 We're back, we're live here on a Monday morning and I guess it's noon with Energy 808, The Cutting Edge is very important program because we have Commissioner Jenny Potter on the show and we have my, what shall I say, my co-host, Marco Mangelsdorf, who is now going to make a fabulous introduction of Jenny Potter. Are you ready Jenny? I don't think so. Go Marco. Well, thank you Jay, I actually prefer unindicted co-conspirator, but I will settle for anything that's remotely respectful. So thank you so much for having me on again today and I am beside myself with excitement and pleasure and joy to have my very dear friend Jenny Potter who is joining us today from the commission, actually from Maui to be more accurate but representing the White Public Abilities Commission. And I've known Jenny now for going on a couple of years, we met at the Verge Conference which you may remember was back in the day when there were big conferences with lots of people in a big auditorium. And we just kind of immediately hit it off and we've become good friends and kind of fellow travelers in the energy, in the energy past. So Jenny's been on the commission since July 1 of 2018. She has another four plus years in her term which takes her to June 30th, 2024. If I'm doing the math correctly. And I just feel she's a rock star there in the commission along with Dr. Jay Griffin also very steamed and the more recent arrival of Leo Asincio. So I just have such confidence and faith that we have truly a stellar commission and I think it's just fantastic to have Jenny on the commission and fantastic that she joins us again today. So if she hasn't blushed too dearly, thank you again Jenny for coming on with us. That's it, that's it Marco, that's it. That's your introduction. I don't want to put her in a state where she's so embarrassed that she can't speak for the next 25 minutes. So I'm trying to go moderate on the praise, Jay. What's your reply to all of that Jenny? Well, I think Marco is too kind but he did have a lot of facts straight. I do sit on the commission. I did meet him at a Verge conference. All the rest of it's just his interpretation. So it's great. I thank you so much for the kind words Marco. I appreciate it. I don't know if you have, you want to add anything Jay but I'm just teasing. I do, I do. I was thinking that the last time I saw you was at the Hawaii Energy Policy Forum, legislative briefing in the middle of January just around the time the session opened and you spoke. And Marco said, you were a star in that. I have film. I have proof of this. And the part that I remember that was so impressive was that you told me about this kind of new ethic about moving things quickly at the PUC which we all appreciate. Everybody left, right and center, we all appreciate that. It was very good remarks. If you ever want that footage, I can provide it. That's wonderful. Thank you. I might take you up for that. And that was in the middle of January. We didn't even know about the coronavirus at the time. I mean, I recall there was a bit of a scare about it at the same week at the Pacific Telecommunications Conference where they thought somebody had traveled from China into Hawaii and that was bad into the conference at which there were 7,000 people. But it really didn't take root either statewide or nationally in the middle of January. We had to wait for at least a couple of weeks before anybody really took note of it there in January. But now certainly it's changed our world. And it continues to change our world. It has almost unpredictable effects on institutions, on the community, on individuals, on everything. And so I guess one of the things I'd like to ask you about today, we both want to know is how has the COVID affected the PUC? And you, as an individual commissioner? Well, it's been a huge change to our business operations first and foremost. We moved everyone off of the office, out of the office, and onto a remote telecommuting right at the beginning. It was like March 13th. So we got a head start before everyone else. And our chair, Chair Griffin, he really saw the writing on the wall with this coming. So he started preparing for that change in our organization well before we came to the point where the state actually closed down and decided that everyone should be telecommuting. So that was a significant change. And thinking about how we were gonna continue our operations and how we were going to continue issuing orders and doing public workshops and having our hearings, our status conferences, that was a huge undertaking to make that a migration, if you will, over to these remote sort of hosted platforms. So we have been able to do status conferences. And some of them we've had 75 people in a room, in a room, a virtual room. And that's been pretty remarkable that we've been able to continue business that way. In terms of the utilities that we regulate, that's been a real challenge. Probably one of the larger challenges we're going to have to face as commissioners, certainly during our time, but this is unprecedented. What's happening right now to our economy and to the people who live here and losing their jobs, we have a third of the population unemployed and we have utilities that are having cash flow problems because they aren't necessarily able to collect on the bills that they issue. They also, we have utilities that offer essential