 everyone. Another Wednesday, where did that week go? I always say that every week because where did that week go? So, Mitch Yuan, I'm the host of Hawaii, the State of Clean Energy, and I'm happy to have Jay Fidel of Think Tech Hawaii as my co-host. And our guest today is Rebecca Atsushima, who is the Director of Renewable Energy Acquisitions for the Hawaii Electric Companies, all of them, which is awesome, so welcome to the show. And Rebecca's going to tell us about the latest acquisitions and RFPs and what's going on renewable energy at Hawaiian Electric. So Rebecca, what is going on? What's the latest and greatest news coming out of Hawaiian Electric? So last Thursday we officially launched and issued our final approved RFPs for Oahu Maui and Hawaii Island for Renewable Energy as well as grid services. It's by far the largest procurement that we've ever done as a company and one of the largest in a utility-wide throughout the United States. Really? So, like, how big is it, approximately? So, we're seeking, you know, over 2 million megawatt hours between the three islands, between 2022 and 2025. So, we're looking to have all of the energy in place in 2025. We're also seeking energy storage and those needs vary by island of the in-service date. Okay. So, do you have any... Can we get some terms defined? Yeah, sure. For me, I like to understand the difference between megawatts and megawatt hours because, you know, you mentioned before, there was 900 megawatts and 2 million megawatt hours. I need to know the mathematical relationship. The megawatts are basically the capacity, what is available for the system and the megawatt hours is the actual energy that's being output of the system. So, it's based on the capacity factor and... Over the period of the contract? Annual. Okay, good. And so, the megawatt hour translation, the 900 megawatts, is if you're looking at solar, that amount would vary depending on the technology. So, the RFPs are not specific to a certain technology. So, we frame them in megawatt hours to be technology diagnostic. So, diagnostic, I mean, if I have a wind farm or a PV array or if I drill my own geothermal hole, I can sell you guys power. Is that what you mean? Yes, as long as it meets all the technical requirements of the RFP, it can, and it's renewable, it has to be renewable. It can fit into the RFP. Right. So, we had your team, what, two weeks ago or three weeks ago that actually wrote this RFP. Yes. The guys. And I was amazed because I actually, I was telling you before the show, I actually read it. It's like 1200 pages and that's just the main document. That's not with necessarily all the appendices. That's a pretty big RFP to log through, isn't it? But all these guys, I mean, the guys will probably bid it. Is this pretty familiar territory to them? Is that, or is it all the kind of new stuff in this RFP? Well, for this RFP, it's the first time that we're seeking other services in addition to just typical energies. So, we're seeking separate energy capacity, energy storage to provide capacity onto the grid, as well as on Oahu and White Island, we're seeking contingency storage to provide fast frequency response. So, as we transition to renewables and we take off our larger firm generators that have been typically fossil fuel to firm generators, we're looking to also provide some of those grid services that were typically provided by our fossil unit. So, this is the first time that we're seeking, specifically seeking out certain services through this larger scale procurement versus we did a stage one RFP in 2018 and there we were looking just for energy and we saw low shifting storage paired with that energy, but nothing separate requirements. So, this is the first time that we're looking to actually procure a capacity and fast frequency response. Are you making a distinction between dispatchable and non-dispatchable? Are you agnostic about that too? Because if you are, if you're not agnostic, then it would seem to me that you don't need storage on some kinds of dispatchable supply, right? So, it varies by island. So, for our megawatt, our energy that we're looking to seek on Oahu, we do anticipate some of the projects were potentially a lot of the projects we've paired with energy storage, but they're not required under the RFP to bid that way. Maui, where we already have a high amount of renewables, we are looking for that energy to be paired with storage. That's a requirement so that we can shift that energy to the times of the day when we need it. And on Hawaii Island, if it's a solar project, we're looking for that to be paired with storage, but other types of technologies, we're not requiring storage for that. We are separately seeking storage requirements on Oahu to replace the AES coal plant, which will, the PPA expires in September of 2022. So, we're looking for specific, specifically energy storage to replace that. And on Maui, we're looking for a specific energy storage to replace the Kahului power plant, which we will retire in no later than 2024. So, that energy storage can either be provided, paired with a renewable resource, or it can be standalone storage, can be bid into the RFP to meet those specific requirements. When you're talking about storage, the issue on Kauai is it doesn't go all night to storage. It's only for X number of hours. And I wonder where we are, where the needle is these days, in terms of requiring or calling for storage. When you say storage, you mean storage for two hours, four hours, eight hours? Storage for all day, or a week, all month? Who I'd like to see that. But what is the model that you're looking for? So, we're looking for the storage to be provided