that put us on a very tight timeline to take a look at many of these areas. So that summer, I had just started in May in this position and that summer we needed to create a set of really robust plans and file that with the PUC. So at the end of that, we came out with our strategic plan because we wanted to make sure all the different things we were filing would tie together in a very cohesive way and we're looking at it cohesively. Or holistically. And that plan has evolved over time to get to at that time. I can't remember now. What was the RPS back in 2014? Was it 40% by 2030? I can't remember now. But it went from, you know, lower amount to the 100%. And so we had to evolve with that as well. But to make those kinds of changes, it's not only changing what our generation mix would be, but it's also changing the culture of our company. And that's probably the hardest thing to do. It doesn't happen overnight. That's what Alan said he was going to do. Yeah. He said that and I think it's, from my observation, that's what's happening. There have been, you know, a lot of, you know, we got into renewables more. The renewables got more sophisticated. The grid became more important. The technology for the grid became paramount to achieving the goal. There was a time, it was a few years ago, but there was a time when we thought about exchanging electricity between the islands. That idea is pretty much gone, I think. We're talking about island by island, I think. At this point, we are. I mean, we talk about executing in five-year increments. So within the next five years, we're not looking at that. But we haven't completely, you know, thrown out that idea. We never know how cost assumptions may change or technologies may change that may bring things back into the mix as viable options for us. For a while, we thought about, you know, making a deal with Nextera. We're not thinking about that right now. Correct. For a while, we thought about LNG. We're not thinking about that so much now, although it still remains a possibility, right? Yeah. I mean, I think at this time, it's not a very likely possibility. When we did our long-term planning, the analysis showed that we could get to 100% renewables in a more cost-effective manner if we used LNG as a bridge fuel instead of oil. But our governor made it very clear he didn't want to go in that direction. And so we're not pursuing those plans at this time. Yeah. Anyway, there's been a lot of changes. And, Marco, I want to invite you to talk about the changes in women. That's a dangerous question. I just noticed, you know, Shelly is a woman, and there are now a lot of women, more women than there were when you looked at this five years ago, no? So talk about it, Marco. I think I'm going to stay away from the generic changes in women. I see that as kind of a slippery slope to places probably we don't want to go right now, Jay. But speaking of women and changing the culture in women and energy, you know, traditionally having been part of the energy field now, myself for 40 years, the energy and utilities business is very, very heavily dominated by men. Though, among Hawaiian Electric execs, there are no fewer than by my count seven women that are in key executive positions starting from the top-down, our friend Connie Lau, CEO of Hawaiian Electric Industries, Sharon Suzuki, President of MECO, Susan Lee, Senior VP for Legal at Hawaiian Electric, Tainza Kimura, Cecily Barnes, Darcy Endo, Omoto, and you, Shelly. So my question is, in your experience in the utility business, how unusual is it to have that many women in executive positions? And then the second part of my question is, what difference do you think it has made for Hawaiian Electric to have so many women, which I think is very laudable for so many women in key positions? Yeah, so when I first started doing investor relations for HEI, I don't know how long ago that was now, 2009, I think, we would go on these investor trips and you'd have all the utilities gathered at these conferences to meet with different investors, and they would bring their top executives to those meetings. As a woman, I felt very much a minority at those conferences. You had all the dark suits all around and you could, you know, spock out the women, you know, all ten of them or whatever during those conferences. And there used to be a women's group at the conference that they would have every year and they would invite all the women that were attending the conference because we were such a minority and they were trying to promote women in energy. And Connie was the only CEO at that time, and she was sort of the pioneer in that respect. And now, I haven't gone recently because I'm no longer in that role, but now I understand, you know, there's so many more women attending these dinners and there's so many more good examples of women CEOs, which is really great to see. In Hawaii though, it's been different. We've never really been in that situation, at least since I've been at HEI. So I started at HEI in 2004. And I think Connie took the helm a few years later. And I've never really seen that as an issue in terms of, you know, the number of women in leadership positions. I've never, you know, felt like it was a disadvantage, which is great. And I think as a whole, we all value the diversity, not only men and women, but for me it's the same thing as an engineer and a lawyer and a marketing person. And so you need that diversity around the table to make great decisions, to have great ideas, to have robust conversations. So I think it really is a strength for our company. And it reflects, you know, the culture of the state, the ethic of the state. Diversity in every way we possibly can. Exactly. I think so. So, you know, the other thing about the planning seems to me to wrap around the notion that we live in a completely dynamic climate as to wit the last few days here with Hurricane Lein. And, you know, so when you plan, you're planning for extreme weather that you can pretty much predict will be