 the cutting edge. I'm Jay Fidel. This is Think Tech. And the handsome young man is Henry Curtis. Life of the land. We're going to talk about the whole who knew a litigation, which just, you know, just came back again from the Supreme Court. Welcome Henry. Aloha Jay. How you doing? Good. We've talked about this case before, but some people may not know too much about it. So can you give us a thumbnail about what's going on with who who know it? Yeah, who who knew a proposes to clear cut forests and turn the trees into wood pellets and burn it to produce high powered high costing electricity on Hawaii Island. Oh, from an environmental point of view, how does life of the land feel about that? Trees are the lungs of the planet. They remove carbon dioxide from the atmosphere. So we're all talking about how to plant as many trees as we can to cut back on on greenhouse gas emissions. And here who who knew a is trying to do the opposite by removing the trees and burning them to put more CO2 into the atmosphere. What's interesting is we have talked on a number of occasions with Dr. Camilo Mora at the university. And he is dedicated for many reasons, both philosophical, environmental and personal to plant trees. And he goes out with his students and volunteers every weekend to plant trees furiously. And he's planted, you know, I would say by this point hundreds of thousands of trees here in Hawaii with that exact process in mind. So it's really ironic that on the one hand, Dr. Mora is planting trees all over the place. And on the other hand, who knew wants to chop them up. It's really interesting. All this happening in the same state. Anyway, can you give us a thumbnail of the background of this litigation? I know that might take a long time, but see if you can, you know, minimize it and give us a thumbnail. Well, this original power purchase agreement dates, well, dates from 2012. And the PUC approved it. And then who knew a failed to live up to the terms. So HECO canceled it. And who knew a filed a federal lawsuit and anti antitrust lawsuit against HECO and a whole bunch of other players to settle it. They agreed to file a new agreement with the PUC in 2017. That federal lawsuit is still hanging over HECO who knew is still hanging it over HECO until this is approved by the PUC. Now, who knew has always argued that we need to move quickly. We need to get it done. We need to get it over with. And then shock after shock, just a few weeks ago, who knew it turned around and asked for an indefinite delay in the evidentiary hearing, which blew my mind. Well, some people have speculated that they want the composition of the PUC to change because Jake Griffin's term is up and he's announced he's not going to renew this spring. And if he's gone, they may stand a better chance with the PUC later. Have you heard anything about that? How do you feel about that? While we don't take positions on people being appointed or elected to positions, we have heard that rumor and that would be a reasonable assumption to make. Another reasonable assumption to make is that right now HECO says that if you put in the who, who knew a plan, it will raise rates for rate payers. Who who knew it says no, it won't. So there's a split between who who knew and HECO and who who knew and may want to delay it until they can figure out how they can actually cut rates instead of jacking up the rates. That's a tall order. I mean, their whole model is based on high rates. How can they possibly reduce rates? I have no idea. I'll let their eight lawyers try to figure that one out. Yeah, that's interesting. On your side, there's you, there's the Consume Protector and there's this one nonprofit that's joining you. Three organizations are involved in the litigation. On the other side, how many lawyers did you say, eight? Well, I think there are eight for who who knew and there's a whole mess, a whole bunch of them for HECO also. Okay. Okay. That's that's quite interesting. I suppose I would say good for you, Henry, for carrying on the fight in the face of this enormous imbalance. But let's let's talk about all these appeals. It's wound up with a number of appeals. And the last thing I understood was that Supreme Court wanted an evidentiary hearing because who who knew or wanted to have an evidentiary hearing on environmental issues. And the hearing was about to start within a day or two when who who know filed, I guess, another appeal, a third appeal by my count to the Supreme Court, as you say, trying to delay the proceedings. And for a variety of reasons, not not all completely understandable to me. And the Supreme Court didn't take too long on that. That was kind of interesting, wasn't it? The Supreme Court only only took like two weeks to rule on that on that that motion to stop the hearing now. Yeah, it was because normally, if you think of a contest case proceeding before an agency, the agency makes all kinds of decisions along the way. And if you appealed every single one of them to the Supreme Court, you would bog down the agency and you'd make it very ineffective. So what the