 Bingo! Here it is. It's a 12 o'clock rock on a given Monday with Marco, Mina, who is not here, and me on a Monday talking about energy on a Monday. Welcome back to the show, Marco. You rock, my friend. I can think of a better place than time to spend with you and the two of us. And, Mina, if she's able to join us then every other Monday and talk about the rock and rolling world of Hawaii energy. You bet. That's what we do. And we can rumble and ramble around and find material that lasts and lasts and lasts. There's always something new. Let me just say that the Clean Energy Day program on, what, August 16th last week was very good. And we had a lot of speakers and they were, for the most part, they were candid. And they, you know, they, I think a lot of them told it like it is. And that was good. David Ige spoke, Randall Iwasse spoke. A lot of people in the energy community spoke. And I think, and of course the utility was there and spoke. And Sharon Moriwaki and Mike Hamnett gave awards, six awards out for transformational achievement. And it was one of those coming together kinds of conferences. So I think that adds value and it's probably at least my observation. It's the best energy conference at least that goes on in Honolulu. And we're going to keep doing it on a regular basis and you should come, Marco, next time. You should come. I'll get you involved, all right? Well, thank you. And I have a deep and profound philosophical existential question for you, which is, what is the meaning of is as far as you discussed what is going on energy-wise? I mean, what is the definition of is in that sense? Well, there were, I'll answer that by telling you there were, you know, panels on how things are moving. And I think everyone agrees that the next era deal, you know, sucked the oxygen out for a while. That now we're faced with putting more technology on the grid. And Juan Electric said they had a bunch of new boxes they were testing. I hope the tests are short and they get out there in the field. That's going to take some cash money. There was a lot of talk about storage. We had a panel on storage. And that was very interesting because now everybody agreed that batteries were the solution. Batteries have their limitations. Of course, Stan Osman was talking about hydrogen as a transportable storage device. And of course, there was a lot of discussion about exactly what the technology is in batteries. And PS, there were a number of articles here in the last couple of days on the MIT technology energy review about the new batteries and the taste for batteries and so forth, which I would like to use as a starting point for discussion of electric vehicles. And finally, we had a panel on transportation where the State Department of Transportation told us about all the things they were doing off the highways to be efficient and clean energy. But there's not too much happening on the highways over fuel or cars. And that's really a problem. And finally, we had a wrap-up panel where Rick Rochelow was very interesting. He's my favorite energy scientist for sure. Him and we had Mark Lick there and Kyle Data of Uluponu, all very candid. And I think what Kyle said, which was a closing remark on the thing, so I would leave you with Marco, is he said, you know, we haven't talked about the limitations on the technology. In this discussion, we have assumed that the technology will take us wherever we want to go. So now it's a question of getting our act together and using the technology and getting on board with it. And I think he's right. And that distinguishes this panel, this program from other programs in the past where we wondered about whether the technology would take us there. I think we all agree it's available. It's out there. It's just a matter of getting our act together. And I think one interesting thing, let me add this one point came up in the colloquy, that is we have, you know, a few simple things and they present as a kind of, at least a pro forma solution. Number one, we have solar. We have an interest in solar. We have political acceptance of solar and that's good. Two is people are not jumping off the grid. They're staying on the grid. One speaker, you know, talked about how he got off the grid and then he regretted that. I was very interesting. A guy who writes for Civil Beat, a fellow named Eveslin, E-V-S-L-I-N. And, you know, bottom line there is that we have interest in storage. We have a certain technology in storage. And I think we have really all the elements and we know what a smart grid is like. So if we put all that together and make it better and better, we'll have what we want. We'll get there. Because you could generate an awful lot of electricity with the solar panels. You could store a lot of electricity with the batteries. You can handle the peak hours with the batteries. And if you put enough money into it, I'm talking about billions, you'll be able to replace the whole system with solar, both residential and, you know, scaled up, utility scale. Smart grid for, you know, demand response. And, you know, these batteries, we could do it. We have it all there. It's all there. It's just a matter of making our minds up. So that's my takeaway from the program. Well, thank you. And I would appreciate it, hopefully, in this conversation if you would share a little bit more about why this individual who went off grid decided that it wasn't such a good move. But let me, I'd like to respond to a couple of things that you said, which is I've taken what I consider to be quite a deep dive into residential energy storage, residential battery storage over the past several months. And I can tell you, Jay, that there is a substantial, a substantial where the capital asks, if not the whole thing, capitalized. There's this substantial disconnect between what one hears at conferences, what one reads in MIT journals and other parts of the popular press, and what is available here and now at what price here in Hawaii for residential energy