 Bingo, it's 11 o'clock and 30 minutes, and I'm Jay Fidel on Think Tech, and this is Hawaii the State of Clean Energy, and our special guest today is Randy Iwase, he's the chair of the State Public Utilities Commission, and again, we welcome him to the show. Thank you for coming down, Randy. Well, thank you, Jay. Thank you for having me. The POC is very important. Energy is important in Hawaii. It's probably the most important thing we do, the most important initiative. It affects everyone, it will affect everyone, it will affect the economy of the state and the future of the state, and at the center of that is the quasi-judicial agency called the Public Utilities Commission, and Randy Iwase has been the chair of that agency, and some really interesting and important things have happened, are happening, and will happen going forward so as to shape our future in energy, clean energy, and everything around us. So it's very important that we talk to you from time to time, Randy, and I hope we can see you through the year 2017, but for now we're talking about reflections on energy in 2016, and I want to ask you, you know, what has happened as far as the POC is concerned in the last few years? Would you say it's different now than it was when you took over? Would you say there's a dynamic where it changes, you know, with changing times? How is the POC organic, and how does it organically reflect the changing times? Well, I can tell you what I have been trying to do over the last two years, is to get people to understand that the process at the POC is not a political process, it's not like getting a bill passed. You don't run around and you lobby people, it's an adjudicatory process. Just as you don't lobby judges, it would be inappropriate for people to try to lobby individual commissioners who have to act as judges. And that way we are, you know, we are ruled by the rule of evidence. We have to make decisions based on the rules of evidence. And that's what we try to do and will continue to do. We did that in the next terror case, we will be doing that in the cases that come before us. Really with the uptick in interest in energy sustainability and renewability, the POC's role has become, in the investigative documents we have, much more of a manager of issues. It's not a contested case hearing to try to bring the parties together, all parties, the stakeholders, the utilities, to try to develop good sound vision and plans as we move forward in the area of renewables. So we're becoming a little more active, we have been since the inclinations, much more active in trying to develop that vision for Hawaii in the energy field. The inclinations, can you talk about that for a minute? What was that? And will you do that again? Well, inclination was really a response by the POC to a filing from the electric company, which was unsatisfactory about their vision for the future. And so the POC took it upon itself to write this white paper, creating a vision about what a 21st century utility should look like, what it should be, how it should serve the public. And we've been driving towards that goal, it is not specific, because we need the input of all stakeholders and the utility. We are dealing with it in the DER docket, distributed resource, the power supply improvement plan docket, the demand response docket, and the decoupling docket. And so now that the stakeholders out there know how we're viewing the world, how can we implement this? And those four dockets are going to be very critical as we move forward. Yeah. We'll talk about them. So I guess the question is, how has 2016 been for you? You started out in the middle of the next era docket, and you spent a lot of time, and we saw you on television spending a lot of time. We have witnesses already. That was really a remarkable, if not unprecedented experience for the POC. Can you talk about how that was and whether it got in the way of other things perhaps because of the number of issues, the amount of time? Well, when I started at the POC two years ago, we had about 32 staffers. We built up to over 60 now, with the attorneys filling the attorney staffing, the research policy, engineering, and compliance. We were not at 60-something at the time of the next era hearing. So it did have an impact on us. So we still had the responsibility to move forward with cases other than next era. Next era was a huge case involving a number of documents, highly controversial, well-publicized, and we did what we did based upon the rule of evidence, not upon what people thought should be done. There's a requirement in that case that the applicants meet a burden of proof. We determined that they did not, and I'm comfortable with that decision. I think we made the right decision, irrespective of what others may think, because I don't think the others read the 88,000 pages of documents, sat through 22 days of hearings, and review the opinions of experts. So yes, it slowed us down some, but it did not slow us down totally. Do you expect that this might happen? I know nobody has any information about it. I just wonder, in the larger context, do you expect this kind of thing will happen again, but somebody will come into town from the mainland and want to buy the utility? Well it's always a possibility, Jay. I mean there's talk about a co-op on the Big Island, and whoever, whenever that occurs, the process will be the same. You have to prove that you are fit, willing, and able to perform, and you have to show that this application is in the public interest and will benefit the people of Hawaii. That guided us in next taro, it will guide us in any other case that might come before us. There are suitors out there, I can't say, because that's not our role. But when and if it does happen, we'll be