 Welcome back to Think Tech. I'm Jay Fidel. This is Energy 808, the cutting edge where Marco Mangelsdorf and I share thoughts every couple of weeks. Hi, Marco. Nice to see your smile and face. Hey there, Jay. Great to be back. I missed you, my friend. And we have Ian Lin today, a special guest who's a blogger and who wrote a couple of articles about who honua, which is what we're going to discuss today. We've been talking about some efforts on the part of who honua to affect state government. And the other, an article more recently that was republished in Civil Beat regarding litigation of the ownership of who honua in San Francisco. Very interesting. We're calling this renewable energy on the big island in the wake of, at least in face of the honua litigation, I suppose you could say. Marco, can you give us a background on all this? Can you make a proper introduction of Ian? I think he deserves a proper introduction. Well, I'll do my best, Jay. First of all, thank you for having me on again, Jay. And thank you so much, Ian, for being available on such short notice when I read your latest contribution to the who honua saga, as I'll call it. I thought I got to get in touch with this guy and see if I can make direct contact. And thank you so much for your availability today. Much appreciated. I feel we got a little, a lot of scoop here that we'll be able to talk to you. So Ian has been around for a long, long time, doing great reporting and investigative journalism. And I so do appreciate that, especially in this day and age, when when the media has changed so dramatically and print media, of course, is morphing to something different than what it was and great. The civil beat in Pyramid Yar and his crew and you are doing what you're doing. So I do want to express my sincere thanks for all that you guys do in terms of covering stories that don't lend themselves to, you know, four or 500 words in this shorter version. So I thought it'd be a good idea to maybe to get into just a brief history of who honua for those people who aren't maybe as familiar with it as those of us who are into the minutiae. So for decades, there was a power plant up in Pippa KO, but Hamaquah Coast, that was burning the gas, the waste from the cane harvest that came to an end when sugar cane came to an end here, essentially mid 1990s. And then the Hila Coast power company power company decided to switch to a new fuel source after the gas. And that was coal. And that went on for approximately 10 or so years until 2006 ish when coal stopped being burned. The plant was idle. 2007 or so, a group of investors got to thinking, gee, what else can we burn in this power plant? Make money. And through the twists and turns now of 12 or 13 years, here we are. So there was a power purchase agreement between a group of investors who honua that was approved back in 2013, I think, for a power purchase agreement to burn trees, biomass, that was grown, that would be grown along the Hamaquah Coast. And that was approved by the PUC. And the milestones weren't met that were agreed upon. And Helco declared it null and void, essentially Helco, Hico, and HCI next year were all sued by who honua for breach. And that led to a second revised PPA that was submitted to the commission and approved by the commission in 2017 for at a lower a kilowatt hour rate. And Henry Curtis, life of the land, challenged that. Yeah, that went into the Hawaii Supreme Court. The court ruled that the 2017 decision under Randy Wassey there and then chair Randy Wassey, the PUC was in fact in error and the decision was remanded back to the commission now under Jay Griffin, Jenny Potter and Leo Sunsteal. And the commission ruled in July of this year that in fact they negated, they vacated the 2017 decision to approve the PPA that was challenged by who honua. They asked for reconsideration. The reconsideration was turned down by a decision that was announced back in July of this year. No, no, excuse me, that that reconsideration was turned down several weeks ago. And now we have who honua that is asked the Hawaii Supreme Court for a writ of mandamus to essentially force the commission to reverse their turning down of the PPA that was before them. So I think that's kind of an emergency request for an order for the Supreme Court. Not an appeal now, just a request for a kind of emergency order. And that's where it stands right now today, go ahead. As I understand it just to wrap up, as I understand it the court has the option of denying the request for writ of mandamus with all of the sentence or two saying request denied or they can conceivably say we'll take it into consideration, we'll let you know later on. So as far as I know that's kind of where we are now and I'll turn it over to you and you Jay and Ian for further discussion. So obviously Ian, there's a lot of money involved and there are arguments on both sides on the big island. Some of them may be somewhat contrived, but there are people who would speak on each side of this weather or who who know it should be permitted to proceed. And then you wound up writing this really interesting article about efforts