 We're live at noon show on a given Tuesday. This is Community Matters. We're talking about the Big Island. We're talking about PGV, Pune Geothermal Adventure with its manager, Mike Echini. And we are so happy to have him on the show. Hi, Mike. Hey, Jay, thank you for having me. Absolutely, absolutely. We're gonna catch up with you on PGV. I have been so happy that PGV is in the array, the diverse array of renewables in the Big Island. I always thought it was a fabulous thing that Hawaii had PGV, that it had geothermal. And I always wanted to see it there and more of it. I recall that back when it was 38 megawatts and everybody was expecting it to go to 50 megawatts, but there was always resistance. And the resistance goes back to the 90s and that's a story, another story altogether about the resistance. There was heavy resistance back then. You guys have been strong, you have kept on coming and you have dealt with the eruption a couple of years ago and with COVID and you are to be complimented for your determination and your contribution to the grid in the Big Island. So I'm delighted to talk to you, Mike. So there was a couple of stories I wanted to mention. One is that you were gonna go back on and the other is a continuation of that same kind of opposition you saw in the 90s. Some of the same people opposing you. It's a life work for them to oppose you and you have a couple of lawsuits pending. I know you can't talk about that. But let me talk about it. I think it's just activism. I don't think it's constructive for anybody. This is a time for Hawaii to work together. This is a time for Hawaii to achieve its promise. This is a time for Hawaii to find new technology. It's a time for Hawaii to be so concerned about energy and climate change. And it just amazes me that people are not all on board about that. The very same people who complain about high electric rates are the ones who are making them higher yet. You guys were producing, gee it, at least a third of the energy on the Big Island and when you were offline, that was a problem for Helco. Now you're back or at least in part and you have the promise of going back to where you were and making that contribution, Big Island grid and hopefully reducing rates. So what's not to like about that, Mike? I don't know anything not to like. Tell us how you've been doing. Tell us how it went for you during the period of eruption and the roads being covered with lava. What kind of challenges did you have in that time? Sure, sure. So yeah, if we go back a little bit, the eruption actually started, the migration of magma started in April and then the earthquakes and the ground movements, but the actual eruption to surface took place on May 3rd, 2018. The same day during that eruption is when we shut the plant down. We activated our emergency response plans, kicked that in here and made preparations for the lava to approach us. And make a longer story short, we did get our substation and a few of our wells covered by lava and the eruption, which is a spectacular event. It's a lifetime type of event. It's amazing. We were fortunate that the majority of the facility remained and the eruption ceased in early August, but the landscape was really still full of heat and residual magma below that's not hardened. So it wasn't until the end of 2018 where we were then able to build a pioneer road back to the facility. So in December of 2019 is when we first was able to come back up prior to that, we would have to fly in and do inspections and check out the facility. What's a pioneer road, Mike? What's a pioneer road? Basically unpaved gravel, strong enough for sturdy vehicles to travel on like a four-wheel drive and an APV. The one positive note with that is when we re-establish our access, we were able to voluntarily, we built a little offshoot to the folks to the east of our facility that were surrounded by lava. So we allowed access to our nearby residents or community members. We had on the order of almost 300 folks on this list that were able to go in and it wasn't, you know, this was in April of 2020 and it wasn't until November that the end of November that the county actually re-established the road that was covered below us. So there were several months where our community and nearby members could go back home. So we were happy and pleased to help out. And since then we've been doing refurbishment, overhauls of all of our equipment, our generating equipment. We've worked very closely with Hawaiian Electric. Those guys, I tell you, they're great, great to work with. And, you know, they had part in this because the substation on their side got inundated and several of the transmission poles and lines got inundated. So of course we had to go through the approval process with the PUC for the transmission line rebuild. It was basically Hawaiian Electric to believe that's their responsibility. And so they rebuilt the substation. We rebuilt the substation. We drilled a couple