 A year of change at the PUC here on Energy 808, The Cutting Edge with my co-host Marco Mangelsdorf and Leo Assantian, a commissioner on the Public Utilities Commission. We are really going to dig in and find out some stuff today. Right Marco, why don't you introduce Leo? Well, thank you. Thank you, my co-host there, Jay Fidel. And thank you so much, Leo, for joining us yet again on Energy 808, The Cutting Edge. So always so pleased to have you on. So mucho, mucho mahalo. Glad to be here, folks. So the first question, Leo, is do you miss Jay Griffin already? I know you just saw him a little while ago, and you work with him every day, but soon enough he's going to be gone. Do you have palpitations? I do not. And part of it is, you know, I've been around enough times to see appointees come and go. It's part of the nature of the work of being an appointee, but, you know, Jay's still here to June 30th. We have a lot on our plates to try to get done by then. And, you know, there's going to be stuff that is going to go beyond June 30th that we need to get done by then. Yeah, well, can you tell us some of the things that have to happen? Yeah, we have a couple of decisions on some dockets that need to be made. That's an effort because we want to do it with the current commission makeup. It does not do any justice or any, there's no reasoning to extend it because that just means, right, the new commissioner who will talk about it a little bit later, right, will have to catch up on everything. And you have to review an entire record. And that's not, that's not fair. It takes some time. I've been in that position to review entire records in order to make a decision. But, right, if we can do it in the period of time that we still have left, I mean, we've got 60 days, basically, to do what we need to do and finish up under Jay's administration. Yeah. Well, you know, what strikes me from this discussion that, you know, every time you have a change and it's always a political appointment change, you have this problem. And it's got to be somewhat disruptive, even if in the 60 days you, Jay finishes off, you guys finish off everything that was pending with him, where he's familiar with it, you still have, you know, a disruptive event when you have somebody new who hasn't served before coming on the commission. And that's why there were some people I know, Leo, who feel that appointments to the Public Utility Commission should be for life. Don't I mention that? Well, okay. I mean, you know, how do you feel about the commission these days with the change? Is the change of, you know, the, you know, of the chief commissioner going to affect policy? Do you think it's going to affect the way the commission operates, the way it's methodologies, its way of tackling these and addressing these problems? Yeah, I think Naomi Kauai, who's the nominee, she still needs to face a full Senate vote in the coming weeks. But, you know, she brings, she brings to the table, I would say unique, right? And I look at it as the commission, right, is starting to get into other things, other than just utilities, right, where we're being asked to look at the environmental issues, sometimes land use issues, siding issues, and the like. And Naomi brings that as being an attorney, right, as an administrative law attorney, but also very versed in environmental law and land use law, right. So bringing that to the table will make us think a little bit differently. Make sure that we cover all of these. I see it as issues that were never historically parked, right, under the guise of the commission. But now we do have to think about all of these items, right, we have pending things like for water utilities, right, but how does that impact our water resources, right. So I can tell you that we've been working, say, with the commission on water resource management, right, to make sure that we got it all covered and we understand it before we make our decision, right, under our permit, right. And I think that's, that's one of the future for the commission, right, we're going to have to work with our sister agencies in the executive branch a little bit closer to understand the issues that they're having on their side, right, everything from siding when we talk about, you know, solar farms, right, and, and you're going to do it an agricultural best place to do it. But then they're impacting agriculture, how do we, how do we work and who do we work with then, right, we work with the department of agriculture, we work with farmers stakeholders in the agricultural world. So that's, I think, what Naomi brings, she's been involved in that for, I've known her for almost 30 years. And she's always been, right, as an attorney, yes, in private practice, but then representing, right, clients and representing interests in, say, agricultural land use, right, environmental and the like. So I think bringing that to the commission is, you know, kind of, kind of breadth of pressure in this time that we're in and having to deal with a lot of the different issues, not only utilities, right, it's kind of related. I think you bring up a really good point and that is the commission, even though your terms are not that long, as we know, the commission has to follow the action, it has to follow the technology, it has to follow the state of the environment, climate change, for example, and all the things that happen around climate change, good, bad and otherwise. And it has to keep current with, it has to be multidisciplinary. And your