Supreme Court has said is, except under extraordinary circumstances, wait until the proceeding is over, wait until there's a final decision by the agency. And then if you don't like it, appeal it. And instead, who who knew has said, no, we're going to jump in right now and say there's two, three things we don't like, and we want to ruling now. And the Supreme Court said, there's nothing extraordinary about what you're proposing, you're doing it midstream, and it's improper. Yeah, interlocutory would be the word, right, interlocutory appeal. But that doesn't come as a matter of right, you really have to show a really good reason for that. So what reasons did they argue in order to get to the Supreme Court this time? One, they argued that the legislature changed the way that the PUC addresses greenhouse gas emissions. What the PUC did after Life Land won the case on forcing the PUC to look at greenhouse gas emissions, the PUC said, we shouldn't have to look at it if you simply want to replace one utility pole. You shouldn't have to replace it if HECO is going to float bonds. The greenhouse gas emissions should really be done for contracts, for fuel contracts, for power purchase contracts. And it's less important or it should be discretionary for water, wastewater, and telecom. It should really be focused on electric and gas contracts. So we agreed with the PUC and Rep Lowen put through the bill that would do that, and Hu Honua never testified on that bill. But now they're trying to say that what the PUC and Life Land and Rep Lowen agreed on, they don't know what they're talking about. And only Hu Honua knows that the law is different than what everybody thinks it is. Wow, that's, thank you. That's a very complicated one sentence explanation. Thank you, Henry. Okay, so this is kind of unusual because you would expect this to be decided within the evidentiary hearing that Hu Honua had requested and the Supreme Court ordered. So what did the Supreme Court say specifically about that and about all the other reasons that Hu Honua gave asking for this delay and this interlocutory action? The thing that really I think stands out is they said the appeal was quote, particularly outlandish, unquote. And that's pretty strong language coming from the court saying particularly outlandish means the appeal is bizarre. So that's the first thing they said. And the second thing they said is that the only intent by Hu Honua is to delay the proceedings. And so it's now back or will be very shortly back at the PUC for them to reopen the proceedings. That doesn't bode well for any further appeals. Supreme Court is now questioning their credibility by saying they're just trying to delay things. That's interesting. And was there oral arguments in this or was it just on papers? Just on papers that the court said these are standard issue, preliminary orders. And it's nothing extraordinary about them. And therefore there is absolutely no grounds for an appeal. Okay. So time is an important factor here. Now that the court has denied that appeal, then presumably the PUC can continue or can start and continue its evidentiary hearing, which was going to start before. So I guess the PUC lost a couple of weeks in that, but they presumably can start again right now, can't they? Yes, but I don't think it will be this week because it's too quick to really start this week. Next week there's a Winter Nehru National Association of Regulatory Utility Commissioners meeting, their winter policy meeting that the PUC is going to enforce. So it will probably be either the week of the 21st or possibly the week of the 28th of this month. That would be our guess. So when you tally that up, it's like four or five weeks of lost time. Yeah. And if you take that rumor, that cuts right into the time remaining for this particular chair of the commission in office. So it has an effect on things. So what is that evidentiary hearing? What does it look like? Are you going to participate? What does it sound like? What it involves is that each of the parties, HIKO, the Huhonua, the consumer advocate, to hear a power and life of the land, each of the five entities can cross-examine the other party's witnesses, but you're not allowed to ask friendly cross-examination. So you have to focus on witnesses who opposed your position. Now it's interesting because Huhonua and HIKO have some very sharp differences in their analysis. For example, whether rates will go up or down. HIKO says they'll go up. Huhonua says they'll go down. So Huhonua wants to cross-examine HIKO's witnesses on that issue. So yeah, there'll be, I don't know, about 20 witnesses in all or something that will go up through cross-examination. Is this a rule about examination ordinary course of business in the PUC or is it something special for this case? We've been involved over the past 25 years in maybe a half a dozen evidentiary hearings. So it's not something that happens all the time. Normally parties are able to either decide things ahead of time or the PUC just asks for final arguments or final briefs. But on important issues like