 This is Think Tech Hawaii, Community Matters here. Okay, welcome back to Think Tech. This is Meena Marco and me on Monday. That's M, M, M, M. And today we're going to study M, M and L, which is Maui, Molokai, and Lanai, with the president of Maui Electric Company, which is the company that is the utility for those three islands, Sharon Suzuki, the president. Welcome to our show, Sharon. Thank you for having me. Great to have you here. And at remote, we have Marco Mangelsdorf, who joins us by Skype from Los Angeles, or wherever it is in California. Where are you, Marco? Actually in Palo Alto, and thank you so much, Jay, and I just want to say it's not often that we get the wonderful opportunity to speak to one of the presidents of our state's electric utility. So I'm just very pleased that we're able to join us today, Sharon, so thanks so much for being on. Yeah, thanks for the invitation. Okay, let's talk about what it is to be president. You've been president for five years of Maui Electric, but you've been with Hawaiian Electric for a long time. Can you talk about your career, and can you talk about what it's like to be president of Maui Electric? Sure. So I've been with the Hawaiian Electric family of companies for 25 years now. I started out in initiating the energy efficiency rebate programs, where we were promoting solar water heating, efficient lighting, AC, air conditioning, motors for businesses and residents. So it was quite exciting. I mean, it was fun to be able to walk into a customer's office and offer them a rebate for a change, instead of just sending them a bill. Spreading happiness. Yes, it was fun. Then I moved to customer service at Hawaiian Electric, and had the opportunity to move over as customer service manager of Maui Electric, then the Renewable Energy Services Department, and most recently as president. So five years ago. What is it like? It's actually quite exciting. Energy is at the forefront of many discussions these days, and we as a company have been working hard to provide customers better service, engaging with the community on all our programs and projects, and I guess it's been fun. We have a lot of talented employees at Maui Electric, Hawaiian Electric, and our sister company on Hawaii Island, Hawaii Electric Light. So by combining our talents, I think we really are up to the challenges of getting 200% renewable energy for Hawaii. Yeah. Well, that's been a mainstream issue for the past five years anyway. You've seen a lot of growth and development and renewables in that period. So how has Maui Electric changed? How have you changed as an executive in the past five years? How have we changed? Well, we've gone from in 2008 being 14% of our sales from renewable energy resources like solar, wind, biomass, and hydro to over 35% as of the end of 2016 with the same types of resources. So we've been able to change how we operate our existing generating units to lower the levels that they run at, to be able to incorporate and integrate more wind and solar energy when they're available. I was mentioning that a few weeks ago we took a trip with Chris Reynolds of Maui Electric. Works for you. And it fell named Todd Kanja. He's with the Wine Electric here in Oahu. And Fred Riddell, who was the energy commissioner of Maui, who's very interesting. We went to look at your facilities in Maui and Molokai. We didn't go to Lenai. Too bad. Next time. And we saw some really remarkable things. But the one thing that sticks in my head in the context of this conversation is Ulu Palakua. First of all, it's so beautiful there. First of all, it's a serious, you know, commitment to wind. And Maui has plenty of wind. Can you talk about wind in Maui, Maui County? So wind in Maui County is mainly on Maui. We have 72 megawatts of capacity available. And the peak on our system on Maui is about 200 megawatts. So it's a huge percentage of the generation. But as you know, wind is not always available. So that's where our generation is able to manage up and down. When the wind drops off, our generators pick up the load to meet the demand for electricity so that customers get the power that they need when they need it. Yeah. But Maui has been ahead. I mean, Maui Island has been ahead on wind from a long time ago, from first wind back when, and now Ulu Palakua and other facilities, no? So we had 2006 was when we interconnected the first wind farm. Then we had Ulu Palakua, the Aawahi Wind Farm, another 21 megawatts. And phase two of Kahiawa was 21 megawatts. So over the course of the last few years, yes, we've been integrating a lot of wind energy. And we found in talking to the engineers at Ulu Palakua that there was still a certain amount of curtailment. They didn't seem troubled by it because it wasn't that much and it wasn't for that long. But can you talk about curtailment as it exists for wind on Maui? So we've made changes, as I mentioned earlier, to lower the units at Kahului as well as, in fact, just last year. We made modifications to our units at Maalaya so that we could take on more wind. And as of last year, we took 95% of the wind that was available. So that's quite a bit. Yeah, that's great. That's an improvement. That's a win-win-win kind of thing. So Marco, you had some questions you wanted to ask, too. Let me try to include you in this discussion. Well, thank you, Jay. I appreciate that. So Karen said that she's been involved with Hawaiian Electric in some form or fashion for 25 years. I can't quite name nearly quite that long, although it's been going on 18 years now that I've either been a part of HCI or a dependent of HCI, but I've still attained very friendly court relations with many people around the companies. I've seen people come and go like Mike May and Dick Rosenblum, the president of HIKO, during my tenure in Hawaii. And then now we have Alan Oshima on the big island. My friends, Warren Lee and Jake Nassio, is going on 