 Welcome to Stan Energyman here on Think Tech Kauai. Stan Osterman used to be from the Hawaii Center for Bands Transportation Technologies, but now I'm retired. So it's just Tiger Shark LLC, which is shorter, but probably just as hard to say. Especially if you're not coherent like me. Anyway, today's got a special, got a very special guest. Somebody used to work with me when I was at HGAT, and we both helped really drive the train down there at HGAT. It's always good to catch up with Ms. Rachel James, who has been pretty darn busy the last couple of years, actually, at HGAT. Managed to eat her way through a law degree. I think she had like a 5.3 GPA or something like that. And then she went and passed the bar in record time. I think it was like a week and a half a week when she passed the bar. So she's now a full-fledged lawyer, and because she's such a hot commodity in the legal community, she's got a great job at the Public Utilities Commission. And being that I don't know diddly spit about the Public Utilities Commission, I started to come on the show and tell me what it's about. So I could fill my clue bag as it were. Rachel, thanks for being on the show. I really appreciate you coming on. So give us an update on Rachel James and how hard was it to get through school and pass the bar. Is that really good in your rear view mirror right now? Yeah, it's great in the rear view. I keep telling people that I'm kind of floating through life right now. It's nice to have achieved something for which I've worked for a number of years, and working at HCAT during that time was really probably the best place I could have been in earning a law degree. I learned a great deal just about energy specifically, but being fortunate to work for you, Stan. Yeah, and being able to be mentored by you and just the different partners that we had was really an enriching experience. So it helped me muscle my way through law school and now I'm on the other side of it. Better informed and now at the Public Utilities Commission. Is there a time for surfing and stuff now? In theory. In theory. Now I'm terrified to get on the water because I haven't been out there for so long and I'm like, oh, do I still know what to do out here? So I'll have to inch back out. Well, tell us a little bit about what it's like at the PUC. And what kind of stuff do you do at the PUC? What's the PUC all about? I think at a very kind of bare bones description, the PUC is a regulatory entity. And we regulate the utilities across the state. So we're often in the news, and I think people readily associate the PUC with regulating the electric utilities. And so HECO and the PUC, those are two acronyms that you hear kind of located in stories often. But we also regulate telecommunications as well as water carriers and taxi cabs and truckers. Yeah, taxi cabs, truckers, buses, like the van bus things. There's probably a correct name for it that I don't know yet because I haven't reviewed one of those dockets, as well as entities like Mattson and Young Brothers, so marine carriers as well. Yeah, and our kind of gist of it is that these entities are providing a service to the public at large. And the public utilities regulation over those entities and to ensure that the rates are reasonable, as well as the service being, we prefer exemplary for the people who are paying for that service in the state. Are the companies that you regulate all monopolies relatively speaking? Or is it sometimes like taxi cabs? There's more than one taxi cab company, but you regulate all of them. So how do you kind of divide that up between monopolies and just at large service? We could get deep in the weeds about the regulatory compact for my legal buddies that are watching. They're going to be like, Rachel, don't do it. Don't do it. So I won't go too in the weeds. But part of it is in part of the definition of what entities the public utilities regulates. There is a section that speaks about regulating entities that essentially are the only entities that provide the service, so monopolies. And part of those entities being monopolies is them being granted something called a franchise agreement. And essentially, and I'm very bare bonesing it, but essentially the franchise agreement is that the entity providing the service is allowed to operate as an essential monopoly. But the agreement is that that allowance requires that they allow the regulation of public utilities commission in things like rates. So when ECO files a rate case, that's a required thing to do. They're not able to just increase or decrease rates or change rates on their own. Part of that regulatory compact is saying, you provide the service, and as providing the service exclusively, we're also allowing you to regulate us. So it's a handshake, but it's a official handshake in writing with lots of history. I'm starting to smile because all I was thinking when you were saying that was, what if they want to lower the rate? Do they have to ask permission to lower the rates? Rate changes. Rate changes. A rate case. Yeah. Even if they wanted to cut the rates, they have to go to the PUC. Yes, and even, yes, great changes. Right. And then for the other folks that are like multiple companies that don't necessarily have a monopoly there, you just kind of standardize the performance and make sure they're performing. Kind of like Department of Commerce and Consumer Affairs does for licensing boards. Having little experience with DCCA, I couldn't speak to the similarity. But I can say that for entities