 This is Think Tech Hawaii, Community Matters here. Okay, we're back real live. It's Monday. Wow. I'm Jay Fidel. It's 9-11. Wow. We have to talk about that. And we have Mina Morita of Energy Dynamics, a former chair of the PUC, former legislator in Hawaii. And we have Marco Mangelsdorf, Provision Solar and Hilo, who follows not only the PV statistics in the state, but everything around energy. Welcome to both of you guys to our show today. Hi. Hi, Jay. Hi, Mina. Marco. Greetings. Thank you for having me on and us both on again. Jay, it's always something to look forward to every other Monday in my life. It's 9-11, you know. And as I passed City Hall this morning, I saw there was a big celebration, a celebration memorial service of some kind there, not a celebration, obviously. And there were flags around the city in half-mast. What does this mean to Hawaii 9-11? Because we are far away, we've got the news last, and perhaps we have forgotten. Have we forgotten, you guys? On Hawaii, 9-11 has a double meaning, you know, what happened to the nation as a whole. And of course, today 9-11 is the 25th anniversary of Hurricane Imiki, so that certainly has a special meaning on Kauai. Yeah, you bet, it's a double anniversary today. Marco? I think, you know, amongst other things, of course, including the tragic loss of the lives of several 3,000 Americans, I mean, it showed for the first time in decades, if not longer than decades, a vulnerability that America was found to have had despite the fact of having oceans on our east coast and off our west coast and having friendly Canadians to the north and friendly Mexicans to the south that we weren't as invulnerable as we thought we were, and that's really had a dramatic impact on our foreign policy, our security policy over the past 16 years, so it's a very different world from 9-11 2001 compared to prior to that, and I just kind of the overarching vulnerability of the United States and so much of our species, I think, especially in light of global warming and super storms and things that prior to the past dozen or so years were thought to be 1-in-100 or 1-in-500 year events that we're seeing at a certainly much faster clip, much more frequent clip than 1-in-100 years or 1-in-500 years, so I think vulnerability, that's really striking out to me. Yeah, yeah, fragility, vulnerability, absolutely, those are the words of the day, not only because of 9-11, but because of the storms that are happening now, and as you said, Marco, and there was a piece on National Public Radio just a little while ago, a proposition that used to be a 100-year storm has now become a 10-year storm, and the other point that it sticks in my brain is, this Irma is a five level, what do you call it, five severity hurricane, well it would have been a two severity hurricane, and not much of a threat at all a few years ago when sea level was a point or two in temperature below where it is now, and that in fact the temperature on the surface of the ocean exacerbates the storm dramatically. In this case, a couple of degrees makes a difference between what would have been a two severity storm to now a five severity storm, and that temperature isn't going down anytime soon, so we can expect more of them, vulnerability, we got it. So this all accentuates, it all accentuates renewables, renewables are what everybody should be doing, and we have to keep on doing it even though Hawaii's footprint, if you will, is not that big in the world of climate, we still have to do it. So that's a message for us. So let's talk about renewables. Let's talk about how the sale of Molokai may affect renewables. What's happening Marco? The parent company of the Molokai Ranch, which is by far the largest private land holder, private land owner on the island of Molokai, which owns 35%, 35% more than 130 entire island company based in Singapore, they announced last week they're putting the island up for sale for a paltry $260 million, which I figured a coin drive by asking everybody to look between the cushions of their couch, maybe we could come up with enough change to have a community sponsored effort to buy Molokai and turn it over to the people per se. But it's just I've been a big fan of Molokai ever since I was there 50-some-odd years ago as a kid going fishing with my father, so it's very near and dear to my heart. And the renewable energy situation is quite interesting over there. I just talked to one of my Miko contacts earlier today and essentially the island has been closed off for additional rooftop solar for the past two years or so, and that's not something that Miko is happy with at all, but they have limitations in terms of just how many more uncontrolled PVKW that the grid can handle over there, which is a small grid. So that's kind of on the micro side in terms of what's going to happen on the energy, but on a more macro kind of juicy political social level, I just see that island as being kind of a throwback in time and that there is a substantial part of the population there that doesn't really want to see any changes or very modest changes take place. So the rub I see is that Molokai Ranch has been losing money, substantial money each and every year for years and years, and now apparently they're tired of it, so whoever were to purchase Molokai Ranch, they're going to do one of two things. They will decide that they have deep enough pockets that they can sustain and are willing to sustain losses. In other words, losing money year to year to year like the ranch did, or they'll come up with ideas how to turn their holdings into profit-making. And I see that as being an enormous, enormous undertaking because as I said, any type of proposed changes in that island, I think, are met by kind of a knee-jerk no-no-no reaction. So it's just going to be very interesting to see