storage. And the reality is, and I tried to make this point in my piece on the Star Advertiser last Wednesday, the reality is that the actual choices to homeowners today, I'm not talking about when the gigawatt factory in Nevada Desert is completed in turning out product, or other future dates, but today and in the weeks to come, the choices to the homeowner for residential storage are limited and they're very expensive. As a way of comparing, let's say, a battery less system, no batteries to a battery-based system for no export connection to the grid where no surplus power essentially, or little to no surplus power is permitted to be fed back into the grid. If you take a five kilowatt system, this will make the math really easy and you're installing it at four bucks a watt, four dollars a watt with no batteries. That comes up to $20,000. If you're putting in adequate storage for such a size system, given the usage pattern that we have here on this day, which is less power consumed during daylight hours from eight to five more power consumed between five to ten p.m., you more or less double the cost from $20,000 to $40,000. And that is going to be a huge hit on those consumers, those homeowners who have yet to go solar who may still want to go solar. So again, the disconnect being that the options and the technologies and the hoopla and the spin and the buzz and all the wonderful hype words and phrases that people like to use in the energy business that just is disconnected from the practicality and the affordability and the availability of the options available right here and now. And that's of great concern to me. I agree with you. And it should be of concern to the large number of people who cannot afford $40,000. But it isn't a surprise. It isn't a surprise that the batteries are going to cost about as much as the panels. And that doubles the price for those people who can afford that. And by the way, many more of them could afford that if the state renewed the solar tax credit, which I think the state should do to encourage the progress in this area with that and the utility doing it on the other side with solar farms and large scale facilities and community solar also. And I'm not hesitating here. Put billions of dollars into batteries. It doesn't have to be all in one day, but over time, and then retire the power plants, we'll have a system that works that will be all renewable. And yes, it will cost money. It will cost money on both sides of that equation. But there's no surprise. Retiring the power plants costs money. Putting in high tech, putting in new infrastructure, making the whole thing independent of fossil fuels was never going to be cheap. And I don't know where people got the idea that this was going to be cheap to adopt new technology around the state, to transform the system. I think we should all be very realistic about this and understand it now even if we didn't understand it before that it's going to cost a lot of money. So I don't think anybody's fooling themselves about that. I think it will cost money. And the people who think, oh, it's going to get cheaper and cheaper, it's not, not in a short term, not in the intermediate term. It's going to cost billions to do this. And we've got to do it. No question. We've got Madeleine coming down on us. It's been raised to a class three storm. It could put the lights out. And the guys with solar, the guys who are, if not off grid, there aren't many of those, but independent of the utility for electricity, at least during the day and maybe even during the night, those guys are going to be in much better shape than the rest of us. We've got to be resilient. Climate change is going to give us Madeleine after Madeleine. And we've got to have this ability. It doesn't matter what it costs. Oh, it doesn't matter what it costs. I mean, you're talking like the federal government, like you spend a heck of a lot more money than you're actually taking in. I mean, I think it matters tremendously what it costs and it matters tremendously who's going to pay for the cost and under what terms and over what length of time. And I mean, we are going in the right direction. I'll just put another plug in for my friends at KIUC. I mean, they're moving forward with their third utility scale PV project that will have dispatchable power, battery power. Yeah, 15 megawatts. I was very, I'm always impressed with Dave Bissell. I'm always impressed with him. He talked about that project. And one thing he said, you know, he took his cell phone out in the middle of his remarks and he said, hey, I got lithium ion in my cell phone here. But I know that a year from now, my lithium ion is going to be about half as good as it is today. I know that if I buy even the best batteries made today, they're going to lose their, you know, they're going to lose their ability to hold the charge in a year or two and they won't be as good. So I have to know that going in. I cannot make any false assumptions about what batteries can do for us or about how long they will last. He's right. And he and KIUC go into that whole program, which I agree with you is very successful and they are really smart guys and they have great relationships really unbalanced with their community. But they know going in that there are issues they're going to have to, and that sense of reality of being realistic about things, very important to dealing with their customer base. And I mean, for what it's worth, I mean the company that they are dealing with for their third project is Solar City. Solar City, which loses more money quarter after quarter year after year and has never made a penny a profit ever since they became Solar City years and years ago. So I mean, there's this odd, odd disconnect in the sense that we have some of the more innovative companies, solar companies out there, that are pushing the frontier, the boundaries of the frontier in terms of storage and in terms of innovative means of finance for solar systems, both