 This is Stink Tech, I'm Jay Fardell. Marco Mangelsdorf is my co-host contributor and we have today Henry Curtis, we're going to talk about the PUC decision a couple days ago on who, who knew it. Ah, you know, more action in that one case than you could shake a stick at in years and years. So first thing is, Marco, can you introduce Henry? Tell us about him. Tell us about the scope of this discussion now to follow. I'm really, really pleased to have, and we join us today because he has been one of the main players, one of the good guys, the good guy on this long and arduous path of Fuho Nua, Helco, trying to get across the finish line and they've been not denied for the second time. So thank you so much, Henry, for joining us on a short notice like this. And I'll let you take it away. What, what went down from our, our friends and colleagues and all the above at the Public Utilities Commission on Monday. Well, the wall, thank you Marco and thank you Jay for having the show. The Public Utilities Commission found that the who who knew a proposal simply does not make sense that there are a lot of unanswered questions. Fuho Nua said, well, then if there are unanswered questions, just tell us what you want us to do, and we'll talk about it. But of course, the applicant coming in has the burden to show that their case is reasonable. Instead of turning around to the regulator and saying, you tell us what you want. So the PUC rejected the power person agreement for the second time. And now we're an eye of post PUC process. Yeah, so what was it, what was the background of this hearing I can recall reading not too long ago that it was continued for a week or so in March, was it. And then at the end of that hearing, they sat down wrote their opinion and they came up with a two to one decision here. So what's the background for that. There was an evidentiary hearing where you're allowed to cross examine witnesses on all sides. I found it interesting that the dissent argued that because life land does not cross examine all witnesses. That means we have no controversies with any of the witnesses. Rather, you look at the entire evidence in this case, over the past several years and decades to determine how you argue your position. In the evidentiary hearing, all the parties presented their statement of position their legal brief and the PUC weighed all of the information and came out with the rejection of the power purchase agreement. So one of the things in the dissent I noticed by Leo, since the on the third commissioner was that no, the Supreme Court referred this back remanded it back for a specific, you know, hearing on a specific issue. And he looked only at that issue and found that the burden that who knew I was under the student to the remand had been met having to do with greenhouse gases. Do you agree with that statement? And if not, why? No, life land disagrees with that statement. That statement that he presented was probably written by, or I shouldn't say that it may have been written by who who knew or certainly by someone very familiar with who who knew as arguments that the P that the Supreme Court focused on a very narrow topic. But the Supreme Court actually said, and if you look at the first couple of pages of the decision, they actually said life land appealed on three issues. And they said we're granting life lands issues on one and two, but not three. And to which who knew I said, well, the Supreme Court doesn't understand the word and one and two are really the same thing. It's really a narrow focus. It's really just on greenhouse gases. That we find totally bogus cost has to be one of the issues you look at the fact that who who knew will raise the rates of every resident on the big island for 30 years. That has to be a factor and the commission recognize that. If you look at a power purchase agreement, you got to consider cost right and just, I mean just coming in from from the side that would you would expect that you would expect any examination of any power purchase agreement to be an examination of cost among other You know, the, the, the general discussion of the environmental considerations. You know, I guess who was saying this is not a problem. You know, the greenhouse gas effect is offset by other factors. And indeed, Warren Lee of who who knew in the newspaper article in civil beat was saying it's not a problem, because we, you know, there are countervailing considerations that would offset the concern about greenhouse gases. What are your thoughts about that. So the major offset would occur outside of Hawaii and would involve procedures and protocols that are not yet established. So what who who knew us said is, after the commission approves the power purchase agreement, then we will sit down with the PUC and discuss with them, how we can actually prove we have offsets on the continent. And that is several interesting issues because one, the PUC does not regulate who who knew the public utilities commission regulates utilities, not biomass companies. And second, the PUC regulates what happens in Hawaii, but can't regulate what happens outside of Hawaii. And third, as the PUC noted, who who knew a litigates everything. In fact, they have a 1.5 to $2 billion lawsuit right now hanging over he goes ahead. Who who knew a is suing he go in federal court for 1.5 to $2 billion. So for who who knew a to turn around and say to the PUC, first to prove it, and then we'll negotiate on things that you have no jurisdiction and no control over is totally crap. Well, you know, it would seem that there's been plenty of litigation on this and scorched earth kind of litigation, up and down and back and forth to the Supreme Court. And you know, various other attempts to change the result of the commission, change the thinking of the commission. Marco, you were quoted in the Sylvia article to say that, you know, you complimented the PUC on its resistance to the quote onslaught. And I'd like you to talk about