ready. Yeah, I mean, and I think the challenge, just putting myself in your shoes for a minute, the challenge would be you have to open it up, you have to be transparent, you have to hear all sides, you have to allow anyone, anyone legitimate anyway, who wants to testify, to come in and testify. At the same time, as you said, you have to be governed by the evidence. So it becomes difficult, I suppose, when you have a lot of loud noise around you, and you have to resist that. I think in a way, next taro was a good experience to demonstrate that kind of process. Yes, and it was televised on Olelo, and people saw what happened there. About the noise, the background noise, because I've been around a lot, because I was in the political system, because I'm not here to move forward to other positions. This is my last public service position. It was easy for me to tune out the noise, to recognize where it was coming from, to recognize what the motivation was, and to recognize what our responsibility was. This is not my first time heading an administrative law judge agency. I did that with the Labor Appeals Board. We had an excellent staff reviewing the matter, and it was duty-bound to make sure that we adhered to the process, that we were not going to let names, political statements, interfere with our duty to the people of this state, and that is to make sure that the applicant met its responsibility, burden of proof, and to... We looked very, very carefully at whether or not, in the totality of everything we had, this merger was in the public interest, and we concluded that it was not. So after, I think it was middle of July when you ruled, and... No, I think we... Yes, it was. I think it was toward the beginning of July. Beginning of July. Yeah, first week in July, I think. So after that, all of a sudden, the burden is off everyone. Now the storm clouds disappear, and we move forward. How would you characterize the rest of the year for the PUC, what's been happening? Have we recovered our momentum, so to speak, after next era was finished? Well, I don't think we ever lost that momentum. We have slowed down a little bit, but we kept moving forward, moving towards the vision that was set forth in inclinations, as they are being reviewed in the four dockets. In the year, in the past year, we created the transition program from the NEM program to grid supply and self-supply, so that there's greater responsibility in the kind of programs that we have. And then we also issued a time of use, a project that hopefully will get people to change their habits. That is very critical. We are working on now what's called community-based renewable, that was a legislative mandate, where those who cannot afford PVs or batteries, one or the other, or both, can buy to lack of a better term, for lack of a better term, an interest in the power production at a solar farm, or a wind farm, and get a credit on their electric bills. And that is still being worked on. There are some legal issues that have to be resolved, but we think that is also a critical component. Finally, I think it's important that the new administrator for Hawaii Energy, we've met with him. We are trying, and who is it, Brian Kaloha. And I think they're all buying in that we have to be more aggressive in energy efficiency. People forget that we have two goals that were set by the legislature. One was the RPS goal, a renewable portfolio, 100% by 2045. There was also an energy efficiency portfolio. To meet certain set, I think it was 4800, I'll forget what it was, I'm sorry, but by 2030 to reduce our energy, to improve our energy efficiency, and thereby reducing consumption of electricity by 2030. So it's a two-front process, I mean, two-front effort here, and we want to make sure that the energy efficiency side is very important, is pursued. And he certainly, you know, came out of the box running when he was appointed six months ago. Yeah. So what you have, all the things you've named that are in play for the last part of the year, say, you know, July through now, they all seem to be related, aren't they? You mentioned them as components in sort of a larger vision. And how do you handle that when you have multiple dockets, multiple initiatives? How do you bring them all together and make them work as one? Well, the first thing is to have good staff. And they are committed to that. They help draft inclinations. They know the goal and the push that we have. My role as a PUC chair is to assist in that effort and to lead that effort when necessary to keep pushing things forward. That is why we have the four dockets. In those dockets are not just the utility company, but all the stakeholders, including not just special interest groups, but also groups that purportedly represent the public. They come in as intervenors. They come in as intervenors or participants. And you know, more is less in this case. In the next arrow case, maybe it was too much and we had over 30 intervenors. But they are those who are the stakeholders in these dockets are very important to us. And I hope it is also important to the utility to hear. And I hope that they take the utilities, view them, you know, they can think of themselves a utility as having all of the burden on them. And it's a pressure filled thing of feeling to have. Well, the pressure is on all of us because we are going to share the air, we're going to share the power, we're going to share whatever the result is. We are all literally in one boat. We are in the middle of the Pacific Ocean. True fact. So, you know, explain to me, if you would, Randy, you know, a docket versus another docket. So do you, in a docket, when do you come to the end of it? And do you ever merge them so that you can, you know, integrate the ideas and programs and