 Welcome to Hawaii, the state of clean energy. And I'm your host, Mitch Ewan. Our underwriters of Hawaii Energy Policy Forum, which is a program of the Hawaii Natural Energy Institute. And I'm very pleased today to welcome our guest, Jennifer Potter. Jennifer is the Director of Regulatory Innovations for Strategy and Consulting. But most appropriate for this show, she's a former Hawaii Public Utilities Commissioner. So today we're going to be talking story today about the PUC's role in Hawaii's energy policy and how the PUC protects you, the general public. So Jennifer, welcome to the show. Thank you so much, Mitch. It's a pleasure to be here with you today. Thank you. And you're coming to us all the way from La Ina. All the way. Which is a good little plane trip. I was over there, I was over in Maui a couple of weeks ago attending the Hawaii Energy Conference. That was kind of interesting. So anyway, just so everybody gets to know a little bit more about you, so we don't just jump into a PowerPoint presentation, how about giving us a little bit of your background? How did you actually get to Hawaii and become a PUC commissioner? By a lot of luck. So I started my career as an electric analyst. So I started doing low research and basically from the very bottom of ranks of the utility industry. So I started with the utility. I spent about 10 years with utilities, including SMUD, a second-hand municipal utility district, one of the most famous municipal utilities. So I was so fortunate to work there. They were very progressive, as I recall. I had some dealings with SMUD in a previous life. And they were known to be like big thinkers, thinkers out of the box. So like you said, it's probably really good for you to work with those guys. Absolutely. I learned so much. It was a tremendous experience. And that experience led me to Lawrence Berkeley National Lab, where I spent about three years working on energy research and then moved to Hawaii Natural Energy Institute, where I worked with you. And so I was there until I got swooped up and asked to be commissioner by Governor Ige. And was confirmed by the Senate in April of 2018 and began my tenure in July. And so it's been, I think I had about 13, 14 years of experience in the industry prior to becoming a commissioner. So a healthy amount, but maybe could abuse some more. Right. Well, they probably threw you in the deep end of the pool. And I guess you had to swim pretty fast. Yes, yes, definitely. A lot of reading. Yeah, we're going to get to that in a minute. We have a slide about that. So I also wanted to point out that you actually came from one of the neighbor islands. I mean, not very many commissioners came from a neighbor island. So would you care to comment on the commute and what it was like trying to manage just life living on the neighbor island and having to commute over here to Oahu? Yeah, yeah. So I actually had to rent a studio there because the expectation was that I would spend at least half the week, so three to four days a week there. And I commuted over every week. And I flew Moko Lele Airlines, which is just the best little airline in the world. And it flies the backside of Malachi so you can see the beautiful cliffs. And so I had the world's best commute. I have to admit, I can't complain about that. But I did spend half the time away from my family. And so that's the sacrifice that you make in order to fulfill these positions, in particular, when you're a neighbor island commissioner. And that, it's just what you do for public service. Well, it's probably difficult to recruit, or you probably hadn't think long and hard about accepting the position, I would think, given the time away from home and everything. Absolutely. And I was a newlywed. Oh, wow. So that was even, it was harder. I was like, I really like my husband still, you know? That's really great. Well, thanks for that. And thanks for your service. And thanks to your dedication to the people of Hawaii. And you had a really good reputation. You were a great commissioner. And so we're going to hear your views on how the PUC is taking care of the general public. So let's get on with the first slide and you can tell us what you're going to talk about. Sure. Sure. Yeah, there it is. So yeah, so we're going to go over an overview of the Public Utilities Commission, basically who we regulate when we're established. Then we'll talk a little bit about how the PUC is engaged in Hawaii's energy policy. That is kind of the, that's the mandate and the marching orders that we have on the day-to-day basis, carrying out the work that we do. And then we'll discuss some of the priority areas for the PUC today and then past and moving forward into the future. So. So hopefully what we're going to have, I'll take some of the mystery out of the PUC because I think the general public doesn't really know what the PUC is. It's just a bunch of words. They might see PUC on the back of a taxi cab. And their numbers and what all that means. And we're going to talk a little bit about that. So let's go on to the next slide and tell us a little bit about the background of the PUC. You know, what are they, when do they happen? What do they do? You might go a little bit more detail. You bet. So the PUC has been around for 110 years, which is just a remarkable history if you think about what they've been able to accomplish and how we've developed the islands and that's been through regulation of what are considered monopolies. So these utilities that the PUC regulates are natural monopolies. They're the electric companies, the gas company, water, wastewater, and so these companies are typically, they need regulation in order to control costs and