the, you know, the litigation and the controversy over the years that has to run this project and what you mean by onslaught. I've been more witness to, to multiple campaigns and controversies and and people trying to get things done. And I can't identify any other issue any other project, any other effort that has been more a dedicated more relentless, more unceasing, probably more expensive. Of course, none of us are privy to what who know has been paying for counsel over the years. But I got to believe and you know so there's someone I have the food chain there who has made trying to get this across the finish line, a very personal and very high priority. And that's of course they're prerogative to do so. And kind of a tangible example to illustrate the onslaught is that, you know, we well known that the commission was going to come up with a decision in order. Especially with chair Jay Griffin's departure the end of next month. And week by week, who knew has continued to take out full page, not full page but large color ads in the big island newspapers and probably star advertiser as well. And just, you know, continuing pedal to the metal, and I would think maybe now they'll stop, perhaps, or maybe not maybe they'll continue the ads. But I mean, they're, and that's just part of the onslaught Jay. And that is my belief that they have been pushing and pulling all the possible political lovers that they can push and pull county government, state government, wherever they can to find allies for their, their efforts to try to bring this power plant across the country. So it's, you know, it's clearly backed by very deep pockets and a, an unwillingness to, to, to call it quits so I mean that begs the question to me and I'd love to get Henry's view on this. I mean, you know, if I game this out regain this out. The commission has, I believe, this weekend next week to file a motion for reconsideration and appeal to the commission, fairly short small window. So let's assume they're going to do that. And let's assume just for the sake of assumptions that the commission will deny it. And then what, then what did they go back to the Hawaii Supreme Court and essentially argue that the commission yet again did not pay attention to explicit directions from the court, they could do that. And let's say they do do that. And the court rules in favor of the commission saying no they followed it. They followed the instructions we gave them. And I know we're, you know, I'm engaging in hypotheticals here obviously, but one of the questions I guess I have for you Henry if you just kind of go with my sequence here. By then, you know, Jay will be gone or close to being gone, there will be a new commissioner on the commission Naomi. I, it'll be a different dynamic of course whenever you have a new person replacing one of three of course a small number. I mean is it possible Henry is it possible that after the scenario that I outlined with a newly formulated commission that the parties in this case, Helco and who knew a could resubmit the same PPA to a newly formulated commission with the hopes that they will get the two out of three needed, at least two out of three needed for approval. Is that possible. Marco you raised several interesting issues so I'll try to take them one at a time. First, you're right they have until I think next Thursday to file their motion for reconsideration. Now filing the motion for reconsideration does not put a stay on the decision. So they have 30 days after the decision to file their appeal to the Supreme Court. The, theoretically, the commission could say when they filed their motion, yes, we're going to stay the decision, but that's totally not going to happen. So 30 days after the decision, they have to appeal to the court. Now they can appeal under one of two issues. One, that the PUC did something procedurally wrong. Or second, that they got their basic facts wrong, and they interpreted them wrong. In the Supreme Court case and why I'll see IP in 1996, the court said, we're not going to second guess the the PUC on policy. So who knew it would have to show that there's a procedural defect in what the PUC did. I think it's ironic that, like, where's the beef. They've spent millions of dollars setting new records, exploring newspaper articles on the Big Island and Hawaii and Wahoo and elsewhere. They still haven't answered basic questions at the PUC. They've set new records, I think, at the PUC for the lack of transparency. For example, who is who who knew it. We're in our 15th year, and we still don't know their corporate structure or who owns them. We don't know who their major investors are. No other business that I know of has ever gone to the PUC and said, we won't tell you who we are, but we want you to approve this contract. So we think we're going to win at the Supreme Court. I'm confident of that. But if the Supreme Court, if the Supreme Court goes very verbally, and then they want to come back and submit their bid again, they would have to do it either through a competitive bidding process. And the HECO RFP3 is the HECO RFP3 is about to be released and they could bid into that. But that would start them all over from the very beginning where they'd have to show the utility that they're better than all the other bidders and why they deserve to win. And then the PPA would be filed with the PUC and it would go, the process would start all over from the beginning. Or they could approach the HECO and say, we want a bilateral filing. We don't want to compete with anybody. We simply want to file it. I don't think the Public Utilities Commission would accept that because the Public Utilities Commission has said, in order to get the lowest price, we should be competitively bidding projects. When Hu Ho Nua first started in 2008, there were not a lot of competitors, but now there are competitors that offer far cheaper options than what Hu Ho Nua is presenting. The notion that one of the Hu Ho Nua electric