services such as young brothers that are had to reduce the cargo loads that they take on to the ports because there was concerns about the health and safety of their employees. And one of the reasons for that was if they had one employee that became sick, it could cut down and close the entire port for 14 days while there was some recovery. And so that some people don't understand why some of those changes to the types of cargo were implemented, but it was really to reduce as much contact from person to person as possible and to protect those employees. Because one other thing that happened was the governor put in a quarantine for anybody flying into her island. So that really restricted the ability for them to transfer employees from one port to the next. And so they were pretty much stuck with the personnel that they had at that port. And if anything were to happen to them, it could close down the entire port. So that in and of itself, created some severe reductions in revenues from cargos and what they were able to transport. And that's led to a pretty dire situation where they're looking forward and seeing about an 11 million dollars worth of losses by the end of the year. And that's assuming that things sort of stay the way that they are at this point. But because of that, they've now been looking at other options such as closing down or restricting some of the sailings to the neighbor islands so that they can really reduce some of that loss. And some of the changes that they're implementing can basically recover about six million out of that 11 million if they reduce those sailings. So it's been a pretty severe situation for our utilities and for the maritime transport. The utilities are also dealing with quite a situation where they've suspended any disconnects and they're not collecting interest anymore and they're really trying to help in any way that they can while protecting their employees. But these lead to some times where there's lack of liquidity within the utilities. So there are in situations where it might be difficult to raise funds to pay for some of the services that they provide while they're not collecting revenues or seeing this very economically just incapacitated almost at this point with insight. So... Well, this kind of reminds us that you do regulate things other than energy. We get into a viewpoint that you're only looking at and that's not true. And when we have the crisis of COVID, we find that, oh yeah, you do regulate transportation and inter-island and all that. Very important that you mentioned that because certainly that's the lifeline for a lot of people to eat and get the essentials that they need and that has to be attended to. But going back to energy for a minute, one of the things that has been made clear is that people, the utilities are not disconnecting these days. I assume, we know that from Hawaiian Electric and I assume it's so for a KIUC as well. But that means that they have to pay their fixed expense and which, you know, formidable fixed expense, huge physical plant, all kinds of fixed expenses, but they're not getting revenue. And furthermore, I mean, I'm just guessing here but it's not like there's a pot of cash at the end of the rainbow where everybody's gonna say, oh yeah, I owe you some money. Why don't I pay you for my back bill? I would hesitate to think that's gonna happen. It may never get paid. That bundle of indebtedness may never get paid which puts a lot of pressure on them. And I suppose, you know, you guys are progressive and you know this is happening and somehow you've got to incorporate that into your thinking. How do you incorporate that into your thinking? So we've been tasked with thinking about this for several of the utilities. We've actually, we're issuing an order. I think we haven't issued it but it should be coming out today. And it was in response to a letter from the consumer advocate regarding utilities and cutoffs and how to manage some of the bad debt that is very likely to come from the scenario. And in that order, we are authorizing and requesting that the utilities start documenting their losses as regulatory assets, which means it's something that they can count on over time and rate base over time to recover some of their costs or some of those losses. But it basically spreads out the pain, right? And some of these losses over time and sort of socializes them if you will. So there's definitely some mechanisms that we have in place, but there's definitely a need for us to get creative right now as so many other utilities as so many other commissions and utilities across the country are dealing with these very same situations. And it's so unfortunate. It's so difficult to balance the needs of the consumer along with the vitality and the health of the utilities because they are essential services. And what's so difficult is making decisions that are going to impact both sides there. I mean, this is the kind of situation there's very, very few winners that are gonna come out of this. So how can we do our best to make people as whole as possible in the midst of this? Because some people will not be able to pay their electric bill. They will not be able to pay back bills. So it may be fine that we're looking at suspensions all the way through June 30th, but the reality is with the airlines cutting off service to the different islands over the