ensure that investments are prudent and in the public interest. And so the PUC's role and responsibility is really to look out for the public interest and ensure that the utilities are performing up to excellent standards and providing the best service possible to the residents of Hawaii. And that means affordable and dependable. And so those are really one thing that the PUC strives to commit to and really trying to, is that affordability complex because we're well aware of the high cost of electricity in the state of Hawaii is no mystery to anyone. So it's a big mandate. Yes, a huge mandate. And we'll see how many people you guys regulate and one of the follow on slides. But we also hear about an organization. I know we're not here to talk about them specifically but the consumer advocates. So it sounds a lot like the consumer advocate. So what's kind of the difference between the two organizations? Could you care to comment on that? Absolutely. So the consumer advocate is involved in every single proceeding in front of the commission. They have some options, there's some exceptions. If there's a telecommunication like a wireless carrier that comes in and wants a certification for public convenience and basically to do business in the state of Hawaii, the consumer advocate typically won't take a position on that but every other docket, there are bread and butter. There are things you- What's a docket? Hang on, that was- Sorry. No, it's okay. I just want people to know what a docket is. Like, what is that? So it's a regulatory filing that's submitted to the PUC and it's typically a request for something. It can be a request for a rate increase. It can be a request for a merger. It can be a request for a capital investment. So there's all different types of proceedings that come before. There's also investigatory proceedings and dockets where the commission can open up a proceeding that looks at how to improve regulation in the state of Hawaii, for example. That was one that the PUC opened up on their own. And then there was actually a subsequent legislation that said, please take a look at this. So we are very in line with our lawmakers, which is excellent. But so yeah, so that's our dockets. The consumer advocate basically does a tremendous amount of the analysis behind all of the filing. So if they're looking at a rate case, they're the ones that are running the numbers behind the scenes, behind the PUC scenes and working alongside the applicant, whether that's an electric utility or it's a gas utility or a wastewater utility, in order to come to a stipulation or an agreement, if you will, about what's the appropriate investment or so that the consumer advocate can make a recommendation to the PUC about whether we should proceed or accept or move forward with whatever that application was requesting. So there- So I have a quick, let's go ahead, sorry. But their main job is really to look out for the public interest. That is, if they take public comments, they really are, they're the ones that are digging into the numbers to look for accuracy and ensuring that we keep costs down and the affordability. And they're, the consumer advocate is a very great ally for the PUC, isn't it? I was just gonna say that. So looking at the PUC, like how many staff does it require? Because you guys have to do all these studies and background investigations. You probably have lawyers and technical guys. I mean, what's the level of staffing for the PUC? So there's approximately 60 people that work there. And there's engineers, compliance people. We have attorneys, we have policy wonks and economists and I said engineers, but auditors. There's a huge and actually even compliance enforcement. So like people that go out in the field and actually enforce some of the requirements for our motor carriers, which we'll talk about in a moment. So staff of 60, they do a tremendous amount of work. I can't believe the amount of work that those 60 people are able to do. And I should not fail to mention, we have amazing IT team. There's actually only two of them. And they keep the whole thing, the wheels on the bus. So I mean, if you think about the docket management system, we have a repository for all the proceedings. They manage all of those repositories. They manage all of the filings and all of that infrastructure that is for basically to do our job on a day-to-day basis. Were you guys totally revamped that whole system? I think during your term, that must have been a monster project. Oh, yeah, I have no idea. I think I lost some hair on that one. I know we don't regret it. Very good. So, and what kind of an annual budget do you have? Do you have any idea? Like how much does the cost, and where does that money come from? I kind of know the answer, but I'm gonna let you say it. Well, I don't know the total budget number because I know that we typically over collect and then send monies back to the general fund. But there is a 2% surcharge on people's bill, and that's on every utility bill that we actually, that are regulated entities. So give to customers, right? So that charge is collected and then passed to the PUC and it's not held in a special fund. And if at the end of the year that money is not spent, then we kick that back to the general fund. So that to the state, yep, can use that money. Let's go on to the next slide because it's gonna give people an idea of the magnitude of the job. Right, 60 people regulating over 1,800 entities. So. How do you do that? It's pretty remarkable. We'll talk about this in a moment, but the large majority of these are motor carriers. So we have electricity, gas, telecommunications, and then private water and sewage. We do