 This is Think Tech Hawaii, Community Matters here. I'm Jay Fidel. This is Think Tech Hawaii, the state of clean energy. We are honored to have at our table this afternoon Alan Rashima, the CEO of Hawaii Electric Companies. Thank you so much for coming back. Thanks, Jay. Yeah, great to see you. Thank you. I get to see you at this table every three years. Yes. It's been three years. I want to renew old times here. So yeah, let's talk about Hawaii Electric Companies. This is why Electric Companies, you know, we were just about to talk about this beforehand. You know, it strikes me that just as the computer has become the center of our sort of social and intellectual world, we have to treat electricity as the center of our community and our society. It is really foundational, isn't it? I mean, what we're seeing with all the recent storms and the recovery from that, how essential a strong grid of reliable power is to our lifestyle, whether we're in Puerto Rico or Hawaii or Houston or Florida is essential. Yeah. I was telling you here in Think Tech, you know, we've learned that you need computers, you need electronic gear to do things you have to do. It's the only way to do it efficiently. And so everyone is finding that out and that means electricity and you cannot exist in this society without having plenty of it and reliable. And you provide that so you become more critical as the days go forward. Well, you know, it's a good point. I think that people think of computers as that hard thing on a desk. And of course, the computer that everyone uses every day now is a cell phone, right? The cell phone has more computing power, the smartphone, than I have running the Navy Regional Finance data center in San Diego when I was in the Navy with the big hard drives and tape drives, et cetera, and 52 people punching cards in the back room. What we have in our cell phones has more computing power than that. And it really carries our whole life, right? Our photos, our music, our records, contacts. Lose one and you'll see how you feel about it. Absolutely. Right. Bills. Email. So access to the Internet. So it is a big part of our life. And not only that, now as we have consumer electronics, also having the Internet of Things, everything is smart. So your coffee maker, your refrigerator, everything is connected and can provide information that's useful to our lifestyle. And all of that runs on electricity. And what I've seen is the electric company over the past few years has become more and more a study of technology. And in order to build the grid you need to have in these days, you really must have the technology to balance it all, make it work, make it service. And so, since our last discussion here at this table three years ago when you first took office, which I remember so well, I wanted to ask you how has that transition been in terms of using technology, changing the company as you said you would? Yeah. It's been great. I think that I see it on a day-to-day basis, so it's almost like watching something grow. I see the growth. I see the progress. It may not be as visible to people who only see bits and pieces of our company. We were national—today I got an email from Public Utilities Fortnightly congratulating Erlen Miley and Lani Shinsato, our co-managers, even that is the departure, our co-managers of Distributed Energy Resources, Rooftop Solar, DER, co-managers. They have been named as one of the 40 innovators in the public utility world. In the country. In the country. That's fabulous. Investor-owned, municipal-owned co-ops. They are among the 40 top innovators and that's because we've now innovated with our customer information technology where all applications for Rooftop Solar and other things, customer facing contractors, can go online and do all of their applications and get immediate feedback on what's missing and really complete it in a much faster time. I mean, we're doing a lot of things that maybe a lot of people don't see. Well, moving ahead to 100% renewable—that's 30 years away, or 28 as a case, but it just strikes me that in order to move there, you have to follow the technology because that's the enabler to get to where we need to go. You have to be ahead of the technology. People are always asking, and so I will say that we've done a—we've put a lot of work into it. Our transformation includes setting up a whole technology and innovation space headed by Colton Cheng because we're in constant planning and really trying to be ahead. We have new business development. We just hired a new returning Hawaii resident to head that up with a lot of background in the communication space, et cetera, where a lot of things are happening. Brennan Morioka has joined us. We had our electrification efforts. A.J. Holigau is now our marketing manager, and we've hired another person who's going to run our polls. I attended an Emory-Eppry Electric Power Research Institute summer meeting where the head of the California PUC of all things talked about the value of the wood pole. I was really heartened to hear it because the wood pole is really the infrastructure we have in every neighborhood. Or the telephone pole. Except in our neighborhood where it's underground. We're in the same neighborhood. And as we go to smart cities, sustainable communities, that infrastructure is very valuable for things like sensors that will connect up with smart cars, security systems, even allowing you to know where cars are parked, where's the space available. The poles become valuable. So we have a new group that's just going to be looking at managing poles from a different viewpoint. Putting nodules on them, wireless nodules and all that. And bringing additional revenue to the company to make up for the decline in customer load. Because the more customers we have, the lower the rates are for everyone. And if we don't have that, then we