 Okay, Energy 808, The Cutting Edge. Today we're going to talk about Life of the Land and its report on what Hawaii Energy is that we're doing today. It sounds right to me. Marco Mangelsdorf, my co-host and Henry Curtis joins us from Life of the Land. Wow, exciting. So there's lots to talk about and you guys are a blue ribbon crowd. Marco, why don't you introduce the scope of the show and tell us who Henry is and how he got into the studio? Well, Holi, Marco, Hikiho to both of you. This is the first of 2022 shows that we're doing with Hintek, Hawaii and Energy 808, The Cutting Edge. So mucho mahalo to you, Henry, for joining us, Henry Curtis, Life of the Land. Henry and I have been circling in similar circles now for 20-plus years and I'm always very, very appreciative to have you on with us, especially the suspicious beginning of 2022. So thank you so much, Henry. Let me kind of dive right into it. There were other topical news. As of Friday, Governor David Ige announced that the chair of the PUC, Jay Griffin, Dr. Jay Griffin, is going to be stepping down at the end of his term, which is the 30th of June of this year. My question to you is what's your take, Henry? What's your quick take on Jay's term as chair, even though he still has close to six months left? And do you have anybody in mind, any candidates, if the Governor were to seek out your council as far as the next PUC Commissioner, anybody come to mind? Well, let me say first that it's a remarkable three-month period with Sierra Club, Blue Planet, Pico, Robert Harris, and Jay Griffin all making transitions. And therefore, it's a very vibrant and dynamic shift that's going on. Jay Griffin certainly served over a very, very dynamic period in the PUC's history. And the PUC is clearly at the top of its game in its ability to lead this dynamic shift. Lifeline does not endorse, rank, attend fundraisers, or do anything for any administrative, judicial, or legislative, elected, or appointed positions. So if the Governor asked us who we would select, we would not name a name. We would say that the person who is selected has to be knowledgeable about a wide range of issues and not directly connected to existing regulatory proceedings because otherwise they'd have to recuse themselves for many, many dockets. So it would have to be someone who is, it doesn't have to be someone from Hawaii, but it has to be someone who's very knowledgeable about what's going on here in Hawaii. Okay. Thanks a lot. Let's say that precludes all three of us then, right? Yes. Yes. I just want to be clear about that. We can be independent in our discussions. Well, you say transitions, and I suppose transitions are important or dynamic transitions, as you say, but is it all as positive as you make it sound, Henry? Or are there problems in all these transitions, all in the same three months period? There is a potential for a positive transition, but there's also a lot of risk. The Public Utilities Commission has built up a great deal of expertise in very important proceedings going on from performance-based regulation to individual solar and wind projects to geothermal, which we'll probably be getting into today. And as HECO transitions to their integrated grid planning process, but there's also an enormous risk that whoever comes in will, well, first of all, it could be one of the two existing commissioners could become chair and another commissioner become the third commissioner, but there's a risk that the Senate will react hostily to whoever the governor picks and shift the appointment of the new chair to the following year with the new governor. And the Senate doesn't mind weighing in on some of the issues before the PUC. What are your thoughts about that? I would hate to step into that quagmire. Certainly the Senate does appear to be very interested in putting its foot down on effecting policy. At the same time, they're not regulators and they don't have to live with the long-term consequences of what the PUC does. Well put. So let me ask you this. There are many controversial issues, some of them more than more controversial than others, but what are the ones that life of the land is concerned about right now? You must have two or three of your favorites, two or three issues, controversies if you will, that you're following and participating in, into PUC and otherwise. What are they? Can you talk about your favorite ones, Henry? Well, Hu Hu Nua obviously would have to top the list. We're going to an evidentiary hearing on January 31st and Hu Hu Nua and Life of Land still disagree about what the scope of the issues are. They want to chop down forests and burn them, but not consider chopping down forests to be part of the issues. And we certainly think that this removing trees at this point is a disaster. The world as a whole is losing 10 billion trees a year, and that does not bode well if trees are supposed to be the lungs of the planet. A second one is performance-based regulation. We're moving the utility from- And can I just go back for a moment? You know, Dr. Mira at the university has sworn to plant a million trees, million trees, and he is out there with his students every weekend planting hundreds and thousands of trees. And it's very ironic that on the one hand, we have this professor at the university with all his students planting trees furiously all over the Hawaii, wherever they can plant them. And on the other hand, we have Hu Hu Nua that's going to cut them down. That's very ironic. Yes. And another thing very ironic that's coming out is that trees tend to be net emitters for the first 20 years of their existence. They tend to be net sinks after 20 years. So if we're seeking to reduce greenhouse gases in the next decade, trees that we're planting today will not help in that drive. They will help after 2040, after they've been in the ground 20 years. So we need to protect the trees that we have now, and that's really critical. Well, okay, we can come back to Hu Hu Nua after you identified your favorites. What's the