10 years there at Reinhardt who preceded you on Maui here. So my question is, other than obviously you're a different gender than the people I just mentioned, what do you think differentiates you from the people I just mentioned in terms of leading a utility company in the state of Hawaii? I guess my background is finance and business, and I also worked in the customer service arena, both with the energy efficiency programs as well as with our operations in terms of meter reading, billing, and call centers. So I have the customer perspective that I bring to the table, and I think that's been a lot of our focus in terms of trying to transform our business. We still, of course, need all the technical knowledge to help us determine how we can better integrate more and more renewable energy on our very small island grids. But of course we need to make sure that it meets the needs of our customers and everyone has the support of the community, so I'd say that that's what I bring to the table from a background that's maybe not as technical as some of my co-workers or former co-workers. I think that's a great response, and the follow-up would be, since you've arrived or walked up to the big chair and sitting in the big chair as president of NICO, what has surprised you the most? And now that you've been president, what's surprised you the most? And what have you found to be amongst your most difficult challenges? Surprised me the most. I'll just say that I've been very impressed with the diversity of our workforce internally, like being exposed more to what the engineers and the operating folks do both in the office and on the front line, and because that was not where I had my experience with the utility, I think it's most impressed me. And it's more just because I didn't have as much exposure, but I see how important it is for all of us to work together. We all have a different role to play, and it all needs, I mean everybody's input is important. Kind of complementary to that is the diversity of our communities. You know, Maui is a little different from Moloka'i, is different from Lina'i, and very different from Oahu, and I'm born and raised on Oahu, so when I relocated to Maui, I thought, okay, I'm a local girl. It should not be too difficult, but of course quickly I learned that the cultures, they're really different cultures on the different islands, and they're each very special, and I think, how did I adapt? I tried to listen and adjust and rely on a lot of the local folks who are born and raised on Maui to provide me guidance to help give us direction in the right way so we could make progress. Yeah, you know what, and to follow up on that a little bit, you have three distinct islands in your county and your company there, and they all have subcultures that are a little different. I would say that Moloka'i has got to be different than Maui Island, and Lina'i is different than either Moloka'i or Maui Island, and so you and I were talking before the show about Guan Chi, you know, just like for a real estate lawyer, it's not about land, it's about relationships, and you alluded to that a minute ago. And the same thing in utility, I mean, you have got to deal with the public, and sometimes the public wants to be heard, they have views, it's, you know, you are their utility company and they want to be heard. So how have you dealt with that? Because you know, you've had resistance to development in Moloka'i, and you certainly have had the whole wind farm affair, I guess that was before you were tenure as president, but certainly Maui Electric has had an experience, if you will, with the people in Lina'i about the wind farm at the Garden of the Gods, there in west and on the cable and all that. And so what are the special concerns and considerations, what are the special relationships you've got to fashion to keep this all working? OK, so since I took over as president, we formed a position for a director and a staff person for government and community relations, because it's so important, so it goes beyond just customer service, but it's developing relationships in the community so that we are able to listen to their concerns, their preferences. And we're using Moloka'i as an example, and instead of just coming up with a plan and presenting it to them, we've last year held 13 roundtable sessions, plus a large community meeting to have a dialogue about energy and educate them about different resources like solar, wind and different storage, like battery and pump storage, and ask them what their preferences are for their island. So having that dialogue and then consolidating and getting their information and sharing back with them what we heard from their friends and neighbors, I think has proved to help develop a better relationship. They see us more trustworthy and that we're being transparent. We also did that on Lanai after the major outage in January, and when we went to them, we said, how can we improve what happened? And they said, it would help if we had better information. So we developed a communication plan working with the Maui Police Department in the event that something like that happened again, and what we're doing to build a little resiliency in an affordable way and making sure that our communication channels are clear. And we went back to the community in December, and they were very appreciative of our follow through. And one of the residents came up to me after the meeting and said, thank you for coming to our island. Thank you for being transparent with us. Yeah, very important and very required. You've got to do that. But then there's a distinct benefit about it on Maui as there is in other places in the state. I know that Marco has some questions for you about the changing circumstances. All this on a bed of changing circumstances in terms of the technology, the end of the gas and the changes in storage, the changes in solar. And