not actually regulate any wireless carriers like T-Mobile or Sprint or any of those. They have to come to us for some merger information, for like for mergers, but we don't regulate them. So telecommunications being more like a Hawaii telecom is basically our main character there. And then then, of course, the motor and water carriers. So Young Brothers, for example, which is just sort of this wild card, if you think about it and you throw that into regularly, it's just seems like, whoa, okay, water carriers, that's different. Most states don't have water carriers. So. Well, we're not people carrying buckets of water either, are they? No, no. This is the inner island tug boats and barge service. And so I looked it up before the show. I think we have two. There's that and then there's the little ferry that operates out of Lahaina, right? Yep, the Honohueve, is that right? Yeah, yeah. Yeah. Is that it? That's it. That's it. That's it, those two. Yeah. Okay, so let's go a little bit more into the next slide and talk about enforcement and how you keep people from getting ripped off. Yeah, exactly. So of course we have state statutes that we have to follow. In our case, it's Hawaii Revised Statute 269, which is basically that's the PUC's mandate. And that's updated pretty much every year by our legislators. They do touch that, those statutes. And those we have to follow to the tee. And if we don't, we typically end up in the Supreme Court. So it's not a something that you wanna mess up on. So we really do, those lawyers that we employ at the PUC are really good. They know their statutes. They know the rules and regulations, including the administrative rules. The PUC can make administrative rules and also does make changes to those rules, updates them to make sure that they're current. And then we set policies in terms of how we regulate the utilities, but we don't set state policies. For example, like Bayes. I was wondering about that. Yeah, like the renewable portfolio standard, that would be a state energy policy that we wouldn't actually have anything to do with. But we would set policies saying, like net metering, for example, that would be a policy requiring the utility to carry out net metering. So those are the types of policies and standards. Also interconnection standards for renewable energy assets that are going on and distributed on homes and businesses. Right, so let's move on to the next slide. And we'll talk a little bit more about what it does not regulate. So what does it not regulate? We don't do the Honolulu Board of Water Supply or the bus, which is interesting because a lot of our motor carriers are, they're buses, they carry tourists around, but the city-owned buses is not in our jurisdiction and same with the Board of Water Supply. So there's a resource on the PUC's website. If you click on reports on the PUC's website, you can find all the annual reports from decades they come back. And they have a lot of information about the PUC and what it does do and what it doesn't do. So let's talk a little bit more about the public utilities. So this is a hard to read the slide to get on your side, but you know what inside out. So why don't you just give us a run-through on this one? Sure, sure. So when we think about energy, we often think about electricity, but we also need to consider gas. So we have Hawaii gas in the state of Hawaii. They provide propane typically to the neighbor islands, which is not regulated, but the natural gas is regulated and that's on the island of Oahu. So the electric utilities are on the big island and then on Maui, which covers Malachi, Lanai and Maui, and then we have Oahu. There's also KIUC, this Kauai island, utility company, yes. So, and they are of course under our jurisdiction, but they also have their own board of directors. So they're not so heavily regulated as the other, as the HIKO companies would be. And why is that? Why are they, because HIKO has the board of directors. You know, what's the theory behind that? So they're municipal, so they're not municipal. They're a co-op and that co-op means that they're owned by the residents of Kauai. They vote in, they elect people to represent them from their districts that will make decisions about the course and direction of the utility. And so because they have that framework in place, they don't need the same oversight because they literally are for the people, of the people. And it's just a very different business model. So the KIUC doesn't give out dividends like a publicly owned company like the HIKO companies. That's correct, but what they do do is if there is overpayments, so if they overcollect on the revenue requirement, they will actually offer bill credits and provide bill credits back to the residents because they are a not-for-profit entity, which is extremely different than the HIKO companies, which are definitely an investor owned utility, which means that they are a for-profit and they do provide dividends and have shareholders and that they answer to their board. So it's a very different business model. The majority of the entities that we regulate are mover carriers and those are tour buses. As long as there's seven seats, if that's the case. Oh really? Is that the cut-off? Yeah, that's the cut-off. Seven seats or more and then you need to be regulated by the PUC so you do have to actually come in for a license in order to do business in the state of Hawaii. In our lineup to the show, you talked about actual enforcement. You actually have PUC people that go inspectors and so what are they looking for when an inspector goes out and inspects a motor carrier? So they'd be looking for like tax, like there's motor carriers that