of new geothermal wells and it took us still this time. Like I said, we started back up on November 5th, 2020, almost two and a half years since the shutdown in early May of 2018. And yeah, it's a huge, huge accomplishment from our perspective, you know, like you said, just staying focused and it's been challenging, rewarding, you know, a lot of courage. And our parent company for Pune Geothermal Venture is ORMAT, which is headquartered out of Reno, Nevada, will publicly traded on the New York Stock Exchange. And, you know, from the very onset of the eruption and the plant shutdown, the chief executive officer flew over here and informed all the employees that we're keeping everybody on the payroll. You know, at least for the whole year, I think we see what happens. So that was a big deal. So we did have, I think maybe one or two employees that voluntarily left because they didn't wanna be out here with the eruption. But I'll tell you the day that a couple of big events, the day that we reestablished access was a huge step. And then, you know, the day that we came back online is another milestone that we're all very, very, very pleased about. And we're looking forward to coming back online, providing the renewable, clean energy to Hawaii Island, Hawaiian Electric, you know, some of the lowest rates available. We were 31% of all the energy in 2017. So pretty close to, like you said, one third, right? And so we wanna get back there. And, you know, we actually are in discussions with the new contractor as we speak. So hopefully that'll come to fruition soon. Yeah, that's, you know, you're very important to the big island. You're very important to Helco. I mean, how did they handle the gap while you were offline? They must have been scrambling, no? So fortunately, you know, how any electric, Helco, they had units in standby, you know? So their plans to transition from oil to all renewable, you know, they've got a very, very good plan, very detailed. So they've decommissioned at least one unit that I'm aware of that's in Halo down at the Bayfront area. But then they put the other units in more longer-term layup. And so those were the units that I believe that helped get them through with us being offline. Now that you're coming back online, that you are back online and there'll be more, they can take those older units off again. That's correct. I believe that's their plan, they can confirm, but that's what they've been planning to do all along. Yeah. So it's interesting to have to rebuild in the face of all that the challenge is presented by the lava, especially the lava underneath, down that got into the shafts and so forth. Did you change your technology? I mean, because since the time they were originally drilled, a lot of technology has changed, especially around geothermal. So what kind of new technology did you deploy for that? Well, we've been, I would consider us to be ahead regarding technology, the drilling process. The geothermal industry has learned a lot from the oil and gas industry. And they're very more mature in terms of technology. And so we have implemented similar technologies, automatic or continuous monitoring of the drilling process in process, compared to years ago, when you're drilling down a depth and if you wanted to determine what your direction is, you would have to come back out and go in with a compass and determine it that way. Today, it's all done automatically with high tech instruments. Our folks understand the field, they have, we have very good historical knowledge of the area, you know. So that's- As I recall, Ormad is loaded with engineers, isn't it? In fact, the CEO who you introduced me, there was an event that I covered back a few years ago at Puna and there was an Israeli CEO person. He was an engineer many, many years. His primary occupation was an engineer. Is he the CEO today or is it somebody else? So we have a new, a different CEO today. We, in fact, our CEO is as recently taken on the responsibility as the chief executive officer. His primary background is not engineering, but the previous CEOs, like you say, were, but you know, the company is got engineers. We have a host of them, super folks, super mechanical, electrical, you know, thermal dynamics, controls, our guys are like cutting-edge engineers and we're really proud of it. So when you re-organized it, rebuilt it as necessary, that you put in new safety equipment, safety engineering to reduce the possibility of, you know, negative effect from the drilling? So we've implemented, you know, we've learned a lot from this eruption and, you know, we've implemented some safeguards that we think will help us going forward. The way we have constructed our sellers and the piping, that's something that was, you know, unless you go through something that's, you know, like an eruption, you just don't know, right? So it's amazing, yeah. So we've implemented a bunch of things, not just on the technical side, but even on