 Okay, we're live. This is Jay Fiedel, ThinkTech Energy 808, The Cutting Edge, here on The Given Monday. And guess what? We have Marco Mangelsdorf, our provisional solar and helo joining us by phone. I'm Marco. Smile and say hi. Hey, hi. My smile just goes off the screen because the joy and pure pleasure I have for speaking to you is just immeasurable. So thank you so much for having me back on. Alright, nice to be with you. So the title of our show is, Coal and Solar in Our Stocking. And the subtitle is, But For What Christmas. So let's answer those questions one by one. What do you mean coal and solar in our stocking? Do we have it now? Do we gonna get it later? What do you mean by stocking? That is futurist because we're not at Christmas. We're not at Christmas now. You're right, but if we try to live with Christmas and Hanukkah and Kwanzaa and all sorts of other good holidays in our heart year-round, right? Uh-huh. What got me thinking about coal and solar? Well, let's look at coal to begin with. There was a piece in the Hawaii Business Magazine on the coal-powered, the one and only coal-powered power plant, coal-fired power plant here in the state which is on Oahu. And it is owned and operated by AES, which is a mainland multinational corporation in the energy field. And that power plant is scheduled to be decommissioned or at least stop using coal no later than 2022. And the question has been what comes next, if anything, is some type of alternate fuel source possible? There was apparently an attempt to the legislature this past session that would have codified or made it official policy law that this plant would definitively go go away and not produce power anymore, at least using coal, but apparently Hawaiian Electric wants to not necessarily completely eliminate that possibility to continue to burn coal there. And I couldn't disagree more with any possibility or likelihood of that power plant continuing to burn coal in any way, should perform under any conditions. From what I understand, that plant produces more pollution than any other facility in the entire state of Hawaii, even compared to much bigger oil-burning power plants on Oahu. And we can and must do better than burning coal on the island of Oahu and on in the state in general. And what also goes along with this is the largest power plant on Maui, for Miko Territory, is the power plant at Maulaya, which is 212 megawatts. And that, if I'm not mistaken, is also scheduled to go down for good by 2024. And I know that this commission of J. Griff and Jenny Potter Leo Asensio is my belief they are firmly committed to seeing both AES go offline for good by no later than 2022 and Maulaya go offline for good no later than 2024. So the big question to me, one of the big questions is what do you do? What is Hawaiian Electric on Oahu and Maui Electric on Maui? What do they do to replace that firm generation, that backbone generation? And that's where things get much more challenging. And my position, the risk coming across a little bit hard and hard on Hawaiian Electric is that they've had years, if not a decade or more, to plan for the retirement of these power plants. And I believe that there is concern, at least I'm concerned in terms of what comes next because all this solar stuff, utility scale, solar and storage, which there's a new RFP that's been issued for hundreds and hundreds of megawatts of solar and hundreds and hundreds of megawatt hours of storage. That is two, three, five years away. So what do we do in the meantime? And there's, there's this concern in terms of what's going to produce that, that necessary kind of base load power generation once, once say the AES plant goes offline of 180 megawatts in the Malaya plant on Maui, which is 212 megawatts. So, you know, we're, we're entering into, seems like we're always entering into uncharted waters, Jay, when it comes to what the energy mix is going to be in the near term for our islands and also what is going to be in the longer term. But renewables in terms of meeting the renewable portfolio standards, which have were mandated by law back in 2015 and committed to by all the parties back in the Hawaii Clean Energy Initiative 11 years ago. There's a ways to go, especially HIKO on O'ahu. I mean, just to, to briefly go over the numbers. I mean, they were supposed to hit 30% renewable by next year, 30% by 2020. And as of last year, according to one electric zone data, HIKO was about 22%, which obviously is considerably lower than 30%. Now they do a, a cumulative tricompany average to report to the commission. But last year, they hit 27% actually a little bit less than 2017. They were 27%. 2016. They were 26%. 