that provide a service where they charge a flat rate, essentially, or a common rate across the public that they're serving, those entities that the public's submission regulate. So then taxicabs all basically charge the same rate? Right. That's what they're asking for. Yeah. So as a brand new rookie lawyer, I'll call you a rookie lawyer. Please do. At the PUC. I am. What's your learning curve like? Did they just throw you in with the wolves there and let you fend for yourself? Or do you kind of tag along with another lawyer and get some practice and do some research and things like that, or how do you kind of things fill your day? So the learning curve is steep. And I'm grateful to have been told that up front. I kind of set myself like a page number quota per day. And then I was like, all right, I can do this. I just got out of law school. I'm used to reading volumes of information. And when I wasn't quite like halving even the quota that I set for myself, and I was like, oh my gosh, I'm only a quarter of the ways in, like what in the world? Speak into some of the other attorneys. I'm like, Rachel, you should give yourself a break. The learning curve is steep. We don't have to pretend like it's not. So part of that steep incline is it's just kind of the layering in of regulatory frameworks with technical specifics. And so receiving information from the utilities with the request to whatever action is requested to be taken. Part of my reading and research and reviewing is understanding the legal aspects of what they're asking, but to understand the legal aspects, I need to have some sense of what the technical aspects are as well. And so that's why it's really helpful that we have a team of engineers. We have auditors, compliance folks, and just a number of subject matter experts that can help piece together these dockets or these requests essentially to take some action that come from the utilities. And so my familiarity with, especially working through AXE Chat, understanding kind of how things are out in the real world is helpful. But then understanding the nuance of how those things come to be is really where, for me specifically, where the learning curve is deep. So getting to understand things like depreciation and amortization and capitalization and how rates are rate cases and what's included in a rate base and kind of those pieces of things that I can understand in application. But you need an accounting degree to figure out. Yeah, fortunately, I have an accounting degree. So at least I can understand the terms and then layering it all together to understand really what's being asked and what legal implications that has is my task now. I'm going to turn you there. So where does the PUC exactly fit in the state's organizational structure? Under the executive branch, kind of independent? So we are under, well, in recent history. So in 2014, Act 108 transferred the Public Utilities Commission to the Department of Commerce and Consumer Affairs, DCCA. But prior to that, we had been in Department of Budget and Finance. I think it had a different name before. We'll just say we were in a different department before, because I don't remember the history exactly. But not under DCCA. Yes. But we are still a relatively autonomous entity with a quasi-judicial disposition, you could say. And so we had increased regulatory authority provided through Act 108. And what that essentially means is that many state departments have an attorney general attached to them. And in the PUC history, that was the case. And over a series of court cases and a number of decisions, it became evident that having an AG is challenging for the PUC as a regulatory entity, because the AG could end up having to represent both sides of a situation. And that's not good. No. If you're a regulatory entity. It's not good, even in private practice for attorneys. It's hard to represent two parties at the same time in the common concern. I think it's discouraged to say the least. So long story short, the Public Utilities Commission was permitted to have their own counsel, which I'm part of that commission counsel team. And essentially, that allows it to make decisions that are its own. And if those decisions don't necessarily square perhaps with another department in the state, then the state can still be represented by the attorney general that's assigned to whatever entity that is. Then in the same token with any other entity that has issues with the PUC or its decision or procedural matters, the Public Utilities Commission has a core commission counsel of its own to represent it. So it is housed under an agency administratively attached, but it's not necessarily subject to the same kind of processes as some of the other entities. Under the executive branch, under a cabinet member who is the head of the Department of Commerce and Consumer Affairs for administrative purposes. But your chair can probably talk directly to the governor if they need to on issues. Yes, the chair Griffin. So although administratively you're under DCCA, you're kind of in the military. We'd call it chain of command. You can go around DCCA directly to the governor if that's what's required for a particular case. Yeah, that's my understanding. OK, OK. That's good, because I mean people probably don't even care about some of this stuff. But it's interesting to me because working in both federal and state government and watching how things move, it kind of helps to know where things line up and who they're under and where the belly