 Welcome to Power Up Hawaii, where Hawaii comes together to walk towards a clean, renewable, and just energy future. I am your host, Raya Salter. I'm an energy attorney, clean energy advocate, and community outreach specialist. I'm also the principal attorney of Imagine Power LLC. So today, we're going to take a look at important energy and utility news from Hawaii, around the country, and the world, as reported in the last week. So first, let's take a look at some recent developments in clean energy and clean energy policy in the islands. The biggest story out today, I think you're going to hear that from many sources, and I hope you pay attention to many different points of view. The Hawaii Public Utility Commission has approved utility plans that include massive rate increases for Hawaii rate payers. In an incredibly important development, the PUC has given the initial green light to the HECO Company's PSIP or Power Supply Improvement Plan, which include massive rate hikes for Hawaii rate payers. We've got a graphic that we can show here that will illustrate what this means for rate payers. So here you go. Now I try and stay away from too much in the way of nuts and bolts sort of geek out graphics like this, but this I really think we need to take a look at. So what you've got is projections out on two different time frames. And what we're looking at for the 2026 time frame, more than 44% rate increase for HECO, that means Oahu, 42% rate increase for Helco, that means the Big Island, and 23% rate increase for MECO, that means Maui. So as you look at that graphic, what you've got is upward trends. So let's go ahead and talk a little bit about that. So given the substantial, and we can move away from the graphic, thank you so much. So given the substantial increase in rates forecasted in the report, the Commission is concerned, and they did make a statement in their ruling. So this is what was said by the Commission. The Commission is concerned that the companies have not fully considered the affordability of their plans. The companies have provided only limited responses to the Commission's instruction to analyze customer and implementation risks. The companies do not appear to have evaluated the capital investments, financial commitments, and the resulting increasing rates in the context of affordability to customers and the risk of stranded assets. So I'm going to pause here and talk a little bit about what the Commission's concerns mean. And to be totally honest with you, I don't see the justification for an approval of a plan given that grave level of concern. So what the Commission is talking about is that we've got a massive grid improvement plan, and there doesn't seem to have been enough thought in terms of, what is it going to mean to implement this? What is success and failure going to mean? What are the opportunity costs involved in this plan? What does it mean for the residential ratepayers who pay the highest electricity costs in the entire country? What does it mean for stranded assets? And let's talk a little bit about stranded assets. writ large, stranded assets are one of the, I think, the more controversial issues that happen any time you get a grid transformation scheme when you look at it historically, and I think it's important to look at it historically. So traditionally, a utility makes investments in big capital expenses. This is the traditional utility business model. Big billion-dollar nuclear plants, we're going to talk a little later about how South Korea is abandoning some nuclear ideas for future nuclear plants. Billions of dollars for nuclear plants. Billions of dollars for large power plants, and then they get to recoup that investment from who? The ratepayers, customers, you and I. This means you've got long-term investments that last over our lifetimes, sometimes our children's lifetimes that are in the ground that we continue to pay for. So that is what is at stake from even just the initial push for electricity infrastructure and why it's so important that we switch to clean and renewable energy, so it is important that we do that. But what does it mean to have stranded assets? Well, in most jurisdictions I think actually in every jurisdiction that has an investor owned utility, there are a network of agreements and laws that have been in place since utilities were given monopoly franchises. One of them is sort of a loose deal that universal service, folks are going to get service in exchange for exclusivity in that market. So as we have walked forward with various utility reforms and business model reforms that attempt to incorporate market liberalization into the grid, which is the concept that you can derive competition from the regulated markets. You can derive efficiencies by inserting competitive forces into the regulated markets. At times and in other jurisdictions, this has required that utilities divest of certain assets. So utility is entitled per the law in most jurisdictions where there's an investor owned utility to recoup those big investments that they make. So what happens if the plan is for them to turn directions, for them to turn the boat and do something different? Do you think that we get the money back? Who pays for that big investment that is no longer going to be utilized at that scale that we first thought? We paid for it the first time. Guess who pays for it the second time? Yes, for the most part it is again the rate payer. So again, historically in other jurisdictions where utilities were told to divest of major assets, that meant big changes in their investment plans and that meant very, very large billion dollar payments to utilities because of that opportunity cost or that stranded asset. So much so, but I think in many cases it was considered windfall payments. This happened a lot in the 70s and 80s and quite often it was considered windfall payments and it has been very controversial. So I think it's tremendously interesting and also very, very troubling