2015. They were 23%. So the long and the short of it is Hawaiian Electric, as they try companies, I think are, are challenged right now in terms of hitting, they will not hit. I'll just go out on the limb. They will not hit 30% by next year, most likely. So, you know, so what, you know, does that mean anything? Whereas KIUC on Kauai will be somewhere over 50, most likely by the end of this year. So I've said a lot. I will shut up and please invite to respond. Well, let me, let me just unpack a little of that. So Maalaya is coal also? No, Maalaya is oil, oil based. The only coal plant in the whole state is the one at AES on Oahu. Okay. And you said that AES, I mean, I know that AES is a big, big energy company, very deep pocket. And they do renewables among other things. It's interesting, you know, that they're into coal and also renewables. Why can't Hawaiian Electric or somebody say, look, you know, we're not going to extend or renew your coal contract at Kapolei. Why don't you do something else and we'll entertain that? Why don't you do something renewable? And we'll entertain that? Why don't you, you know, help us out on that renewable goals? Wouldn't that be, you know, an easy solution? I mean, you got, you got a deep pocket investment source here, who is interested in Hawaii. Why can't they just move over to a better resource? Is that been discussed? Well, apparently, was brought to my attention, in fact, it's over the weekend that AES either is doing or is looking into using a fuel substitute in the form of wood pellets, wood pellets to in lieu of, let's say, burning coal to create heat and running turbines. And one can say, well, wood pellets, I mean, especially if the wood is recycled, right, if it comes from waste and it's not virgin forests are being chopped down, obviously, that's a preferable power source to coal. And on one level, you know, I buy that argument. But I have evolved to point in my thinking, in my view, that we cannot, those of us living in the state, and also as a species, we just cannot abide by any type of new power generation beliefs in our state that comes in the form of combusting any type of hydro carbon material. I'm, I'm just across the Rubicon, Jay, in terms of we have to, we must do better. In terms of new power generation than burning stuff. Well, the other thing that comes to mind, I mean, I agree that burning wood is still going to give you carbon emissions. It's a fossil fuel. That's not a step forward to renewables. Sorry. So that doesn't sound like a great idea to start burning wood. You know, you, but you know, there's a policy point here that I'd like to inquire with you about. And that is you mentioned that there was a bill in the legislature last year that would have forced the termination of the coal plant at the end of the contract in 2022. But is the legislature the right body to determine that kind of issue? Is the legislature the right policy and implementation organization to determine the short strokes on how we deal plant by plant facility by facility? Shouldn't that be coming from somewhere else? An energy office, for example, I know that the energy office hasn't done much here, or possibly the PUC itself, which as you said has expressed a view about this. Why don't we have the PUC? Why doesn't the PUC step in and say no more coal? We're not going to permit it. And we're going to issue a decision in order on some, you know, some, some case or other that stops that. Hasn't that been discussed? It seems to me that having the legislature deal by statute and by, you know, people who may not be experts in the subject on policy around around the source of energy in the state is really not the right way to do it. I haven't to believe that this commission effectively will do as I think we both wanted to do, Jay, but I don't necessarily thought the legislature for trying to try to get on the right train, so to speak. This House Bill 563, which was in play this past session was passed by two House committees, but never got a vote in either the full House or Senate. The bill would have prohibited, quote, air permits for coal burning electricity generation facilities and the approval of new power purchase agreements for electricity generator from coal, close quotes. In other words, all Hawaii electric utilities and their contractors would have been prohibited from using power plants that run exclusively on coal after the site retires in 2022. I don't find that by any stretch, any type of overstretch on the part of the ledge to say no more coal in this state. Yeah, you know, you and I both agree with that bill. However, and that was a Henry Cornus life of the land bill, wasn't it? However, I would like to add this, though, that the legislature is sometimes very slow, and it operates out of political motivations, sometimes out of personal biases and personal arguments. And if you want to count on the legislature to do energy, you know, energy policy with alacrity, don't doesn't work that way. And we need alacrity. I mean, climate change is coming. And our deadlines are coming to rely on them, you know, I mean, even the bill that that was supposed to allow for storage, storage credits, you know, has been languishing for, what, three years or more? You know, who's to say what's going to happen in the, in the machinations of the