that who honua made a few weeks ago in your blog. And I wonder if you could summarize that article for us. That's the first one where you really got into this. Sure, I started hearing, I mean, I'm not, I haven't been a close follower of who honua through the Public Utilities Commission. That's such a legalistic regulated process that drive you mad trying to keep up. Marco, I appreciate that you're digging through all that stuff. But I started hearing that there were had, there were, there are efforts underway behind the scenes to pressure various state agencies and state employees to actively support who honua's effort to overturn the PUC. Whether it's legal or not, whether it's procedurally correct or not, no one cares. They just want the PUC to be overruled. And two key senators, Donovan Dela Cruz, who chairs the Ways and Means Committee, which is considered the most powerful that controls the purse strings of the state. And Glenn Warkai, who chairs the Senate Energy Committee, have both been privately and well, not even privately, quasi-publicly contacting agency employees, from some office heads and threatening them, you know, we need you to do this. We want you to do this. And if you don't do this, you know where your office is in the budget. I can tell you the line and the position numbers and those could all disappear if we don't get our way. At least that's what I'm told the conversations are going. It's getting very blunt and very direct. It's the kind of arm twisting that I would expect to be from some huge operation, not for something that at its best is going to produce 200 jobs, including all the ancillary jobs that aren't really related, don't come directly from the company. And that's the, you know, exactly why this is happening. I don't know. There aren't campaign contributions. There aren't big lobbying expenses being reported. And yet somebody's got these guys revved up and using up a lot of political capital on behalf of what is really a strange request to overturn years of this highly regulated legalistic process with a, you know, wave of the hand and poof, we're going to overturn it. It's a strange, it's a strange demand to be making. Can you identify some of the agencies and individuals involved? I mean, the ones who receive letters and calls, can you identify, I mean, can you mention them? Well, the PUC, for example, I mean, the individual commissioners that the PUC itself as a quasi legal organization, quasi judicial organization. Well, there, there, I found in the, in the records of public comments on the Hujo Nua project, a copy of letters sent by, signed by Glenn Wakai, to the chairman, actually to the commission, but he addresses it to the chair, dear Jay, James, James Jay Griffin, and his letter says, we talked earlier this year about the important role the PUC can play in ex-relating energy projects. So we get our neighbors working again. It came to me as a shock that the PUC did just the opposite on July 9th, the day they made the Hujo Nua decision. So he admits, I was there earlier this year. I talked to you about Hujo Nua. We told you what we wanted. I'm shocked that you didn't do it. That's, that's pretty blatant. Yeah. Then there was a, then was this very strange affair involving some spoof letters. I don't recall whether that was in your blog or whether I just read that in this paper. But what do you, are you familiar with what happened? I'm not. I just know that the PUC identified several letters out of thousands that were form letters that were sent through a Hujo Nua company website in support of the project. And they found a handful, a half a dozen that didn't, the person whose name was on it said they didn't write such a letter. Yeah, right. I remember. Right. And look, it's more like, hey, don't pay attention to the big thing over here because I got these six letters I'm worried about. It's, it's, it's kind of a sideshow that really has no relevance to this, the bigger question of how, why this is being done, why the pressure on the PUC in this particular case. You know, Have you ever seen your, you've been doing investigative reporting for a lifetime. Have you ever seen this sort of thing before where a given, you know, party and interest approach so many government and agency, government individuals and agencies with these kinds of demands and threats. Well, in this case, the senators, I'm not sure what their interest is. That's the problem, right? They're interested, they say they're interested in jobs, but these, this is a Manini number of jobs that this, that this project promises to produce. If, if it ever succeeds, it's more likely to collapse under its own financial weight and mismanagement from what we can tell from this litigation going on in California. What a perfect segue, Ian. That would, that was the second article and that is truly remarkable. I really, I had to pull over and sit down and take a look at that one. This is the article that was reprinted, so to speak, in Civil Beat not too long ago. Can you, can you summarize that one because that is dynamite? That's about the ownership and legal litigation between owners. Well, let