at a minimum four hour duration. But we've also set megawatt hour per cycle that we need from that storage. So, on Oahu, that amount is 1200 megawatt hours per cycle. So, by what we mean by per cycle is, if it was completely charged, completely discharged, it should provide us 1200 megawatt hours. And that's based on our studies of what we would need on a typical, you know, in a certain events, now that the AES plant won't be available. And then on Maui, that is 160 megawatt hours in one cycle that we're looking for. And we're asking these storage providers to be able to provide a minimum of one cycle per day in their company. So, do the electrons for the storage, does it matter what kind of a source they come from? Do the electrons have to be green electrons, i.e., come from renewable energy? Or can I go out and buy a diesel engine and run it and charge up a big battery and then bid this lump of energy to this bid? So, for the projects that are, the energy storage projects that are paired with a resource that are going to be bid in as a paired project, those have to be paired with a renewable resource. The standalone energy storage projects, they will just bid in to be charged from the grid, from excess energy on the grid. So, a lot of that energy will, that'll be a resource mix of what's on the grid at that time. They would typically be charging during times when we have excess energy, you know, either in the middle of the day from, you know, rooftop solar or other things. So, a large portion of that, and as we move towards 100% renewables, more and more of it will be renewables. But in the beginning, there will be some fossil fuel that is, you know, part of our mix on the grid at the time that's charging the standalone storage. So, that's addressing the duck curve. We also had a program on the duck curve here a few weeks ago. Is that, is that what we're doing? And kind of arbitraging. So, you know, you're buying the electricity at a certain price, lower price, hopefully, because it's, you know, excess electricity. And then, when you have the big huge peak at evening, when everybody goes home, then discharge that into the grid at a different price. That, what we're kind of the concept we're talking about. Yes. Okay. You know, one thing I heard you say, I think I heard you say that coal plant, the AES coal plant was not going to be renewed after, was it 2022? It's done. Yes. So, you know, that's kind of important. Yeah. That's, that's an inherent decision here. Yeah. Is that your decision or the PUC's decision or a combination or what? It's an important thing, important, important change. That was the company's decision, which is well supported by the Public Utilities Commission. But, you know, as we're moving towards 100% renewables, we'll, you know, over time be removing fossil fuel generation and that is expiring. And if you look at our power supply improvement plans, even dating back to 2016, we anticipated that the AES plant would be, you know, that that PP would expire in 2022. So, we're in a new kind of new kind of place right now, aren't we? This, this is historic, isn't it? Yes. And, you know, this will, once these projects are in service, or, you know, by the end of 2022, the state will not have any coal burning plans. So, we'll have, you know, completely that moved away from coal. And this is going to be a really big push to get us to our goal of 100% renewables by 2045. So, the, you know, we're looking to really push the increase at a greater speed, even than we were originally planning to get, you know, faster to our goals. So, it sounds like an R.B.P. R.B.P. It's an R.B.P. Really big push. Things, things are moving. Things are, am I right? Yes. So, obviously, I mean, in order for this to be successful, we're going to need everybody, you know, all of the stakeholders involved to really help us. So, for this much energy, there's going to be land that's needed. So, we'll need land owners to want to participate and offer their land up to developers to use. We need community support behind the projects because they're only going to be successful if the community, you know, is in support of them. And we've added a community engagement. We strengthen our community engagement requirements for developers. Obviously, we need the support of the Public Utilities Commission and the Consumer Advocate. But it's really going to be a statewide effort to bring on this much energy at one time. What about the grid? I mean, if you are putting energy storage or, you know, renewable energy system out in the boonies, and that part of the grid is really soft or, you know, old and needs to be upgraded, I mean, where's the limit? I mean, where does the developer have to play a role? Does he have to put in new power lines or is there going to be some, is that a negotiating negotiating point that, you know, the electric utility will, you know, team with them and figure out what the requirements are for accepting that amount of power? So as part of the RFP, you know, we've identified for certain circuits kind of the space available for interconnection of these facilities. So developers can contact us. We haven't done that obviously for every area of the grid, but we did run a land RFI in 2017 to see from land developers, you know, who's interested in having a, who has land available and would they be interested in having a renewable project there, and we provide that information to developers under an NDA. And for those sites we've, we've done some preliminary load flow analysis to determine, you know, how much renewable generation can go in at that, in that area. In other areas, the developer, you know, we have some information not as