residential and commercial, and yet they've been notoriously unprofitable forever, the forever being ever since they have incorporated and started doing business. So I mean, how much longer, how good a business model, how reliable, how solvent a business model is it when we've got these monster solar companies from San Edison, which declared bankruptcy back in April, two companies such as Solar City and other major financial development companies, solar development companies, which have never ever been profitable. So I mean, I don't want to diss Solar City too much here because I take my head off to them in terms of what they are doing, what they've done on the island of Kauai. But this is all coming at a tremendous cost in terms of losing their quarter Q2 losses whereas over 250 million with an M, $250 million just in one month, one quarter. Well, limiting it to Hawaii for a moment, one of the things that came up at the conference I thought was really interesting is that if you have this RFP process and the utility is out there looking to essentially buy renewables from developers, the developers make bids, they all make bids. And one of the factors they put in their bids is a factor that covers the risk. What risk are we talking about? Aside from the ordinary business risks, the risk of doing energy development here in Hawaii is the risk of permitting. And also I guess the risk that the utility will cancel your deal for some reason. And so you have bureaucracy and uncertainty all around and any self-respecting energy developer is going to build the risk of those uncertainties into his price. The result, of course, is his price is higher. And if his price is higher, our price is higher. If there weren't so many risks, if this was all sort of settled down and the developer would know pretty much what was going to happen and could be confident about the permitting and the solidarity of his contract, he would bid less. And if he bids less, our price is less. So I don't know if it works that way in the mainland but I think here one of the reasons we're paying so much for renewables is because of these bureaucratic uncertainties. We have them in all areas. That's why housing is so expensive too. You don't know when you're going to get your permit. If you ever get your permit, you may have to, you know, one Castle and Cook project took 40 years to build the project out in Mililani because they had to go through all these gauntlets. And the result, of course, was the housing was far more expensive than it might have been. And I think the same rule applies to energy and that's too bad. If we addressed that on a governmental level, we could fix it. Or at least in part we could fix it. Don't you think, Marco? Well, I think you're absolutely right and I'm just kind of harked back to, I don't have the latest reports from Moody's Fitch and S&P standing in pourers right in front of me, but my recollection is whenever these rating agencies most recently do seem to come up with analysis as far as the energy situation here in the regulatory environment that one or more of them has been noting the uncertainty in the regulatory environment, which has, like you were talking about, notes the risk involved in terms of doing business out here. And I mean, next year I certainly learned the hard way after being invested here for, gosh, you know, more than two years and we know how that turned out. So there's a tremendous amount of risk and I get it. I mean, you want to factor that in in terms of coming up with pricing just to kind of round out, just to go back briefly to residential storage. My rough estimate, Jay, is that the cost of residential storage needs to come down somewhere in the 70 to 80% range, 70 to 80% compared to what we're seeing now, people like me are seeing now as far as what providers are offering for storage right now. It needs to come down by, you know, three quarters or so in order to really hit more of the mainstream. I believe, I really believe that will happen over time, but it's not going to be on a month-to-month or month-over-month basis. It's going to be more incremental and I can only hope that there will still be enough, enough of a PV industry here in the State of Hawaii to be able to stick around long enough so that when those prices do come down as they ultimately will by that kind of margin, which I pretty much hopefully do, that we'll still be around to... Yeah, that's so true. I saw that in your article. I certainly agree that whatever is happening, it's deteriorating the PV install industry and that will have an effect going forward because they won't be around anymore. But speaking of which, we're not going to be around for one minute. We'll take a minute off, Marco. Marco and me can take a minute off. We'll be right back. You'll see. Aloha. I'm Richard Emory, host of Condo Insider, a weekly Thursday show at 3 o'clock that goes all summer long talking about issues living in a condo association. Each week, we bring experts to talk about the rights and obligations of owners and boards of directors to successfully run their condominium. It's a great educational show. It answers a lot of questions. We hope you'll visit us sometime. Aloha. Aloha. I'm Chantal Seville, the host of The Savvy Chick Show, which you can watch every Wednesday at 11 a.m. on thinktechhawaii.com. On The Savvy Chick Show, we are all about inspiring and empowering women and girls to be the best they can be by having amazing guests from all around the world. So we hope you'll join us every Wednesday at 11 a.m. Aloha. Bingo, we're back. Marco and me on Monday talking about energy. That's energy with an IE, right, Marco? So we're going to talk now about the end of that case. And I guess the question is whether it's really the end of that case. So Meena Morita, you know, brought an action to, I guess, for a declaratory judgment or set aside the appointment of Tom Gorak and the circuit court judge who heard that didn't take very long. I thought he might