this, the PUC does have hold evidentiary hearings. What I mean is the thing about the friendly witnesses and the limitation of the examination for a friendly witness. What's that about? Is that usual or unusual and how does that work out and how does it play in this case? Well, the PUC wants to cut down the amount of time that the evidentiary hearing takes. So rather than having opening arguments or direct examination, all the parties had to file that in writing and that's already filed. In addition, there'll be minimal redirect and close each party will be allowed a brief closing argument. But basically the purpose of the evidentiary hearing is really to question whether the witnesses know what they're talking about or whether there's weaknesses in their arguments and therefore this cross-examination by different parties. That's really the heart of an evidentiary hearing. The really the most challenging part to question a witness about whether what they're saying is credible or whether there's weaknesses in their arguments. Like expert witnesses and so you would test the credentials, you would test the experience, the positions that have been advanced by that witness in the past and so forth. Is it evenly balanced between the witnesses you are calling and the witnesses others are calling? I think it's evenly balanced in that most of the witnesses come from HECO and HUHA NUA, but they're the ones that have the burden of proof to prove that this project is viable. Whereas consumer advocate is focused at mostly on the cost to rate payers and to hear is focused mostly on whether it would curtail their operations and we're focused mostly on the environmental and greenhouse gas impacts. So really they have who, HUHA NUA and HECO have the bulk of the witnesses to justify their contract. And you have the bulk of the cross-examination. That's where it stands. I think HUHA NUA has the bulk because I think they need to go after both the consumer advocate and HECO. They need to take on both parties because the way it stands right now, if HECO is right and the consumer advocate is right, then HUHA NUA has an extremely weak case. Okay, so I should have asked you this at the outset, but my recollection is this is all about the environmental impact of the project. That's what the Supreme Court was interested in. That's why it originally ordered an evidentiary hearing. In my right, what is the bottom line here? What is this evidentiary hearing supposed to determine? If you look at HUHA NUA, they think it focuses just on greenhouse gas emissions, just coming out of their proposed plant and just compared to a fossil fuel power plant. Our interpretation is it pertains to how they match up compared to alternatives like other forms of renewable and storage and also where they're getting their wood from and what the environmental impacts are associated with their fuel acquisition, as well as their proposal to plant trees to offset what they're chopping down. So we have a broader picture on what's on the table and HUHA NUA has the narrowest interpretation of what's on the table. That's interesting, is if you follow the action up to this point, whatever the PUC decides, probably be appealed anyway, don't you think? Yes, HUHA NUA has already said they want a written transcript from the hearing for their appeal. Certainly, if we lost, I can't commit what we would do, but certainly we haven't fought for 14 years to walk away, but we're confident we're going to win at the PUC and we're confident we would win on any appeal. Wow, it goes on and on, doesn't it? I can't think of any case. Can you, over our lives together in these islands, Henry, where there's been so much action, so much litigation over one project? The only one that comes to mind is the Bi-Hila Ridge transmission line, which went from 1973 to 2002, but that had separate parts to it and it went through different entities, whereas this is the single longest fight at the PUC and involves the most appeals to courts of any PUC action. Now, what's interesting is that HUHA NUA has said that it has nearly, just very nearly completed the physical facility for this plant and it has spent somewhere in the neighborhood of $400 million building that out. How does this play? Why have they spent that much money without having all the necessary approvals and what does this mean to the substance of the litigation now? Well, it's interesting because we believe that HUHA NUA actually started building before they got approval the very first time back in 2013. So they've been building for a long time and they don't have any vested interest in the plant. That is until you have actually a final discretionary approval, you don't have any vested rights to it. So they're building it at their own risk right now. Yeah, it seems so. Will I be able to watch this? Will it be on the internet? Will it be televised or streamed so the public can see what's happening day to day in the hearing? Yes, it will be streamed. The public can view it on YouTube. The hearing itself would be on WebEx, but the commission has already said to all