second one? Performance based regulation. How you get the utility, how you incentivize the utility through their earnings to move in directions that support state issues. For example, do you incentivize quick shortening the time for projects to come online in general? Do you shorten the time it takes for when somebody calls and files a complaint that the HECO actually answers the phone and addresses the issue? Do you incentivize the lowering of rates to customers? How you do that is really critical. And that's a process that PUC has been underway since 2018. And how that actually succeeds is really powerful. And we're still in working groups right now adding performance incentive mechanisms. What's interesting is the word performance in the technology sector means speed. I mean, it's got other meanings, of course, but the primary meaning is getting it done soon. That's what it means. Getting it sooner, but also increasing resilience, increasing reliability, protecting the grid from extreme weather events. And so yeah, on multiple levels, how do you make sure the utility has enough money to survive? But then if they want a higher rate of return, they have to meet these state goals. Okay. You had a third one? The third one I think would be how do we get more distributed generation on the circuits? How do we increase rooftop solar on the big island? How do we increase individual wind turbines at sites, for example, in Kohala? How do we engage the community so the community is part of the process, rather than just being the receiver of large commercial wind farms or solar projects in their communities? Well, Henry, in your first and second one, there's a forum involved. In both of them, I guess the PUC and maybe the courts. But in the third one, is there a forum involved in increasing solar and distributed energy? Or is that just an initiative you would like to see accomplished? It's an approach that crosses many dockets and many regulatory proceedings. So it's not one thing. I guess the closest would be integrated grid planning, where the utility is planning out how to move forward on a wide variety of renewable energy efficiency demand response programs. Okay. Are you seeking legislation on any of those three this year? No. I think the legislation that may come might deal with speeding up how soon we get to 100% renewable. Might deal with how we define renewable energy. It might involve whether we pass a green constitutional amendment, the right to clean air, the right to clean water, the right to healthy environment. Are those things coming up this year in the ledge? I believe so. I believe also cesspools will be coming up how to deal with the runoff into the ocean. And also whether manufacturers should be responsible for buying, getting back the goods that they sell. That is when you use a tire, you can return your old tire where you buy it. But should that be expanded to cover more goods? Okay. Well, it sounds like your plate is full. Let's begin at the top of the list. Let's begin with Huo Nua. Marco, do you have any questions or comments you want to make about that so we can get Henry's input on it? Yes, I do. So last week, as you know, Henry was a rather busy week on that particular docket, Huo Nua docket. We leave it was Monday of last week. Huo Nua formally asked the commission to postpone the evidentiary hearing to an indefinite date in the future. You pushed back rather forcefully. I read your contribution to that docket. And then on Friday, the commission announced that they were denying that motion to push out the evidentiary hearing. And it's going to take place as far as we know, starting three weeks from today. What was your take? What's your take on the happening of last week? And do you believe in fact that everything is full green light for the rock and roll starting three weeks from today? I think it's full green light for starting in three weeks today. I can't begin to think about why Huo Nua asked for a delay. The only thing I can think of is maybe if they lose, they want to have another issue to appeal on. But since the Supreme Court and the legislature are virtual, I don't see how Huo Nua could argue that they would be unfairly prejudiced to having a virtual hearing. As it's set up in terms of the legal horsepower involved, Henry, you're on one side. You're on the, what do you want to call it? You're not in the high capital department. They put it that way. But how does it set up in terms of the horsepower? The horsepower clearly is strongest at Huo Nua and Helco in terms of their lawyers and the money they can throw at this. It appears that Helco is really shifting it to Huo Nua, asking Huo Nua to carry the burden. The PUC also has a lot of firepower and the consumer advocate has some, but the hearing and life of land will also be important players in this. So we have what about 20 witnesses and more than a dozen lawyers lined up between all the sides. So it would be a lot of firepower. Well, so what are the issues? I mean, to me, I'm simplistic about this. The issue is whether this is good for the environment. That's the issue. But I suppose it's much more complex than that. Yes. To life of the land's position is that we can do many different things to get to 100% renewable energy. So is Huo Nua one member of the portfolio of what is needed to get us to 100% or should it not be a member of the portfolio? And we believe that it does not serve a role in the portfolio. We also think that with climate change is one of two devastating impacts going on globally. The other is loss of biodiversity. We're facing the first man-made wave of extermination of biodiversity across the planet. And shopping down ecosystems has to be one of the factors considered. What do you say in response to the Huo Nua claim that they should have this as a matter of their investment, their reliance on previous rulings? And as a matter of demonstrating to the world that Hawaii is fairly to investment, what do you say to those arguments? I would hate to live in a