button is if you've got to push it to get something done. So good to know these things. Let's take an example. Say for example, Hawaii Gas wants to do a rate hike. And so they submit a rate base. And then it gets on the agenda for the PUC, which they have. There'll be a docket. A docket will be established. They establish a docket on the PUC. And then you folks do some research and ask a bunch of questions and do your homework and do diligence and everything. And then what happens? And a decision in order comes out. Before the decision in order, though, there's a considerable amount of back and forth. So some of that is the consumer advocate is essentially like he would, whomever at current consumer advocate is he, Dean Nishina. But whomever is a consumer advocate has the opportunity to always opt in to be a participant in a docket. And as a participant, you're able to essentially stay informed throughout the docket process and have engagement on the considerations that are taking place throughout that process. And so when a docket is filed or opened and you have, I like to think of the docket as just a basket in which all the information related to whatever is being filed is contained. And so traveling through that process, in our example, Hawaii Gas, whatever they're requesting, the consumer advocate may have concerns about whatever they're asking. And so the consumer advocate can file their concerns. If some other entity is also interested in participating, they can file to intervene or be a participant. And that request is reviewed by the Public Utilities Commission. And then essentially whomever the parties are in the docket, those are established and kind of like ordered. And then the progression of the docket, those parties remain informed and included as whatever is requested as being considered. So me as a consumer, assuming I'm a gas customer, if I had a concern, maybe I wasn't happy with a rate hike or something for whatever reason, would I go through that consumer advocate? Or are there other means for us plain old citizens to get into this docket process and the PUC? That's an excellent question. So well, both actually. So you can speak with a consumer advocate who advocates for all consumers. So both you as an individual, but the concern is also for entities that are consumers and small businesses. And so consumers broadly, the consumer advocate advocates for. So you have immediate access to write to this consumer advocate, to call, to schedule an appointment, but to have your concerns heard by the consumer advocate and to request that those concerns be brought specifically to the docket that you have an interest in. Alternatively, you as an individual can also go on the PUC website. And you know the docket number. You can put your comments in directly. So you don't necessarily have to be a participant in the docket. If you'd just like to file comments for a docket, you can. And then you're not required to have legal counsel in order to be a participant in a docket. I think legal counsel is helpful. There are a number of deadlines. And there's some specific ways in which things are requested to be filed. So having legal counsel can be helpful in doing that. It's not prohibitive if you don't. But you can file to be a participant or intervene in a docket as well. And that's on the heels of a recent Supreme Court case. We're going to take a quick break now, and we'll be back in 60 seconds, because I've got a lot more questions for Rachel James here. This is called Stump the Dummy on Stand Energy Man. She's no dummy. Hello. Thanks to our ThinkTech underwriters and grand tours, the Atherton Family Foundation, Carol Mun Lee and the Friends of ThinkTech, the Center for Microbial Oceanography Research and Education, Collateral Analytics, the Cook Foundation, Dwayne Kurisu, the Hawaii Community Foundation, the Hawaii Council of Associations of Abarbon Owners, Hawaii Energy, the Hawaii Energy Policy Forum, Hawaiian Electric Company, Integrated Security Technologies, Gailin Ho of BAE Systems, Kamehameha Schools, MW Group, the Scheidler Family Foundation, the Sydney Stern Memorial Trust, Volo Foundation, Yuriko J. Sugimura. Thanks so much to you all. Hey, we'll come back to Stand the Energy Man, interviewing the newest member of the legal staff at the Public Utilities Commission, who, because she just studied all the books, knows a lot more than any of the lawyers at the PUC because she's got all that knowledge fresh. In fact, she ran up here with her fingers in her ear, so the knowledge wouldn't run out of her head before she got up here. Rachel, thanks for telling us how the PUC's set up and who they go to. But this consumer advocate guy, how do you get ahold of them? Like, how do you find them if you decide, you know, hey, I saw in the paper that somebody wants to raise this rate and I don't think it's right, and I want to talk to this guy. How do you do that? First, I have to do a disclaimer because I'm a new attorney and I have to set the record straight. I'm certainly not the most well-informed attorney of the Public Utilities Commission. I am the least informed. I'm trying to get you in trouble and you're just fighting me the whole way. No, no, all that knowledge is fresh in my head, and so it hasn't leaked out in my ears yet and I have to disclaim. In terms of reaching the Nishina, so the consumer advocate is, by statute, the Executive Director of the Division of Consumer Affairs. Okay. Or Division of Consumer Advocacy, rather, which is underneath the Department