right after, right, Marco, you'll have to agree with me on this. Right after this break, we're going to take a short break, I would invite Marco to ask you about that. OK? OK. All right, Marco? OK. All right. We'll be right back after this short break. You'll see. Aloha. I'm Kili Ikeena, and I'm here every other week on Mondays at 2 o'clock PM on Think Tech Hawaii's Hawaii Together. In Hawaii Together, we talk with some of the most fascinating people in the islands about working together, working together for a better economy, government, and society. So I invite you into our conversation every other Monday at 2 PM on Think Tech Hawaii Broadcast Network. Join us for Hawaii Together. I'm Kili Ikeena. Aloha. I'm going to the game, and it's going to be great. OK. We're back. We're live, and we have Sharon Suzuki, she's the president of Maui Electric Company, which takes in Maui and Molokai and Lanai. And we have Marco Mangelsdorf, who joins us by Skype Audio from Palo Alto. So Marco, you had some questions you wanted to follow up on about Lanai. Go for it. Actually, Molokai, Jay, and I expressed to the past Molokai had a very near and dear place for my heart, coming back to my youth when my father took me fishing there 50-some-odd years ago. And I wanted to ask you, Sharon, can you provide us any update on how things stand between Niko and this company Half Moon Venture, which has made very public and is wishing to develop a substantial PV farm or PV facility with battery storage on Molokai, which if there were to go through it would be a very dramatic event in terms of Molokai achieving highest levels of percentages in terms of renewable energy feeding into the grid compared to anywhere else. Could you give us a possible update on kind of where things stand with that project? Yes, we're still in discussions with Half Moon Ventures, who has proposed a PV farm and battery combination, and they had gone to the community in the latter part of 2017 last year to present their project. So we're still in discussions with them. Yeah, we went on a trip that I mentioned that we took. We went to talk to people on Molokai, and one of the people we talked to was Amelia Nordhoek, who is one of the co-executives, if you will, of sustainable Molokai. They are taking an affirmative position about how that deal should be shaped. And actually, if you go on our site, thinktecawai.com, or on YouTube.com slash thinktecawai, you'll see two movies of our trip. One the movie to Maui Proper and another movie to Molokai. And next time we want to come over and do Lenai, check up on that. Anyway, so what do you see as the future of that deal? I mean, this is a complicated deal because the sustainable Molokai crowd has weighed in, they have expectations, and it's something I think that Molokai has waited a long time for this deal. What do you think is going to happen? Well, we always look at proposals from developers from how is it going to impact the customers, because we know that customers are very concerned about the level of their bills. But these purchase power agreements generally do as though it helps stabilize the pricing. As you know, right now our bills are tied to the fluctuations in fuel prices. So, of course, that volatility is not something that our customers like. So to the extent that we can reach an agreement where the pricing will demonstrate based on our outlook for the future over a 20-year horizon that it is going to benefit our customers, you know, we may be able to come to some kind of agreement. But we're always looking out for the best interests of our customers while making sure that how it integrates into the grid will help us maintain a reliable service to all customers. Yeah, and this deal is a little different because it's not just solar, it's solar and battery. It's that new model, the model they've been using in the KIUC about linking the solar facility with the battery facility. Yes, so of course it provides a great opportunity, which is why we're looking at it seriously and in discussions with them. Yeah, okay, we want to follow up with you on that one. Sure thing. So, let's talk more about the technology and the changes that are happening. For example, the closing of HC&S and how that affects things. Marco, why don't you frame some questions? Sure, I just wanted to, well speaking of HC&S, what kind of tangible impact has that had on me? Because that of course was a long time source of power with the cane byproduct after harvesting. That's been better for Maui repairs as far as has it had any impact on their bills from month to month? Has it had any impact on being able to accept more or less renewables from wind or has it not had much of an impact? Well, HC&S did provide a source of reliable renewable energy, and it was firm generation that was scheduled into our grid. So, to the extent that they're not there, we need to make up some of that capacity. And so what we're running on now is maybe sometimes when our unit's on overhaul, we have a kind of tighter reserve margin, but fortunately, we've been able to provide service as reliably as we had in the past. And we're looking for other sources to provide us capacity value. And one option is to get customers more involved with us through what's called a demand response program. So if the water department, for example, is willing to not pump during a period of our peak and we lost maybe two generators, one was already out on maintenance and unexpectedly we lose a second, by them reducing their demand for electricity, we can still serve that evening peak on the island and they would in turn get an incentive for being available for us. So that's a program that was approved last year by the Public Utilities Commission to help us meet some of the capacity or reserve capacity that HCNS once provided. So we continue to look at those types of resources. Also looking at battery energy storage as an