 Okay Monday energy 808 the cutting edge and wow do we have a guest this morning we'd love to have you on the show Jay Griffin he's the chair of the PUC so nice to have you here glad to be here again thanks Jay thanks Marco Marco why don't you make introduction okay on Jay and you and remember this is only a 28 minute show yes I'll try to keep my appusiveness under control here well first of all fantastic to be back with Jay and Jay my blood brothers from different mothers and yeah it's always such a treat to get you Jay and Jenny and hopefully Leo sometime into the studio as well to come and talk turkey and tofu with us here and yes doctor James Griffin known to his friends as Jay has been up with the Commission now for about two years by my recollection and became chair in the past month and the gov couldn't have made a better choice so again I'm just so pleased to have have you on the show Jay and thank you so much for joining us so Jay you know chair I don't think we talked to you just before you were reflecting on that before I came here yeah so this is this is an important moment for us and I you know I just wonder I had my my personal image was that it was it was clouds there and the clouds opened up and a beam of light came down through the clouds and then you would share how was it what happened that day it's pretty pretty simple I got a phone call from the governor and he said I would like to designate you as chair and things pretty much rolled from there yeah I've been something that been discussed a little bit but I think it was in the middle of the overall transition of the administration so there are a lot of big important decisions going on yeah and that was one of them that you know it happened at a good time and gave us some continuity as Randy's Randy had retired at the end of the year and so early in January the governor made the call and then what I want to talk about two months later he ultimately made the decision to fill Randy's vacancy with Leo and so you know one of the big changes is the new leadership new composition of the Commission I think we have a great you know I'm proud to serve with my colleagues as well as our staff but our kind of dedication and focus is still the same we want to move the agenda forward and be an effective regulatory agency so we're we're no change there but you have an additional duties responsibilities as the chair what are they sure they're pretty expansive ultimate executive management responsibility for the agency are but I try to carry those out as a team again working with our my fellow commissioners as well as our senior management staff basically responsibility to represent us in the media and the legislature with other stakeholders and government agencies so big a lot of time spent managing the legislative affairs and a lot of time you know looking at our dollars and nickels making sure we manage our budget we do oversee a number of different programs like energy program but also what one call center or excavators don't have to make sure those things are all going smoothly too and bills get paid fair enough it's like the Chief Justice Supreme Court it's a parallel similar I don't know if I want to quit but yeah I mean I think beyond you know it's a big weight when your decision-maker is a commissioner it's a whole nother level of responsibility being the chair now you know we always wonder you know both on the Supreme Court and the PUC whether the chair has greater greater weight somehow in the in the in the decision process is that true one level no I mean we all have equal votes in our decisions and orders but I think there is a I mean I know my feeling working with the chair before you know you do have some deference or when they want to set a direction and particularly in their management at the organization I think that we try to refer to the person responsible give give advice sounding board but so I think there is a little more I mean I think you get the ability as I said that direction and established priorities but you know we're very much trying to do that collaboratively and in that regard I mean I just wonder I'm sure you've thought about this as the chair perhaps you look further down the road perhaps you you are you have to have a larger a larger picture you have to be in more of a planning years ahead kind of am I right about that absolutely I mean I think of it in two ways gotta think about how is organization I mean are we gonna be successful during my term but in some sense even more importantly how are we setting up our successors to be successful also and so I think that you know that gotta think about that a lot of particularly a lot of our internal decision-making management of the organization but as well as our regulatory decisions well you know to me one of one of the big things in my legal life is always looking for decency and you haven't changed at all you're a decent guy oh it hasn't it hasn't gone to your gray hairs okay but your shoulders are not yet hunched you don't seem to be carrying the weight of the world you seem to be the same you know gentle good-natured fellow that was here before I appreciate that and I attribute that to our staff who always amazing help my colleagues as well as my processors that is up to be in this position that being said Marco let's talk about some cases and issues can we without without going outside the bounds of this discussion and just staying away from stuff stuff that is you know protected by ongoing process so what's I guess Marco why don't you take the question about what's new in terms of the let's see the prior we covered that oh who know what we should talk at least about how that fits in the larger framework why don't you frame the question mark up sure so as you I'm sure could expect she you know who on Noah has a particular interest for me and that is on the big island where I live and as far as I understand at this point the 2017 decision that the Commission made to approve that power purchase agreement has now been formally but not mistaken been remanded back to you and the Commission you and Jenny and Leo and the staff our Supreme Court has made clear what I can tell you the Commission was not taking into account greenhouse gases climate change and effects on environmental