worse and worse until the world figures out how to reduce carbon emissions on a global basis. And what's that like? What was it like the last few days? What is your planning point going forward? Yeah, so it's a really interesting question because people often say, well, why plan? Because things are just going to change. You don't know what's going to happen. Things are so dynamic. Well, I even have a long-term plan. But I think Hurricane Lein is a good example. We plan for these kinds of situations. We drill for these kinds of situations because of the critical role that the electric company has in a disaster to keep, you know, everything going. It's kind of the backbone of the economy and people's way of life and also for safety and security. So we take our jobs very seriously and we plan and we drill for these kinds of situations. And you never know what may come up. I mean, in this situation, you know, we're initially facing a category five hurricane that might hit every island. We're already across all islands. In the end, it wasn't as bad yet we still had very severe impacts and, you know, Marco is feeling the brunt of that or has felt the brunt of that over the weekend. And you add to that, we had fires. We had fires on Maui. We had fires on Oahu. And so you adapt from the plan that you had but you have a base plan. Everybody knows their roles and responsibilities and we can quickly adapt in those kinds of situations. We're going to adapt now for exactly one minute. We're going to have a one-minute break for promotionals and PSAs and we're going to do this right now. Watch. We're back with Marco Mangosdorf who joins us from Provision Solar in Hilo, very wet now. And Shelly Kimura, who is a Senior Vice President of Business Development and Planning at SIGZane. Can you talk about your SIGZane Hawaiian Electric outfit here? Yeah, so we created a new logo several years ago. I can't remember how many years, maybe five or so years ago. And we worked with SIGZane based out of Hilo and they created the logo for us and they created these shirts for us. And so many of us have these shirts. We can't get them anymore. So it's actually a vintage. You know, there's an Apple, an original Apple One for sale now. It still works. It's going for a lot of money. At the time it was originally on the market it was 600 bucks. Now it's more like 600 thousand bucks. We'll have to keep this shirt there. Keep it. Yeah, hold on to that. And you say the water, the water, or rather, Hilo. I used to say that people from Hilo are really special. Remember Darren Kimura? No relation, I'm sure. No relation. But, you know, I always used to say that people from Hilo are very innovative. This includes you, Marco. And it was because of the water. Now I'm not so sure what happened with the water may change my mind here. But, okay, so planning, planning, you've got it's not only the weather. It's not only these goals. It's not only the technology. It's not only, you know, changes within the company in terms of, you know, the way the company is organized and the way it sees things, its approach to things. And then you've got political changes. You've got changes on the customer basis. I mean, you've got so many changes on your desk. I don't know how you can sleep at night. How do you sleep at night, Shelley? How do you deal with all this? Well, I sleep very well, so that's not the problem probably because I don't get enough sleep. The bigger question is how do I keep my desk clean because of all the things on my desk. I actually just spent the weekend cleaning my desk last weekend. Not this past weekend, but last weekend. Yeah, I mean there's a lot going on, but we have a really good team of people at Hawaiian Electric. Everybody takes a piece of it and we all know what we're responsible for. On the strategy side, that one's, you know, more fluid like we talked about. There's so many changes in things that we don't control. So if you look historically, the utility could make a 20 year plan and as a monopoly there weren't that many external influences. You still had the regulatory and the political influences but today with the market evolving and so many players in energy now, that not only makes the planning more difficult to know how those pieces are going to change and how it affects your business, but it also impacts customer behaviors and so that impacts how we plan for the future and then all of that impacts the political and regulatory environment that we have. So it just builds on top of each other and the dynamics and the variables are so great and I always say we're no longer a true monopoly anymore. We're really a competitive business and that's what we tell our people and that's part of the cultural change that we're going through. We have to think of ourselves as a competitive business. We have to not take our customers for granted that they're always going to be our customers. We have to make sure that we are their service provider of choice and when I say that I don't mean between distributed rooftop PV or Hawaiian Electric because I think it works best when you have both together. But people who are going to go off grid that I do view as a competitive threat and I also view that as a threat of getting to 100% renewables. One of the biggest challenges we're going to have to get to 100% we have several but one of the biggest ones is the cost and we can do it most cost effectively if everyone's connected to the grid because we can optimize the resources when that happens. Yeah but you know there's going to be new technology and sometimes it may get cheaper but there's going to be more of it anyway and you want to acquire it and you want to keep renewing it following the best technology you can find that costs money. If you use existing equipment that doesn't cost so much money but my question is do people understand do you think we have to do something to make them understand that moving toward these goals costs money and guess what one way or the other they have to pay for