have to find other sources of revenue to make it equitable for everyone. And you spoke before the show began about drones, which is very interesting technology. One has to think a little about why a utility company would be so interested in drones. Why? Well, I think about a month ago we showed you how we've used drones for electromagnetic kind of serving of the site of our new grid solar farm in Westlock. And for things that you otherwise would have to have hard ground kind of contact, we can put sensors on drones and do the survey. Lot of effort, lot less effort, better results. So you can reduce cost. When you look at Hawaii with our mountains, and we have transmission lines growing over mountains, now drones have only line of sight kind of pilotability. But as things improve, we can use drones for things that we now hire helicopters to do, cutting the cost, improving reliability. In our industry meetings after Hurricane Harvey, right, Houston, which was a water disaster, the report back from center point was that the two takeaways were the value of the drones in assessing damage and recovery and communications. So those were the two takeaways that we need, the internal communications with cellular serving the company or hardwired fiber. And we absolutely have to deploy more drone technology to assist in lowering cost and better reliability. I think it's a good example of how technology comes from the side, from places you wouldn't even expect, and all of a sudden it can help you big time. So you mentioned when I saw you at the Verge conference a few months ago, that you were engaged or already completed a significant reorganization of the company, can you talk about that? Yeah, we knew we had to transform. I think we talked about it early on. And then of course we were delayed in the transformation actual implementation because we didn't know whether the merger would be approved or not approved. Once we knew that it wasn't going to be approved, then we could act on it. And so we really created a whole new aspect of our business so that all of our five islands are now day-to-day managed under leadership, what we call our one company initiative, so that we can use best practices across all the islands. We can purchase things more efficiently. And finding those little nuggets that we have to change in our systems of getting better. Among the things that we changed was the foreign managers that we talked about. New revenue sources, new ways of connecting with our customers, bring customer value, staying ahead of technology, even offering consulting services to others. Because there's so much that we've done in Hawaii that maybe doesn't get the press here, it gets the press nationally and internationally, and people are always asking us to speak. And I think there's a revenue opportunity for our customers' benefit if we can capture some of that and use some of the things we've learned to help others. So you spoke early on about trying to change a culture, change the old culture into a more modern, high-tech culture, if you will, a culture appropriate for the time of fast transition, which we're in. And I wonder how that has happened and what the status of it now? We're getting there. And I think the transformation, the reorganization is an indication, the one company effort is an indication. First, we needed to build trust. We needed to build trust among our employees that were all headed in the same direction, working for the same cause, getting customer value, being willing to accept some measure of failure. Engineering companies, engineers are trained to be perfect. Because we all saw in the old days, Jay, we saw the guys marching across the bridge and the residents would topple the bridge. And the engineers have to make sure it doesn't topple. Nowadays, technology is moving so quickly, where we have to get to is, what is an A plus work, B work, C work, D work? Because some things we can take measured risks to get better value faster. And that's the change in the culture. But we have to know what is required, A plus, right? We're not going to give up anything there because that's safety, reliability, resiliency. We're willing to take some chances here. To just test it. So more pilots, we're already doing it. And we've got countless kinds of things on the system that are providing results. Allow us to incorporate more rooftop solar, safely, without threatening the grid. We're installing a flywheel at Camel Industrial Park in place of a battery. That's the first time in Hawaii, isn't it? To test it. And some of these are in conjunction with Elemental Accelerator. So that partnership is really productive. Yeah. Good organization. NHNEI really assists us as well. And every, I mean, all these partnerships really help. And they're tech partnerships and entrepreneurial partnerships. Exactly. And you're the hub of the wheel, but all these people are helping you out in one way or another on contract by consulting or engineering. I'll give you one example. When I spoke to a management meeting, we bring all of our managers together. And it was time when solar impulse was kind of waiting in Hawaii for the opportunity to leave again. And I borrowed a slide with permission. And that was FAIL. Because I asked him, how did he ever get this done? And he said, fail. He had to convince his crew that fail was first attempt in learning. It's OK to fail in a measured way. But unless you do it, you'll never get where you need to be. If you never take that chance, right? So you've mentioned change in culture. And you've mentioned bringing some of the younger executives up in an ultimate succession. And things are changing. And I'd like to ask you about whether leadership is changing. Because leadership in a utility company is different than leadership in other corporate experiences, which you had. And how is it changing under