companies would enter into a no bid, you know, exclusive PPA just seemed to defy believability at this point. Since, especially during days of incredibly high electric costs and the need to get new generation that's going to be under contract for decades, right, to get that new generation as competitive as possible. So that's one thing and I very much appreciate this particular PUC has been very dollars and cents conscious as far as what's the impact going to be on ratepayers, especially those ratepayers who are struggling already. So I really appreciate your explanation. And in terms of this lawsuit in federal court, it's just essentially been on hold, so to speak, right? It's been in abeyance that I would think if Hu Ho Nua, the plaintiff were to revivify or want to move forward with the federal lawsuit, that probably wouldn't take too much time or effort to do. Right. It's on hold as long as there is a power purchase agreement being debated at some level. Once the P once there is a non-appealable defeat of the power purchase agreement, the federal lawsuit kicks back open. The non-appealable. I mean, after either they do, well, after they go to the Supreme Court, the Supreme Court says no, then the power purchase agreement is dead, and then the federal lawsuit against Tico can start moving again. Since the last time the Supreme Court had abided this particular issue, where if I'm not mistaken, that was where Hu Ho Nua essentially tried to postpone the evidentiary hearings, right? And that was slapped down with some colorful language, I thought, from the court. That was pretty quick. So what's your take in terms of how quickly, and how it's difficult to predict the court because they had their own scheduled course, how quickly you think the Hawaii Supreme Court would rule on an appeal from Hu Ho Nua? Not being a lawyer, I would imagine there would be one of two paths forward. The court could either simply reject the appeal saying something or other. Or we would go through a section where we brief the court and we have opening briefs, countering briefs, reply briefs, in which case the decision would probably not occur until early next year. And can we just for a few minutes here extract the procedural controversy, extract the politics and all the trouble, the gauntlet that Marco has been talking about, and get back to the basics. I mean, the reason that Life for the Land has taken its position, the reason that Life for the Land has continued its position. The public policy concerns that you have, and that arguably we should have about this project. I think we sort of, we are in the, what do we call it, procedural weeds here, bouncing around between the PUC, Supreme Court, with what an ordinary observer might think is pretty technical stuff, and pretty political stuff, and controversial stuff, and fighting for the sake of the lawyers, essentially. So, but my question to you is, can you explain to us and the public now, you know, what the real issues, public policy issues are here. And extracting all the procedural stuff, you know, it seems to me that we expect the PUC to determine policy in its statutory area of operation of jurisdiction. So if we look just at public policy, Henry, what are we looking at? I would say that there are three things that it boils down to. One, currently around the world, we're chopping down, we're having a net loss of more than one million trees an hour globally. That's the total we chop down, the total we plant, the net loss is more than a million trees an hour. That is a very serious and a climate change future. And therefore there are fights around the world about whether biomass should continue to wholesale chop down forests in light of climate change. That's one issue. The second is transparency. What, show us the facts. Where's the beef? Pujo Nua is less transparent than any other company I have ever seen in Hawaii. That is not the way you further business. Third, and this is I think absolutely critical and picked up by the public utilities commission. There are carbon offsets that make them carbon negative or based heavily on speculation and not on substance. Okay, let me ask you this. When we started this discussion, I mean, you know, Marco and me and once in a while you, and for that matter in the discussion with Warren Lee, we had him on the show. You know, the numbers have changed as I recall the investment that Pujo Nua had made at the outset of our examination of this was something over 300 million not quite 400 million dollars. It seemed like that had gone up, and it was 400 or more. And the last report is it's over 500 million. I don't know how it went up 500 million dollars. If it hasn't operated yet. Maybe that's, you know, administrative costs, the legal costs. But right now, ostensibly according to the newspaper, who has 500 million dollars into it. Let's assume for a moment that, you know, you could defend the accuracy of that number. I'm not. I'm not convinced of it, but let's assume we could defend it. What that what that says is that offshore investment and as you point out, we may not know exactly who is making this offshore investment of 500 million dollars is is at risk here. The interesting thing about Hawaii is it's got to learn to manage offshore investment. It's got to learn to attract offshore investment, and it's got to learn to manage the companies that are in which that investment is made. And, you know, Hawaii hasn't been that good at either of those things. And in fact, Think Tech has had a number of, you know, programs dealing with how you do that properly and improperly sometimes. So one could say, Henry, that we should not be turning away an investment of 500 million dollars, assuming that's the right number, that we should encourage offshore investment, that we should encourage offshore investment and energy. How do you answer that? You know, Wall Street may say to the extent of Wall Street may be involved. Wall Street may say those guys in