detailed as a load flow analysis, then the developer often makes some decisions too, but the developers are responsible for all of the interconnection costs. So depending on where they interconnect or what they're trying to interconnect, they may be able to use existing substations, but they may also have to build their own substations to the company's requirements. But that's typical even of our existing projects with renewable independent power producers, what we refer to them as they're always responsible for their interconnection. The facilities needed to interconnect them to the grid. So what kind of response do you expect to get on the RFP? I mean, you know, we live in times when Hawaii's, I'll make it short, when Hawaii's indigenous installer community, you know, the PV community, all that, it's not that well capitalized. And do you expect to get responses from local companies or local companies in partnership with national companies or only national companies? You know, what's the indication so far about who's going to be responding to this large amount of renewables? So, you know, to date there hasn't been a lot of local companies in Hawaii that are working on the large utility scale projects. There are a few players in the market and I expect that they'll be interest from them. But typically our independent power producers are larger companies from either, you know, elsewhere in the United States or even we've had, you know, international companies that have come in and our independent power producers are in our grid today. So I expect at the size that we're looking to procure, especially on Oahu, we will attract a lot of those same larger players in the market. But I also think that we will see, I think the local market is starting to develop or is starting to gain more expertise here in Hawaii and, you know, that's great. We love to see that. And so I'm hoping that they'll also be interested in whether that's, you know, bidding in on their own or partnering with a larger company. We do have requirements that the developers that are bidding and have experience and what, in the type of project that they're going to bid in and the sizes they're going to bid in. But that doesn't, that can be through a partnership, through a member of the team that has that experience. The reason we do that is we want to ensure the project's accessible. So we don't want somebody with zero experience, you know, bidding in a project that we select and then they actually, you know, don't have the capability to make that happen. Or the deep pockets, you know, the capital. So, yeah, I mean that's really important to make sure you don't get a clunker in there who goes belly up in the middle of the project. That's not a good thing. But I was wondering when you have the RFP and you're ready to go, this could be a cliffhanger question. Can we do it after the break? The answer on the other side, no, I'm going to ask it now. Yeah, and then we can back away. They'll really like to know the answer. Yeah, right. When you, when you have the RFP and you want to have this interest from everybody or everybody qualified, you want to tell them about it, right? I mean one way to tell them about it is right here on ThinkTech because everybody will watch ThinkTech get the idea. Exactly. Beyond that, beyond ThinkTech. How do you get the word out? Don't answer it, don't answer yet. How do you get the word out to the world, to Europe, to Asia? I mean any United States, to the mainland, how do you get the word out and now take a break? Okay, so we have a cliffhanger question standing by waiting for an answer, but we've got to take a break. So don't leave this channel, wait for that answer. So let's go to the break. Aloha, I'm Stan Osterman. Stan the Energy Man, every Friday here on ThinkTech Hawaii. If you're really interested in finding out what's going on in energy, especially here in Hawaii, but also all the way around the world and especially if it has to do with hydrogen, look into Stan the Energy Man every Friday, 12 o'clock, ThinkTech Hawaii. Be there. Aloha. Aloha, I'm Winston Welch, host of Out and About. It's a show that we have every other Monday on ThinkTech Live here. We explore a variety of topics that are really interesting. Organizations, events, and the people who fuel them in our city, state, country, and world. We've got some amazing guests on here like all the shows at ThinkTech. So if you want to catch up on stuff, tune into my show every other Monday and other shows here on ThinkTech Live. It's a great place to learn about stuff, to be informed, and if you have some ideas, come on my show. Let's talk about it. See you later, and Aloha. Okay, we're back, live, all the way from Hawaii and from my Canadian friends. Look at the beach, isn't that great? Awesome, guys. Too bad you're going to miss that. So we're here with Rebecca Matsushima from Hawaiian Electric, and she's left her with a cliffhanging question just before the break about climbing, and what was that question? How do we get the word out? How do we get the word out? There you go. Through ThinkTech Hawaii. Well, that's one way. Yeah, a real plug from Jay. So Rebecca, you've had some time to think about it. I've had some time to forget what the question was. So roll the drums. What's the answer here? Sorry. I think it's a really important question because it is, you know, I think the success of the RFP is how many people know about it, how much interest are we getting. So the process has actually been a pretty long iterative process. We started back in February with our first status conference with the commission to get to last Thursday when we officially issued the RFPs for the