me, let me back into it. I got interested because I was reading the press reports about who Honua's appeal to the Supreme Court. And so I downloaded the application they made to the Supreme Court. And here's, I won't say which publication this is from. This is common of similar to many others. Their story announced Honua Ola Bioenergy submitted a filing with the Hawaii Supreme Court on Wednesday, blah, blah, blah. Well, Honua Ola is, is a new name for who Honua, OK? The company hasn't really transitioned over. They've transitioned some things with not others. But when I went to look at the Supreme Court document, there was no Honua Ola mentioned anywhere. It was from who Honua filed on behalf of who Honua signed by five attorneys who work for who Honua. So that got me interested. So who is who Honua? And I started just doing preliminary research and stumbled across a court case that's been pending in California for not quite two years, I think. Um, in which the lead investor in who Honua says the project was and is a multimillion dollar financial disaster, a fiasco from the beginning. Those are pretty strong words for someone who apparently individually has sunk at least $40 million of her own money into trying to keep this project afloat. Who is this person? You, you went into some detail in your article. Um, the lead investor is Jennifer Johnson. She is the currently the exactly sure she's been elevated. She was the chief operating officer of the Franklin Resources, which is the company that controls the Franklin Templeton family of funds. They have reportedly some 700 billion dollars under their management. And she's the daughter of the billionaire owner of the San Francisco Giants, the majority owner, excuse me, of the San Francisco Giants. And her brother is the chairman of the Franklin Resources. So it's a family of fear, a lot of rich people, a lot of money. And since 2013, maybe a little bit before she's been the primary financial backer of who knew her, but you would, it sounds like from the tone of what's being said in the court proceedings now, you know, the glows off the rose here. It's it's it's the wheels are falling off this financial buggy. She she is in the dispute. Basically, she, she removed the person who was managing her investments in who who knew her Harold Robinson in 2018. She says she got fed up with how much money they were losing and basically gave him the boot. He was an at will employee. She says of her investment companies. Um, Robinson turned around and filed suit against her saying he was due millions of dollars. I think he claimed something like 17 million dollars based on what he says was a certainty that who would be approved, a certainty that the Hawaii Supreme Court would uphold the former purchase agreement and based on that certainty, he said, you owe me a share of the future profits, which, which if the project was built, those future profits would be successful. They were locked in a, you know, a very bitter legal proceeding. Now we get into this lawsuit in San Francisco, which has national firms doing it and have three law firms are involved in this lawsuit filing papers as if they would know tomorrow. This is a major lawsuit. Uh, thousands of, you know, pages and tons of trial documents and so forth. So I have to, I have to say now, as a, you know, a formerly employed investigative reporter, now mostly an investigative blogger, I'm stunned that with all the attention on who, who knew her for years that no one came across this litigation previously. That's just blows my mind. Um, that's, you know, a sad state statement on the status of our news media today. Yeah, I would have to agree. So, uh, what, what, you know, how, how is it doing? Um, my guess is it's been going on for a couple of years. Um, they've been aggressive both sides are dealing with it. And, uh, it's, it's coming on for trial soon. What's, what's the situation? Well, it's set for trial in January, um, sort of late January. Um, there's, they're fighting over preliminary trial matters, uh, how the jury, what the charges to the jury will be and, you know, a lot of, um, Selenius things, but in the process, both sides have been filing, um, legal briefs with huge numbers of attachments, including for all these formerly secret financial, um, documents, uh, projections, consultants, reports, um, emails, uh, we're starting to get a little better idea of how, how who, who know, has been funded in the past. Um, uh, Jenny Johnson contends that Mr. Robinson as manager failed in his efforts to bring in outside investors. And there is some evidence that in the 2014 period when the company was really under financial stress, they were being, their contractor was walking away. People were filing liens against them. They weren't paying their bills. Um, and one of the major investment groups that had come in, they put up, put together something called grandest ventures one. And Robinson had put this together with another person in San Francisco and they had taken in, I believe, uh, I believe they'd taken in $30 million. They were still had another 30 million they were trying to collect. And