option, but as you know, battery prices have been relatively expensive. So finding the right time and the right size for the grid is critical. Yeah. What effect does this new tariff on solar panels have on things? And let me transmute that into what's really my question. And that is if I'm an energy developer, a renewable developer, and I come to you and say Sharon, I'd like to do something on Maui, in Maui County. What would be the best thing to meet your expectations? Should I get into battery and solar? Should I get into wind? What should I do? Okay. So we have a new process that should be coming out soon and it's to bid into potentially two requests for proposals. One is for additional renewable energy in general. So we'll leave it up to the developer to propose either solar alone or solar with battery. And a second is to replace the capacity after we retire our Kahuluik power plant. So we still need capacity to meet the needs of the island. And there will be what's called a firm request for proposal. And it's to have firm capacity on the island or firm generation. So there are two opportunities for developers out there to soon be able to bid into or bid their projects into our solicitation process. So is this calculated to move faster? Is it calculated to reach that 100% goal in a more expeditious way now? Yes, what we're trying to do, especially on the renewable RFP where it could be just solar or solar and battery, is to try to allow developers to take advantage of the tax credits that are available, which would of course bring down the pricing and result in lower cost to all of our customers. Yeah. Marco, your turn. What have you got? Yeah, there's kind of a fuse is burning now as of now in terms of the federal investment tax credit is 30% has been 30% since I believe 2005 for renewable energy project projects. And we have 30% this year. We have 30% next year in 2019 and then starting in 2020 it begins a ramp down. So there's a bit of a sense of greater urgency now compared to six months or a year ago or especially these larger projects which can have quite the long timeline from start to finish. So when it comes to bringing online utilities scale, renewable energy capacity, these decisions, these contracts will need to be agreed on fairly soon in the months to come. But we don't want to require regulatory approval. So I just wanted to say that we're starting kind of a countdown now with the sense of urgency at this point for these projects, these renewable energy projects, especially the near scale to actually make progress towards completed deals to get the ground and operate. Okay, Sharon, that sound was not perfect. Some kind of sound issue. But did you get enough to respond? Yeah, I think we certainly sense that same urgency and I think the Commission does too, which is why they move those approvals forward quickly. And we're actively meeting with the independent observers. In fact, they're meeting this week with our renewable acquisitions group who helps support us on these matters. So we sense the same urgency, Marco, because we're in it together. We need to partner. We can't do it alone. And by reaching this common goal of getting to 100% renewable energy, I think we want to do it in a way that benefits all of our customers. Developers taking advantage of tax credits is part of the puzzle. Yeah, in regard to you, Sharon, that you live in one of the most interesting, as far as utility companies in Hawaii are concerned, you live in one of the most interesting times imaginable. So many things happening, so many possibilities out there. So much expectation, so much promise. How do you feel about that? I think it's exciting. I think that's why it's changed. Although I've been with the company for a long time, I started with a program that was new to the utility and it's constantly changed. So it's kept me very interested. And we have a lot, like I said earlier, we have a lot of great talent across our three companies and combined, I'm sure, working with our customers, our communities and our partners, we can get there. Yeah. One other thing that comes out of that is that, so the three companies within Hawaiian Electric were more distinctly three until recently when Helen Oshima had an initiative to make them more like one. Can you describe what happened and how that affects Maui Electric? Okay, so what he did was he asked these operational senior executives to lead the processes like energy delivery in our poles and wires, as well as our generation as examples, across the three companies, also in our customer service area, so that we could bring alignment in terms of policies, processes and practices. So if a developer is doing business on one island or one company, they're all the same. Very good. They may be doing business on in two service territories and it shouldn't be different, right? Except maybe for the size, because of the size of our islands, right? So and we can gain more efficiencies, which we've seen in some of, especially in our customer service area, where for example, calls can come in, they can be fielded by any one of the customer service reps on any of the three main islands, Maui, Oahu and Hawaii Island. And the customer can probably get better service because you're not waiting in line only for say the Maui representative if you're calling for Maui. So we've gained some efficiencies and cost savings by we call it virtualizing the call center. So it's with technology that we can find these efficiencies, right? That's great. And it's everything to win that way. Efficiency is the name of the game. And you're going places. I really appreciate you coming down. Marco, thank you for setting this up and thank you for your questions. And I hope to see you again soon, Sharon. Okay. Thank you very much for the time. Yeah, welcome. Please come back to Maui. Okay. Aloha. Aloha. Thank you, Sharon. Thanks, Dave. Thanks, Marco.