comments really suggest to me that it is being multidisciplinary and disappointment will, you know, give it additional, additional contact with additional subjects. So that's, that's a good thing. And we are thinking of changing the name of the commission to the, the Public Sustainability Commission. What do you think? Well, we've been, I mean, we do have public service commissioned on the mainland, so whatever that term covers. But then I will add, right, we've also been doing it with staff, right? Our staff is also, right, coming from different backgrounds, even though they're the typical analysts or economists or the like, right? They're backgrounds and what they've been looking at also varies, right? So throughout our staff, we're trying to, you know, kind of diversify the staff as well, like, right, if they come with certain skill sets or they come with certain interests, we try to make sure that they're helping us get that information, stay up to date on things. So I just wonder, you know, I kind of know the answer, but I'm just wondering that does, does the governor consult with the other members of the commission when he's about to make an appointment? I mean, you know Naomi, but does the governor consult with you and say, Leo, you know, what do you think about this possibility? Did you ever have that conversation with him? I had a conversation with him when he had the slate of nominees, right? So he was just about to go and interview with these people who are interested in being a PC commissioner, I will say, right? Under Governor Ige, it's a very transparent process. He just, he doesn't go around and look for someone. People have to apply. I don't know if you folks know that or the public knows that, right? There's an actual website on the governor's website for boards and commission, right? And it shows which ones are going to be vacant and whoever's interested, you sign up online, right? So there were a number of applicants that submitted their names to the governor for consideration. I had a discussion, I believe, a week before he was ready to go out and talk to these guys. Certainly he can do that at any time. He could have went to talk to people and then come to me or come to anyone on his cabinet and go, what about this person, right? What do you think, right? And I know the governor does that from time to time, but in this case, as far as my personal involvement, it was before he even went and interviewed the slate. That's good. That says a lot of good things about him and you. Marco, are you disappointed? You weren't on the list? No, Jay. No, no. Not at all. Not at all. Okay. Well, Leo and I may be disappointed. We're not going to say anything, though. Marco, why don't you take over on the Q&A here before we come back and ask Leo about, you know, the stability of the grid and face of the possibility of cyber attack. Whatever you have on your mind, why don't you ask Leo now? So I'm just going to kind of take it from the political perspective. I watched the hearing last Wednesday in the Senator Baker's CPN committee. And when all is said and done, it was a four-to-one vote to approve with the sole nay vote from Big Island Senator Joyce San Buena Ventura with a couple of excused of senators who did not vote. So my assumption is based on that vote is that the Senate leadership, the majority leadership appears to be backing Ms. Kawai's nomination. So likely there's going to be a vote either. It has to be really either this week or next week because the legislature, of course, is winding down and they would take over. She would take over if everything goes smoothly for her by July 1. So I want to kind of riff a little bit off of a question that Jay asked you, Leo, which is this is the first time in a number of years that there's going to be an attorney on the commission in the form of Naomi. And I'm wondering what effect do you think, what impact will it have on the commission to have an attorney back on board? I mean, in past years, there's been no shortage of attorneys that you and I both know over the years. And the commission has been, shall we say, attorney lights, LITE, with you and Jenny and Jay. So with the addition of Naomi as an attorney, what difference do you think that will make practically speaking or administratively have an attorney back on the commission? I think for us, it's like a sounding board because we do have legal staff. We have a chief counsel and there's about six or seven attorneys that support her and support us in different matters. But having someone on the commission itself is very helpful as someone that kind of like another voice and legal thinking, which we should take into consideration. Like I said, Naomi comes with 30 years of experience. And yes, the majority has been in land use and environmental and administrative law. She has a few utility clients, but they're mostly on the telecom side, which is another one of our areas that we need to take a look at. But really, having that legal background kind of is like a little bit of a sounding board for our legal staff to make sure and validate which way they recommend versus have you thought of this, kind of back and forth on the legal side. I think for us, I'm more of a policy person versus being a legal person. I look at it through that lens. Jay and Jenny, they kind of look at it both from the researcher academic side, but also for Jenny having worked at SMUD, Sacramento Municipal Utility District. We have all these different types. We're not legally