next, until like September. I mean, these are pretty significant. People are not gonna have their jobs back. And so this isn't something that's a short-term issue. I mean, this is going to continue on for years potentially while we get back to a type of new normal and it may not be a new normal and maybe just something completely different because the state may have to reinvent itself. And the utilities that are providing service are gonna have to think about doing things in a way that's different than they have before. It's just, we're not gonna be able to run the boat this way. We can't just cut off thousands of people for electricity, right? I mean, that's not acceptable. Marco, your turn. Hoo, we've taken a very deep dive within 15 minutes and it's kind of head spinning. And what it brings to mind, if you think back to the Great Recession and the phrase too big to fail, right? What comes to me is less so too big to fail, more like too important to fail. And when you look at what the PUC's jurisdiction is over from water, telecom, transportation and power, it seems to me that the power and the transportation and of it, as Jenny's been talking about is really necessarily garnering the most attention. And I think your comment, Jenny, that is of course not just Hawaii PUCs but PUCs across the country are finding themselves in new waters that there's no Nehru guidebook, most likely, to be able to go to chapter six, page 32 and see in the event of a pandemic what to do. So I guess my question, Jenny is, and you've already kind of touched on this, but I'd like to, I guess, hear a little bit more of your thinking on this and your feeling on this, that trying to find that balance as a commissioner and as a commission in terms of yes, Hawaiian Electric cannot be allowed to fail, yes, YB cannot be allowed to fail, KIUC cannot be allowed to fail. And where's the dividing line between letting the free market move forward as things will with this pandemic and yet on the flip side, tapping into the public trough, so to speak, whether it's rate payer money or taxpayer money, I mean, it's the same group of people, essentially. Where is that dividing line between action versus inaction between intervention and non-intervention? And fully realizing that I'm asking a relatively impossible question to answer, but I'd like to hear you give it a shot, please. Well, let me add another impossible factor, okay? Which we've been talking about. I just want to add one factor that I think needs to be added. And that is we are in the lockdown, which will continue at least to some degree. People be locked up in their houses like we all are. They are using electricity. They are watching television. Television is a richer source of engagement, maybe than it was. Both on the entertainment side and on the non-entertainment side. And electricity in their homes becomes really critical to keep their concerns down. And if we went to a blackout, if we went to a failure, even a partial failure, you would see amazing things happen in the community, because the community depends, especially now, on power being fed to those homes. And I'll just leave you with one thing. It was in the newspaper this morning, aside from the increase in domestic violence we've seen here and around the country in the past few weeks. There was a guy in Kalihi that was doing target shooting out of his window with a rifle, shooting something across the street. And of course, the neighbors heard the sounds of the gunshots and they came and arrested this guy. And my immediate reaction to that is, we're going to see more of that. And so we've got to make sure that at this time, especially this time, I'm not talking a year or two or three, I'm talking about now, we have to cope with the possibility of a very unhappy population, okay? I just wanna add that to Marco's question. Yeah. Now I kind of forgot Marco's question. Marco, can you summarize that again? For sure. So the notion of, in this case, we have publicly regulated companies, let's focus on, let's say YB, transportation, Hawaiian Electric, we have companies that cannot be allowed to fail. They're too important to fail. They're big as well, but they're too important to fail. So what kind of guidance can you go by? I mean, is there any guidance you can go by? Which I think the answer to that is really no. But you can, of course, take a shot at it. To try to balance between market forces allowing, we allowing market forces to do what they do, which is to winnow, right? Those who are, you know, Darwinian in fashion. And yet we have companies here in our state that really cannot be allowed to go under. So where's that dividing line between public regulation, public intervention, public support, and allowing the market to do its thing? Right, right. When you say market to do its thing, I actually, I think of, you know, market forces, laissez-faire, I think of, you know, the capitalists, where once we go out, market determines the best price for goods and services, and that sets the actual quantity and the value, you know, economics 101 kind of. So, and I don't think that's necessarily what you're referring to, but the market, I think what you're referring to is, you know, if these companies cannot be viable right now, then, you know, then what is our option, other than if you either allow them to fail, you intercede, and you basically make, take