the administrative side, the procedural side, the communications with the county and civil defense, you know, so one thing about civil defense, boy, so we always go through these after review processes, you know, after an event and go over what lessons learned, what can we do to improve next time? So yeah, we're always looking to have that continuous improvement in all the processes that we do. So during this period, Mike, you know, there was discussion with Hawaiian Electric about a new power purchase agreement. And I really never came to the end of that. I never found out the result. You intimated a minute ago that those negotiations were still going on. What's the status? What's the expectation? Sure. So prior to the eruption, we were in discussion with Hawaiian Electric, and we were talking about a refiring plan. So the equipment we have out here, Jay, is almost 30 years old. It's outdated compared to the equipment that we have today. They're considered dinosaurs. So what we had intended and planned to do, which we did eventually, is we wanted to replace the existing equipment with more modern equipment, right? And the results would be because of efficiencies and increasing output. So from 38 megawatts, the refiring project replacement with new equipment would increase our output to 46 megawatts. So we have that proposal that Hawaiian Electric accepted. So there's an agreement between the utility and PGV. And so that proposal was submitted to the PUC at the end of 2019. So there's been participants in the docket. It's a normal process that we go through, that all part producers go through. And information has gone back and forth. And the commission is reviewing all of this information. And we're hopeful that a decision will be made very soon and hopefully before the end of the year. We're not certain. It's in the hands of the PUC. But the four key elements for this proposal is number one, we will de-link the price from oil. None of the contract will be linked to oil. It's all a fixed pricing for the duration of the term of the part purchase agreement. So de-link the price of oil, remove the old inefficient equipment and replace it with new efficient equipment and get the gain of eight megawatts. And to extend the term of the contract, the existing 38 megawatt contract will terminate at the end of 2027. Now that we will invest into all new equipment, we were at proposed to extend the contract out in additional years. And the beauty of all this is that the new equipment would utilize the same amount of the geothermal resource that the existing facility is utilizing. But again, like I said, with the efficiencies, it's gonna have an improvement of eight megawatts. It's gonna be larger generating units, but fewer rotating parts, which will result in a reduction in noise and also a reduction in the potential for emissions, which has been a concern. So it's just, from our perspective, it's just a win, win, win, win all across the board. So hopefully- Yeah, it sounds like that. Hopefully we hear something that's about energy here. Okay, you had feedback from the community, has the community be involved in either the negotiations or in some hearing with the PUC? Well, there's been folks involved at the docket. We as a facility have been sharing the general information that we can share at our community meetings. And in general, we have wide support. Of course, there's some folks that aren't supportive, but that's how it goes. That's how it goes, yeah. How it's gone all these years. That's how it's gone all these years. That's how it's gone all these years. And it'll probably continue. Yeah, right. By the way, I have to just take a digression and say, I've known you for probably 15 years. And I admire you very greatly, Mike, for sticking with it, for being the operator in the face of PGV all this time and for achieving all the things you've achieved. You are very important to energy, renewable energy and to the big island in my humble opinion. Yeah, that's how I feel about it. And you're getting younger all the time. I don't know how you do that. It's the geothermal emissions. Must be. It's good for me. Yes, sulfur. Well, let's talk about the future. When we first met, I think you were at 38 megawatts. And there was always expectation that you could go to 1,000 megawatts. You had the resource down there. And the only question was, what are the steps going forward? And there was a lot of talk about increasing it, like to 50 or somewhere in the neighborhood of 50. But there was a kind of glass ceiling on that. Maybe many, many factors were playing into that. And it just didn't happen for the period in which I was watching. I'm glad to hear that it can happen now. And I'm glad to hear it can happen with the existing facility. So it was just three wells. And your existing facility can actually turn out another, what is it, 8 megawatts on top of 38. It's terrific without having to expand the whole thing in a concomitant