decisions from one with the other in a sort of combined, a combined result? Well, we haven't done that yet. I don't foresee that being done for the foreseeable future. But we have combined where there is a similar issue. For example, Hawaiian Electric came in with a time of use for DOE and they wanted us to open a docket. What we did was we merged it into the DER docket because it's going to deal with time of use in totality as a whole. We will, I don't think the four dockets will quote close in the foreseeable future because these are investigative dockets. It is an effort to develop ideas, thoughts, and finally programs that will be initiated and implemented by the utility company. Along the way. Along the way. So the docket really doesn't close with this, you know, huge big order or anything. The docket, this kind of docket anyway, closes when you've investigated to your satisfaction all the issues that have arisen. And then we may spin off issues and create other dockets. But there is no hard and fast rule, Jay. We are, I mentioned earlier, we are a tiny little island in the middle of the Pacific Ocean and we are confronting issues because we are at the tip of the spear on energy and renewability that other states really have not had to deal with. For example, and most critically is the grid. We have one, literally one grid in the state. We can't shoot off power to Utah or California or accept their power when we run out of power. We have to be independent. We are, yes. And in that regard, we have to figure out innovative ways to deal with issues that confront or impact like the grid. Can you give me the background for the PSIP, what is it, Power Supply Improvement Plan that Hawaiian Electric just filed a couple of days ago? The one that's 2,000 pages long, that one. Yeah. That's one. Well, it's asking the utility company, how are you going to get us to 2045 and 100% renewable? What kind of plans are you going to have? What kind of vision are you going to have? Now what we hinted at strongly because the interveners hinted at it, rightfully so. And that was let's not look, because we've gone, this is like the third time we're doing it. And each time we send it back to HECO saying that's not good enough. Now that does not mean it's bad. It's improved along the way. It's got perceptible, much better in what they're sending back to us. The concept with the PSIP is the same as the what it called the IRP before, Integrated Resource Plan. That was part of it. And it became, it was part of it. We've got all of these four dockets now, but the PSIP is what I think is going to be important for us as we move forward with this PIP portion. And then we may close it, we'll see what happens is the interveners were saying we can't be looking the reason why these dockets has continued is because we're looking out 20, 30 years. That's a dream. There is no data that can go out 20, 30 years to give us a sense that these things can be done. So, you know, Hawaiian Electric, tell us, give us a five-year plan, where are you going to be in five years? What are you going to spend the money on? And so that we can make decisions, good decisions on whether that expenditure is appropriate. As you move, you can look out 20 years, you can look out 30 years, but tell us today what a five-year plan is like because you have the data for us to determine whether or not that kind of planning is good and will get us to some place better than where we are today. Yeah. So, some of the things, I mean, when nobody's finished the 2000 page, there hasn't been enough time since... Oh, no. ...I was at File Friday, I think. But some of the things that came out are kind of interesting, and I'm just judging from what I see in PBN. One is that the utility is no longer actively pursuing LNG, or for that matter, the under-sea cable. Is it possible that those initiatives will nevertheless be pursued? Well, we won't pursue it. The request has to come from them. If that's what they said, that's what they said, and we'll take them at their word, at least for the foreseeable future. Yeah. And let me add this, Jay. I hope that if there is acceptance by islands like Lanai and Molokai that the cable is dead, that there will be more acceptance from those islands of renewables such as wind for their island. Because I believe that before 2045, before 2030, Molokai, Lanai can be 100% energy efficient, but it's going to have to rely on the wind and solar and other sources of renewables. But what I found from the next era hearing, when we went to Molokai and Lanai, great distrust. We don't want wind because they're going to send energy to other places. What happens, Molokai and Lanai, if the wind energy, the wind turbines for your island, will you be accepting of that? And so I hope that there is a rethinking on the part of the residents of those islands, at least on those. Yeah. Right. It's different now. On the Lanai initiative, that was intended to serve other islands in the state, but people haven't talked about the undersea cable in a while. And so maybe we're talking about island by island, isn't that what's happening? We are sort of moving from a notion of undersea cable connection or connection in one way or another among the islands in the state. We're moving to a kind of approach where each island is on its own. Well, that's what we are now. The question, there's no question in my mind that the Big Island, Kauai, Maui, Molokai, Lanai, they probably, they have the resources because of the smaller population to be energy sustainable for themselves. The big question is what are we going to do on Oahu? We don't have geothermal. We have limited land area given the urbanization of our island. Urban source might be hydro that can produce the kind of megawatts that we need, and