three larger islands, and so we've, you know, along throughout that process we've been issuing press releases. We have an email list of people that have contacted us in the past about our procurements, current IPPs on the grid, people that have asked questions in particular with these RFPs. So we email them every time we file something with the commission, update them of where we are in the process, and then we also file with the commission. So all the documents are also public there, but we have a pretty robust website that we keep all of our documents up and available to the public as well. So we, on Thursday when we issued, we actually, we sent out another email blast, goes out to about 200 or so developers, or people that have interest, and then we issued a press release, and we do that nationally larger technology publications, things that developers are looking at. And I think there is, there's a lot of interest, this is a large RFP, so it has been picked up in some of those national publications and run there. So we're hoping that that helps get the word out, and obviously we appreciate coming on the show and being able to share our message here as well. So is it, is it one monolithic, you know, the transaction here, or there are little parts for each sub project? In other words, I could be a smaller capital concentration to one part, but I couldn't do all of it. I'm not big enough for that. So, you know, how does that work? We fully expect to have multiple projects come out of the RFP, so we did a, as I mentioned, we did a procurement in 2018, and the, if you look at the average size of the projects there, they, they happen to all, all of the selected projects happen to be solar plus storage in 2018. Those projects average around 30 to 35 megawatts, so if you look at those, their megawatt hours, what we're seeking here, if we got the full amount, if we had enough interest and they came in at low enough prices and, you know, they met all the requirements of the RFP, we could see anywhere between 20 to 30 projects if they, if they range in that same size as the stage one projects. So, so yeah, so we expect, you know, the projects can range in, in size. Is there a minimum size that you've allocated? There is a minimum size, it depends on the island, for example, on Oahu it's about five megawatts, so there's, there's a, and then on Maui and Hawaii Island it's about 2.7, 2.6 megawatts. That's doable. Yeah, and then on the larger end we have, you know, grid requirements, so we have what we call, we don't want to exceed a single point of failure, so we have kind of larger end requirements, project can come in bigger than that, but it has to be size so that if it, you know, it can be kind of if, if it were to, you know, fail or there was an issue with the plan it can be taken down from maintenance in chunks versus coming, we don't want to see like a huge disturbance on the grid if a large plant were. So graceful degradation. So how long does, people have to, have to be able to respond to this RFP? What's, what are kind of the key dates here? Sure, so developers have a little bit over 60 days from last Thursday to respond. I'm sure they have one. A little over 60 days, it's, proposals are due the first week in November. Wow, that's pretty fast. So it is pretty fast, but as I noted, we've, you know, we've been doing this process since February and, and been trying to, you know, keep the market up to date and, and due press releases and. And you've been socializing. You actually, and you've had draft RFPs already out, because you had to submit them to the PUC, so that's where I picked up mine. It's an interesting, developers have already commented and, you know, been a part of the docket as well. Right, okay. Other responses that come in, you know, they're going to be stating price, right? They're going to be proposing price terms, all that. And it's competitive. You know, you might have more than one applicant applying on more than one, on the same project. If that's the case, it's got to be secret. The whole process, we call it a closed bidding process. So we have, we follow a competitive bidding framework that was approved by the commission. And so the, and we work with an independent observer that's hired by the commission to oversee the process to ensure that it's fair, even though it's a closed bidding process. So we take all the bids in, we have several steps of an evaluation process. So first is eligibility, just did they meet kind of the very basic requirements of the RFP? If they pass that screening, then they move to threshold, which is a little bit more detailed analysis, but did they meet kind of these threshold requirements that we're looking for? And then if they met all of those, then they can, they can go into our initial evaluation, which is a more detailed price and non-price evaluation. And then from there, we select a priority list of projects, and we allow those projects to refresh their offers, give us a best and final offer for their pricing. And then we do a detailed pricing analysis, a benefit cost analysis of those projects to select the final award group. And this, this RFP, we're introducing a portfolio analysis. So we're not looking at how does one project itself, you know, what are the effects of that one project? We're looking as a group, how does this total group of project, you know, what, what is the cost to the grid for that, and what is the benefit to our customers? So we're looking at the total portfolio for the first time. So is it all on cost, or is it more subjective? Can you add other criteria, like the quality of the renewable energy source? I mean, you know, all sorts of other things, but