how this plays out. Well, you know, Molokai's been sort of the outside island in the fullest sense for a long time. They don't really want anybody over there. They've shut down on tourist boats and cruise ships, they don't want any part of that. And on and on, you know, there have been so many examples of Molokai going the other way just to avoid being involved in the commerce and, for that matter, the social structure of the state. And it's really sad in some ways, but I suppose if you like to, you know, be behind, if you like to be relatively primitive to the rest of the state, Molokai is the place. But you know, this means that something is going to change in Molokai. Whoever buys this, I agree, it's a cheap price, is going to want to invest money in it and probably do something about energy there. I'm not sure what. Mina, do you have any thoughts about this? Well, first of all, I think, you know, for Molokai, it's finding the right economic model for Molokai. And yes, there has been a lot of resistance to development on Molokai, mainly because the types of development being proposed, the residents there didn't see it as benefiting themselves and or the island. So, you know, a lot of it is just finding the right direction that the community can buy into to stabilize the economic situation on Molokai. For a long time, it was, you know, just selling an export model, an energy export model. But I think, you know, we've come to learn that that kind of export model where there's really no benefit for the island itself is a difficult sell. So I don't see any, I don't see a proposal for a large wind farm moving in a positive direction should that ever come up again. I think, you know, the feelings there were well established. And so I don't, I don't see that happening. Yeah. Well, it reminds me of the Molokai reaction to next next era. They were they were not happy with the possibility of that change. And they opposed that change. And I suppose and the article that you sent around Marco, I guess it was Catherine Mickelson of the Star Advertiser, there was one part of it that struck me and said that they that whoever the buyer was, they could expect resistance, no matter who they were, no matter what they want to do in Molokai, they could expect resistance. So my question to you guys in the next four or five minutes is what do you recommend to a buyer who might be considering coming in at this bargain price? What's your what's your suggestion for how that company could handle the resistance in Molokai and what that company could do to structure an energy program, among other things, you know, to develop some economic base, what that what that company could do to structure an energy program that would be acceptable to the residents of Molokai thoughts at the risk of sounding kind of cynical. Jay, I recommend two things above one. Number one, come in with your eyes wide open. Number two, don't delude yourself by no matter how many community meetings you have, that you're going to make a damn bit of difference in terms of changing people's minds there. Well, why do it then? Why come in? What's your advice to them? Don't let Alina, I mean, maybe she can say something more optimistic than me. Well, I think, you know, I agree with Marco that anybody that comes in at this point has to come in with their eyes wide open and any type of plan will have to be developed from the community up to get buy-in. And there have been groups out there that have, as a matter of fact, a bunch of young adults on Molokai who are looking at different economic models for for Molokai and what is important to Molokai residents. And so you can't develop a plan from the outside and bring it to the island and sell it. It has to be from the bottom up. And the other thing is I don't believe it can be based on, you know, the old models of the 70s and 80s where you develop a resort and sell real estate around that. You know, I think it starts from how do you engage the people? How do you give them housing security, food security, job security? On a small island like Molokai and definitely electricity prices play a huge role just because the more expensive electricity is the smaller your opportunities for economic development. So how to reduce energy costs, huge issue. Big question, big question. But, you know, something that Marco said, something that Marco said really is provocative. Why don't we all chip in our spare change? Then why doesn't the state raise $260 million and make the state land? Or, and this is more in Marco's court, why not create a co-op and, you know, get some investors and some lenders and raise the money and have the co-op on it? Gee whiz, those are all, you know, kind of insider purchases where the people could be represented and we could have a new model both on the acquisition of the land, the development of an economic activity, whatever it is, and on energy. Does that appeal to you? You think it's doable? Any of that? Let me let me try to kind of unpack that, Jay. Oh, go ahead, Nina. Sorry. Oh, the short answer for me is no. I mean, I think government should facilitate, but, you know, what you're really talking about is new investments for the island. And I don't believe the public, the community can raise the kind of capital needed to give Molokai an economic boost. And then also when you're looking at co-op models, what you're really doing is shifting all of the development risk on, you know, the cooperative members. And, you know, I just don't see that. I think that's a really difficult model to sell in order to raise the needed capital. Mark, what do you think? Well, let me kind of give you a point of reference here for me. So I have been visiting or been, had Waipio Valley here in the Big Island, a part of my heart and my soul for, gosh, more than 40 years now since I