it? Yeah I think that's a really good question I'm not sure how much people understand about the transition to 100% and the many tradeoffs and decisions that we need to make along that path and so one of the things we think about as we look at our strategy is pivoting from being very utility centric in terms of what the engineering solutions are to get to 100% and turning outward and making sure that we have a good understanding of where our communities are at what's important to them and trying to make sure we weave that in to our path to 100% and while we're doing that we can help our communities better understand what choices we need to make and what our tradeoffs are You know I've noticed one thing in the past two years I mean in your in your last five say of line electric is that the conversation with the community is different the tone of it is different the players are different their attitudes in getting you know stakeholder attitudes as expressed to the utility and to the government and the government you know all the people talking together everybody talking together is pretty mellow that conversation is creative that conversation is more constructive than at some points in the past that conversation is in fact planning isn't it it's a kind of community planning and that must all wind up on your desk somehow because you've got to listen to them and you've got to explain to them and you've got to have this kind of interactive relationship and we are special in that way because that's the that's the Hawaii way planning model right yes I agree Hawaii is special in that way I think in part because we're smaller but also in part because we're very relational and we recognize how everything is interconnected I think when you live on an island you quickly see how everything is interconnected and you're right we have changed in the way that we interact with stakeholders and communities we're very more transparent and I think it helps that if you take a step back I think people are realizing we're all trying to get to the same place we're all trying to achieve the same ultimate goals it's really how we go about doing that so once we have that general understanding that we all have the best interest of our state in mind then the conversations get much easier and then you're just talking about issues and facts and analysis and how you're going to be able to get there yeah related to that I see another thing too I see conversations and this is not only Hawaiian Electric I see conversations among Hawaiian Electric and KIUC between Hawaiian Electric and utilities on the mainland I see national conversation among utilities everywhere where they're sharing information they're sharing suggestions they're sort of consulting and sharing and caring for each other if I can use that term more than they have been in the past do you see that it's funny you bring that up we just came me Colton Ching, Scott Sue Brennan Morioka several of us were at a conference last week and we had to come back early because of the storm but this was the EPRI electrification conference EPRI is the Electric Power Research Institute and there are 1700 people there many utilities represented yeah it was huge and this was the first conference that they've had so what that told me is that electrification is a big trend and a big movement going forward because many people across the nation and many industries are recognizing that electrification is much more efficient when you look at the total energy picture and as we move the entire nation moves to more and more renewables well hopefully the entire nation continues to move to more and more renewables that electrification just gets cleaner and cleaner so it was so it was very encouraging to see the level of interest in this inaugural conference that they had on this topic so there will be more on your point on learning from each other I mean this is a national conference and Hawaiian Electric was on three panels so I was on one, Colton was on Brennan was on one and we learn a lot from the people that were speaking and the speakers but I think people are also looking at Hawaiian Electric on what we're doing and that's also why people are hiring us from a consulting perspective to help them figure out some of the issues and they're now having to figure out after us. Because we have challenges we learn from the challenges and we become a leader in the national inquiry on best practices. So how much of this do you agree with Marco? No, I think what Shelley's shared makes a lot of sense and I know we're kind of winding down time wise and I wanted to kind of follow up on something you mentioned earlier Shelley which is you folks at Hawaiian Electric go have your hands full right now in terms of evaluating a number of proposals for multi-megawatts of renewable energy across your service territories and if I recall correctly the deadline for you to announce the winners is September 17th. Yep, you got it. You anticipate, I'm sorry? You got it, you're correct. Do we anticipate that you all will wait, Hawaiian Electric will wait until that very last day to announce two or would it be possible you think that we'll find out a bit sooner? Well I don't want to jinx us so we have the September 17th date as our deadline but we are trying to select sooner than that. We're working with our internal teams as well as the independent observer that was hired by the PUC to oversee this process and we're trying to get through that process as quickly as possible particularly for Hawai'i Island and the situation that we're in there because of PGV. Yeah, geothermal. Well I know. Go ahead, Marco. Yeah, I think it's going to be very interesting to see I know the commission, the PUC back in June made clear their preference for renewable energy plus storage excuse me, the PUC have been going with great gusts over the past several years so I'm really very going to, as so many of us are going to be very curious to see what the Winnie bitters will be at in terms of price points