world where if a developer built something, it would have to be regulated because they spent money building it. That is offers a very dangerous scenario. Huo Nua was given permission in 2013 to build it. They failed to meet the terms and conditions. It had to go under renegotiation and since that time the PUC has never given final approval. That is a developer is only assured of it when all the regulatory and legal hurdles have been cleared. Since this docket opened in 2017, since then has never received final approval and final approval that cleared both the PUC and the court system. So up until today, Huo Nua is risking its money investing in something that has not received final approval. And I can imagine all kinds of projects that could be built if developers knew that simply building it guaranteed them the right to proceed. Yeah, so you find yourself an interesting quandary if they put the money in knowing that there was a big issue that shouldn't count in their favor. One thing you said, Henry, that strikes me is the precedent value of this decision. When all of the courts and boards and appeals and whatever is supposed to happen on the timeline here are settled and Huo Nua gets into the quote portfolio end quote, isn't that a kind of signal to the world that we're willing to take other Huo Nua's in the future and burn more trees? Well, if you look across the United States and the Department of Energy's projection on what is coming across the United States over the next 20 and 30 years, it's solar, it's wind, it's offshore wave energy, offshore wind, but biomass and tree burning in particular is a very small percent of what the government rejects as the path forward. Tree burning is only really big in Europe where Europe is seeking to change out of fossil fuel and to tree burning. That's interesting. Marco, are you ready to go to the next PBR, next issue PBR? You want to do more on Huo Nua? I'd actually like to bring up kind of what's going on on Oahu right now with a yes kind of timely because if I'm not mistaken over the New Year's weekend, there were one or more issues that put Ho'an Electric, HIKO and kind of a bind in terms of asking people to conserve energy. I believe AES was down to 50% or less of output for various issues. And my question to you is, Henry, do you see because I mean, as far as I know, it's pretty much a lock, not a complete lock, that once and for all the AES power plan on Oahu has been burning coal these past years, well, 100%, 1000% definitively go offline will stop burning coal sometime in September of this year. And my question to you is, how concerned are you about the so-called reserve margin and is what happened, you know, eight or nine, ten days ago, more kind of a one-off due to bad weather perhaps, due to one-off instances of things going wrong? Or how much of it is perhaps a portent for the future? How systemic might this be? On the one hand, HIKO is seeking to do greater amounts of maintenance now in order to have more reserves in September and October when the AES plant goes offline. And at the same time, there are attempts to increase the amount of energy efficiency, demand response, and new generation. So there are very positive signs that we can survive September and October. On the other hand, the weather events of this past week do indicate that weather can play an extreme role. September is still the height of the hurricane season. So there are risks. I think the governor's task force on powering pass coal and I think the PUC are both examining ways of protecting Hawaii from the threats of 2022 and 2023 due to the shutdown of the coal plant. So I'm comfortable that we have reserves now, but we have to remain extremely vigilant, extremely alert, and do everything possible to really make sure that we do have the reserves in place. I think HNEI is also playing a key role in evaluating what the risks are. I think that the PUC chair transitioning at this point is also be critical. Henry, I don't know if I've heard you opine on where you stand or sit on the possibility, as has been proposed by a number of legislative boards, the possibility of shifting the fuel source of this AES plant on Oahu from coal to biomass pellets. What's your take on that? I would imagine if you are aware of what's happening at Huahua that a switch, the AES attempting the same thing will create a potential long proceeding where it will not be just life of the land, but others also intervening. It's interesting that under state law 225P5 in state emissions have to have net zero by 2040, 2045. So if you're importing wood pellets from somewhere else, you're emitting here, theoretically reducing emissions by planting trees elsewhere, that does not, the equation breaks down under HRS because you have to get net zero in Hawaii's emissions. That's under HRS 225P5. Under the PUC, you're looking at life cycle emissions. So it's two different laws that would both apply to AES. Henry, you mentioned earlier that Jay Griffin is leaving the PUC this year. I wonder about your thoughts on whether and to what extent his departure would have on the issues we've discussed so far on Huahua, on the reserve problem in September, and I guess on biomass pellets as well. Is his departure going to affect you think the PUC's position on these things and on PBR and also on PBR? Where is it going to go without him? I think his wealth of knowledge built over more than two decades is very difficult to replace. So I think his departure could have enormous potential downside. It could be smoother if the governor appoints a strong candidate and the Senate goes along with approving that candidate, but replacing someone with that kind of experience poses risks. Yeah, you also mentioned a little while ago that there might be legislation or at least a bill introduced to change the target date for going to 100% renewables. I don't know how realistic that would be, but any idea about when the new target would be? While I've heard dates of 2030, I think 2035 would be more