 from the chair here on Think Tech at the 12 noon block on a given Monday. And the chair refers to Jay Griffin, the chair of the PUC here here on Energy 808. And Marco Mangelsdorf, my co-host and contributor, regular contributor is here to introduce Jay and to introduce the scope of our show today. Marco, the floor is yours. Thank you, Jay. Thank you, Jay. Thank you, Jay and Jay. It's, can't think of a better day, a better way to spend my Monday than to be with the Jay brothers, the wonderful dear twin brothers of rather different mothers. We only have half an hour, Marco. You're a party pooper, man. So great to have you back on the show, Jay Griffin. And we're all leaders and we're so pleased to, do you have some time in your busy, busy day there at the public utilities commission to spend with us. So thank you so much, Jay, for being with us. Yeah. Thank you, Jay, for being with us. It's great to have the PUC chair come around, give us an update, you know, inform the public about what's going on. It's a fabulous, fabulous process and we really appreciate it. So it's good to be here. Great to have you. So let me, let me just go through at least some of the things we wanted to talk about. I guess the first thing, and we talked about this before, and it's coal. What's the status of coal? It was supposed to end by statute, September 2022. We're online for that. What are the steps that are necessary? What's the PUC's involvement? Jay, you're correct. By law now we, the PUC is unable to extend the current contract with the coal plant. It's an independent power producer here on Oahu. And so by September 2022, next year, plan is for that plant to come offline. It's a major, largest source of energy, a major power plant for this island. And we've been working for years towards this. We have a suite of large number of projects that are intended to replace it. I think the last time I was on here, we just had a a tense status conference with Juan Electric on the status of those projects. And we've been working really hard after that. And actually that work started long before that. And you had Scott Glenn on here also with the governor's powering past coal task force. And so in the course of numerous meetings, follow up to that and really putting into place a number of contingency actions. I think what I said in our status conference last year is we appear to be turning a corner on bringing enough resources online so that we have, you know, can assure reliability both next year. It's a multi-year process as you dig into this. So the first key hurdle is next fall, next September in particular. And then there's another major one the following summer. So when we look at the timeline of new projects and new programs that have been approved, really the first time last week that Juan Electric showed that we have, you know, I think reliability results metrics that are no worse than the current state of reliability in that time frame. Actually the demand for electricity is highest in the fall. So that's really kind of one of the gaps we have to shoot here is that we're taking plants offline when power demand is possibly going to spike. And really the critical point is that we're going to, Juan Electric will be adjusting their scheduled maintenance for other plants to keep as much of the other generating units online during that time frame. We're going to have another numerous programs with customer-cited storage coming online ahead of there. We'll see how much we get online. We just approved up to 50 megawatts of a emergency demand response also being called scheduled dispatch. It helps with the transition here. And we have proposals from at least two of the other solar projects on how they can accelerate their timelines to come ahead of some of these de-hurtles. So putting all that together is more encouraging news than we had in the past, but it's still going to take, you know, very attention to details with the schedules for all these projects. We really can't see any more. We need to keep seeing things move ahead of time and not slide. And that's always the challenge with, you know, schedule management for such a large set of projects. So there's a lot of hands on this now. The Governor's Task Force includes the Mayor and the Department of Planning permitting on this island, as well as the other executive agencies that have some permitting role for these projects. Really the first time, at least more in the state's history, we have all of those players in the same room comparing schedules to make sure we can keep the whole group on time. But I think, you know, those are all positive, positive moves since our last meeting, but the reality here is that this is going to cost us and it's going to cost us in a variety of ways. And that's been incredibly frustrating for the Commission. We've said that, I've said it. So there's going to be direct costs for some of these projects that we may have to pay to bring online sooner. The contingency plans are all going to cost us. And, you know, we've got to do better than that, that these are costs attributed to basically the delays of the projects that we've had. So that's been rough and rough for all of us. The silver lining here is that actually when you put all of these new plans together, we have a pathway to retire in total five units on Oahu, but not just the AES plan, but potentially four units of the YL power plant on Pearl Harbor. And we're seeing a similar pathway for retirement of old fossil fuel units on Maui, and then hopefully the Big Island as well. But I think there will be a ton we can learn from and benefit into the future. But that's the full rundown of where things stand at least from my perspective. Well, it sounds encouraging and better than it was sounding before. It also sounds like the devil is