the parties they do not want to have any sections dealing with classified information in the trial, which would interrupt a person viewing it so that we will try to keep as public as much as possible and totally if possible. Are you in favor of that, I take it? Yes, yes. So when you say classified, you mean proprietary? Right, there are documents which are hidden from the public at different levels. Certain documents only the PUC can see. Some documents the consumer advocate can also see. Some we can see as non-competitors. Some to hear he can see as competitors but members of the docket. And then there are some that are open to the public in general. So there's multiple levels and the PUC would really like to keep all of that away from this evidentiary hearing and just focus on what's in the public. Well, Henry, I'd like to sort of lift our sights for a minute and ask you what what does this mean in the context of what life of the land would like to see in the development, the evolution of our energy initiative in this state, where our energy initiative should be going, where does this fit with it and what and the alternative possibilities of how the PUC could deal with this case and how the Supreme Court will ultimately deal with this case. What is the long shadow effect on our clean energy initiative one way or the other? I think there are two things that are going on, one technical and one community. Right now, as we move towards 100% renewable, we're going to be building more and more things in more and more places. So it's really important that communities, local communities and put throughout the islands get involved in determining where things should be built and what should be built. Second, extreme weather events are going to cause disruptions to the grid. So we need to be able to sectionalize the grid so that if a disturbance hits one spot, it doesn't destroy the entire grid. And that means we need supply spread throughout the grid. So when you sectionalize, each area has enough supply to meet the demand in that section. Yeah. So how does it affect the portfolio, if you will, on the big island? If they are permitted or not permitted, as the case may be, after this litigation is done, it may take a while, I suspect, when you consider the possibility of other appeals. How is it going to affect the portfolio one way or the other on the big island? I think the big island is fortunate and it has the most variety of resources and the greatest potential with its land size. Right now, it has a number of hydroelectric facilities. It has geothermal that could also be put on the west side of the island. It has pump storage potentials. It has an OTEC facility. It has many different possibilities. And the question is, what is the right mix to increase reliability and to lower rates? Well, this could, I'm sorry. And a lot of that involves getting the Hawaii Island residents involved in the equation so they can determine where they want to go on that. Well, I think rates has got to be an important issue here because the big island has always had, at least in my recollection, the highest rates or among the highest rates of all the islands in energy. And if these high rates you're talking about prevail, that will have an impact on the big island, on the rates on the big island. Yes. So driving down the rates is really critical. And the Public Utilities Commission is doing that through performance-based regulation and they're doing it by really being cost-conscious on how much projects cost. So the implications legally now, because I think one of the central points of all this is whether we want to chop down and burn trees as an environmental matter. If for some reason the Supreme Court decides, I mean, or the PUC and the Supreme Court, decide that it's okay to do that. I mean, gee, that's hard to say this. If they decide that that's going to be permitted, what effect is that going to have on our state, our environment, and on climate change in general? It's going to have, it would have a very poor effect on our environment if that happened. One of the other conditions is we have a law that we have to be net carbon neutral by 2045. So who would have to plant trees in Hawaii to offset the trees? They're chopping down in Hawaii. And right now their plans are to grow trees in North America and not Hawaii. So even if they could chop down trees, it's where you plant them that has an impact also. That's very interesting. Why not plant them here? Why North America? You have all the shipping expense and you have the supply line issue and a timing issue. Why not plant them here if they say they're going to plant them? I haven't figured out their strategy. I really don't understand them. They have a number of strange characteristics in their proposal. Okay. Turning to the legal side of this, as you said, 14 years of litigation, multiple appeals, really scorched earth kind of litigation sounds like to me, the leave no stone unturned, every argument that could possibly be made being made and so forth. This is really a huge battle, battlefield and