don't have, you mentioned earlier in the show, the PUC on the back of the buses and the cars, that there are no labels or signs that are indicating that they are actually registered with the PUC. They would of course write them a citation for not coming in and applying for a business license or basically the right to do business. And one thing we ran into also during my tenure was dumping. So there was actually, there were motor carriers that were actually dumping waste into areas that were not, it wasn't appropriate. So they were cited as well. So it can be people that are moving companies that are getting rid of debris, that are doing it in an improper way. And so the PUC actually enforces compliance with those types of situations. So how do you do that? I mean, do you have a guy trolling along behind in a car and a little bit of subterfuge here, like a pie that I? Kind of. So the investigators come over to the neighbor islands usually at least once a month. So they'll pay a visit to each island once a month. And they do, they'll kind of park and it's in particular at popular tour spots and wait and just watch. And we also receive complaints. So if there are complaints from the general public that say, you know, this moving company, you know, take care of me. And there's, you know, we need to investigate, you know, that whether they're up and up, you know, are they basically, are they? Yeah, are they doing their business correctly? Then, and those public complaints we take seriously and we do look into those. And so in the case of the dumping, that was one of the, actually a public complaint. So we had to go in and look into that. So there, we get tipped off. And then there's also just sort of that, you know, looking and waiting for it. I'm just kind of curious, like how many, how many of these investigators do you have? I believe there's three. Okay. Yeah, so not many. Okay. Okay, so let's move on. Slide down, we'll finally get there. Yes. So basically traditional utility regulation has been, as I mentioned earlier, we look at major projects. So capital investment projects, long-term plans. So like in integrative resource planning, so like how they're going to procure energy in the future, how they plan on implementing customer programs. And then also most importantly is rate cases. That's the traditional model of utilities. And we also implement energy policy directives, which is, you know, our renewable portfolio standards and our net zero carbon goals and our energy efficiency goals that we have for 2030. So we have quite a few policy directives from the legislature that we must carry out. And then the PUC also leads several programs, including the public benefit fee administrator, which is our energy efficiency program in the state of Hawaii energy. And then also a long call center. So call before you dig. That's what you'll see. Yeah. So I'm kind of curious, how to keep track of all this? I mean, it seems like there's hundreds and hundreds of issues and subjects that you have to control. You have some master computer system or how does that work? So the document management system is pretty much the main repository for all of the work that we do. And the organization of that information is actually quite disastrous because there is so much going on. It's difficult to keep tabs on everything that's happening. And in particular in the compliance section, the commissioners can get pretty far from that, you know, because they just sort of go on and do the business and, you know, we only are notified when there's something that's the rye. So typically those motor carriers are kind of off the, they don't receive the same level of attention as you would with perhaps the HECO companies. So the majority of the attention goes to the HECO companies. That's like where I think the commission spends 60% of its time, if not more. So does each commissioner have its own subject area? You divide all this stuff up among the commissioners and so you get some dockets that you're in charge of? Yep, absolutely. I kind of like the Supreme Court and then you all come together and meet and then vote. Is that how it works? That's how it works, exactly. So that's actually something we implemented when I was there because I was like, this is crazy. How are we not doing some sort of assigned commissioner to each of these dockets? And which worked really well for me because I focus on, you know, demand side. So what's behind the meter? What's happening in the customer home? That's really my area of expertise. So I was able to take on all of the dockets and proceedings that were focused on that. Whereas the other, for example, the old chair and the chair that's not there now, rate cases were their number one priority and that's where they focused their attention. So we did divide and conquer and then bring back that information. So we meet with the teams and then come back and provide information to the other commissioners so that we were more efficient and effective in getting our orders out. OK, so let's just shoot through to where we're getting, we're actually almost out of time. I know it was amazing. So I want to shoot to slide 10. I'm going to bypass the traditional role in the rate case slide. Let's go to slide 10. Yes, I wanted to give everybody an idea of how big these dockets and the files and the workload that's on a commissioner. So what are we seeing here? It looks like a lot of reading. Yeah, it is a lot of reading. So this is a HECO rate case. This is the binders, the first binder there is basically the application. And then all of the remaining binders are testimony from different experts and analysis that's been completed and reports that they've