in the detail and that my guess is you're going to have continuing conversations to make sure these dreams come true. Am I right? Yeah, this is something we're going to have to track closely through the rest of this year, 2022, 2023, because the timeline for a number of these projects is not till 2023. And I talked about the schedule, the maintenance schedule for one electric plant. So part of the plan here is to keep them online in the fall of 2022. But at some point, you've got to take them off to continue the maintenance process. And so that really comes up in the summer of 2023. So we've got to play catch up at that point. And by then, the schedule intends to have enough other the different projects and programs online to account for that. But there's really not really much of any room for slipping that any further. We've lost a lot of that capability from the initial delays. You know, it's interesting that we have multiple agencies and organizations, business interests working all at the same time. The deadline, the original deadline, the AES deadline for September 2022, that came from the legislature. And it's an interesting government experience to see a deadline established by the legislature, possibly without reference to some of the details here and the challenges of doing it by that date. And I wonder, you know, your thought about the general process of planning the transformation of energy, should it work that way? Will it work that way in the future? So you're right. It was, it was a legislatively, well, actually the deadline was triggered by the end of the contract with the coal plant. So I was going to come up either way and legislator and to be clear, most of the actually all the major players here all supported the legislation. The final version was last summer ending that deadline. That actually happened before we're informed of the delays at the time we're looking at having a number of these projects all online in time. So that is a gap in information here has been a significant concern to the commission. We continue to highlight it. But to your broader point, Jay, I do think it's important that we pick, you know, we try and draw a line in the sand on this and plan around it. And if you look at some of the commission's subsequent actions, we've done what we term financial retirement of a power plant. And so for two of the YL units, we've said that one electric will need to take their current costs of those off the books on a date certain. And then, you know, based on what they've submitted to us. And then we plan around that because if we have a firm timeline for when things have to be online and the rest is flexible, you know, that's how you end up in the situation. So we need, I think that setting those sorts of deadlines is the discipline that's needed to organize all the different players here. So I think, you know, I think we'll look at something similar on Maui and in the future as we identify what resources are needed to retire other plants. I think we'll see this repeat otherwise, right? You're just going to see the timeline slide. Am I right to think that by the time you retire, or the coal plant is retired here in Oahu in the September of 2022 and in Maui 2023, that is that will be the end of coal in Hawaii? Yes, there's no more coal plants. I just, I would, I can't see how anyone would build another one or try and repower one. So I think, I think it's fair to say it'll be certain at least for power generation, a coal plant can be used for other fuels for other activities, but we don't really have any of that here. Well, Marco, let me ask you to propose a question to Jay about Oahu, because we've talked about that a number of times and it's your turn. Thank you, Jay. I'm going to make a comment that I want to have just heard before I go to who I'll know, which is, you know, my mind clearly it's the Hawaiian Electric companies and the PUC who have had, I'll say, shared responsibility in terms of bringing this AES thing to a successful close. And going back to that status conference of March where Senior VP Colton Ching voiced his concern about a so-called type reserve margin. Seems like things are better. Seems like you're a little bit less concerned, might take Jay Griffin, in terms of progress, having been made over the past three months or so. So, you know, my takeaway is that Hawaiian Electric got AES, Kapolei Energy Storage, and that the responsibility while still shared between the PUC and Hawaiian Electric to my, in my mind, has kind of subtly shifted more towards Hawaiian Electric now that they are getting kind of sort of more or less what they want. They wanted KES very much, they got it under certain conditions. And then, and as we move forward, you know, roughly a little more than a year from now, you know, all eyes on them and on the commission as well, but especially on Hawaiian Electric to execute, to execute and make sure that there's adequate margin, adequate reserve to be able to handle demand once AES goes offline. So, moving to Hu Honua, as we all know, the Supreme Court issued a ruling. Or did you want to comment on that, Jay Griffin? I don't want to just blah, blah, without giving you a chance to respond. Let's see, a couple of things. Look, if you look at what we went through last week, it's more than just that one project. We need all the contingency plans that we've worked on so far, including all the customer side resources actually fill the gap and the interim. So I think that what has, I want to be clear when you say level of comfort, for me, it's only a level of lost sleep. And so is it the extreme for, you know, three months ago was, and for this three months before that, six months before that, it was extreme. You know, I mean, when we say we got to keep the lights on, we mean it. So