battle. How does this affect our energy future? When you have people coming in, these are out-of-state investors coming in and spending $400 million and then litigating for 14 years, it sets up a kind of precedent on how we are going to do these projects, how we are going to, what do you want to call it, manage offshore investment in energy, how we are going to treat these environmental issues. Is that good or bad or otherwise, do we want this kind of offshore investment? Do we want this kind of, what do you want to call it, legal experience? What does it say for the future? I think the number of companies that are looking to Hawaii is great and the fact that one company is screwing it up is not going to have that much of an impact. I think there are a number of different players out there, some local, some North American, some foreign, that Hawaii is enough of a place with high prices and many possibilities that many people want to invest here. You know, Henry, a lot of the road to Hawaii is littered with the bones of energy projects that never got off the ground for a variety of reasons, many of which are not good reasons. It was over the years, the last 10, 15 years. I wonder, what I hear you saying is you do not necessarily oppose offshore investment in energy. I guess what that means is it's okay as long as it's managed. The management, I presume, would be the PUC and other agencies of the state government that would have some interest. My question is, in a perfect world, Henry, looking forward, how do you propose what should be the parameters of managing offshore investment in energy projects, including big ones? Wow. I think competitive bidding that the PUC has adopted is really the way to go. To put out there is to say, this is an open request for proposal. Come in with your ideas, tell us what your proposals are, and let us figure out of all the proposals coming in what is best for us. That is a win-win for business, it's a win-win for the community, and it's a win-win for the environment. All that considered, what about the argument that these investors make is that Hawaii is a very hard place to do business. It takes a long time. What do you say to them to encourage them to keep coming? Because after all, whatever we do, we have to achieve, we want to, we seriously want to achieve renewables, 100% renewables by the designated target year, 2045. How do we move it ahead without getting bogged down in process? Well, I think one example is because Hawaii is really on a cutting edge, we're developing techniques here that can be brought elsewhere, like inverters traditionally follow the load, but we're developing inverters that are grid forming, that help stabilize the grid, and so we're at a very cutting edge on those kind of technologies, and so companies want to come here to Hawaii, want to see how we're doing to be able to then export those ideas elsewhere. So I see Hawaii as a major player in the world, not just receiving investments, but actually interacting with the world. Yes, absolutely, a leadership position. So now my last question for you, Henry, how does this case, this litigation, this experience in energy initiatives, as far as the PUC is concerned, as far as why electric is concerned, as far as the Supreme Court is concerned, as far as life of the land is concerned, the community in general, how does it and its result, whatever that may be, affect our ability to get to 2045, and our ability to entertain, to encourage offshore investment? I think we have a rosy picture to 2045, and I think we can move it up 10 years to 2035. I think that we have a sophisticated utility, we have a sophisticated PUC, we have some legislators who really understand the issue, and we can move forward, but we have to do it in a collective fashion, involving the community in some real two-way dialogue, and I think both onshore and offshore investors will be winners in that process. Yeah, and it requires attention, requires attention by all these agencies, by the PUC, by Hawaiian Electric, by the State Energy Office, certainly by you, Henry, you cannot take your eyes off the road, can you? No, and we definitely are looking for some younger blood come on board. Okay, well maybe somebody watching today or watching this video later will get the idea that it requires a full-throated participation by everyone who cares about the future of the state. It's not simple, certainly it's clear that it's very complex, on the other hand it requires public participation. So give us a closing statement, Henry, what would you like to leave people with? What does it take away you'd like them to think about in connection with this litigation and the future of the issue around who honed it? We need to show the world that we need to save forests and not cut them down, and we need to thank groups like yours for being willing to present these ideas and get the dialogue going, so mahalo. Mahalo to you, Henry, not only for this but for all the work you've done over the past generations. Henry Curtis, life of the land, thank you for joining us today. Mahalo, Jay. Aloha.