of Consumer, I always forget the second. Department of Commerce and Consumer Affairs. Commerce and Consumer Affairs. And so you said acronym. The only reason I know that, by the way, is I have a contractor's license. Ah. And that's in Department of Commerce and Consumer Affairs. Gotcha, thank you. I'm too used to saying the acronym, but I'm like, there's another C in there that means something. So you can reach him or the division generally through the website readily, because everything's available on the interweb, but the phone number is also available there and so you can call and you can set an appointment if it's necessary. I think it's important to document what you're interested in sharing. Just that's a helpful way to keep things on record and to make sure things follow the path that you're hoping in, to make sure your words are your words and not to say that they could be misinterpreted, but hearing from constituents in their own words is important. So, you know, I am a little bit familiar with some of the things that go through the system there. And some of them are very confusing to me. I agree. And I'm not gonna bring up specific cases, but I may wanna kind of talk a little bit about some that confuse me, like for example, you know, when we're talking about putting TV panels out and then taking that energy and moving it someplace, it's like if it crosses a tax map P line, then suddenly there's a big issue and the PUCs gotta be involved. So those kind of things, you know, do those things get built in statute or do they come from the dockets that get through the PUC? I mean, what drives those kind of things? Because and the reason I mention it, and I'm not looking for, you know, any case law or anything here, but when I work with companies that we wanna move electricity from here to there, and it's their own wire and their own equipment, but it crosses a tax map P, then all of a sudden now we have a whole new ball game. So, you know, how does the PUC get involved in those kind of issues? Like moving stuff around, if you are up on that yet. Well, so the concern that you mentioned is one that is often expressed. And I think often it's, people will just call it like wheeling, wheeling, wheeling, wheeling, wheeling, wheeling, wheeling. Yeah, which is something that is born of statute. So it is a statutory phrasing that speaks about what a utility is. So the Public Utilities Commission is something that is created by statute. So that's kind of one thing. And then within our charter are things which we have authority over. But even without authority, some of those, some of the ways in which we assess information are already defined in statute. And so things have definitions already that are provided by the legislature that we then can develop administrative rules for, but have kind of the policy backbone already established. So that's part of your research up front is to, when you address a new issue, you go back and do the legal research. Yes, so often it's important to see kind of hints from once. When we're faced with a question like what you're asking, trying to understand what was the impetus for whatever happened that inspired this question. And so often it will have statutory backing as does the wheeling component. And what I think people are often discussing when they're talking about things crossing pack, map, keys, and whether or not it's allowed or disallowed. It's less that it's allowed or disallowed and more that the definition of a utility is defined such that power is moved in a certain way or the resources moved in a certain way. And so if an entity operates in that way, they would then be considered a utility. And if they're a utility, then the public utility's commission would likely have regulatory authority over whatever they're doing. It's interesting, specific to energy. There is actually a carve out, I don't know what carve out is the right word, but there's a definition that speaks to energy that is renewably generated. And I'm not gonna be able to quote the statute specifically, but it's like section M and N. But there are these nuance that are expressed that recognize that renewable energy presents different opportunities for how energy can be moved. But it's less that it can or can't be done and it's just if operated in this way that then bring someone under the current definition of what is considered a utility. And being a utility in the state then affords an entity the opportunity to be regulated by the public authority. So, whether it's a rape case or whether it's Stan Q. Citizen feels like this is a weird wheeling rule that why should my company have to go to the PUC to get permission to move my power from my lot to my lot next door and cross a tax map P. And I put that into a request and it ends up in a docket. What's kind of like the range of how fast things can get through a docket? Like don't expect anything within two weeks or two months or, and then out as far as maybe two years or three years, what's kind of the range and what would drive something in terms of complexity to push it to a long duration docket deliberation? I think some things are time bound in terms of like when a response needs to be filed and like when participants need to opt to engage. What I think is pretty fascinating is that, I mean just in this recent year with the seven filings for like the largest renewable energy acquisition that the state has seen, those were gotten through in less than a year when there are issues in times past that have taken a year