that, you know, level of comfort means that we have enough, I think we have diversified the risk here to make sure we have enough resources online in a way that will do that. But again, it will cost us more. You know, what hasn't been as well discussed is, you know, we're depending on keeping all the other units online, which means we're going to burn oil until we bring the other solar projects online. And if you look at the cost of oil right now, that is going to cost us more. You know, I brought that up in the March conference. And so, you know, again, we're going to be dependent on the oil markets for the initial cost here. So when you talk about responsibility for execution, I agree. But that is actually shared as well. And that's partly why we have the other agencies on this task force, is it does it, a lot of these projects depend on getting other approvals. And so I think having that level of shared responsibility is going to help and just, you know, greater attention to the to the matter as well. Because you can't, you know, if we come up in August of next year and find that we're short, you know, you can't fix it in that timeframe, we've had the course correct, you know, you need months and years to do this. So it is why we had to you know, we try to avoid canoe paddling comparisons. But if you've ever, when you have to steer the canoe, and when the steersman has to course correct hard, it's difficult on everyone. But it's better to do that than lose course. So the net positive for you, my friend Jay Griffin is your sleep sounds like it's less, a bit less disrupted. You're sleeping hopefully a little bit better. But yeah, but no, again, it is responsibility for all of us here. But yeah, execution will depend a lot of it, a lot more of, and it will come down to a lot more of the technical side now. We got to get the interconnection facilities in on time. You know, commissioning of power plants is very time intensive, you know, all hands endeavor, we're going to be doing a bunch of that at the same time, when you talk to the folks on KAC is each time they bring on one of these plants. There's a lot of fine tuning with all the different control systems. So you know, we need the cooperation of all the different parties to see each of those go smoothly. So they build some time into their schedules to do that. But you know, we need more wins than, you know, the alternatives for this to go as smoothly as it could. Okay, so so taking Elon Musk's hyperloop from Honolulu to Hilo and up the Hamakua Coast, we have this power plant, which has been being built for quite a number of years. Supreme Court decision not too long ago remanded some stuff back to you and your colleagues there, Jay. I know you really can't say much substantively about who Honolulu, but what can you tell us perhaps about the timeline about the schedule? What do we what do we have to look forward to in terms of when an evidentiary hearing, for example, may be taking place? Yeah. And since I took so much time on the first topic, I'll give some back on this one. The decision was formally remanded last week. It goes last Thursday. Okay. Working on our procedural order. So answers. Stay tuned. Okay. That was that was a short and quick and sweet answer. That's a terrific answer. Yeah. What about PGV, Puneji, a thermal venture? What's happening with that and the need or perhaps not so much the need for an EIS? Yes, I think on this one, I wanted to take the opportunity to clarify a couple of things. One, I think there was some confusion. We actually had two approvals or dockets for our commission. First one was dealing with the rebuilding of the transmission lines. And so we approved that, I believe it was almost a year ago now, I believe it was right before July 4th. And so that's allowed the plant under its current PPA to come back online, which they have been doing. And during the course of that, we asked for it and they said they'd been working on it for a renegotiated amended PPA. And that's what came in at the end of 2019. And what is proposed there is both an expansion of the plant and an extension of the term for another 30 years. And until we saw that or until everyone saw that was not exactly clear what would be necessary. And so they're going back, I think actually into 2019 as the docket looking at the transmission line, people were asking whether new environmental review was needed. And they were focused on transmission line question. Actually, if you look at the analysis at the time, the new PPA hadn't even been submitted yet. On the question of the transmission line, I take it, I wasn't really aware of this, that the transmission line was damaged or destroyed in the course of the eruption? They had, if I remember right, they had to rebuild in short, yes. And they had to rebuild. And it was, I think, it was moved slightly. But yeah, you can, when you go out there, you can see where the lava flow took over. I mean, basically everything except the plan itself or what came almost up to the plan itself. So the road was rebuilt and the transmission line was rebuilt and realigned. And so I go through that because we, the earlier reviews on whether environmental additional environmental review were needed, focused on that transmission line question did not look at the actual power, the new amended power purchase agreement itself. And so in the course of this docket, we've asked about it, we've looked at it ourselves. And our analysis, it was in the orders that we had, says particularly, that any change in scope and intensity and change in the length of the project are triggers under what's known as Chapter 343. That's the part of our state law, dealing with environmental review. So that was our internal review, that's what we put in our order. And one thing I want to highlight, I