you, with you, in Hawaiian Electric over the past few years? Let me just say, I think basic leadership is the same in any organization. I mean, you have to have trust. You have to have vision. You have to have management tools that can get you there. Trust is the most important in my mind. So you have to have a corporate culture with a tone at the top that reflects how you want people to operate in the space. It has to be porno. In Hawaii, it has to be porno. And people have to understand that. Once you're there, then each component has to act in accordance, but act holding hands. Because with everything that's happening, no one part of the company can act without input from everyone. It's so highly matrixed. I will say that it's not only us. I think every company is undergoing change. And those that don't understand that they're undergoing change are really going to get black. Technology disruption is occurring everywhere. It is not the way we've known it to be. Retail. Everything is changing. So we're fortunate that it hit us a while back with renewable energy and various policies, oil crises. It forced us to change. So it's going well. We're trying to get a development plan for all of our people knowing where they're going to land up, where they want to land in the company, what they need to get there. Our board is really keen on succession planning. And I think we're doing a pretty good job of developing people, identifying high potentials, and then coming up with programs that will develop. Well, it seems to me the company is doing much better than it was when you first took office. The next-air thing was not a happy time. I'm sure it was stressful, and it stood in the way of some of your programs. And it created a certain amount of polarization in the community that was regrettable. And it accentuated some of the trouble about DER that was happening before. It delayed your planning, all that. Those things have subsequently been resolved, no? Right. But let me say, I mean, from our standpoint, Next-Aero would have been an exceptionally strong partner. And they really supported our transformation. It's unfortunate, I think, how long it took and what happened, but we're beyond that. As soon as we're- That's your point. Yeah. Once a decision was made, we're there. We're moving on, we're ready to move. And we're still, you know, we learned a lot during that process, and we're putting it to good use. But to your point, we have to change. We know we have to change, and we're still doing it. Yeah. But things look, to me, anyway, they look brighter now. You can see down the track better. The company is sort of more in harmony with the public and with the regulators. All of this seems to be a good time for you. Am I right? All right. Thank you for saying that. It's hard for us to say some of those things. We can switch chairs. Yeah. We are trying really hard to be good listeners and not- It came across in the past that what we were trying to do, and we were really trying our best to provide solutions. But sometimes we may have been solving a problem that people didn't want to solve. I mean, they saw something else. So really being good listeners and bringing all the stakeholders together first, getting input, coming to some common understanding, not that we'll all be agreeing, but at least we're being respectful of parties' input and then developing plans and then going together, right? As much as we can to come to some agreement because everybody has to be accountable if we're gonna reach this audacious goal in 30 years. And we can't, and right now it's only on the backs of KIUC and Hawaiian Electric on the renewable portfolio standards of how we generate electricity. But it's a leaky system, as you know. And we really have to get more transportation converted to clean energy. Benefits everybody, right? More uses of daytime electricity allows us to take on more renewable energy and lower the cost at the same time for everyone. That sounds like a plan. And after this break, Alan, I'd like to talk about the DER, how it's changed and how it's emerged and the PSIP and how it's changed and emerged and what it looks like for you going forward. Let's take a short one minute break as Alan Oshima is the CEO of Hawaiian Electric Companies and we are honored to have him here. We'll be right back for more. This is Think Tech Hawaii, raising public awareness. Okay, we're back, we're live. We're so happy to have Alan Oshima, president or rather CEO of Hawaiian Electric Companies, talk about how the company's been doing. And one of the things I wanted to ask you about is DER, I mean, all that with the grid and how much energy you can take in renewables and everything is moving at the same time, just like watching a panoply of activity. And now it seems to be in better shape. There was a time when everybody was arguing with you about whether they could give it back, I mean, sell you electricity, renewable electricity or not. Well, it seems to have come to a better time. Am I right? I think so and I commend the commission for basically the decisions on kind of resolving some of that on the net energy metering, some of their newer decisions on smart energy programs, CGS plus. Self supply as I said. Self supply, which smart energy where it allows you to have your batteries at your home, supply the battery and then discharge at the evening peak to lower the system requirements to provide that load. It's working together. Yeah, I mean, I think there is a much better understanding. And I think that the public will come to see that we all, it cannot just benefit some people for us to reach the goal line. It has to be fair. It has to keep the grid alive because it is the backbone for our economy, for our lifestyles, et cetera. So it has to be fair to everyone. But for that, everybody's accountable, right? You can't just be a taker. You