I'm going to estimate and guess it's going to be somewhere around 10 cents a kilowatt hour for these power purchase agreements hopefully with plenty of storage and that we can lock in we can definitively continue to move away from avoided cost contracts which were effectively banned by the legislature signed bilingual 12 years ago in 2006 and that we will continue to make great strides to nailing down long-term power purchase agreements which will be renewable energy not at all cost but renewable energy that's cost effective so I applaud what you all are doing there Shelley and your great team Thank you for that when we make our selections and we announced pricing we can compare notes at that time but until then I can't say much about the process preserve the integrity of the process but yes we're very excited it's the largest procurement we've done ever and the total amount we're trying to get by 2022 is over 300 megawatts so it'll be huge so I have a question that sort of wraps up on both sides of your job one is the business development and the other is the strategic planning so a few years ago not too many it was the hub in the wheel and it sent electricity out from its various generation plans it didn't take much back sent it all out and that was simple because it was a one-way direction on everything now it's much more complicated not only technologically but logically I mean trying to figure out conceptually what we're doing and what's going in what direction and how you solve the need in the community and so the business model the range of activities in business that you would do has to be changing and I wonder what your thought is on where the utility winds up with this I mean people were saying for a while well the utility is a conduit from one side we give it to the other side but it's not that simple how do you see this working out yeah so I think one of our core responsibilities and roles as we move forward is to be that integrated grid platform and what that means is that on the physical side and the operational side just as you're describing we have to make sure we're like air traffic controller for what direction the utility the electricity is going who needs it when the peaks are making sure that all the disparate pieces are working together because instead of having say six power plants we now have tens of thousands of individual power plants in addition to the utility scale that we have to orchestrate so that it all works together so that's a key function of the utility of it is the transactional platform right if customers are going to be providing energy and services to the grid what is that worth and what should we be paying customers and what is it worth to the customer to be connected to the grid and have all the services and reliability of being connected to the grid and figuring out what that trade of value is is part of the challenge as we move forward and that's not an easy answer but we're doing initial steps in that as we look at our distributed energy resources docket we're moving into the market track and also what we're doing in demand response so we're somewhat dipping our toe in the water in demand response as we set valuations for grid services and also we're creating almost like a PPA contract a purchase power agreement contract for demand response aggregators and that's one way that you know we'll try and figure out how we move into this future but I think what you're hearing me say is a lot of this is iterative we have to try things on a small scale which is different from our history and our mindset in the past and then iterate on it and then scale from there well clearly more and more you're kind of electronic clearing house you know you're becoming and you will become to a larger extent a technology company organizing and transmitting and being a clearing house for electrical products electrical energy the question is going forward now you're a private company and you're likely to stay a private company in pretty much the same form for as long as all three of us will live but the question is now I know Marco you can comment on this but are you going to be bigger are you going to be smaller is your staff going to say the same size get bigger get smaller are you stockholders how are they going to do do you need more space or less do you need more yards and equipment or less how do you see the size of the company changing because of the changed role in the business I think roles will be different they'll transition I don't know about counts per se but I think as we transition we're looking at how we retool our workforce to be able to take on the new roles and the new skills and talents that we need in our business what else did you have those shareholders so I think as we look over the next five years we have significant investments we need to make in our grid so from that perspective I think that we're on a sustainable track there it's not overly aggressive but I think it's competitive in terms of us being able to still attract investors because that's really key for us to fund all this investment that we need to make in our grid exciting very exciting Marco you can comment on that and then close and make sure you thank Shelly as usual I think we've barely scratched the surface we could go on with this lovely trio of you two dear people and myself I think for considerable longer than we have so I won't get into anything more substantive but I think it's just fantastic you've been able to join us today Shelly and I hope you can come back for you do what Hawaiian Electric is doing the very interesting and make turbulent sometimes energy environment that we all are either a participant and thanks Marco I enjoyed being here thank you Shelly Senior Vice President of Business and strategy going forward at Hawaiian Electric and I can only leave you guys with one thought never take the utility for granted when you wake up in the morning and turn on the switch think of Hawaiian Electric unless you're in Kauai thank you Shelly