of the 2020 legislature on this, this action to isn't it isn't it better to simply have the PUC, which is three people, and a docket and maybe a hearing act on it, they could they could be a lot quicker. And they would not get stuck in the kind of politics that the legislature we need, we need an organization, whether it's the PUC, the energy office or an energy, you know, authority of some kind that is able to move quickly on these things, or we'll never get there. No, I'm not going to disagree with you there, my friend. I mean, I'm I've been in the energy field in Hawaii now for several decades. And I'm surprised at how slowly things move sometimes. And I mentioned to you before my first energy conference that I went to, one of the first ones that I went to was back in 1981 at the Sheraton. So I'm dating myself, you know, almost for 40 years ago. And yes, indeed, we have made progress. But I think there's a more of an urgent imperative to really no longer abide by the foot dragging and excuses. And well, this is the way business is done here. I really see much more of a, you know, kind of house on fire. In fact, I'll share with you I was sitting down not too long ago with one of the GI directors. And this particular person told me several times across the conversation that planet is on fire. And you typically don't hear directors of major companies saying stuff like that. But I happen to believe that they characterized it exactly right that I think the planet is on fire. And we need more action sooner rather than later. And less equivocating and less excuses and chasing tales. She's our own tales in terms of why things can't be done so soon. So yeah, I agree. I agree. If you know, if we have three people that commission who are making decisions is certainly better, or likely to lead to a faster, hopefully better outcome than than House committees and Senate committees and and machinations and political game playing that often goes goes on in the part of legislature, not just in our state, but also across the country. Yeah, we need leadership from the from the governor and the governor's office. Because it you know, a lot of this, either action or inaction starts there. So I hope the governor is listening. If he wants things to happen, he wants to take credit for any moves and energy, any improvements and energy, he has to do something. And right now I think we're we're in the Daldrums as you point out. So let's look at chart one. You had a very interesting chart that we should take a look at and that you should explain about where the movement is in various, I guess, renewable sources. Yes, in fact, this particular graph was provided to me by our my friend and our mutual friend Ted Pack, former energy director under Governor Linda Lingle. And the the graph shows the and I'm waiting to see it on the screen there. The graph shows the contribution of energy going back to 2007. The the x axis being time from 2007 to 2018. And the y axis being a megawatt hours, megawatt hours, which is one meg watt is a million blocks. And what I find rather striking and hardening is that rooftop solar, you know, started off at pretty much zero 12 years ago. And now as of last year, it is producing more megawatt hours than all the other renewable energy sources by far. And I was just surprised to see that it shows what rooftop solar also known as distributed generation also known as distributed energy resources, that these 80,000 rooftop solar systems across our islands. When you add them all up, they are actually producing quite a bit of power. And I find that to be encouraging. And we need to we need to continue to support rooftop solar. And you know, I'm very concerned, as I've said so many times over the months and years, that rooftop solar is down a lot from its healthy on days of 2011, 2012, 2013, 2014, 2015. And I see distributed energy resources in the form of solar plus batteries to be absolutely critical to going where we need to go as a state as far as distributed energy being a positive from multiple perspectives, not least of which is resiliency, and the robustness of a grid where we have the potential for having power available micro gridding or nano gridding in the case of serious disruptions to the parts of the grid. I mean, I don't know what kind of play hurricanes Eric and Flossie got over the past several weeks over in Oahu. But you know, the big island is the first front line, right in terms of these weather disturbances blasting in from the Eastern Pacific. And that's only, you know, we're at the beginning of the hurricane season. So it's not like I keep on saying, and I think we both agree it's not a question of if but when one of the islands is going to get hit by category three, four or five hurricanes. So distributed energy resources rooftop solar, I think is absolutely critical to be able to take this where we need to go along with centralized solar and storage and centralized wind and storage and so forth. So that you know, it's got to be a