realistic. It would allow a number of projects which are sort of long term to begin figuring out whether they're part of the portfolio. For example, offshore wind off Oahu is one thing that has been projected as a 2032 or 2033 date as a realistic approach. So if you were to cut it off at 2030, you'd be cutting out that possibility. I think there are other possibilities also coming. It was interesting, it was announced just this week about an underwater battery being tested off Kaneohe. I think there are a number of different possibilities. I don't think you could ram it through by 2030, but 2035 I think would be a realistic goal. I think we have to begin discussing where solar goes and where ag goes on Oahu. Well, if you measure the importance of the issue by what was discussed at COP26 and the speed at which climate change is happening to us, we really ought to consider making that date earlier, just as a matter of global responsibility, if nothing else. Anyway, go ahead. Speaking along those lines, we have to deal with electrification of transportation. We have to say that either there are some that you would use sustainable biodiesel for, but for a lot of it, you have to electrify. One way is to ban the sale of new fossil fuel vehicles as some places are doing, but we have to not only set the end goal, we have to set the interim goals and move just beyond having state and county fleet switch over. We need a long-term plan because to replace all the vehicles on the island would take 10 or 15 years. Let me ask you a question that comes from a sort of national perspective and that is what do you think of the appropriate relationship? What is the real relationship between what we do here in terms of these issues and climate change in general and renewable energy and so forth? The relationship of what we do here with what is going on in Washington in terms of the policies being developed by the by-demonstration and in terms of the money, ostensibly the infrastructure money and so forth that is supposed to be coming here. How does one affect the other and how independent should our thinking be? Well, renewable energy interestingly enough does cut across party lines. When you delve into climate change it tends to be more partisan, but many even Republican areas do support renewable energy because it's an economic driver, it supports the local economy, diversifies the economy. So we can as a state show how we move rapidly towards a low greenhouse gas renewable energy future. So we can play an important role, but Hawaii is just one of many places that can show the process forward. Okay, are you satisfied with our development? This is the third area of interest that you identified at the beginning of the show. Are you satisfied with the progress we've been making in renewables? For electricity, yes. For transportation, no. Transportation is going to involve a lot of different players from Blue Planet and Sierra Club, the Ulupono Initiative, Life of the Land and others, Big Island, EV Association, others pushing to really put into place the benchmarks, the metrics, and the interim goals that are needed. And that is something that Ann and should be done this legislative session. Yes, absolutely. Marco, we're almost out of time. Can you ask any other points that you'd like to know about from Henry? And ultimately can you summarize our discussion and the way forward? I'll take a shot at the first part of that first. So the legislature opens for business next week and it'll be doing its thing for four months until sometime it may, if I'm not mistaken. Open may not be the exact right word, Marco. They're talking about doing the whole thing virtual. Virtually open. It will be virtually open sometime next week. Henry, have you heard tell of any interesting bills that may be introduced regarding energy? From what I understand, since House members are limited to 10 bills and chairs are limited to 20, that a lot of the House bills have already been finished, so to speak. They're in a hopper waiting to flip, whereas it's the Senate that can accept additional bills at this point. Right now, we have been in discussion with many different groups about what kinds of bills we can support and which ones should be the lead issues. But right now, I don't know what will be the centerfold. Have you heard, Henry, have you heard of any possible bill that would essentially mandate that the PPA before the commission regarding Huonoa, between Huonoa and Hawaii Electric Light Company, that would somehow mandate that PPA would be approved? Have you heard anything along those lines? No. And the difficulty thing there is I think the House is stronger in resisting that idea. And you can't have a single-purpose legislation. You can't have a bill that says just one company has this right. But no, I haven't heard anything. There's speculation that senators are thinking about that line, but beyond that, no. Well, so much juicy stuff, my friend. So much juicy stuff, how quickly the time goes by. And in conclusion, I could thank you both very much and I vow to have this happen again. Let's touch base with you, Henry, after the adventiary hearing, sometime perhaps in February, and kind of get your take on things as the arguments and the evidence of all these past years and these momentous documents that have been filed on that docket will go to the judges, so to speak, go to the judges and the jury, and an answer decision order will be forthcoming at some point in the month. So thank you both very much. Thank you, Henry. Thank you for coming around. I hope we see you again soon. Let me say that the issues you're involved in, particularly Huonoa and PBR are momentous, and they will set the stage for our transition to renewable energy. So what the work you are doing, the cases you're involved in, the issues you're handling, very important, and thank you for being involved. And thank you, Marco, for co-hosting the show. Thank you both. I look forward to seeing you both again soon. Aloha. Thank you, de loha.