some type of action to basically put a band-aid on, or some other service, or you fully subsidize them, or take them under your wing, and basically fully accommodate them. And I think that there's, you know, obviously we have to balance the needs of the residents here in Hawaii, and the needs, which is also to receive these services, right? I mean, it's not, it's just getting, you know, just having them available, but being able to deliver electricity when it's needed, as it's necessary, meaning like your refineries are still operating, because there's so much interconnectedness, you know, is our refinery still operating so that we can get bunker fuel, and can we produce NAFTA that's used by Hawaii gas? And all of these things are being impacted by the decrease in demand across the board for natural gas, for fuel, for, you know, for bunker fuel, as all of the demand for that has decreased, it's impacted the bottom line for all of these companies dramatically. And so how they're trying to recover or even maintain services is in the public interest for us to find solutions as their partner, because we have to maintain reliability and service to this group of customers and to our customers on all the islands. But the challenge of finding that balance for, you know, bailing them out completely versus, you know, trying to find a solution that can help them get through this in the short term and basically get over to the other side. I think that's actually what we're being tasked with right now and will be the biggest challenge. And as you mentioned, there is no guidebook. There is nothing in history. And I don't know that Hawaii as actually, I think Hawaii might be one of the most difficult places in the US for this, because there are not, there's no many community choice aggregators as there are in Oregon. There's no market wholesale market operator and like the ISO that helps manage load through all the Western corridor. I mean, you have so many other options and other jurisdictions which we just don't have here in Hawaii. And so how we come up with a toolkit to basically wrench on this thing is gonna be, have to be decided in the very short term, right? I mean, we don't have that much time as money is now at the point for these companies is now starting to become more of an issue. And so that's just gonna be something that we have to continue to find new solutions, which there aren't a lot at the top of my head. So I'm glad I have a really bright team that can help think through this stuff. And the companies also are thinking about this as well. All of the utilities are thinking about this as well as ways that they can reduce their cost and they can try and come to the table with some solutions because they don't wanna bring us any bad proposals. That's not gonna work either. So it's actually gotta be a team effort. Everybody in the canoe rowing, right? But it's yet, there's no guidebook, there's no precedent here. There was some discussion a few weeks ago about the CARES Act. And I must say, I do not know how it ended up, but maybe Marco, Jenny, you know what happened as to whether any funding loans or otherwise was provided to utilities around the country, many of which are having problems right now. Or as far as the CARES Act and federal funding, are they on their own these days? I actually don't know anything about the utilities getting any sort of money, federal money at this point. I think that there's still something in the works though for them. So I'm not sure that all the checks have been signed at this point, but we'll see. Marco, do you know anything about that? I think I would back you up on that, Jenny. I mean, I haven't been following the day-to-day blow-to-blow minutiae, but it seems to me it's been a triage approach in the part of the FETs to get money to those who need it the most, not to say that utilities aren't needing it, certainly, but I think that that's a work in progress to be able to come to the financial aid of utilities and that's a line of business. You know, the only thing I remember about, you know, an issue that surrounded that possibility was as in the case of the airlines, the federal government, the White House, wanted to negotiate for stock in these utility companies. So it wouldn't just be, you know, a gift. It would be something in respect of a stock interest. They tried that with the airlines and there was a lot of pushback and I don't think they did that with the airlines, but I'm not sure how it worked out on the utility side. Anyway, let me ask you this, Jenny, what about your big initiatives? I mean, you have a PBR initiative last time I looked and of course you have a clean energy initiative with lots of jobs in the pipeline. Is that all following second place to the question that Marco asked about trying to balance things and keep everything in good order? Thank you for asking that. So I didn't pay you to ask that, but we at the commission have set out several priorities for our organization in response to this emergency and the first is really to encourage and continue to promote the clean energy revolution. So that's really imperative. So in all of our decisions, we're gonna see that underlying, you know, there's a lot of pain in them and that's currently under happening right now. The second is economic recovery and that's actually something we're really taking by storm. So we're