graduated high school. I've been there many times. There has been a very, very beautiful coast. North side of the Hamakoko Coast here in the Big Island. And there has been talk over the decades of the state essentially buying the bulk of Bishop's land holdings down there. The state or the county, not so much of an eminent domain takeover, but just, I have no idea, no doubt whatsoever the Bishop would choose to get out if they could for a reasonable price. So Waipio is a microcosm, a small, much smaller area compared to Molokai in terms of the amount of Pelikia headache issues, challenges of the state or any governmental authority would be taking on by buying the ranches holdings down there. And I just don't see the will, let alone the wallet to do something like that. So I see it as a huge, a huge stretch that there would be some type of public interest or public availability of funds and so forth and drive. Now, as far as the co-op model goes on Molokai, I think conceptually it sounds kind of cool. But one of the things that has become clear to me is that you have a relatively small number of Miko personnel who actually live on Molokai. I believe it's somewhere less than 15, certainly less than 20, somewhere between 10 to 15 people. So any fact you have Molokai operations on Miko operations on Molokai that are being assisted, subsidized in a very tangible fashion by Maui Miko folks and the residents of the, the repairs on Maui who in my opinion are relatively are in effect subsidizing the Miko operations going on, on Molokai. So what does that mean to me? That means that if the grid were to be standalone on Molokai, not be a part of a large utility company, then the prices would inevitably go up. The cost of operations would inevitably go up, which would mean it would have to be passed on to the ratepayers. Now that could be overly simplistic. It could be overly pessimistic. But that is a conclusion that I have come to that mitigates against the practicality and the desirability of a standalone co-op, electric co-op coming into being on Molokai. Are we going to have to move on? We're going to have to take a break and come back to discuss other issues. But I just want to leave you guys with one experience that I had not three weeks ago when I visited Alaska on the Norwegian Sun cruise ship. We stopped at a place called Icy Straight Point, which is an island owned by the Indian tribe, the Tinklit Indian tribe, under an LLC, believe it or not. And every Indian in the area has some stocks, some interests in that island. And they operate it as a business for tourism. They have a board of directors. They do very well. They make loans. They make income. They pay off loans. They distribute their income. It's really a great story about how local people, if they can get their act together, can do whatever they want. And this is a great opportunity somehow. That's what I think about Molokai. And we shouldn't let it go to the likes of the company that owned it from Singapore because they weren't happy. They didn't make anybody else happy. And nobody made money. It was not a successful holding. Anyway, let's take a short break, you guys. We'll come back and we'll talk more about the customer grid supply program, how it's ending in October, coming soon, and what we're going to do instead. We'll be right back. I'm going to the game and it's going to be great. Early arriving for a little tailgate. I usually drink but won't be drinking today because I'm the designated driver and that's okay. It's nice to be the guy that keeps his friends in line, keeps them from drinking too much so we can have a great time. A little responsibility can go a long way because it's all about having fun on game day. I'm the guy you want to be. I'm the guy, say good morning. I'm the guy with the H2O and I'm the guy that says, let's go. Ted Rawson here folks, your host on Where the Drone Leads, our weekly show at noon on Thursdays here on ThinkDeck. We talk about drones, anything to do about drones, drones, remotely piloted aircraft, unmanned aircraft, whatever you want to call them. Emerging into Hawaii's economy, educational framework, and our public life. We talk about things associated with the use, the misuse, technology, engineering, legislation, with the local experts as well as people from across the country. Please join us noon on Thursdays and catch the latest on what's taking place in the world of drones that might affect you. We're back, we're live. Mina Marco and me on energy here on a Monday. Mina Merida, Energy Dynamics and former chair of the PUC and legislator for many years. And Marco Mangelsdorf, founder and principal of Provision Solar and of HIEC, the Hawaii Island Energy Co-op too. And so now we're going to talk about, in this show, we're going to talk about the Customer Grid Supply Program, which is coming to a close in October or possibly sooner if the caps in the program are reached before that date. And the question is, what happens, what does that mean, and what happens, and what do we do? Who wants to go first? Marco. Oh, sure. Well, I actually, I'd like to kind of delay that or defer that question just for the moment, and kind of take a little bit broader look that in light of what's been going on in Florida these past several days, and I want to read what I'm seeing here on the Washington Post website just a couple of sentences here, is that after the storm roared through Florida, thrashing winds tore down trees and power lines alike, officials said Monday that Irma appears to have cut power to a majority, a majority of the state's 20.6 million residents, and that they had no clear answer on when the lights would come back on. And this is a quote from Eric Szilagyi, President and Chief Executive of Florida Power and Light, which is part of next year. Quote, more than half of