or more. So I think being in a newer regulatory space in terms of like what we are actually regulating like you can say energy broadly but how we are defining energy and what is available to be defined as energy is changing rapidly. And I feel that this commission composition is really interested in being able to be as responsive as possible. So I certainly can't speak to the expected response times but I can say that that is a specific thing that we are working to address. And even before I came on board and that's something that they have successfully addressed at least in terms of like timeliness of response in the recent year with the current, well the recent filings. So like in when you work for the state and you're doing a contract or something and you have a process of paying for things or whatever you have certain like this has got to be out there for 15 days and it's got to close and then this has to happen and then that's the closing. So when you put all the basic stuff in what's kind of the fastest you could expect something to get through a docket. Meeting those gates, is it like months or is it close to a year? I would say months. So in my super novice, totally naive, very new perspective, the estimate that I have in my mind is roughly three to six months. And that's just being thorough and due diligence. And then maintaining the established timelines in terms of like when people can file to intervene. And so like not cutting any of those like 45 day timelines off. I feel like it's months. But there's just a range of things that are requested and if it's something that's totally new, I think that will likely require more research. If it's something that's been done before and is relatively cursory, that might require less. But truthfully I haven't seen the full range of the things that we consider. I have a 500 and so much page docket in front of me and this is the thing that I'm like setting myself page goals to get through daily and I'm failing each day and I'm like oh my gosh I have a notebook to the side that has notes about like oh I need to look at that regulation and that regulation. But I'm also grateful for the opportunity to be that specific and to be able to research in that level of detail because the decision does affect the entire state. And so I think that importance is not lost on anyone in the commission. And so while things can be done in the slower manner, understanding the gravity of the decisions that we make I think can sometimes slow things down. Just frankly, yeah. Good, I thought you were going to tell me that really sharp lawyers can just get it right through. Really sharp lawyers can but they might be so sharp that they're cutting corners so we try not to do that. Okay, so we're almost at the end of the show so I want to leave you a couple of minutes to say what you want to accomplish in this new job and what you think you'll walk away with in terms of experience and knowledge. When you move on to be like governor or president or king of the world or whatever it is. This is recorded, Sam. So when you move on to whatever and I'm not saying you're going to beg from PUC but I know that you'll contribute as for certain you'll contribute and you'll learn. So what do you expect? I certainly don't know what I'll walk away with and probably because I'm so happy to be there that I'm not really contemplating walking away just yet. But what I'm hopeful to learn is to get a better understanding of really how we include community voice. And I feel like you've heard me talk about that a lot. But I think that's a genuine interest at least that many entities have, the PUC included. Understanding how to do that and how to do that in a way that makes the majority of community members who are interested in engaging feel like they are truly heard. I think that's a special part. And I've had some experience there and so I'm hoping to be able to bring that to bear. And I think that this commission is really interested in having a more improved engagement in that way. And then again, as I mentioned, just getting through things in a more timely manner. But also recognizing that we're in a really, really remarkable space, not just to be fast and be good and to be out front, but to really do that well in a way that reflects that we're here in Hawaii and we're in a place that has a history and we're in a place that has scarce resources but an abundance of other resources. We're really looking to make sure we honor communities and honor our commitments that we've all signed up for as being PUC staff or council or commissioners. I just feel like I'm at the commission in a good time where it's readily apparent that that is the overall intention is to really do good for the state of Hawaii. Great. Well that's outstanding and it's a very noble task you're at and I commend you for being at the PUC and I know they're gonna get a lot of good quality work out of you. That's the plan Stan. So thanks Rachel, thanks for joining me again on Think Tech. I know it's like your second home so. We're gonna wrap it up here and say aloha to Rachel and thank her for being here and explaining the unexplainable, the Public Utilities Commission in a way that even a former flyer can understand it. So thanks for your help today and for the rest of you we'll be back. I think we're gonna be taking a break here for a couple of weeks and coming back next year after the holidays so keep your eye on Think Tech and check on the schedule. We'll see you probably in a couple of weeks. Aloha.