that we are entering this stage in Hawaii of major infrastructure modernization, a major revamping of the rules of engagement that will clearly benefit, clearly at this point anyway, benefit the utility at the expense of a major rate hike for rate payers without having thought consciously about affordability, about risk, about opportunity cost, about cost to society and cost to rate payers, about the cost to the most vulnerable rate payers in the entire country, the very poor rate payers here who suffer more than any other rate payers in the country. What will a 44% increase in utility bills mean to a fixed income, low income, low income residents say on a law who that this has not been considered holistically yet this plan has been green lighted is, it's really astounding because what we really should be looking at is what are the full costs of this transformation, what are the risks, what are the opportunity costs, who will shoulder those risks, who will get the benefits in a conscious way. And this is something that I think has been done frankly better in some other jurisdictions. Now I have practiced in New York, has the New York plan I think been completely holistic in terms of, in terms of what stranded assets look like, who will pay for what, no I won't save it it has, but has it been clear on what it's trying to do in terms of, look our goal is to build this platform that can include more distributed generation, one, two. Our goal is to split this market up between the utility and the private players and here are the rules of engagement. So this is how this large pie is going to be split between the private sector and the public sector and the investor owned utilities and yes, plans for increased community engagement and environmental justice, has New York gone as far as they should, no. Has New York gone as far as California where they have a major cap and trade program, the proceeds of which in many times go towards community and environmental justice concerns, no. But has there been a discussion, has there been a portioning of the market, is there an understanding amongst the community of regulators and others of what's going on? Yes, does more need to be done? Yes. A undertaking, I think what I'm trying to say is that undertaking this kind of cost is the equivalent of entering into a major grid modernization scheme or plan in Hawaii and that it would be done as an afterthought or as a concern with a lack of planning that this wouldn't be in the forefront of the conversation, I think is a concern. Now I do want to say that I think HIKO has in many cases done a fantastic job of managing the highest solar PV penetration level in the entire country. We know that HIKO is dealing with grid modernization. How can it move on to this next level of grid modernization for Hawaii? And I understand that the commission has also really had to grapple with a lot of issues at times with limited resources. So I don't want to be overly critical. I want anything I have to say to be in the light of helpfulness. I think what would be best if we can really talk about this massive, massive investment. It doesn't look like a massive investment right now, but when you add up the numbers of what 44 percent rate increase means, when you add up the numbers of what stranded assets could mean, we're talking about a major restructuring effort in Hawaii without, I think, intention, enough intention and a conversation about what is the intention for this grid modernization, a restructuring plan in Hawaii is extremely important. So I, gosh, there's so much to say, but I'll go on a little bit and talk about one of the key reasons what this plan is willing to do. And I remember when I came here in 2014 to speak at the Maui Energy Conference, I came because New York was looking to build the specific plan was we're going to build a platform. We're going to build a platform that will allow the integration of more renewable energy and distributed generation. And at the time, we knew that Hawaii was working and grappling with some grid modernization efforts. At the time, I don't think that it looked like the plan was similar. It didn't look like we were looking to do a platform here. But the truth is, is that, is that we were? So what does this grid modernization plan do? What is all of this money in this market, major market restructuring that is really happening kind of under the radar? What does it mean? Well, the HECO grid plan could enable as much as three times more rooftop solar in Hawaii. Overall, the new plan will shift the bulk of funding from physical infrastructure-based wire solutions to grid modernization solutions was really what we're talking about a smart grid with HECO planning to spend only 49 million on wire solutions through 2023. So the utility states the initial focus of the plan is to mitigate existing service quality issues that are arising so as to continue to enable ongoing customer adoption of solar and batteries. HECO also seeks to create a platform whereby distributed energy resources, a broad category that includes not only solar and batteries but demand response to other technologies can help to meet the state's 2045 renewable goal. This will require the deployment of technology both on the customer and utility side of the meter. Unlike earlier plans, which called for widespread deployment of smart meters, in order to save costs HECO is now calling for such meters to be deployed surgically, which will include customers with rooftop solar on circuits that HECO considers saturated and those that are nearing such levels. This deployment will include related software to help customers make better decisions about usage. So like I said, it seemed a couple of years ago that we weren't talking about a platform now that's exactly what we're talking about. So we're going to move to a break when we come back. We'll talk a little bit more about the big HECO plan and other things happening in Hawaii and around the country. I just