quality that this power plant would have if it were to go online so what is got me thinking since it was announced by a five five to zero decision how does a regulatory body in this case the white PUC or any regulatory batter body for that matter how does the regulatory body operationalize these values as they were stated by our Supreme Court how do they operationalize these values into the decision-making process which you and your fellow commissioners will be engaged in in order to come up with a decision that all follow-up I well I think a couple of things so as you know now as you know the decision was formally remanded leave us last week decision came down a few weeks ago it was unanimous so I think the command and so our prior order has been vacated and remanded back to the Commission for further proceedings consistent with and I think the fundamental key and I'm gonna miss quote the statute there's a section of our part of statute saying the Commission needs to explicitly consider quantitatively or qualitatively it gives and it gives a number of different factors but one of them is greenhouse gas emission and so what we were no found is that our decision did not correctly do that we've read the order carefully and I think pretty soon you'll see that we will reopen things and lay out how we think we can meet the statutory requirement for reviewing those factors we've had a number of decisions or think a couple now where this has come up and so we're I think we're learning as we're going I think is my honest answer and we're gonna when we reopen the proceeding will lay out how we think we can review these issues well within you know given the direction of the court and what the statute says but I think that you know that order coming from the Commission should be soon I can't say much more at this moment to respond and to indicate correct I mean it was unanimous decision is we heard it loud and clear and we will carry forth as such was just a surprise oh I don't know if I wanted I mean I we're gonna I mean we've read it clearly and we're going to you know all exactly what the courts told us to do that's my we were told that we're you know had not so you know and not followed our own statute so do you know Jay whether any Commission's any comparable bodies on the US mainland have already chewed on this particular set of issues in terms of quantitatively or qualitatively factoring in clean air greenhouse gases environmental quality into some type of decision-making framework in other words do you believe that you guys have any guide any insight of this path already being walked by Commissioners on the mainland are you guys gonna be walking new ground you're reading my mind cuz I'm getting geared up for our neighbor because the National Association of Regulatory Commissioners we meet three times a year next month there's a meeting in Indianapolis and that's the exact question I'm gonna pose to my colleagues that sit on the team subcommittee to my and I my initial read on that is that I'm not aware of another Commission that goes through this kind of analysis and it's pretty broad if you look at the statute on the types of decisions that possibly covered I'm not aware but I can say that we've been looking at I mean there are there are I mean there there is a pretty established body of analysis on how to look at greenhouse gas emissions from projects like cycle emissions you know it can get complicated but that kind of analysis is has been done for a while now but whether how it's factors into regulatory decision-making not as aware of other places that I think we'll probably have to do it to the extent that we do this will that be important meeting for you just get to handle on what else is going on elsewhere yeah it's always they're always great meetings just to kind of pick the brains of your colleagues sitting in a similar position Marco can I ask Jay a couple of questions on this if I could just follow up and I'll turn over to you my friend Jay Piedale my kind of cloudy crystal ball Jay Griffin indicates that a decision on who I know is probably not going to be forthcoming until late this year or early next year given given all the factors involved do you think that's the more or less accurate observation from my cloudy crystal ball your crystal balls cloudy but it's probably better than mine well I mean let me step that back for a sec you know we can there's certain we have some ability to influence I mean we set the schedule but there's parts of that that are out of our I mean things that are some aspects are out of our control but it's I think one aspect that is pretty clear is that we're going to need the whole we would expect to hold an evidentiary hearing and those take time to gear up for and to receive the transcripts and shoot a decision from so I think would that be on this violence the hearing or hearings I don't think we have stay tuned but I think what at least what I can say is I think we're cognizant of the fact of the communities where the projects take place but I mean the other fact is that evidentiary hearing you know it will be you know for the parties to the docket it's not the same as a public hearing okay but I telegraph I mean I like I said we're yeah I think one thing that I really heard loud and clear is I was being confirmed that our we don't want our commission to be a Wahoo or Honolulu centric you know we have a statewide impact and don't understand how particularly these some of these projects affect local community okay thank you so this is a this is an environmentally oriented Supreme Court I mean this is this is the court that that made TMT go back to the drawing boards this is the court that stopped the super ferry I know that was a few years ago but it's essentially the same court and I wonder if you see in this decision a further trend around environmental considerations a further trend to drill down on vague statues like this and as you said relatively vague statues like this and I'm sort of refine them I put more teeth into them more specifics into them as you said we're all learning together on this but is there a direction of the court do you think on this kind of issue I probably I don't want to speculate too much on a different body I think my message was a little different