 Okay, we're back. We're live. It's 4 o'clock. I'm Jay Fidel, and guess what? This is Think Tech. Yes, again, Hawaii, the state of clean energy. With Jay Griffin, one of the PUC commissioners. Wow. And co-host Jeff Ono. Wow. What a team. This is great. Let's have a schmooze, ready? Great. Thanks, Jay. Thanks, Jeff. Thanks for the invitation. You've got a lot of things going on at the PUC. We're so happy you'd come and talk about it with us. And one of the things that's in the newspaper the last week, or so, was Jennifer Potter, the new commissioner, reported by David Igay. And it must be on the way to a confirmation right now. All the signals I hear are positive. No problem. Sort of like you. Oh. Well, yes. I mean, the news came down. I commend the governor on his choice. Nominee has a very strong background and experience in a lot of the issues that the state and the commissioner are currently facing. So I'm going to commend him on his decision. As I understand it, the confirmation hearing has been scheduled for April 12th. So I imagine she is going around meeting with senators, fielding questions on her background. Good. It's good when you put the confirmation in, or the nomination in the middle of the session, because then you can get confirmation of that same session. That's a worry about next session, you know. Understand. The timing is important. So tell us about Jennifer Potter. You know her, yeah? I know her some. If you look at her resume in a lot of ways it speaks for itself. She's had experience working at Sacramento Municipal Utility District. Municipal and utility in Northern California routinely received some of the highest customer satisfaction grades and responses. She worked on a number of different programs there, but including one nationally recognized pilot project looking at innovative pricing design programs for their customers. So this was something that we were tracking closely here in Hawaii, because these were topics that we were looking at at the time. Back in 2013-2014 she had worked on another well-known nationally recognized demand response study while she was at Lawrence Berkeley National Labs. Getting something we were tracking closely. I had the chance to meet her a number of times and interact with her while she was attending conferences here. You know, our times at HNEI did not overlap, but have met the nominee before and gotten to know her. Yeah, and you know how things work at HNEI. I mean, you were there for a while. I was there back and forth between there and the commission. So we have two now, two commissioners coming from HNEI. Two wonks, may I say. Is that okay? Well, the Senate will have a say in that. I think here at my perspective on it, one speaks to the institute itself. The types of projects that are going on, the people that are attracted there. I think Rick has done a good job attracting people with strong technical backgrounds, but also because a lot of the work there is hands-on demonstration projects. The people working there come with a lot of practical industry, what I say, on the ground experience. So if you look across the staff there, there are a lot of decades of experience of former utility engineers working in the grid start program. When I was there, Mark Glick had recently come back. So somebody with experience running the state energy office, John Cole, a former commissioner. If you look a little more broadly, there's a number of people with experience in the hydrogen technology area, marine resources. So again, people, there's a premium place on people that maybe views analysts or wonky, but come with a lot of practical on the ground industry experience. That's great. Great to have that. We need that. P.S., you know, you guys, she's coming on our show on the Amina Marco and Me show on Monday, two weeks from next Monday. So you'll get to ask your questions in person. Well, how was your first year as commissioner, Jay? Can you tell us about that? Sure. It's been, well, it's a very, it's been an enjoyable time. It's a demanding job, challenging in a number of ways, but incredibly rewarding. I think I can point to some, I think we've made a lot of progress. We obviously have a large, large number of issues on our plate. Important matters before, before, before us at the commission. Well, we have made a lot of progress in moving forward on the plans that the electric companies had set, sent to us, you know, making decisions on those and allowing the implementation of a lot of the projects, the new programs, new efforts to procure renewable energy. So it is rewarding to, you know, personally be involved in making those decisions and seeing things go forward. You get to attend, you know, groundbreaking projects of things that we had worked on and signed to see go forward. So that part of it is very rewarding. It was encouraging to come back and work with the staff that we have there. Now it's a, it's a young, energetic, but experienced and very talented staff that we have there. So that part's definitely rewarding also. So, you know, you had a certain concept of it before you went in because you were looking at it. You watched the next era hearings and you saw that, you know, from various advantages over the years, then you have a certain, a certain model in your mind about how it works. So my question is, how surprised have you been? What has surprised you when you actually took the chair, so to speak, took the seat? Well, I think in a lot of ways the job's more fun than I might have imagined in the sense that I, no one I