focusing on dockets as of now that can really improve and encourage and promote economic recovery. And that includes things like the community-based renewable energy program, our docket, our distributed energy resource docket, of course the performance-based regulation docket. These are all dockets and integrated grid planning. That's another one that we're focused on pretty heavily right now as well, micro grids. So quite a few dockets that are coming up here in the effort to really send a signal to the market that Hawaii is open for business and we want them to come in, in particular on these clean energy projects and be able to invest money here and do it in a way that's in the short-term, mid-term, not something that's in the long-term. So what we're picking up in particular with the DER dockets with the distributed energy resources, the DER, all right, I hate it when you use acronym. That one in particular, we're really working with the parties and HECO and this is the DER Solar Parties and Mark would know a little bit about this stuff but trying to encourage the utilities to really streamline and fast-track their process for interconnection because these DER providers are really gonna be an integral part of our economy and trying to build them at recovery. Here's how we're getting building permits and we're continuing to invest in, consumers are continuing to invest in these types of projects and programs and that's something that's absolutely paramount to us. So we have changed or continue to maintain and changed and emphasized economic recovery within our priorities for the commission and our activities on a day-to-day basis. So and that runs true to our motor carriers that are on the ground really trying to improve some of the processes for them and as well as the lines and not issuing fines and delaying some of their filings and the cost for that. So it's across the board for all of the entities that we regulate. Well, it sounds like you're really working hard. Marco, is there anything in that that you wanna follow up on? No, I would like to dramatically shift the conversation from one of great seriousness and imports where we've been over the past 25 minutes or so and in the few minutes we have left it shifted to a much more personal level which is I would like to ask Jenny just since we're all amongst friends and BFFs here what would you like to share with the rest of us that might be coming as something of a surprise if they heard it? Sure, I wanna preface this by saying you cannot judge that you cannot predict the future from the past and that's one of the big ideas I think in my life is that I've had to hold on to and then also don't look back, you're not going that way. That's my personal favorite to say but both of those relate to this. I actually about when I was about 16 years old I dropped out of high school and I never went back. So I ended up getting into college off of some really great SAT scores but it's something that for many years for me was a big black stain on my persona of just thinking I wasn't quite worthy or capable because here I had dropped out of high school so how was I actually floating through this maze of life without having a proper education? And it's something that I now have realized that's probably what made me who I am of getting out of that but I don't know of many commissioners that are high school dropouts. So... So what's the plan? What's that? What's the plan? What's the plan? For what? Are you going to take a PhD now? Oh yeah. I have my master's, I think I'll stick with that. I keep thinking about my master's. I got my master's at Carnegie Mellon University which is one of the greatest schools I think in the country and so that helped delete some of that black stain but yeah, so it was an impressive journey for sure. Well, you know, almost go ahead Marco. I'd like to add that she's... Jenny is getting her PhD right now in PUC so she's going to have a PhD in PUC before no time and I'm just going to kind of riff a little bit off of your story there Jenny which is anybody who's gone through a PhD which I have, it knows it's a long slog it can be a very long slog. I was on the 10 year plan and that early on I actually failed not one but two of my PhD exams so this notion of not looking backward I think is a very good one and what failures do we have as beings as we proceed in our own course in this life are just as much if not more so instructive and certainly humbling and learning experience that allow us to be better people. So that's, I just wanted to add my own admission and confession to yours as well. Thank you. Well, you guys, well, I was telling Jenny before we started that I went to NYU Law School which is behind me in this scene right here. Twice, I had to go twice. I went for my undergraduate law degree and then a graduate law degree and it really, I don't think about it much but since we're talking about that, that's my disclosure. The second degree has not really been relevant to my practice in a long time. That was the degree in taxation. Anyway, thank you for sharing Marco and thank you for coming on Jenny. I hope we can do this again soon. It's great to talk to you. It's great to have this conversation. Say goodbye to the people. Bye people. Marco, you too. Goodbye people, but especially you too. Thank you very much. Hello, how are you guys? Stay well. Thank you.