the population of Florida is out of power would be my guess. And how is that appropriate, or how is that tied into your question, Jay? And to me, it's tied in the sense that part of the beauty of solar, or rooftop solar, is that it provides the opportunity to have individual power plants on people's roofs, homeowners, business owners, and that with energy storage, which has been lacking both in terms of the cost being low enough, the reliability, the availability of technologies that are going to, battery storage is going to last, not more than just a few years, but for 10 or 20 years, that we have the opportunity here, if we're farsighted enough and willing to invest in it, to improve our likelihood or our chances of surviving in less disruptive fashion when these catastrophic weather events happen, by conceivably going down the path of having the resiliency of all these little micro power plants with battery storage, that if the grid does go down, that you will have some energy for however long the grid is down. And right now, according to some of the reports I'm seeing here, it's really going to be a big question in terms of when these companies from Florida Power and Light to Duke Energy and so forth that have millions of customers in Florida, when the power is going to be coming back on. So to go from the macro of the devastation and destruction in Florida to the micro of what's going on in Hawaii in terms of where do we go from here for these interconnect agreements, do we have battery storage, make it a priority, and so forth, what's the commission going to do, what's our public utilities commission going to do in the next weeks to come as the customer gifts supply program formally ends on October 24th, what comes next? And I think the likes of Randy Awasi, Lorena Kiba, and Dr. Jay Griffin, I mean they have a lot on their plate and it's really, I think if I was them, you know, they really have to get it right to the best of their ability, not only for repairs on the day-to-day level of having a grid that's on and not having catastrophic climate change and powerful storms, but also they have an opportunity to set the stage for more resiliency, more independence, and transitioning from the traditional hub and spoke of central power generation to having micro power plants spread throughout the service territory, and that's quite a mouthful, so I'll shut up. Okay, well that's really something because we're talking about, you know, five or six weeks away, and we don't have a solution on the table yet, so they don't move very quickly. That's my observation. I don't know what they're going to do. Do you have any ideas about this, Mina? Well, I think, you know, we really have to look at this pragmatically because while we talk about PV panels and batteries as a way to distribute the power, I mean we also have to look at whether the systems are still up given these catastrophic high wind speed events, and so while in theory it looks attractive, I think we have to be realistic about what can be accomplished during these kinds of events, and, you know, I do agree that we should be looking at, you know, multiple, for lack of a better word, micro grid kinds of systems, but I think our focus should be on not individual homes where I think, you know, the homeowner should be making those kinds of investments, but where I think the public money should go is in essential services and developing the redundancy in public facilities like where people are going to shelter, hospitals, you know, that kind of infrastructure first where redundancy and resiliency should be a primary focus and where public money should be used. What's the chance of this getting resolved? What's the chance of actually having a plan or implementing a plan by October 21st? What's the chance of that? My head today is that the commission knows that they are under the gun, that it's very important clearly for the solar industry, the solar parties, and also for those utility repairs who are still interested in going solar that they understand it's very important to have something hopefully ready to roll out on or around the time that the CGS program is brought to a close with the most likely of the possibilities being some type of so-called smart export, care of smart export, interconnect agreement where the PV system owner can only export to the grid when the grid needs the most, which is typically between 5 p.m. to 10 p.m. when the demand loads are highest. I think the commission gets it and that hopefully not too long after October 21st the Hoan Electric companies and KIUC as well I would think would have some type of appropriate documents and the interconnect agreements where those folks again who still want to go solar will be able to sign up for it and move forward. How close so far are we in this suggestion? From the Wheeling Doctrine. Would Wheeling work here? Is Wheeling inherent in what you're talking about? That's a good meaning question. I think you know when you look at Wheeling what it really means is unbundling the cost of electricity. So people are paying their fair share for moving electricity on the system. And so I think it's very important that I don't think the grid supply deals with Wheeling directly but I think Wheeling is the ultimate of unbundling in the future. Well we're out of time you guys but you know this discussion is not over and we can check back in on the same question about the customer grid supply program and what replaces it and how to organize smart export programs to replace it after October 21st when we meet again. And we can also talk about the saga of FIT, the FIT saga and that will be an important point I think also when we meet again. So I can hardly wait. Thank you Meena Morita. Thank you Marco Mangelsdorf. Great to talk to you guys. See you in two weeks. Aloha.