grandest wanted out. And so basically, um, Johnson using several different investment vehicles bought out their interests. They also bought out the interest of a controversial Irish businessman, um, Andy Ruhan, who had also had a stake. I don't know what the original stake was. It may have been part of that $30 million, but, uh, he also wanted out in that 2014 period and the records in court now show that Johnson bought him out for another $5 million. There were reference references to her father putting in as much perhaps as $100 million. Although I haven't found any, I found papers saying he was thinking of doing that. He was willing to do that. I'm having to pour through to see if he actually did that. So there's a lot of money that's been gone in. So Ian, you know, there's a lot of money here. There's a lot of players. This is big time, big time, you know, business deal and big time legal dispute involving, it sounds to me like everything they ever did together is that issue. A number, a huge number of counts in the original complaint for various, you know, contract, contract breaches and the like. So I guess the question I would, I would ask you after you've looked at all that material is a lot of these things we didn't know, meaning we, the state of Hawaii, as you mentioned, the readership, the, the consuming public, the people in the energy community, the people in the, in the energy regulatory community, we didn't know about this. And it does affect the ownership and therefore, you know, the direction of the Huo Nua company. And so my question is, does it help explain why Huo Nua has been so aggressive in dealing with the PUC, in dealing with the state legislature, the people in state legislature, they contacted. Why have you been putting so much pressure on, on getting this, this approval right now, immediately? I guess they're, they can see the handwriting on the wall and that, you know, for four hundred million dollars could just go poof because it's, it's going to fall, fall apart on it, it is falling apart on its own. And the only thing that can save it is some dramatic bypassing of the regulatory system that would allow them to proceed. You know, all this started back in that period when mid-2000s, when everybody was thinking renewable energy, ethanol, right? We can go on the mainland, they can grow corn and turn it into gas and they made us put ethanol in our, in our gas as a mix and we still, we're still living with that. And, you know, on the big island, people were, were buying up leases thinking we could grow any, we could grow sugar on the old plantations, turn that into ethanol. And it seemed, didn't seem like a bad idea then because there weren't a lot of alternatives of renewables, but in 10 years or 15 years, solar has just changed the world. And that didn't exist when Huho Nua was, was envisioned and when the first power purchase agreement was made. And now it's a whole different world. And that's what the PUC has said. That's what Huho Nua Electric has said. And I think, I think that new world is, is just upending this gigantic investment. Yeah. Well, and it's also a question of feasibility itself, even if you say that their business, their, their energy production model was acceptable still. There's, there's a question of the federal tax credit, which I, I understand is going to expire at the end of the year. There's millions of dollars, you know, significant millions of dollars are involved there. And if they're unable to get, get a, an approval of a purchase power agreement and all the permitting they need to go ahead, they're going to lose that. And that changes the feasibility calculation, doesn't it? It does, yes, because it's almost the tax credits from what the documents submitted in court require that all appeals or appealable things be settled before they can finally be approved to get the tax credits. And as you can see here, this, this thing could be, could bounce around in the courts for a while. Yeah. Certainly way beyond the end of this year. Yeah, easy, easy to imagine that. Marco, you have some thoughts, questions you want to express? Always Jay, always at three weeks ago, Jay, you were talking to my friend, Warren Lee, you pressed him repeatedly, asking him at least three or four times who's behind this, who's behind this, who's running the checks. And he finally answered it was Jenny Johnson. And then he applied, he essentially implied explicitly, he said, why should it matter? Why should it matter where the money comes from? And I find that rather striking. I found it rather striking and lo and behold, three weeks later, we find, I believe that the money does matter, the background behind the money, the motivation behind the money, the interest behind the money, to what extent it jives with the health and well-being of our state, of the people on this island, to me is even more in question than it was three weeks ago. So I think my question for you, Ian, is how do you square the reality that apparently Jenny Johnson and her team are saying this has been an unmitigated disaster for years? It's we've lost money. We continue to write