this this particular decision was unanimous tells you something so I think it was pretty clear where you know what you know it wasn't just different well everyone everyone clearly saw that we had not followed our own statute so that was so what we're taking in the appeal I guess it was an appeal from and life of the land was involved as the appellant and and then somebody had to represent the state the state's interest I guess and that was the state attorney general I suppose yeah the G's office so what was their position and in opposition to you you recall what they were arguing on this on this very point at the court on the decision yeah I think well what was generally argued and was in in our earlier decision is that by approving a renewable project we're furthering the renewable portfolio standards and by extension that addresses a number of different environmental concerns I'll probably misstate our own position but I think that that was the line of argument and I think what the court came back and said is well your statute here is very specific on elements that your decision-making needs to follow we did not have an explicit section of the decision disgusting greenhouse gas emissions and though we were in violation of our own statute but my my my first reaction when I heard about this was well they're talking about a provision in the opinion in your decision but that doesn't necessarily mean that you did not you guys did not consider the very same subject matter in reaching that so this is necessarily I mean if I'm too close to you know where you are these days we read we we take the decision it was a very loud and clear message to us and you know we're gonna go forward you may have to take evidence oh yeah I mean I think we definitely have to take evidence grabbing that there will need that there will have an opening order or order reopening describing what you're gonna do yeah we've been I will been thinking about it pretty hard sure and and right now the I say the jury's out you can't say exactly how you're gonna rule the next time no that'll be interesting Marco you want to follow that yeah energy 808 will follow what happens that's what I mean I think we understand the importance of the specific decision the project on the big island as well as the relevance of the decision across a lot of other types of projects but if you look at it statue talks about great making in general and capital improvements that utilities make so important decision yeah got enough on your plate the next thing we want to ask you about is is PBR Marco let me ask you to frame that question okay sure so I'm looking at my crystal ball again and I'm seeing this image of there's no more important docket currently before the Public Utilities Commission of our wonderful state and the performance based regulation docket and I wanted to ask you Jay Griffin kind of give us a brief update in terms of where we are with this important docket and it's kind of a softball question of how important is it for you all and that's all to get PBR right well on this one year crystal ball is is spot-on this is our number one priority both and I think there's a couple dimensions to that one is just the broad impact of the things under consideration and the you know the footprint of affecting all the different wine electric companies as well as the complexity and the complexity of the issues that are before us so we we have devoted a little over a year now to the phase one of that process and that was intended to really revisit the existing regulatory framework broadly we hosted three different workshops taking feedback from the parties our staff had produced staff memos and reports priority to one write-ups in early early February they produce a staff report summarizing phase one and laying out a proposed decision framework for the Commission a little while ago I think it was about a month ago I'm I'm flies we issued a decision order from the Commission largely adopting most of the elements that were in that staff report and we're gonna spend what's now phase two working through the details and we're we'll have another decision forthcoming laying out the time frame for that but I think I want to reiterate a few things one you know this we've invested a huge amount of our internal time and resources to supporting this and we've and we've needed to do that for the reasons that I stated but also to make sure that this was a I want to say at least collaborative process among the stakeholders there was a lot of concern that this would turn into a feeding frenzy and it hasn't today and you know we intend to continue to work in that environment that's great out of respect for everyone involved in the you know the importance of this matter to the state but we're also gonna you know the it is our number one priority to make sure that this continues to move along in a consistent way if it bogs down at the Commission and leaves our regulatory framework in a highly uncertain place that's not in anyone's interest either we're gonna continue to move in a deliberative way but you know make sure things get the time and attention that they need that's the process part I can you know delve into some of the highlights yeah the phase one decision and so what we we identified a number of different areas of the existing regulatory framework that we're looking to make modifications to one is the general how should I do the general rate making approach and right now utilities file rate cases every three years utility one electric companies are on a one each company staggered by year so year by year by year we receive cases requests to increase rates from the three one electric companies these are huge undertakings there's thousands of pages of evidence material and we're based there they're proposing to us what it what they think it costs for them to run their organization and we review it carefully and issue a decision this the rate adjustment rate setting review of this would move to more of a formula based approach where five maybe basically we establish a certain level of allowed revenues and then those are adjusted annually by a formula it's a lot easier maybe maybe there's more certainty I mean once once all of those pieces are agreed to it's it's supposed to be set in