was on staff before, you have a lot of management responsibility, a lot of time working individually one-on-one with staff. Now I have access to all of our staff, get to, you know, draw up on their insights. I get to probably spend more time diving deeper into the issues before us, you know, read extensively the findings. So to me that's the fun part, dive into what's before us, you know, think hard about what the decisions are, interact with my colleagues, and, you know, do the best that we have with the information we have and make timely decisions. I would imagine that all this helps you or even requires you to have sort of a long-term vision about how this is all going to, how the energy initiative and the development of energy is going to unfold in our state and that you, you know, when you sit there on the commission, you look ahead. You look way, way down the road and ask yourself, how is this going to fit in a larger development going forward? Do you? Sure. Yeah, I mean, I think we both internally and what we've asked of a lot of the regulated entities are to lay out a lot of those plans, analysis, you know, painting that longer-term picture, but the same time things change, technology changes. So we remain flexible and stay focused. I mean, at the end of the day, we, our, you know, our decisions usually have a near-term focus. You know, what's the next, I mean, do we approve this project? Is it going to go on the ground in the next year? What's, what changes to programs or new programs are we going to introduce? But I think one of the skills to have is to see how those individual decisions fit into the bigger picture that you're talking about both, you know, within the context of decisions for this company or is it fit within the larger energy landscape within the state, within the state's landscape. So I think that was something that I watched fellow commissioners do when I was on staff and something that, you know, I've tried to bring, I mean, bring to it, bring to the table myself. Is it, is it hard, Jay? What I mean is you're faced with complexity, sometimes contention, sometimes all kinds of new territory. I mean, you're cutting new territory all the time. Other times when you, pardon the drama, you sit, look out the window and you want the answer to come to you. All these issues dancing in your mind and you have trouble actually making the decision. I mean, is it like that or is it just come to you easily? No, I won't say nothing. It doesn't come easily. And yeah, I mean, the tough decisions often have all those attributes. I mean, a lot of them complex, you know, their long-term publications, oftentimes, many times controversial. And I think it's just you, you, we do the best we can with the information we have. I do, I do spend a lot of time thinking about what the right thing to do is. But at the same time, we can't spend our time thinking about, I mean, there's a time dimension to this where the time matters. And so we, at the end of the day, we ask our staff to review things, provide recommendations. And I work with my colleagues and review those and debate and discuss them by ourselves. And at the end of the day, we make a decision. Are you overworked? What I mean is, how's your workload? I mean, you say you worked hard. Does that mean, you know, too much? Does it mean that you're staying too late? I mean, what's it like? Because, you know, we all may want to apply for this job, you know. Oh, well, if you guys have, you know, we can take resumes here. I'll take them back to the office. Look, we, I mean, we've been fortunate we have been able to staff up. I think we are near kind of our full allotment of positions. And again, I said earlier, we've been fortunate to hire good young people. But our workload has increased. I was talking before the show. I had to double check before I came out. We have 11 active rate cases before us. And, you know, these are very time consuming, complicated endeavors. So that by itself is takes a lot of time and effort. So we're, you know, we're our staff. It's one of the hardest working groups of people that I have ever worked with, you know, no matter what the sector. And you, do you take it home? I work pretty hard. You know, you talk about rate cases, you know, and you've distinguished it twice already in this short discussion. And I really wonder if you can tell people what, what is a rate case and why is a rate case different from other cases, other decisions that you have to make at the PUC? Sure. Yeah, I can speak generally about it. You know, this is traditionally what you would be referred to as a lot of the bread and butter of regulated utilities. So the utility comes in. They say that we believe it will cost us X amount of money to provide service to our customers. It's an estimate for a year. The consumer advocates office is always a party to these cases. They have a profession, their professional staff and consultants review all, and this, you know, for our bigger utilities, there's binder with walls of binders full of all the detailed estimates of what it costs to run their business, and as well as, you know, they're asking for an adequate return on their capital for capital invested by the company. And the consumer advocates office reviews all that information is often time involved in extensive negotiations and potentially trying to settle on the rate request. It's almost always a request for a rate increase. The commission will review all that information. There's questions asked of the parties. And again, at the