way. But what is the future, Mike? If you say that you were at 38, you were providing 31% of the energy for the Big Island. There's a point where the diversification may be somehow worrisome. Because if you're providing, say, 90% of the energy on the Big Island, then the Big Island totally dependent on the stability and success of PGV going forward. And that would be somehow threatening because it doesn't give you the diversification that is a better portfolio. So what is the ceiling on this? How far can you go? How far do you plan to go? What does it look like in the years to come? Good question, Jay. And I wish I could see into the future. I mean, the one thing for sure we know is Hawaiian Electric wants to transition to 100% renewable energy. We know that that's mandated statewide. So I mean, that piece of the puzzle is a given. We're going to go away from oil, we're going to transition. How will that transition look? I mean, there's some solar, some energy storage, batteries that are coming online soon. Of course, there's that big challenge with the biomass folks, so I'm sure you know all that one. And like you alluded to, if geothermal was 90%, it's sort of like having all your eggs in one basket. So I think the key would be to maybe spread the basket around the island. And it doesn't have to be PGV. It can be other geothermal developers, but diversifying meaning physical location. Because look at what happened in 2018. We were 31%. We had to go offline. We're restoring the facility, coming back online. It's all good things. But you get that disruption. So that's where the state, hopefully, can take a proactive role. The state owns the mineral rights. So in other places in the mainland, oil and gas, folks that own the minerals or the rights to the oil or the gas, they develop the wells. They don't necessarily put it in service. They wait, right? And that would be nice if it would help develop. I think it would promote more developers to be interested in coming over. Because the well field and drilling side, that's very high risk. So it's not easy financially, technically, industry-wide. Because it's not easy, Jay. If it was easy, there'd be tons of geothermal companies here in Hawaii. But there isn't. But you want to get out of that. It's really unpacked out a little bit. It's very interesting. Number one, there's still Mother Nature. There's still the possibility of another eruption anytime that a place has been erupting for thousands of years, and it's not going to stop now. On the other hand, I expect that you learn some stuff in 2018 and thereafter that would make you more resilient in the case of another eruption and maybe get it back online easier with less effort, less expense. That's one side of this. The other side is, yeah, geothermal doesn't exist only in Puna. It exists in other places. And maybe those other places have benefits. So to the extent that you say, oh, Puna is close to the rift zone or whatever the risk is out there in the ocean, maybe other places in the big island have less of a risk. And so other developers could have an advantage in that regard. And therefore, you have a kind of diversification of geothermal as well as a diversification of renewables in general. The other, the last thing I wanted to say is that when I first learned about geothermal, I found actually from one of the old engineer experts in Hawaiian Electric that there's a tremendous distinction between geothermal and other renewables. Geothermal is dispatchable, 24 by 7. You don't need batteries, you don't need it. It's different from solar, different from wind. It's certainly different from biofuel. It's the one renewable that goes all day, all night without fail. That is something. Anyway, can you discuss the possibility of a diversification of geothermal on the big island or elsewhere in the state? Well, there's a, I don't know. There's a department under the university system. And you know, Don Thomas was a part of it. And it's a lady by the name of Nicole Loutz. I don't know if you've made it. Yeah, I do know her. Their department, they're actually embarking on looking at the potential in other locations. I know I've spoken with Dr. Thomas many numerous times. And, you know, aside from Hawaii Island, Maui, Oahu have certain locations that's been identified as potential resource zones. And really the key, though, is for people, developers, folks that are interested in geothermal, you need to go and do some work. You need to go do some, you know, maybe some pilot holes or, you know, some other, there's other techniques that can be performed to try and see, you know, if there's a potential resource. You can do groundwater sampling, gas sampling. There's an electromagnetic, you know, type of testing that can be done. So that's where we don't have a lot of activity in my opinion. And that's where maybe the state can help out. So. Yeah, when Don Thomas was doing that kind of investigation around Pohakaloa, he