wait, like until December or January, and that would have made it moot because the Senate by then had an opportunity to confirm. But no, the judge decided within a couple of days that the governor could make an interim appointment and it did not require anything special because there was some reference to that in the Constitution. And it leaves me wondering about what the word qualified really means in the statute. You know, it's supposed to be, you know, you can't seat anybody until it's rather, that Mike Champley would not leave until his successor was both nominated or appointed and qualified, quote. Qualified is an unusual word. It's not the same word as consented to by the Senate. And I think the government took the position that the word qualified meant that he had the qualifications. But I can't buy that because that means the same fellow who appoints the member of the commission also determines his qualifications. You still need a third party to determine qualifications. And presumably that would be the Senate. Nevertheless, the decision was to confirm Tom Gorek as an interim appointee with a full authority of a commissioner. What do you think, Marko? Well, yeah, it was pretty darn quick. It was, Jay. I mean, Thursday, Mina had her proverbial day in court and Friday, the judge issued his ruling. Certainly didn't waste any time. The two-part ruling that, as I understood it, was one is that I think he ruled against her standing to sue that she did not have standing to sue. And second, substantively, he ruled that the governor was, in fact, within his prerogative as chief executive of the state of Hawaii to be able to do what he did. So Mina's choice at this point is to decide she's played it as far as she wants to, or to appeal. And I believe that the appeal would be not to the intermediate court, but directly to the Hawaii Supreme Court. And then, of course, if she were to do that, it would be up to the Supreme Court whether to even hear it. And if they did, then they would rule on it. So I'm too bad we couldn't get Mina to join us today because she'd be in a better position to address this, but that sounds to me that's the decision before her at this time. Yeah, and the standing thing really sort of gets in the way because, well, I have two reactions to that. One is the Supreme Court, if it ever got this case, could deny an understanding and without even getting to the merits of deciding any law. The other reaction I have is that, well, if Mina Morita doesn't have standing, if she doesn't raise any special standing different than you or me, it doesn't matter that she was former chair of the PUC, that doesn't mean anything, not in the context of standing. But then who would raise this? Suppose there was a good and wonderful argument in favor of striking the appointment. Who would raise this? You and me couldn't do it under this ruling. Who could do it? I gotta believe that if Mike Champley, who lost his job, not because he wanted to lose his job but because his term expired, I think Mike would have, would have had standing, would have standing both past and present to challenge it if he so chose. But as far as I know, he's made no move to do so. But I mean, it seems to me that he would or at least should have standing if he chose to do so. What about Consumer Protector? What about the government agency? Not that this would happen, but the energy office in D-bed. See, the problem is that they're all part of government and government is the one who did this. Government is the one who made the appointment. So it's unlikely that government agency would go against its own appointment. So if an individual citizen doesn't have standing, and Tom, rather Mike Champley, doesn't want to come around and take a position on it, take that position on it, there's really nobody practically speaking who could. Well, conceivably, Che, think that out for a moment. Conceivably, perhaps the Senate could have, if they wanted to, but interestingly they chose not to and instead filed an amicus brief, a friend of the court brief in support of Mina's position. I actually read that over the weekend. The Senate majority, number one and number two being led by Senate President Ron Cochee from Kauai. So the Senate majority attorneys filed an amicus brief in support of Mina's position. So I guess I'm thinking, because it's kind of loud here, not being a lawyer, that if the Senate instead of Mina had chosen to sue, that perhaps they would have had standing to sue because they could have argued that the governor was stepping on their toes, their powers in terms of qualifying a nominee for the commission. I don't know that much about balance of powers. Certainly there's a balance of powers question here. It's constitutional in the sense that one part of government may be violating the powers of another part of government. But I'll tell you one thing, I've never heard of a legislature or one chamber in the legislature suing a government body. That would be the first time, at least in Hawaii, that I've heard about that. Well, I think on the national level, I believe that there have been lawsuits by either the majority in the U.S. House of Representatives or the majority in the U.S. Senate. I mean, I'm not a legislative historian, but I believe it's not completely out of the realm of one branch of government, either the executive or the legislative branch suing the other. Okay, sorry, I'm not an expert in that. But let me add that they'll have their voice. They'll have their voice because soon enough maybe, what, 90 days, 120 days from now, they will be able to obtain consent of the Senate. The very same consent. And if they don't like Tom Gorak, then they won't approve him at that time. And it's hard to stop that if that's what they want to do. Although on a substantive basis, I'm not sure there's a lot of good reasons, aside from the appointment process itself, to deny consent for him to sit as commissioner. And I think I read something, this has gone just back to