place there's abilities to review and if not working correctly make adjustments but it's supposed to provide a more certain process and provide different types of incentives to the electric utility than it currently has particularly on this side to operate a little more cost efficiently second so that this is a I mean this is big there's you know billions of dollars the one electric companies roughly have a little over one well over one billion dollars in total revenue a year so every every over several years there's some big dollars at stake and so we've got to get that piece right and then we've also the second major area for review or performance incentives and metrics above and beyond what the utility currently has we've identified a number of outcomes and metrics to review and targeted three of them three new ones to develop performance incentives on and these are intended to be care or two or carrots one has a carrot and a stick aspect to it this is a really creative part I'm gonna go ahead and speculate I'm gonna speculate that we are 12 to 24 months out before a finalized PBR will have been implemented with Hawaiian Electric does that sound according to your crystal ball more or less accurate you think 12 to 24 months out I think we'll we're gonna weigh in on that shortly we'll have a decision in the works you know what we said in our our prior decision is in roughly a month or so we're gonna lay out the time frame and schedule for phase two okay but I guess what else it were we're not going to rush to address these things you know a few weeks ago the London economics report was rolled out by the Energy Office there was some discussion about it and I wonder if that plays any role in PBR that's a is that a separate docket is it a docket at all will it be involved in PBR so well you're right I mean the State Energy Office had included their report it was at the direction of the legislature and so that that effort was funded outside of our docket and I'm in the process of reviewing there's a lengthy report I've read the summary sections but trying to get intel the detail I'm still working my way through it but there was a major focus on performance-based regulation for the investor-owned utilities and I think they generally supported that as the preferred approach but where you know what the Energy Office does with it from now is one question and you know they're they're not a party to the performance-based regulation docket now but I think there's different ways that we can take notice of that effort but I'm not clear what they plan to do is follow up work now there enough we only have a minute or two left Jay and the last item we wanted to talk about time goes so quickly what's geothermal what's the status of this on a regulatory point of view and you know where where does it fit you know in all the things you're doing especially around renewables and dealing with public opinion sure I think there's a few aspects to it there I mean the moment the plan is offline they have an existing power purchase agreement in place they have an applicant Hawaii Electric Light Company has an application before us is part of their efforts to bring the project back online and what I can direct people to there's been an exchange of letters that we have on our web page utilities had worked out a rebuild agreement with Pune Geothermal Ventures sent it to us earlier this year you know making the claim that they didn't think they needed the regulatory approval we looked at the statute and pretty clear that construction of overhead lines require approval of the Commission and there's language in there saying if it's near a residential community hearing so we said you need approval to rebuild the line and expect to hold a hearing to support it we also high in our letter we highlighted the importance of the rebuild agreement and talked about renegotiating the existing power purchase agreement dollars and cents we stated in there we think that's important and hope to see that sooner than later and it's our understanding that those negotiations are underway at the moment so I think you know broadly speaking and last year as the project went offline it was a major concern to us also our back of the envelope calculations showed that no costs are going to go up on the Big Island by burning more oil and keeping the plan online that was a significant part of the renewable energy mix on the Big Island and statewide and it was part of the reason we tried to coordinate a response effort with white electric light company white electric and white energy which several different pieces came into place including expanding the RFP to add more new renewable projects you know so I think we tried to stay on top of the loss of the plant there from early on I was actually on the island the day the lava took over ill inundated the substation that's beyond the call Jay oh we had a rake case over there anyway but I you know I could see it happening and knew that you know this was a significant event both for folks on the big island and statewide we've tried to stay on top of it from then but you know at the moment we've got you know a number of different pieces in place I've I have friends that grew up in the lower Puna area and I'm there so I think there's in this different aspects of community sentiment for the project but so we're squarely in the middle which we tend to be on all these things but you know I think we're we will want to see this move forward on our watch also or I mean we have to and but so there'll be a hearing coming up we don't have a time frame for that yet and expect to get a renegotiated agreement before the Commission also a lot of meaty issues these days oh yeah never a dull moment but always fun Mark I why don't you close well so many so many so many so many juicy stuff juicy things to talk about and it seems like we just get to start it and get up to full speed and then yeah my list was longer I brought my list in here but I have to come back we'll come back and I take I'll talk to Leo when I get back in the office if we can get him on the show too I'd be great been a great great yeah thank you Jay Griffin the chair of the PUC coming down and talking to us we really appreciate it thank you guys thank you thank you very much hello