checks and we haven't seen, we're not going to see probably any type of return. And yet publicly, Huonua has been 100% doggedly pushing and applying pressure more so than I've seen in the 20 years that I've been in this energy arena here intensely in Hawaii, more doggedly, more kind of scorched earth, more political pressure, pressure everywhere, anywhere and everywhere. How can you square the this is a disaster with full speed ahead? We're going to get this done. It needs to be done and we'll do everything practically it takes to get it done. Well, the company had consultants reports from quote, unquote experts, which predicted, firmly predicted that after the state Supreme Court sent this back to the PUC, that the PUC would quickly come up with approving the project. And so up until July of this year, I think they were assuming, well, the consultants are saying it's going to be in our favor. So we shouldn't worry. It's just a little road, road bump in the road, nothing to worry about. And when July 9th came, well, actually for a year before July 9th, Johnson was in court saying, we've just poured hundreds of millions of dollars into an endless series of losses. And I can see she was hoping that that risk would be rewarded when the PUC finally gave their approval. And now it's very clear that's not going to happen or not going to happen in time to help out this company. Yeah, you know, so we should try to, you know identify lessons to have been learned here in energy and Hawaii as you said in them, you know 10 years go by and things change. The desirable forms of renewable or semi-renewable if you like change in 10 years and it'll happen more. It'll happen again. But there must be lessons that we can learn before some people would say. Well, here's another, in this case for years now this has been at legal risk, right? As soon as life of the land filed their appeal and went into court for years, the company knew everyone knew this might not go forward. And yet during that period, they were still out trying to get money, getting her to put in more money trying to find other people to put in their money even though they were at risk. We've been here before. This is kind of like the super fairy when the company did all this stuff knowing that they were at legal risk that they didn't have approval to go forward. So in this case, it's again, they've, I can see you do it with your own money, right? I don't mind risking my own money or I don't feel bad about it. But when you're going out to try and get investors' money and doing all this knowing that you could lose and you could be, you know, out of the game soon, that's a problem and that's what I think some of these businesses have to understand. Absolutely. Let me riff on that for a moment. Please. It ties perfectly to what Ian said. It is my understanding that unless and until two things happen regarding a power purchase agreement unless the appeals process, whatever that's gonna be however long it's gonna take unless and until it plays out assuming there is an appeal which there was of course with Henry, right? Or the appeal period, the clock has run out. Then it makes very clear that the deal, the PPA should not be considered a done, done, done deal. Therefore, an investor is taking a substantial risk at pumping in millions, tens of millions of hundreds of millions additional dollars prior to the appeal period running out or all appeals having run their course. So what do you think, is that the lesson we've learned? Is that the lesson? That is a very big one. That is a very big one. Yes, the power purchase that independent power producers would do very well to look at this cautionary tale that you don't, you don't catch your chickens or whatever metaphor you wanna come up with. You don't count them until two important benchmarks play out fully the appeals process or the timeline to allow for the filing of appeals. Yeah, and you have to gauge your moves on that basis. You can't make any big assumptions until you've got those things in place. Unless, yeah, you're putting other people's money at risk. It would be better. Don't you think that if we had the people with the ideas here, as entrepreneurs here and the capital here, in this case, it wasn't quite like that. The people with the ideas were not here. The people with the capital were not here. I don't think we'd have this conversation actually if this had been a truly Hawaii project. You guys agree? I do. That's probably the case. They certainly have known the landscape, political landscape better, and the economic landscape. Yeah. Well, Ian, I wanna compliment you as I have on other articles in the past on your investigative reporting. It takes a lot of work and effort and focus to do this sort of thing. And Lord knows we don't have enough of you. And I wonder if we could clone you at some time or encourage young people trying to get into journalism to do the kinds of things you do. We need that in our community. We need that for better government and for better business, if you will. So I like to express my admiration. Thank you, Ian Lynn. Thank you, Marco. Thank you guys. Thanks.