that has not yet risen to the top. Also on this island in the area of transportation, can we look at maybe the state fleet to go electric or go hydrogen or go fuel cell, I mean a fuel cell, but a natural gas? So to reduce our dependence on fossil fuel. The big issue is going to be this island because we have, what, 90% of the population here, and with smaller, with a limited land area that we can put on massive solar farms or wind farms. So that's going to be a challenge as we go forward. Yeah, yeah, okay. So how long is it going to take for the PUC to act on, I mean what's the process from here forward on acting on the PSIP? Well it came in, we're going to review it, we're going to render our opinion, I wouldn't call it a docket closing decision necessarily. And you know, it is not, like I said, the PS, earlier, what the PSIP does for us and to the stakeholders is to give us an idea of what the game plan is. If there are decisions or requests to us coming in, I want to build this. So allow us to expend capital dollars for this project or that project. We will have a reference point to it from which to make a better decision on whether how this all fits together because we do have this PSIP docket. And in that docket it's telling us what the picture might be looking like. And so it's not really nearly, oh I want to build a fossil fuel station or I want to buy that, we can now ask why, how does it fit, where's your five-year plan, how does it fit into that five-year plan? So it provides a methodical way to review requests from the utilities to expend money. Is it dynamic in other words if you approve it or you approve it with changes or whoever you act on it, then say two or three years down the road it appears other information has come to your attention, things have changed, technology has changed, and you say, you know, we approved that before or we took this action on it before, maybe now we should reconsider that. Can you do that? Would you do that? Sure. I think I said it on the first program with you that, and I think we all know it if you're in, especially if you're in the energy field. This is all about evolution. Please change so quickly that it doesn't make sense to commit to a specific technology, because that technology may become obsolete in a year or two, or a specific source of renewables, because that may change. So we have to keep an open mind, as someone once, as I used the analogy, an open platform where people can come and bring their things and then we can review it. It's a conversation? Yes. Yes. It's not a formal conversation, but a conversation. And we have to, you know, at points, reach decisions on it, but it doesn't do well to think that there is only one way or the highway. There are many roads that, and more roads are going to be built. Or that it's final. It isn't final because things change. Nothing is final. The only thing that's final is for the next 20 years the sun should be so shiny. That's a good bet. So Randy, looking forward now in 2017, what do you see happening vis-à-vis the legislature and logistics and staff and funding for the PUC? Have any expectations, any hopes in that regard? Well, we have a budget that we put in. We're asking for, I believe, over $900,000 more. And the reason is we are going to have five, at least five utility rate, electric rate cases. Those are very draining on resources. We also are laboring under the retirement of our chief auditor. And so we need that kind of expertise. We don't have any consultant experts in any of the rate cases yet. In addition to that, we're going to have a five or six, maybe four or five or six water rate cases that we have to review. The electric utility cases, rate cases, are going to be contested case hearing. That's a drain. And there's one now, right? There's recently a rate request was made by Juan Electric. We have one that's going to go first at Helco. Then there's going to be HECO. Then there's going to be MECO. And at some point in time, if they have not already filed, KLUC. And they're going to be contested case hearing. We need the expertise. Now, I did say we hired up to over 60. But I think what people must understand is this is a highly complex field. You don't hire someone off the streets and say, okay, now you're going to be the rate expert. It takes that person, someone told me today, who was at the PUC, it takes four years to develop the knowledge of the process and everything so that they can be experts in the field. And so we have a lot of young people, young lawyers, young utility analysts. And we need to keep, get them mentored. And using consultants will help that. It'll help the public. So there are jobs there. Anybody's interested? They should... It's getting smaller. Getting smaller. Yes. And ask for, for me. Yeah. Okay. Okay. So Randy, you know, I just like to ask you, but I think I know the answer. Do you like your job? It's been interesting and fun so far. And it's, let me say this, I am not sorry that I came out of retirement for this job. Now, if you ask me this last year, next year, I'll give you an answer. Well, I think it's great that you come on our show, you talk about it, you talk candidly about it. I think it's part of leadership and I think the PUC can and should exercise leadership in, you know, in the way it's, you know, which is legally possible. I also appreciate that as the time Gorak is coming to the Energy Policy Forum Legislative Briefing, I think, in January, January 12th. So we love to hear from you. We'd love to talk to you. We'd love to take your temperature and we appreciate your coming down. Thank you. Thanks, Jay. I hope we see you again soon. Anytime you ask. Thank you so much. Thank you. Stay happy. We'll see you next year. Same to you. Same to you. We'll see you...