Hawaii, they're they're always opposing our investments and squashing our projects. We're not going to invest anymore. It's just too hard out there. And somebody always pulls the rug on us. What is your answer to that, Henrik? As an economist, I would say that we should welcome competitively bid renewable energy projects that drive down the cost for ratepayers, regardless of who is funding it, whether they come from Hawaii or from the United States or Asia or Mars. Whoever has an idea to bring down the rates to increase renewable energy in Hawaii, we should be opening the doors for competitive bidding to get the best price and the best deal. We send a very different message to Wall Street when we say, if you throw a lot of money at a problem, we will let you build it because you've spent that amount of money. That is a very dangerous approach to take. We should welcome good projects, but we should be discriminating against really bad projects. Thank you. One last thing before I turn this over to Marco to close. And that is the man in the street question. You know, I think that has been asking this question since we met you, Henry, a long time, 20 years ago already. You too, Marco. And the question is, why should I care? Why should Hawaii care about how this goes? Why should Hawaii care, you know, the man on the street, the woman on the street, about what happens in the PUC, what happens in the Supreme Court? What happens to this project? What happens to renewables or not so renewables on them on the Big Island? Why should I care? I would say it boils down to probably two issues for the common person. One is, how much is it going to cost my pocketbook? And second, is climate change going to destroy the environment that I know? This project would take more money out of people's pockets and it would do more damage to the environment and to climate change. We need solutions not to step backwards. I've long been a believer in cost-effective renewables, not renewables at all costs. And I think there's substantial debate regarding whether cutting and burning cheese is truly renewable. So the power purchase agreement as proposed and has been considered by the Commission on several occasions now, I believe, has shown to my satisfaction that this is not cost-effective and not on the benefit of Big Island ratepayers. And second, and this is more driven by geographics, the notion of having logging trucks up and down Hamakua coast from north to south and south to north and up in Pepe Kea, which is not far from where I live in Hilo, the people who drive that road and who live nearby as well would be significantly impacted by a plant like that going online. So that's another reason why people should do care on the Big Island. Henry, how much of what you guys have been saying, both you and Marco, has an effect on the PUC and the Supreme Court? Do they understand the points you guys just made? I think the PUC and the Supreme Court both understand the issues in this proceeding. I think the common person has gained a lot of awareness because of the massive amount of media on this. Certainly, legislators are far more aware of this issue. And that is one, if you want to say one benefit of Huho Nua is that we have gotten far more press and media out on energy, which is a critical issue, and the cornerstone of all economic policies. It's important to mention, and I've mentioned this before on similar discussions, that it is to the credit of life of the land that you have stayed with it for all these years. It's to your credit that you have fashioned your position and maintained your position and found a way to speak on your position through thick and thin, up and down and across. And so admiration goes to Henry for having done that, having done it on behalf of what you perceive to be the proper policy and the proper public sensibility. Thank you for that. As we've been talking, I was thinking, if one Henry Curtis and Cad Brady had not brought your case before the court, what, when did you file the four or five years ago? Oh, 2017 right 2017 is when it was approved by under Randy was a commission. Yes, I mean if you hadn't done that. By all probabilities that plan would be burning trees right now as we speak. So it is a testament to, you know, this world that can be so tough and so cynical sometimes a testament to single or two individuals who in a city, the need, the screaming need to do something to try to stop. Something not so good from happening. And a lot of times, of course, you know that person or two is not successful, but there are also times when they are successful. So, I'll just, you know, roof off of what Jay said, and add my, my, my respect and my, my esteem for you Henry for doing what you did and for getting us this far, you know, the thing with who I know a man is that it's not over until it's over and I don't think it's over, but I think it's closer to being over. So thank you so much. I think we have moved the ball closer to the end line. So to me this all boils down to four decades we've been talking about renewable energy. We've been talking about clean energy we've been talking about getting off fossil fuel getting off greenhouse gases and all that. We've been talking about it till we're all blue in the face. So the question, as Marco puts it, are we going to burn trees? Because trees, sorry, trees is not really clean energy, that's my view. And that's the issue before the house is the issue before the PUC, which I think they've, you know, pretty much made clear their view on that and ultimately the issue the environmental issue facing the Supreme Court. So that's where we are. And in a way, this tests our system. It makes us an inflection of sorts. Are we going to be serious about clean energy, or are we going to make exceptions that swallow the rule? Just my reaction. Absolutely. Henry Curtis, Marco Mangelsdorf, really appreciate the discussion. And I'm sure there'll be more to talk about down line. Aloha. Aloha.