end of the day, we make a decision and that decision establishes basically how much the utilities can collect to run their operations and how they do that. So it establishes the rates that the utilities can charge customers. You know, the business affairs of the utility, what it's costing them to generate or otherwise produce and deliver that electrical energy. Are there any other factors? I mean, the issue often seems to be whether people can afford it, whether there's going to be political pushback. In my own mind, the distinction between the rate case and all the other cases is the rate case has an immediate effect on my electric bill. It has an immediate effect on the plug and so did a calculation. Roughly the cases before us, the annual revenues of all those companies are about two and a quarter billion dollars. So this is a significant amount of money that affects the cost of living for all residents and businesses here. And our job in this is to balance both to determine what are just and reasonable rates for the service provided, but also allow for the opportunities for the companies to earn a reasonable return on their capital. So they need to cover their costs to invest in their systems. They need to remain an attractive place to invest capital, but we can't burden customers with unreasonable rates. So there's a balancing act of all those factors. They're often, you know, can be very contentious because exactly at the end of the day, there's an ask to increase everyone's rates. They never come in and ask for a reduction. Well, what's interesting in this most recent rounds with the impact of the recently enacted tax reform, where those, you know, those tax rates are factored into rates that they're considered a pass-through, with the impact of the reduction is basically offset the negotiated settlements. I think in the recent settlement with Wine Electric, the net impact is a slight decrease of about $0.75 a month per customer. So that's built into the rates? After all these kind of factors get after the settlement came in and the impact of the tax reform was factored in. So there was an agreed to increase and then the tax reform has offset that. And Wine Electric Light Company filed a motion yesterday asking to move forward on the impact of the tax relief. And it looks like that'll closely, largely offset the interim rate increase that we granted in August. So the reason I say it's not always necessarily an increase and that, you know, when you read the comments, everyone, you know, the commission, why does it, we end up as a rubber stamp for all these rate increases? What I can say, I mean, we take the serious, or that we take the process extremely seriously because we know something that affects everyone in the state. But it is that kind of complex balancing act that we're involved in. Jeff, you must have thoughts about this. I do. You were on this issue for the whole time as consumer advocate. This is your ballgame in many ways. And certainly our law firm is responsible for a number of those rate cases that are ongoing before the commission right now. But the question I had is, you know, the commission has been rather harsh in its criticism of Wine Electric. And, you know, and to the point where standard and poor, I think it was that came out about a couple of years ago that said that, you know, the regulatory environment in Hawaii is not conducive to, you know, for the utilities. And it's not just Wine Electric. I mean, KIUC had its decoupling application rejected. Hawaii Gas had the four G09 applications dismissed. Young brothers came in a couple of years ago for a rate case that finally agreed on about an $88,000 increase or just a very small amount. But do you see, you know, when you talk about a balancing, is there going to be some shift toward being a little more utility friendly so we can attract capital in the state? Or is the commission going to be still business as usual? Okay, we're going to take a short break now. And when we come back, Jay, we'll talk about that, right? Okay? One minute break. I'm doing this for the benefit of the engineer because we need to take a break. Yeah. We'll be right back. This is Think Tech Hawaii, raising public awareness. Good afternoon. My name is Howard Wigg. I am the proud host of Code Green, a program on Think Tech Hawaii. We show at three o'clock in the afternoon every other Monday. My guests are specialists from here and the mainland on energy efficiency, which means you do more for less electricity and you're generally safer and more comfortable while you're keeping dollars in your pocket. Okay, we're back alive and we took a break. Not because that question was anything difficult, but because we take breaks in the middle of the show. Nevertheless, we're back now, Jay. And could you address Jeff Ono's question? So yeah, I took him outside and put him in a headlock. Well, so a couple of things. As Jeff knows, our active open cases are contested case hearings. I can't speak to the substance of the decisions, the open cases before us and pending decisions. I did talk about, you know, as when we do this balancing act in these, what I said, what I did, you know, a consideration is making sure that the regulated utilities remain an attractive place for investors. There's been a lot of things written about the environment here in Hawaii. I guess what I would speak to is I think if you look at the recent track record, you know, we are... These are all relevant considerations in our balancing act here. And I think I'll just leave