walked by and I said what's happening guys? They told me they were making music. Welcome to Sister Power. I'm your host Sharon Thomas Yarbrough where we motivate, educate and power and inspire all women. We are live here every other Thursday at 4pm and we welcome you to join us here at Sister Power. Aloha and thank you. Back to Power Up Hawaii where Hawaii comes together to walk towards a clean, renewable and just energy future. I'm your host, Raya Salter. So you just heard me sort of say a whole lot of things about the green lit HECO power supply improvement plan and I just have to say a few more things. We're looking at plans for massive, massive rate hikes for at least for Maui, the big island and Oahu and we're talking about folks who are already paying the highest rates of energy in the country and some may say hey but you know overall folks don't pay as much necessarily well you know what I don't think you get credit because you don't have a heating season I don't think you get credit for certain things. Yes, folks aren't needing to spend a lot of money on heating their homes but that I think is a context that should be removed from the discussion. Energy costs are too high in Hawaii and there are a lot of concerns and the commission shares them about what this power supply improvement plan will mean. So I said a lot of things but I also want to say again hopeful very positive I think the most important really the most important thing to say is that okay Hawaii is on the path towards grid modernization that is going to happen the company has a plan does this mean that the company has been told that it is okay for them to start spending money left and right on the specific plan actually no you know often that's not how these regulatory things work I think and it's the same thing that happened in New York the rubber will hit the road in the rate cases for the for each utility and secession as they come about that's where the rubber really hits the road in terms of specific proposals are made and what is able to be spent. I will talk a little bit about what I think you know I talked about this this what really is a major restructuring and market restructuring plan that is happening under the radar with this PSIP and really what we're talking about if they're going to build this platform and we also talked about it's going to really enable for increased amount of solar and other on distributed energy resources yes that's good that's the point I've talked many times that that you know the state cannot afford for ratepayers to do all of the spending that we need to have private industry and the innovation that comes alongside it playing in the game so we want this to be good for the clean energy industry and distributed energy resources industry we want to find and capture efficiencies and innovation and we want the utility to be able to continue to be you know a big employer in the state an innovator and a just you know a positive force in the community as we move to get off of oil and increase our energy security but we cannot do it it cannot be at any cost it can be not be at any cost in terms of affordability and what does it mean for us to be paying into the system at such a large such a large percentage what does it mean for us to be paying into the system and what do we get in return so what are the community level opportunities for this platform how will residents and other folks who are looking to survive and thrive in OYE as we all know is really really hard what will the opportunities what will the business opportunities be what will the economic opportunities be how will how will various different populations be it racial or ethnic or whatever part of the island that you live on how will people be able to participate how will they have a voice how will it be fair how will folks be able to economically participate in this green energy economy besides only the green energy companies and what will be the environmental and land use and environmental justice and land use justice and climate justice implications of this of these distributed energy resources so what do I mean by that is it okay for for certain folks to use their people to go out and build these distributed energy resources throughout communities one of those resources going to look like here I think we've all on all of our hikes in Oahu and we love hiking and we love getting up in those mountains I know we do what are we doing for most of the time we're hiking up to some busted piece of infrastructure we're going up to something that the military has left we're going up to stand next to some cell phone tower or some old piece of energy infrastructure nobody knows really what it's doing and I'm sure there are a lot of beautiful reasons and we love our infrastructure however what are these assets going to look like who's going to have to look at them can they be designed so that they are not eyesores can we see as these poles and and wires are abandoned that we talked about can we see them going away imagine the roads and the vistas in Hawaii without big ugly poles and wires thank goodness we don't have lots of advertisements imagine if if if distributed energy allows for that to recede this this infrastructure takes steps back where infrastructure is causing potentially a health problem or a visual problem can that be solved you know can we can we actually improve the quality of people's lives and and increase participation in the energy system and and also the biggest question I think where are these assets going to go in terms of land use they're going to there's not a lot of land where will the solar farms go where would the biomass go where will biofuel be planted if anywhere at all this is going to mean there'll be winners and losers do you want to be the person who lives next to a ace a you know a plant a biomass facility do you want to be the person who lives next to that big solar farm and that land has been used in that way when what you really