mining. Like you said, Marco, I will say when I was appointed back in 19, I knew I was replacing former chair Randy Wase. And my first question to the governor when he asked me, would I consider coming to the PC was, I'm not an attorney. My mind automatically went to, the way the commission is set up, you should have an attorney up in front or on the commission, like you had before under Randy, you had also Lorraine Akiva, who was an attorney. And then you had Mike Chappell. So I think it brings a uniqueness, I think for everyone on the commission, as far as how we look at pretty much the legal side of our decision, that would be something that Naomi will bring. But I think you still get kind of openness from Jenny and myself. We're a little bit broader focus. Yes, we do have to pay attention to the legalese a little bit, but we normally come in board, I think she can kind of handle that side of it and inform us. This is what's happening out there in the legal world and how that translates to our decisions. So Leo, if I'm not mistaken, and please correct me if I'm wrong, I don't believe that Governor E. Gay has tipped his hand as to who he can choose without any Senate advice and consent, who he wants as the chair of the commission. Do you have any insight into that? I mean, I guess kind of obvious question is, would you like to be chair? You know, that I've been asked that, I think, you know, I leave that to the governor, right? It's the governor's prerogative. The typical way is, right, he has three names, right? And I think that's, that's his focus, right? He needs one, he needs the third name, which is Naomi, right? And then he can make his decision on who would be chair. You know, I think any of the commissioners could be, could be the chair, right? You know, if you look at time on the commission, right, it would be Commissioner Potter, right? If you look at it another way, depending on how the governor thinks, right, what the commission needs, what kind of leader the commission needs, he can look at it that way as well. I think it's very different, right? Because when Jay was named as the chair, right, Randy had already retired and left, right? There was actually no chair, right? There was kind and at that time, when the governor appointed me to the PUC, I was still at the office of planning, right? I didn't get here until after my confirmation period. So, right, the governor couldn't have waited until the end of session to name a chair because he would be five months without a chair, right? So, in that case, he named Jay. They were operating with two commissioners until I got here right in May of 2019. So, right, this, this, in this case, right, Jay's not his last is June 30th, right? So, you have a chair until June 30th. And so, right, when he does that, I know he acknowledges that there needs to be some transition time. So, my best guess, and this is just my opinion, he'll probably do it sometime in late May, maybe the beginning of June. And then, right, then, right, should now only be successful. That's the third name to look at the names and then he'll decide on who will be the chair. Well, there's no time to waste. I mean, in the sense that you having a transition, there are a lot of issues, not only the ones that Jay has to work on before he leaves, you know, but there are other issues before the PUC. And I wanted to cover one, make me an ordinary citizen, knowing very little about this. And I watched 60 minutes last night at six o'clock. And the number one segment, which was scary enough to lose your hair, look what happened to me, look what happened, is that, is that they believe the intelligence establishment in Washington believes that if Vladimir Putin feels he's losing the war, or he finally understands he is losing the war, he's going to go the next step. And the next step could easily be cyber attacks, because he's good at that. He's done it before. And cyber, the primary target, they said in this segment, is utility companies around the United States. And although we're far away, we're not a big target, you know, we're a small utility company in Hawaii, we could be on Vladimir Putin's list. So I'd like to know your thought, and maybe you're feeling about, you know, whether this issue is something that the Public Utilities Commission, you know, can do something about, on the possibility that we will be cyber attacked, and our and our grid will be brought down by our friend Vladimir in Moscow. Yeah, you know, ironically, right, you saw it, what, a week, two weeks ago, right, there was a separate attack on our top com side, right, on the cable. So yeah, you know, it is possible. I think that, you know, put aside that point, right, it is possible. We actually have been trying to work with all of our utilities over the years. I remember when I came on board, right, I got to go up to Paycom and listen to what Paycom had to say about cybersecurity, right, and what they're doing to make sure right on the national level, especially out here in the Indo Pacific. And, you know, Hawaiian Electric and all the utilities that were already right there at the table, saying this is what we're doing within the company itself. But what we're doing right now, we just got, I think, a couple of weeks ago, right, kind of communicate from the White House, right, asking, right, what has PECs been doing in terms of cybersecurity, right. So, right, we're already kind of, we've been talking to the utilities, we have a couple of briefings coming up, we've had a couple