it's not just basically low, bitter wins. No. So the first, the first portion where we're doing that nine price, non-price, we have about eight non-price criteria that we're looking at. And several of them are, are double weighted that we found to be, that we think are more important to the overall success of the project. So community outreach, what is their plan to, to ensure that the community is, you know, going to support the project and that they're going to, you know, outreach to the community. The other is project development and schedule. So how much, you know, how well thought out is the, is the project plan? Have they contemplated all the requirements for interconnection? Have they provided a schedule that, you know, for the size of their project and where they're locating? Does it make sense to, does it seem like they're going to be able to accomplish that schedule in the correct amount of time? And then performance standards. So obviously to interconnect to our grid and to ensure, you know, our, as a utility, we have a, you know, our number one requirement is to keep the lights on and make sure that that power is reliable. And so we set certain performance standards that the developers have to meet to ensure that we can do that. And so we're looking to see how, how are they meeting, you know, have they met all of them and are they meeting it just on the basic minimum? Are they going to provide, you know, additional services or, you know, how robust are their, their responses to those performance standards? So like you say, it's subjective. Who makes that decision? Does the Humana Electric Company make that decision? Does the PEC make that decision? I mean, because you could have two who are close, you know, in terms of the, you know, the proposal they make to you, but who have subjective differences and your taste, and I guess I would always agree with your taste, you know best, would be that one is more reliable, for example, than the other. One is a better track record than the other. One is a better, you know, deep pocket than the other. Who knows what? And what weight, what weight to put on each one of those factors you just described? This is complicated. I mean, that's why you pay, that's why you get paid the big bucks, actually, Rebecca. But the other thing is, that's, that's why 1200 pages, so that you can actually identify all these issues and deal with them. But how do you resolve that? Because it sounds like you could have an argument among competitive applicants, no? So we try to, you know, if you look at how we actually define the criteria, we try to take as much of the subjectivity out of it as possible. We try to set pretty specific things that we're looking for to make it as objective as possible. But you're right, there's still in the non-price, there is some minimum amount of, you know, there, you can't remove all of the subjectivity. But we do have subject matter experts that evaluate each of the criteria. So, you know, if it's an environmental criteria, we're having people from our environmental department that are specifically evaluating those. And then, as I mentioned, the commission has an independent observer that's assigned to the RFP. And so they're also evaluating all of the bids. And then once we do our evaluation, we meet with an independent observer. We confirm that they agree with our analysis. If they have questions about why we came up with a certain score for our project, then we walk through that with them. We make sure that we're all on the same page. And if, you know, if they have input, then we take that into consideration. So that, so there is someone overseeing that process with the utility. Excellent. How long does it take you to get through that? I mean, what's the timeframe from here on forward? 60 days, roughly 60 days, you're going to get these responses, proposals. What happens after that and how long is it going to take? So that initial eligibility threshold price, non-price evaluation is about two months. That'll take us through the end of the year. And then we'll do our BAFO in early January. And then That's best and final offer. Best and final offer, yes. And then we will do the detailed evaluation, which is we actually are running production simulations and doing a portfolio analysis. That process just due to the you know, we have to run the production simulation takes a little bit longer. So that'll take us into the very beginning of May. So the process from now into selection is we're going to take us up to the beginning of May. And then once we make those project selections, we'll go into negotiations to actually execute the contract with the selected projects. And then does that then have to go through the whole PUC again? Are they all right? It does. So once we execute once we execute the contracts with the selected projects, then they go in for PUC approval. So on that happy note, dealing with the PUC, I'd like to make like to make a statement. Okay. My statement is that this shows you how far we've gotten in renewables. It shows you how much we've learned in the past few years and how to deal with you know, an arrangement, this complex and this important and this central to reaching the goals. And Wine Electric has been learning from all of the contracts you've done over the years and learning how to how to build a portfolio of renewables. We're really an important place. This is a tipping point almost. It's very important. What do you call it? Pretty big deal. Thank you for telling us about it. So thanks so much, Rebecca. So that's it. We'll see you in another week. And I don't know who we're going to have on yet, but we'll nab somebody. So, Aloha.