it at that for now. Good answer, Jay. Look, at the end of the day, companies do need to remain an attractive place. It affects the cost of their raising capital. At the end of the day, that affects the rates that we set in charge for customers. These are all capital intensive businesses. What we're asking the state, I mean, the state as a whole is a massive transformation of the energy industry that will, you know, rely on a lot of new capital investment. So these are all part of that, you know, when we sit back at night and think about what the right thing to do is on these very individual decisions, it's a factor, important factor. Well, you know, that really takes me to this discussion. You guys were mentioning it took place in the Maui conference between Jeff McElina and Rick Rochelow about whether it's worth it, whether the cost-benefit analysis on reaching 100 percent, because it's very expensive and it requires a lot of capital. And can we do that? Or are we asking too much of ourselves to try to get down that track? And I wonder where that policy point fits. Let me add one point. I came back from Australia and I went to Melbourne. In Melbourne, they have these trams and the trams are free and they have achieved a fantastic increase in the amount of business in the central business district because of the free trams. And really the question is whether the trams need to be electrified. They're all old, see, the trams. They're not new. They're not high-tech, but they're free and they have had a huge effect on business. So you wonder whether it would have been, whether the cost-benefit analysis would have been as good had somebody said, well, we're not going to do this with the old trams. We need brand new trams. We need highly high-tech clean energy trams, whatever. And so sometimes the existing stuff works fine, I think, and maybe you don't need to go to clean energy to achieve a better community in some ways. I don't know what your thoughts are about that. Well, let Jeff start. You're the guest, Jay. Nobody wants to hear what the former consumer advocate is saying. No, no, no, come on. I'm just being former, yeah. It's a tough question. And when you have people like Rick Roscholo and Jeff McElvina from Blue Planet debating that question, it just shows you the level of... How we can disagree and yet there are certainly points that everyone can agree on. We agree that we need to reduce our dependence on fossil fuel. We agree we should be more self-sufficient. We should be less dependent on imports. But how do you get there? And when Rick Roscholo says HNEI's analysis shows that at 50% renewable, that's when the costs really start to ramp up. And so we're getting close to that 50% area where costs are going to start to really go up. And Rick's point was it has to be fair to everybody. Yes, there are going to be costs, but we can't just be incurring costs to benefit those who can put rooftop solar on their homes. It has to be fair for all ratepayers, especially the low-income ratepayers. I see it that way too. I don't know how you feel, Jenny. So are you trying to put me in Jeff's position here? Well, no, but actually I would love to hear you take Rick's side. Well, look, a few points. Well, one, we were talking about this earlier. We both agreed it was a high point of the conference. It was a great debate between the two of them. Their moderator, Gavin Bade, I thought it was... I mean, most everyone stayed till the very end and it was engaging. But I look at a few lenses on this. One, I made the point we're engaged in a significant transformation of the system, but at the same time, a lot of the key fundamentals are all... the technical and economic fundamentals are aligned with that. We're continuing to see significant improvements in solar wind technology, battery storages right behind. We're seeing record prices. We have seen record prices initially here in Hawaii, but particularly as you look at new deals being struck for utility-scale renewables on the mainland and other parts of the world. So I think we have a lot of... I think all of the technical challenges that have been raised at some of these penetration levels, the kind of the optimist side of this is winning out for what you see in the recent deals. We have a new large-scale renewable procurement effort going, and so we'll see we will test the market locally and have a very clear idea how, you know, in this kind of the next point here, we get to the higher levels just how costly that's going to be on the distributed side. I think we're also seeing a lot of significant progress for both technology and how companies are coming up with new business models to take advantage of new rate structures and kind of new programs there. So I'm optimistic. One of my takeaways from that debate was that they... I think Rick said 50, but he also went up to maybe 50 and maybe 80. I think kind of the fundamental that you see in the economics profession, you'll see basically at some point, costs increase for these technologies for as you add more and more renewables to the system. I mean, just where that becomes steep, we don't know, and as technology improves over time, it will allow us to push further and faster. And, you know, we have some time still. It's a 2045 goal, so we'll see how innovation in particular helps us get there. This is driven in a way... The future of it is driven by how fast the technology moves and how pervasive and how smart it is. Let me ask you this, though. If there's one case that you've participated in