found water there. He found an aquifer that was thousands of feet above sea level, a whole new source of fresh water. Yep, yep. It's amazing finds that that man is, he did that. And he did the deep water source in Hilo Bay, you know, by the airport. That's another amazing story. Yeah. Yep. So anyway, so going forward on this, seems to me that you have a huge prospect of way beyond 38 plus eight, whatever. And where does it go? I mean, is there any, is there a plan, for example, to build other, you know, facilities either at this location or other locations by ORMAT? Or is ORMAT considered self-limited to PGV? Oh, you know, ORMAT is always considering opportunities. And we're worldwide, you know, we, of course, own and operate, you know, over 2,000 megawatts in the U.S. and international. And then we've also built facilities, yeah? We've provided facilities to the Philippines, Indonesia, all over Turkey, Japan. But we're always looking for opportunities. So I am aware that, you know, the process that the Hawaiian electric companies has gone through the IRF process. There was this RFP for geothermal in 2015. We just could not come to a mutual agreement back then. But I am aware that the Hawaiian electric plans do have for more geothermal in the future. And so it's just a matter of a developer, whether it's PGV, ORMAT, or others participating in that. So from our experience, Hawaiian electric, for the most part, has been pleased with this technology. Like you said, you know, 24-7 dispatchable. Because the only way we can get off of oil is we need to replace the equipment that Helco uses today that burns oil with renewable source that can provide the same technology. The ramping up, the ramping down, you know, and so far, geothermal has been able to do that. So. You know, just to expand on the notion this is a technology that actually is being used worldwide. And it's very attractive to a lot of places in the world today. My wife and I took a trip to Iceland. We went to Reykjavik there in Iceland. And you can imagine, I mean, there's a lot of geothermal in Iceland and Reykjavik. And of course, they get their energy from geothermal, but it goes a step further. I want to mention this to you in the notion that there are other angles, too, you get from geothermal. So you drive down the road and there's all these apartment houses and condos are there along the water in the harbor of Reykjavik. And each one of them has a box, not a very big box. I'd say the size of a VW bus. And this box is connected to geothermal. And this box gives that whole project hot water. They never have to heat the water. They have hot water day and night every 24 by 7 for all of these buildings in the city. And you say, gee, that goes beyond the electricity generation side of things. And I wonder if anybody ever thinks of that. Of course, you get a degradation on a pipeline that would go from Puna to Hilo or something. But I'm wondering if there's any thought of that. There has been. There has been one opportunity that we considered and was embarking on was utilizing the energy to generate hydrogen. Ah, yeah, yeah. So there was lots of interest in that. Because hydrogen, it doesn't make sense to burn oil to generate hydrogen, right? You want to use a renewable source to generate hydrogen. And we were working closely with the university. H&EI. H&EI, yeah. HUN and others. But what had happened is the lava eruption in 2015 was headed towards the town back then. And so we stopped talking about doing it on PGV's location. So they had to move through Nelha, right? They did their facility there. But there's always that potential. It's something that we would consider definitely is a form of utilizing the geothermal energy. We would have to work with Helco, of course, and whomever would be interested in the hydrogen. But I think there are others, not just PGV, but others worldwide, US-wide, that are actually considering the use of geothermal to convert and generate hydrogen. And hydrogen itself is a storage medium so that you can keep the hydrogen for a long time. You can ship it around. You can use it to generate energy or heat elsewhere. And that could be a big piece in the future, I think. It could address the transportation side, too. Yeah. That's a big piece. Yeah. Well, hydrogen is being used in county buses now, or the big project in the county buses in the Big Island. The Big Island is really, you know, it's the preferred island for renewables. It has a higher percentage of renewables there than any other island, as far as I know. And you're part of that, and you will be part of that. And I am so happy and delighted that you're back online and that you have a future in the mix, so to say, in the Big Island, and that you appeared on our show to discuss it. Thank you, Mike. Michael Echini of PGV, Puno Geothermal Venture. Thank you so much for coming around. Thank you, Jay. Take care, and happy holidays to you. Same to you. Stay safe. Aloha.