mix. So I was hardened to see that rooftop solar was by far the largest contributor in terms of power. Now, what is missing on this graph would be the contribution of oil, the contribution of coal, in terms of megawatt hours, and you would need to increase the scale multiple fold, because these renewable sources are teeny tiny dwarfed by what you know, we talked about before the fact that the state is still 80 plus percent dependent on oil for power generation and for our overall energy supply. So yeah, the solar stuff, you know, looks good. But it's still too small of a drop in the bucket of the big ocean of how much energy the state needs. I remember one one comment in that article in Hawaii business that you alluded to earlier for the proposition that in the case of extreme weather or other kinds of natural or unnatural disasters, oil is is a is a good way to bridge the gap to recover. I'm not sure I understand exactly why they said that. But that was in the article you have any comment on that is oil a better way to recover after a disaster? I can't really comment on that. I mean, in terms of a way to recover, I'm not really sure what that refers to that. I guess I'd have to go back and look at it a bit more more closely. I mean, oil is is easier to to deal with it's easier to transport. I think it's it's certainly cleaner than coal. So, you know, it's, you know, between two what I'll call necessary evils, you know, coal or oil, I'll choose oil any day and of the week and twice on Sunday compared to coal. But yeah, let me let me go let me go to oil for a minute. Okay, oil, you know, prices in bed, although they what's going on in the straight straight or moves may have a secondary affected primary effect would be on supplies to Asia. I don't think it's affected global prices. Just yet, but it may. And, you know, oil oil is going to be available. In fact, other fuels such as LNG are displacing oil in many places. And so oil will be available. Now, take that on the one hand, take it on the other hand that we have. We have oil plants in the state of Hawaii that are older than I am and I'm old. And what and what's interesting about that is that they're not they're on contracts like the AES coal plant. That's a contract. That's a purchase power agreement that ends in 2022. The all the oil plants, maybe including Malaya, are they've been around a long time they are directly owned and operated by the utility just as they have been from the beginning. They're the classic model of utility, you know, you know, sort of a hub and a spokes out to the distributives. So we haven't really gotten correct me if I'm wrong, but we haven't actually gotten out of those plants. They still work. They're they're older. Maybe they have greater maintenance issues. But they they they're still there. And that's why we're we're still mostly oil. And there's no deadline date for each specific plant, a plant such as there would be, you know, by the expiration of the purchase power agreement with AES. Do you agree with my my distinction there? And what do you think we can do about about forcing the closure of oil oil fired plants? It's infinitely easier to, in my view, to envision that the AES power plant will be shutting down once and for all for good in several years by 2022. It represents a significant but albeit small, relatively small percentage of the total firm capacity, which again, according to Hawaiian Electric for Wahoo, was 1784 megawatts last year, 1784 megawatts. And the AES plant is 180. So the rough math is that represents about a tenth, right? J about a tenth of total firm capacity. When you look at HIKO's oil plants at Kahi and Waiao, those two plants alone, Kahi being 650 megawatts and Waiao being 500, do the math there, 650 plus 500, that is 1150. Then you get Campbell Industrial Park, which is biofuel 120 megawatts, Gofield biodiesel and diesel 50 megawatts. It is way, way, way more difficult for HIKO to conceive of one or more of those oil plants, especially Kahi and Waiao, being converted any time soon to something other than burning oil, because it represents such a significant percentage of the total firm capacity that Hawaiian Electric needs to keep the lights on. I think one thing comes to mind, and I would like your view of this also, sort of like housing, you want to get in and build a lot of affordable housing, you want to make a new subdivision, you want to bring in investment and provide housing for a state that is in desperate need of housing, you have to go through the bureaucracy. And it takes a long, long time. You know, Castle and Cook took decades and decades for, you know, each of their projects for these large scale housing projects. And so, I mean, it's kind of a radioactive issue, you know, going in, you're going to run into that. So if I want to do, you know, a wind facility or a large utility scale solar facility, I've got to go through the gauntlet. I've got to get all the permits. I've got to go through the EIS. I've got a risk