the past year or so that you've been on the commission, the one that throws the longest shadow on our future that has the greatest leverage effect in Hawaii, what would that be? Oh, great. That's a good question. I mean, I think some of the decisions on the planning dockets are important both for providing kind of the near-term certainty but also the longer-term planning horizon and those capital investments are expected to be... These are 20, 30-year-type projects, so by design they have a long-term planning horizon, and so we'll see a lot of the discrete proposals and projects under those come in in the next 12 months. So I think those were important decisions and I think to get to Jeff's earlier point, there's been a signal out to the business community and the investor community that there's some greater certainty here on the near-term path ahead, and I think that's something people were asking for and interested in. A couple of the small points, well, I'm not so small, is in cybersecurity, two weeks ago there was an article and at times it had spread throughout the media in the country to express concern about Russian tampering with utility equipment, utility plants, generation plants all around the country and suggesting that there were many plants that had been compromised, I don't know exactly which ones, I don't think they said exactly which ones, but that's of some concern because you don't have to spend a lot of time thinking what would happen if we had no power and we woke up one morning. It would be bad. So the question is what is happening as far as you're aware, as far as the PUC is aware, to deal with that possibility and to be resilient about it? So I mean, it's what I think about some of the topics that do keep me up at night. This is definitely one of them. Kind of the protection of our critical infrastructure and what the services that are provided here in Hawaii are essential both for local residents but also the nation. I know through various efforts, state regulatory commissions have worked together to look at cybersecurity and protection and critical infrastructure at the national level. I think I have been invited at an upcoming briefing about some of those efforts, interaction with the Department of Homeland Security. I know there's a lot of interaction between those agencies and the electric utilities and all the essential service providers. So I would say that it's probably worth bringing some of the... The utility folks are actually the best prepared to answer some of those questions. I know when you deal particularly with their IT systems, they do employ a significant level of concern and oversight to this topic. One last thing that we talked about this before the show is the organization of the PUC. There was a bill pending. I wanted some level of reorganization of the PUC. Is it acceptable? And that bill has been deferred. That's not going anywhere. But is the way it's organized now acceptable at least to you? Yeah, I think I'll comment on a few things. One, going back a couple of years, there was a bill to restructure the commission, move it from between agencies where we would be attached. And I think that's been a... I was on staff at the time. I think it's been a significant success in that reorganization and restructuring has allowed us more autonomy and flexibility to be attached to and have a level of autonomy working with DCCA. And it's allowed us to staff up. And so our ability to operate under that to me has been a significant success. And I have said it to the senator that... Because I lived it. I, on staff, we were... We had trouble hiring people. And it was really kind of a... It was very much bureaucratic. And we would make commitments to staff and not be able to fall through. It's really challenging. And that... So that environment is significantly improved. I think we did... There was an audit of the commission that was recently released. The commission has supported the recommendations in there. So we will continue to improve on that front, work on our strategic plan, update the DMS. There were some recommendations on further... Retraining of kind of programs in place for retraining or new staff that come in. So we're working on all of those things. And the last... As I understand it, the bill that was pending has been deferred. And, you know, we'll... I mean, we're... I mean, we remain committed to improving our organization. I strongly believe that. Bill or no bill. I mean, we have to. Jeff, at that time, would you like so much? This is Jeff's favorite time in the show where he gets to summarize. And I always put it the same way. I say, Jeff, would you summarize? And then he does something else. Okay. Well, today, you know, our topic of discussion was supposed to be about legislation. It was supposed to be a midterm update on energy-related legislation. But we had the honor of having Commissioner Jay Griffin here. And we sort of broke away from that. And I thought that was a good thing to do. We got some insight from Jay on the commission and potentially our new commissioner, hopefully our new commissioner, Jenny Potter, who will be starting soon. So this is a great show. I think we should do this type of interview more often, Jay. Yeah. And we should have Jay come back. We'd like you to come back because you are very refreshing to be here. And it's great to have you here at this table. I enjoyed the time. Jeff and I are going to have to talk a little bit afterwards. No, thanks for the opportunity. Thank you, Jay. Thanks. Hello, hi.