of briefings already. And we're not only focused on, say, the electric utility grid, but really everything else, right. I mean, I remember, you know, I made a call out to young brothers, like, what are you guys doing, cybersecurity on the ports, right, because it's going to move commerce and we need the ports there. And young brothers, and I think they're doing it through DOT, right. They have cybersecurity measures, right, going on at the ports. So, it's all over, it's all of our utilities, right, we're, I'm sure, right, our small water and wastewater companies, right, they have SCADA and they have the light, they have, right, the infrastructure there to, to, you know, monitor these things. And I got to believe and something to check, right, I haven't, we haven't talked to all of our utilities yet. They pretty much have plans through case, right, it happens. I mean, is it within the purview of the PUC to say, this is, please satisfy us, you know, talking to the utilities. Please satisfy us that you're doing what, you know, the military, the intelligence community wants you to do. And, and we will, we will opine on that. We will say, whether we think that's adequate or not, whether we think, you know, you should be doing something else, whether we think, you know, the public can be reasonably comfortable about this. I mean, you do, you do have authority in this area, right? Yes, we do have authority to ask our utilities or investigate our utilities. I think there's a fine line on, on, on how much is state involvement versus federal involvement, right, likewise with the counties, right? I mean, they have infrastructure as well, right, like our local water supply, right, it's all run by our respective counties. So do they have, right, in case something happens to their utility? Do they have the plans? I think, I think the most we can do at this moment is really make sure that our utilities are prepared, right, that they have something in place should something happen, right, because, right, these are all critical utilities, right? If you look at the energy sector, the energy sector and electricity, right, you need it to run other things, right, other critical infrastructure. So it's not, it's not the only critical function, I mean, or critical risk. As you know, we also know that, you know, the, the termination of coal on September 1 has risks attached to possibility of brownouts or blackouts. You have spoken, you the commission has spoken about that a number of times. And of course, we have climate change which could create any day of the week, extreme weather that would, you know, tear our system up. And so how do you, how well do you sleep at night, Leo? I don't know, I get about four hours. My body has adapted to four to five hours. You're doing it for us, we know that. So Marco, do you have any comments or questions about these areas? Yeah, I do. I want to take a little bit of a different slant. Number one, in my opinion, there is no country that has greater offensive cyber capabilities than the United States of America and Moscow knows that. So I just in fact saw a new phrase not too long ago. You and I are of a vintage J, perhaps Leo as well to know what the acronym MAD stands for as in mutual assured destruction. When you have nuclear weapons and enough quantities and enough sides that if there's a large scale nuclear exchange, nobody wins. So the slant on that I heard recently is mutually assured disruption, mutually assured disruption, that if you have a significant cyber attack of party A against party B, then retaliation is pretty much locked and loaded is going to happen. So I'd like to believe 60 minutes aside that there's going to be great reluctance in the part of Putin to really go heavy against U.S. assets in terms of the cyber attack. So with that said, I just want to dramatically shift gears here before we wrap up, please, Leo, which is all ratepayers, all consumers in Hawaii are keenly aware of the cost of energy these days, both at the pump and also when they look at their Hawaiian electric bill. And my question to you is, is there much of anything that the PUC, which is to look after the interests of the public, that the PUC can do in light of and to try to alleviate some of the pain of these record high electric costs and FYI, on the Big Island, the electric rate right now is between 44, 43 and 47 cents a kilowatt hour, that's residential. And I wouldn't be surprised if when the May rates come out, we hit 50, which is a record. So is there anything more conceivably that the Commission can do to help struggling consumers with energy? Yeah, part of that is the fuel costs, right? And you've seen the fuel costs just rocket in the light. We're back to Putin again. No, but I think that's right. You're right. And I think we are trying to accelerate getting renewables on the grid to try to balance out that time. But then on that side, and I don't know if you're seeing it, Marco, but certainly like the commercial solar, utility size, utility scale projects, they're running into supply chain issues. And we're back to COVID. I think we discussed this couple of months ago that that supply chain is broken or at any piece of that link, right? Shanghai shuts down. People can't get the parts, right? They can deliver batteries, panels, whatever on time, right? Then there's an ongoing US Department of Commerce issue going on. I mean, this whole thing is, in my mind, how do we, for the near term, kind of manage through this, right? And make sure that