have to also be a contributor in some way. So it's complicated, but I think as we keep going, people will have a better understanding what it is to be accountable on an islanded grid. And you finally got approval of the plan. I think that was really troubling for such a long time that there was no agreed plan. Now you have an agreed plan and it's a matter of implementing which you are doing. You are actually implementing that plan. What do you see in that? I mean, are we gonna need more plans? Are we gonna have to tune that up? How often? And how much reliability will we have going forward to actually reach the goal, right? Well, basically all of the plans have to pass a reliability test, right? You can't compromise the reliability of the grid and just do things willy-nilly. That's the hard part, but we've done a lot. The plans are in constant flux. It's great that we have a five-year action plan, but I will tell you that every week there's another developer coming in with another idea that might supplant or change the plan. And we are open to good ideas. I think one of the planning principles we have is so critical that we only have so much room in an islanded grid to take on big investments, whether it's ours or developers, right? Because otherwise, you've obviated the ability to get new technology in different-sized chunks. So how you phase these things in to make a resource mix that is the best for our customers. On the other hand, you can't wait forever, right? I remember being the president of the PTA and we raised all this money to, it'll sound funny now, to cable the school so we could get televisions and computers in the classroom. And the principal was saying, I'm not doing it yet because the computer prices are gonna drop next year. And I'm saying- No story. We're gonna sunset the funding. You don't get it while our kids are still in school, right? So you can't put it off forever, but you have to do it in a prudent way that makes sense for everyone. And that's a challenge. But there are good things happening in Hawaii. It's being recognized nationally, internationally. For our advances and renewables. And I think that's one of the things we don't sell enough because in a sense, we pick at the disagreement parts rather than celebrating we're in total alignment. And outsiders coming in say it's amazing how aligned the stakeholders are in Hawaii. And we need to build on that alignment to really leverage Hawaii's reputation as vector out of New Zealand. And we quote them in our PSIP as the Silicon Valley for green energy. I mean, outsiders see it, but we don't consider ourselves to be in that space. So our self-identity has to change among all of us. Is to appreciate ourselves. Right, right. We're not just sun and fun. We're doing some great things in Hawaii. So what do you think renewables, where are they gonna go? I mean, there's so many, I went to Nelha a couple of weeks ago just to see some of their things. It was very interesting because algae, nothing really. And of course, Otec, I'm not sure anything is happening on that. Maybe it will, but not yet. Wind seems to be alive at the cable. That's probably not gonna happen. And solar is king. Solar has emerged as king and it fits with all the technology which kind of makes it king. I'm not sure what you think. Can you paint me a picture of which renewables you think will be the ones in priority going forward? Well, our PSIP does that, right? We have a lot of solar, a lot of rooftop solar, grid solar. We have even space for offshore wind. And it just came back from Scotland where I saw some of the efforts there. And there's been an offshore wind development in the US too. First one. But, again, you can't generalize from other states because they have a continental shelf, relatively shelf. Right, right. Relatively close. You have a drop-off. We have a steep drop-off and we've got other activity including marine mammals and military and shipping. Environmental questions, no. All kinds of stuff. So you cannot just say it happened here, therefore it can happen here. People have got to really honor science and the facts. But that's what we do. I mean, we're looking at all of these potentials and making decisions on what the resource mix can be. I would love that we had more, Big Island will get to 100% faster than, because it's got such great resources. But if we had more load on the Big Island, we could do it even cheaper. Isn't that so, yeah. Don't you agree? So all the load is on Oahu. We're not cabled and there's some issues there. So seeing the totality of what we face, it makes it different. We don't have an energy market where we can dump excess solar that is overproduced here to stabilize. We can't dump it into our neighboring state, nor can we import when we need it. Every system, every island is self-reliant. And so basic physics controls and basic economics control. And so that's a rub for Hawaii. That's what makes it so interesting. Yeah, it's a canvas that, I say it's you, but it's we. It's all of us. We have this canvas to paint and we can come up with creative ideas. We know the general outline of where we're going, but the possibilities are enormous in terms of new technology and new creative thinking. Exactly. I'm wondering, you know, back when when the cable was under discussion, there was the notion that maybe someday we could equalize the load and the power so that there'd be a statewide rate. And it's clear now that we're gonna have to go island by island, at least as far as I can see, but query whether it ever is possible logically, technologically, regulatory, legally to have a uniform rate. So let me separate what you just said. I don't think a statewide rate is totally dependent on technology. I mean, we have regulatory ability to do a statewide rate. The systems don't have to be connected in order to do that. Sure. And it makes