having a protest or a series of protests on my hands. I am going to spend a fortune getting there. And, you know, it won't happen for years. So, you know, I mean, if I'm any utility, I'm going to be concerned about these things. And it's got to be, it's got to enter into my calculation about whether it's worthwhile, don't you think? Well, what accounts then, what accounts for one utility company in this state, that by next, by this year, by the end of the year, will achieve somewhere over 50% renewables, whereas the other utility companies, Hico, Elco, Mico, will be lucky if they hit 28%. Why is it that one utility company, in this case, Kauai Island Utility Co-op, can make the chronic progress they did in the same timeframe that Hico has had to make progress? Why is it that one company can do it and another company has much more difficulty doing so? I'll try to answer that. I don't know if I can give a complete answer and I can't speak on behalf of either one of them, but it occurs to me that Kauai is a much smaller place. It occurs to me that Kauai is a co-op where you have a sort of a public outreach to the members of the co-op and that helps politically get things through. It occurs to me that Kauai may have more enlightened management in the government that actually goes along and helps and supports these projects. So that comes to mind. In the case of Hauai and Electric, you have three islands. All of them have a... Five. Thank you. Five islands. Five islands. Absolutely right. Three counties. What I would notice is that each one of them has their own bureaucratic systems. Each one of them has different government and managers. That's more difficult. And each one of them has a public that may or may not be on the same page or that may be apathetic. And so I think the political environment and the bureaucratic environment is different between KIUC and Kauai, which has a little Weetop tiny population and the rest of the state in Hawaiian Electric. I don't know if that fully answers what you've raised, but I think those are considerations that are appropriate. I think that's, you know, if you were in the classroom and you just did that answer as part of your oral exam, I would definitely put you in the B plus A minus range. So well done. Okay. All right, I have some comments. I want to make to you, but I will save them for after the show. Well, thank you for what you say is, I don't disagree with what you said, Jay. And at the same time, you know, you can say, well, Hawaiian Electric has five islands. That's much more challenging. And they have, you know, a little bit of a different culture on each of the islands and different utility companies. I mean, Alan Oshima has now going on. He'll be five years at the helm of HIKO as of October, a couple of months from now, right? And one of Alan's big things has been one company, one company, one company, one company. Alan's one company initiative. Okay. And Alan, of course, can describe it much better than I can, but that's been one of his main goals is to bring the three, the tri-companies together so they're much more integrated. So they're able to not reinvent the wheel, you know, on a per-company basis. And, you know, there's some logic behind that. At the same time, you have these individual grids, Molokai, Lanai, Maui, Big Island, and Oahu. And it seems to me that with enlightened leadership and progressive divisions of what needs to be done, that incredible progress can be made. But again, one of the challenges is one of the things you did mention is the fact that Hawaiian Electric Industries is a publicly owned company, right? They're traded on the New York Stock Exchange. They have a fiduciary responsibility to shareholders to be able to maximize return on the investment through dividends and through performance. Now, to what extent that is conflicting with or is challenged by trying to do the best thing for individual island ratepayers? I don't know. That's more of a philosophical discussion. But that is a key difference between investor-owned utility companies like Hawaiian Electric and TIUC, which is a co-op, which means that the ratepayers are the members and the members of the ratepayers. So there's no schism and an inherent conflict between ratepayers and shareholders. So I happen to believe that that's also something worth noting. And if you said that in your response, you would have got an A or an A plus. Okay, well, I'll give you an A minus for your hard work on this issue. And I think if we if we if we can get to Alan Oshima down here, he can get an A plus in addressing the same questions. Marco, very interesting conversation. Very important that we address this, because ultimately this is at the core of the initiative. So Marco Mangostore, ProVision Solar and Hilo joining us for Energy 808, The Cutting Edge here on Think Tech Away. Thank you so much, Marco. Well, thank you for listening to my meanderings and my machinations. You have patience beyond Buddhahood. Thank you, Jay. Aloha.