we take our reliability, see if we can reduce rates more, see if fuel prices are going to come down, right? Do we have information or intelligence on that and the like? And then we got to focus on the mid to long term, right? Because at some point, the cycle's going to fix itself. And we got to get back on it, right? And hopefully, we haven't missed, right? Not so much critical deadlines, but, right, that a year from now, we're going to say, okay, we're all good at shocks, we missed the year, right? We didn't take advantage of it. So where can we take advantage of things to give instant relief, but also look at the long term, right? How do we keep moving, right? I mean, we still got 100% like 2045, right? Being carbon neutral by that date as well. And all the slew of initiatives that we have, right? I think we still, nobody moved those dates up just because of what's happening today, right? So that's the challenge that we're all going to have to face. And I think, you know, we talked about a little bit of the change in the commission. I think one of the things is for us to rethink, right? Where we go from here, right? I mean, could it get any worse? I don't know. But I think we really need to think about, right? How do we get to, right, next year when AES coal on Oahu is down, right? How do we get to that next threshold, whatever that 20, what are they at? 2025, right? 2030 timeframe, right? Are we ready for that? How do we set it up for, right, beyond? I have one more question before we run out of time, Leo. And that is this, you know, as we go down the pike, there are some things that need, that need help. That need incentivization, for example, in one way or another, tax breaks are otherwise at the legislature. And, you know, if you're in the commission, you say gee, Wiz, we could really use some help here in terms of changes in the statutory scheme for Hawaii that would move us faster and deal with some of the obstacles that we, as commissioners, see. So is there a mechanism? Do you guys actually communicate with the legislature and say, hey, you know, how about an incentive for this or that or the other thing? How about just I'm making this up, but how about an incentive for electric cars? Everybody knows that's good for us. Why don't you guys do something? Do you go down and testify? Do you write them letters? Do you lift up the phone? What do you do to motivate changes in the law that would advance these community interests? Yeah, we actually do talk with our legislators, both on the House and Senate side, not only on ideas that we may have, but also ideas that they have. But usually we work from the ideas that they have and try to refine it or make it better or make it more worthwhile. That's, I mean, being a policy guide, that's what we're supposed to do. And it's just one of the ways that we can do it. But we certainly do that. We also try to work with our stakeholders in the energy sector. If they're facing hardships, say even at the county level, we go and try to sit down with the county folks and go, hey, we really need this and we need to make changes. And they're like understanding that most times it's on a going forward basis. It's hard to retro anything backwards nowadays. But I think we certainly do that. I think we need to do more of it, in my opinion. Because at the legislature, you got 76 guys with ideas. And any one of them could be the champion to try to move something forward. I don't look at them as committees. Yes, that's one way. But how do we get, you got to get all of them involved. Or at least aware of these initiatives that could happen to move. If it's going to get more renewable online, it's going to be a balanced portfolio that we want to seek for the future. What is it? And we certainly are prepared to do that. I think we need to do that. We have been doing it. I think the difficult thing, Jay and Marco, we're going to have a new legislature. We're going to have a new administration come January. And I think that kind of weighs on my mind too. How do we, not so much get in early, but be at the door ready to talk to them about this as we go into, say, next session. Yeah, glad to hear that. It sounds very positive actually. And I hope you can continue and actually expand that effort to make them know what you know, because there's very few people in the state who know as much as you know, and who are presumptively impartial as you are. So very valuable dialogue. Okay, Marco, will you have any more? Take some time. And then Marco, it's going to be up to you to close this show, Marco. And to thank Leo, right? Of course. Well, I mean, when you start talking about things that are known, I can't help by channeling, can't help but channel my inner Don Rumsfeld, who spoke very loquaciously if kind of ambling sometimes in 2003 when he spoke from the podium at the Pentagon, and he spoke of the unknown unknowns. There are the known knowns, the known unknowns, and then there are the unknown unknowns. So they're always going to be unknown unknowns. But one of the knowns that I'd like to have confidence in, and I do, is that being on with Jay and being on with you, Leo, is known to be rich, useful, and always a pleasure. So thank you so very much. You're welcome. Anytime you know that. Thank you, Leo. We really appreciate, not only you're coming on the show with us and answering our questions, but your service at the PUC. We really appreciate your effort and your participation and your contribution to this very important organization.