a lot of sense, by the way, in some ways to do that because we're all in the renewable race together. And some places are paying much more based upon the small size of the population, right? Economies of scale for the new technology. If we spread it out, we got a bigger piece of bread to spread it out, then it's easier. So I think all of those things are on the table. We're constantly looking at it. We have a one company initiative that could lead to that if we were doing it for other reasons, but it could lead to that. So there are many things that we should consider as we move forward. One of the words that we use a lot in the company is hybrid. So people tend to look at solar as the solution. Well, solar plus storage is a hybrid. Solar plus wind plus storage is another hybrid. Microgrids separating far flung population centers that are small that are now served with expensive and expensive to maintain transmission lines, putting them on a microgrid, right? May make sense for everyone. So these hybrid solutions are things that we look at. And how do we use electrification to build low during the day so we can have more solar energy in our system with uses? So it's a Rubik's Cube, but that's what makes it fun. Where does community solar fit in this? Do you see that as an important part going forward? Absolutely. So we have gone through stakeholder discussions. It's at the PUC now for a decision. And we have some opinions on it that we should phase it in and learn. And so even that, it's gonna happen and it'll benefit those who cannot or who don't have roof to put solar. But I will say that we're with NRG, the successor to the Sun Edison bankruptcy is now putting on a process of 110 megawatts of new grid solar at a low cost. And that may benefit more people just through just paying the bill rather than doing anything on their own as we get more grid resources. So I think it's not gonna be a binary decision. I think people will have to look at all of their options but that's our job, to give them options, give customers choice, right? Complicated question is the relationship of all of this generating power through ideally increasing renewables and transportation and Brennan Morioka is very skilled in that. And where does that fit in the big picture for you because transportation is not something utility classically has done. And all of a sudden you find yourself linked to it per force. Well, I think the genie's out of the bottle. Electrification is gonna happen. Autonomous driving is already happening. We'll become more commonplace. So for us as the electric utility, how do we plan to meet that need and how do we use that to support our customers? As I said, more customers, more load decreases the kilowatt hour rate for everyone, right? But it also allows us to use more solar energy if we charge during the day, charge electric vehicles during the day. And there are ways to do that. So we're coming up with pilot workplace charging plans. Driving distances in Honolulu, I'll just use Honolulu. Maui has a very robust charging plan. Big Island has different issues because of the distance involved. But in Honolulu, the average driving distance is relatively short, even with a smaller battery. What you need when you park your car for eight hours, maybe what we call trickle charging, just plug in, charge what you can, it'll get you home, right? And you can do the big charging elsewhere. So it's not like the mainland where you're on a freeway and you have to depend upon a fast charge to keep you going from LA to San Francisco. It's easier here. And by the way, I don't know if anybody who would even wait at a service station for 20 minutes of fast charge for that person to exit the charging station. Right, so the psychology of this is where we have to be. And so I think constant sipping as we go along to keep it going, plus fast charging in some circumstances is what the mix is gonna be. You know, Alan, you and me were pretty much in the same boat about whether we're gonna be around in 2045. We're gonna be around. Sure, thank you for that. But how does it look for you? I mean, you had three years of really interesting, creative, really successful, in my view, helm, leadership at the helm of wine electric companies. And it hasn't hurt you. You're having a good time, it looks like. And the question I put to you is how much longer? I don't know. My board knows. We've had discussions, but it's not like we haven't had these discussions. But I am happy because of the progress we're making. What sustains me is the quality of our employees. It's an exceptional company, Jay. We've got some really, really smart, hardworking people. And they're yearning to do more. So that's what keeps me going. So thank you for saying that. If I didn't have that, it would not be worth it. If it's all about technology, if it's all about science, that doesn't float my boat. And then I think we are becoming better at being transparent and really becoming more accepting of listening to our customers and providing customer value. So we see the numbers going up. We get the mahalograms even after outages. Our app is getting wider acceptance. I hope you downloaded it because it'll give you outage. I have, as a matter of fact. And time for restoration, which cuts down anxiety, right? And it's just the foundation. Our app is gonna get better so that you can do start-stop service on the app. I mean, we're gonna get better. You can see where we're headed. And it's all about customer connectivity. To answer your question, I'm really working hard to develop the strong bench so that the board has some, they already have good choices that they can have even better choices. Thank you, Alan. Alan Roshima, my friend and CEO of Hawaiian Electric Cooperation, thank you so much. Thank you. Thanks for having me. You'll come back soon. Anytime. Thanks. Thanks. Thanks.