wanted to see was just a clean you know a clean view of the ocean and what does this happen and to whom what parts of the island will be will be given favor will it be low-income folks will it be high-income folks guess what guys not trying to make any villains but traditionally when it comes to NIMBY not in my neighborhood it tends to be low-income folks who end up with the fuzzy hand of the lollipop now why do I go on and on and on about this because this is exactly the work but I engaged in in New York we worked with social justice on poverty groups racial justice groups and we just wanted to enter the conversation how can this benefit everybody and I think what we drummed up was a commitment within the reforming the energy vision process to environmental justice protections now what they'll actually mean going forward will that actually be you know substantive in terms of rules I'm going to say yes because I know that the advocates back home are working hard at it but that this stuff is absent here I think the problem and I look forward to talking to folks about what this is going to mean what this is going to mean is it going to be Hawaii and Hawaii's culture and Hawaii's progressiveness is it going to be a meaningful transition that is just and fair to everyone that makes Hawaii cleaner and more beautiful and more affordable as and all the islands of Hawaii's as a model for the world or are we going to have an unaffordable transition that is going to saddle our young people with extremely high high debts for the rest of their productive lives big questions moving Denver based renewable energy companies Sintek bioenergy has opened its first office in Hawaii the sales and field service office which is located in Honolulu will support local installation of Sintek bioenergy's technology for delivering clean energy through advanced thermal conversion of biomass and other waste materials the company said in the statement now this office will be headed by Dr. Chris Guai who has over 15 years of experience working in the renewable energy industry so we're talking about a punahoe boy local boy who says energy security is a big issue in Hawaii Sintek's biomass energy systems will contribute to the growth of local renewable energy resources and achieving the state's goal of 100% clean energy by 2045 Sintek's biomass systems are powered by a variety of biomass and waste materials including wood chips not shells and fruit pits the systems are housed in standard ISO shipping containers making them easy to transport and install the biomass units are scalable from 165 kilowatt up to one megawatt so the company is currently planning to install install additional units in California Texas and Japan there are currently no specific plans for a biomex system in Hawaii so why did I really want to talk about this one I think it's cool that we've got this what look what a cool energy firm that realizes that you know this particular type of technology biomass can be really valuable for islands so where do they decide to come boom here right at the crossroads between here in Asia they're going to use a local fellow hopefully generate some jobs and some money for folks here to sell some systems back on the mainland and also also in Japan so I think that is super cool another reason why I wanted to talk about it just as I said fruit pits nut shells it's all well and good I'm not speaking to this technology but the consequences of these technologies even clean energy technologies are very significant and as somebody who has been to some biomass facilities something that you want to smell you don't want to be next to and I think we've all experienced driving past some either wastewater treatment blend facilities biomass facilities so there really are consequences to these distributed energy resources and you know what I think I'm going to take a pledge I'm going to stop talking about Hawaii's 100% renewable energy goal I have been an advocate for RPS and aggressive RPS and I celebrated this goal over the past two years with everybody else and I continue to believe in RPS but this I think has turned into a rallying cry for 100% renewable energy without thoughts enough thoughts about affordability about sustainability about resilience it cannot be 100% renewable energy for 100% renewable energy's sake as much as we need to have energy of independence here there are a lot of other conversations that need to happen in that context because as the Commission is also concerned about what are the risks in implementation both in terms of money both in terms of the environment what happens to these distributed assets who's going to be watching the companies that are going to be playing on this what are they going to install who's going to fix it will folks invest in things that just become more of this infrastructure that we hate hike to and sort of try and overlook as we as we both mostly bask in the beauty of the ocean in the clouds will quality of life become worse when it comes to energy here in terms of better and when you think about higher energy rates there's a real trade-off there the last thing I was going to talk about that I'll just touch on for a minute is that at the Verge conference there's a lot of discussion about the culture of Hawaii and how much that culture blends itself towards clean energy and so I think we really need to think is that lip service are we going to have folks come and you know say a few words and we're all going to give a blessing about clean energy and yet it's off to the races without looking at the moral and justice implications of what's going on I think that's a problem and I think that we really need to work on these things that are happening under the radar which of course is what think tech is all about some things happen under the radar here in Hawaii at big tech will take you there so I had a lot to say I hope it was informative in some way this is rya salter signing off for power up Hawaii aloha everyone