yesterday, seemingly a long time ago, read something yesterday regarding these proceedings that Gorak would conceivably be the sitting commissioner, the interim commissioner through the whole session, which doesn't end until the first week or so of May. So I'm not sure how that works. I saw that too. I think that's the law in the Constitution. They get to consent. The person appointed, and I don't know if it supplies to the PUC, but in general, gets to sit until the end of the session. If he's not affirmatively confirmed by the end of the session, then his nomination is not valid. Anyway, we're about done, but I do want to make one comment before we close about the article you sent me over electric vehicles standing for the proposition that things are going to happen faster than you think. That the technology is moving so quickly, and people in general would like to see electric vehicles, you know, avoid range anxiety. And of course, the wild card is the automatic vehicle, which by the way started operating in Singapore this week. How do you like that? They're ahead of us. But all this technology moving so quickly that I think that we may be on a roll here. We may find electric vehicles are coming around the corner at a high speed, and we may find that the next time people buy them, there'll be more charging stations, more of them. There'll be 200 mile range, which is pretty good, like a tank of gas, and we will be going somewhere. It's happening. I think it's actually in a funny way, it's reached critical mass. It's no longer an infinitesimal percentage. It's an infinitesimal percentage with large prospect for growing. What do you think? I think the magic numbers are 300 in terms of a standard range, which Tesla can hit if you're willing to spend over 100,000. That's 30,000 or less in terms of sticker price. And third, which is something you haven't mentioned, it'd really be great if we had a company that was selling these vehicles that was profitable, that we could have some confidence was going to be around for the duration, duration being at least more than a year, two or three. I think it's exciting and once we start seeing vehicles that can have that kind of range and do have that kind of price tag, I think that is going to be a very big deal, but we're not there yet. And I keep on going back to being the owner of a small business that can't afford to be losing money year after year that is going to be very important to me that vehicles or manufacturers are going to be able to be sustainable over time and make a reasonable profit. I agree, they'll have to make a reasonable profit and it may not be an American company, it may not be Tesla, maybe somebody else who can do it cheap. Tesla says they can make a car with 200 miles plus for $35,000, that's what they're on to now. But I suggest to you Marco that maybe we'll have that plus an automatic car which will really develop interest among the driving community and I think that will catch on. I actually think if you marry the two elements together, electric and automatic together, it would be irresistible assuming the regulators allow it to happen like it's happening in Singapore. And furthermore, let me suggest that if it doesn't happen by a company in the US, a US manufacturer there'll be somebody in China who does this they're probably working on it just as hard or harder than we are and they can put it together and presto they'll be all around the world before we get out of the starting gate. So we really have to push on it. Not only the people who care about renewable energy not only the public, but also the energy, rather the automobile manufacturers in the US including Tesla and the investing market. How about that? Well one of the major players in China is BYD in terms of vehicles in EV and I know that they're big in China they don't have anything close to the Tesla range and of course the Chinese have shown over decades that they can be very how we say imitative imitative in a not a pejorative sense, but I mean they do a very good job of copying and doing things that they copy cheaper and of course I get some in all kinds of trouble sometimes in terms of trade wars and so forth and allegations of dumping and so forth and so on but I think you're absolutely right that if Tesla's not able to make a profit and I really do hope they make a profit sooner rather than later and I think it's out there who will be able to learn from what Tesla's doing right and what Tesla's perhaps not doing so right and come up with products to be able to make it much more mainstream make electric vehicles much more mainstream and I think we make the combination here in Hawaii of more EVs that are powered by renewable energy sources and we're going ways to hitting that magic 2045 goal of 100% renewable and power generation hopefully off-sitting a lot of imported fuel for transportation so amen to that brother yeah I got one more point you know the recently Uber entered in a partnership I think a 40% interest in its competitor in China a competitor that does Uber, taxi cab kinds of things a smart move instead of fighting mother nature they went along with it and now are in a capital concentration together with the competitor what will rule the day in China on that kind of business well this could happen too, Tesla creative guy he could get into a joint venture or some kind of partnership with some other company in the world bail them out of any financial issues find new technology, new innovation and maybe the answer ultimately for this marriage of the two technologies will be a capital concentration that is on global scale you can do it and that would create a global market right away anyway Marco we're out of time so thank you so much for joining me today as always I look forward to talking with you in the interim and two weeks from today I look forward to having another conversation about all the things that are happening in clean energy here and everywhere else you are my rock to my role okay