done that support their position in the application. So you have to understand who's making what arguments we need to be able to dig into the numbers and understand where those investments are going. And so it is a tremendous amount of reading. Each one of those binders holds at least 500 pages. So a rate case could be easily just thousands of pages. So it's, yeah, and that on top of all the other reading has a lot of fun. Yeah, and then you've got to lug all that back. You've got it all online, so you don't have to lug all these books back to line and to read them at night. Thank you, gosh. Yeah, exactly. So let's go to the next slide, which is talk a little bit about the customer programs. So we're going to have to go through the last two or three slides pretty quickly here. Yeah, so the PUC does direct the companies and all the companies that we regulate to and develop customer-facing programs. This includes distributed generation, so like solar plus batteries. There's also demand response programs. We authorize technology incentives. So for example, batteries, battery bonus programs, which we just are wrapping up now. And then also time abuse rates, which are going to be implemented in 2024 for the state of Hawaii. The EV Charter Rebae Program, the PUC was tasked with taking over that. And we have Hawaii Energy, which is the energy efficiency administrator administering those rebates as well. So I wanted to talk the next, let's throw up the next slide, 12. Let's talk a little bit about Hawaii Energy, because that's a really important program that a lot of people probably could interface with if they knew a little bit more about it, because they actually hand out money. They do. They do. And good money at that. So they have several programs. They have programs for every type of customer, whether you're a residential, you're a multi-family, whether you're low income, and you need just free resources in order to improve your energy consumption. They have larger scale projects, such as the Ocean Cooling AC initiative that's been on the books for, I think, 15 years or something. Yeah, I understand. So they are champions that are out there every day, basically providing rebates to our customers throughout the state of Hawaii for improving their energy, people's energy consumption. And so Hawaii Energy is really kind of the face, if you will, of the PUC and of public-facing programs. So they are just a great ally. I have always considered them our right hand, and they tremendous work. They meet every bit of their goals in terms of just offering incentives to customers that produce those energy savings that are so necessary for us to meet our energy goals. Particularly meeting equity requirements for the low income people. If you have to change your refrigerator or whatever upgrade, they have grants that actually help you pay for that. So I'm planning to have them. I think I'm trying to get them on my next show. So we can talk a little bit more about that. But yeah, it's a fantastic program, and they're doing such a good job. So let's just go to the next slide, slide 13. We have two slides to go. So I'm trying to raise through this. Absolutely, no worries. So as I mentioned earlier, we have our renewable goals. We have the RPS. We also have a carbon neutrality goal now. We have energy efficiency goals that we need to meet. And the PUC is really kind of the fire under the feet for a lot of these entities to basically carry out those mandates. And then another huge initiative was our utility scale renewable procurement process, which is a competitive bidding process. And so for my, when I'm counting, we have well over 300 megawatts of installed solar that's been approved by the PUC, as well as over one gigawatt of storage. So that's so far on the books. And we're already moving into round three of those RFPs. So that will actually extend and create a greater pool of resources available to us to meet our renewable polio standards and our renewable goals. So we've also approved aggregators for demand response programs. And those have been competitively bid as well. So we're trying to bring competition into the market so that we're not dealing with such a static, monopoly status. Instead, we're really encouraging competition. Yeah, like you said, you need all those 60 people to analyze all these programs because they're high value and they're supposed to last 25 or 30 years. And it's a huge economic impact on the state. So Jennifer, we've gone through this whole program. Yes. And now I'll just throw up the last slide, last slide so people know how to get ahold of Jennifer. Yes. There you go. There she is. Yay. And we put her phone number in there. So we're gonna wrap it up now. And so we've been leaving really, but they're even watching Hawaii to stay to clean energy on Think Tech Hawaii and talking story with Jennifer Potter, a former PUC commissioner. And today we've been talking story about the PUC's role in implementing Hawaii's energy policies. And most importantly, how the PUC helps protect you, the general public. So thank you Jennifer for sharing this knowledge with us and thank you for your many years of dedicated service as a PUC commissioner. Thank you. Thank you so much for having me, Mitch. It's been a pleasure to talk story with you. It's great. And thanks to our viewers for tuning in. I'm Mitch Ewan. We'll be back in two weeks with another edition of Hawaii, the state of clean energy. Aloha. Thank you so much for watching Think Tech Hawaii. If you like what we do, please click the like and subscribe button on YouTube. You can also follow us on Facebook, Instagram and LinkedIn. Check out our website, thinktechawaii.com. Mahalo.