don't think this has been as public, but last week during the Hawaii Energy Conference, one of the major topics was community input for renewable energy projects, particularly controversial renewable energy projects. When I go back to our public hearing that we held in Puna, these I think this is in December, I forget the date, it was a very late night in December, spent three hours in a public hearing there, fairly large turnout. And the most consistent voice of the community was, we want government to do an EIS here, we want to see a renewed environmental review. And so to me, when I put all that together, everyone's asking government agencies to listen to the community. This has been a very controversial project there. Yeah, so when we go out and listen and we hear what they ask us, we go back and look at the law and looks like the law says, you have to do this. We said, we need to do this. And it's been unpopular for a lot of the folks that are affected, which I understand, but my take is if we don't do this, it'll be litigated and it'll be another however many year delay dealing with it. Well, Jay, I apologize for my ignorance here, but I'm confused, I guess, as to number one, who can do and or who should do the EIS, right? And then there's the question of, quote, accepting agency. Can you help me better understand the answers to those two questions, please? This is where it gets more complicated in practice than what you see in the law, particularly when it comes to any sort of energy project development. And so your first question, who has to do this? It's termed an applicant to the agency. And when you look at a project like this, you have basically multiple entities. This is a request from White Electric Light Company, Helco, to the commission. So they're the entity asking the commission for approval of the power purchase agreement and to pass a cost on. But it's a third party building the plant. In the past, they've needed permits from other government agencies. They need permission from DLNR to drill the geothermal wells. They need permission from Department of Health for some of their air quality permits and the injection wells. They need permission from County of Hawaii. And so what we've asked is that those two entities, Helco, NPGV, go consult the relevant government agencies together because to get it done, it's going to have to be everyone working on this. I think the responsibility can't be parceled off here so easily. And then I'm still unclear, Jay, who will actually is responsible to perform the study? I'm sorry to be so dense here, but I still don't understand who that is. A contractor, isn't it? I think, but if you talk to Helco and you talk to PGV, they may have a different take, but it is PGV's project at the end of the day. So I think it's going to have to be in court. Ultimately, it's a contract to work here for PGV, right? We have a higher company to help them conduct this, but I think Mark is talking about who's responsible for conducting the study itself. One of the things in passing is the cost. This is going to cost a lot of money, this environmental review. Has there been discussion about who pays for that? I mean, that's internalized by the company doing the project and where that, I mean, as part of the risk of development. So PGV finds personnel to do the study. They come up with a document. They say, okay, we're done a month from now, however long from now. And okay, now we're on to my second question of the accepting agency. Who is that? Why is that important? Because somebody needs to sign off and say you've followed the process correctly. And then that allows the other government agencies to continue their decision making. And we're still sorting that out. And where it gets a little complicated here, the original voluntary EIS was submitted to the county of Hawaii. Subsequently, there have been a number of approvals and litigation, both at DLNR and DOH on this topic. And we have the active proposal before the commission now. As well as litigation over, I understand it was some of the, whether environmental review was needed to bring the project online for some of the other agencies, the approvals there, particularly DOH and DLNR. And either DLNR or the PUC being accepting agency for such a study? And possibly the county of Hawaii, we asked, we've asked DLNR and county of Hawaii, DLNR said they don't have a active application before them that would trigger this. This is where the time dimension becomes complicated here. So what I can say on that, Margo, is we've asked and we're working on our side to try and sort this out because we're not trying to be a hold up. Like I said, we, I see the other counter to this is you go forward and we're going to be, this will all be tied up in litigation as well. And so that, you know, there's not, we got to look at the various possibilities here. So there doesn't seem to be any doubt in my mind, nor in yours, I think, that there needs to be an update at EIS. The last one was done in the 1980s, envisioning that this power plan would go offline, essentially in five years, right? 2026. And at the EIS, that's currently, shall we say, enforced as soon to be outdated. Therefore, a new one is certainly required. Is that a correct characterization? That's a good summary of what we had in our decision. Okay. Thank you. Yeah, you wonder, you wonder, and I'm just being a John Q. Public person here for a moment. You wonder whether this is this kind of strategy in the part of those who would call for the EIS, you know, among the activists, for example, whether they're just trying to oppose the reopening of the facility, because they know that it costs a lot of money and it costs a lot of time. And you've seen that in the past, not only with energy projects, but other projects where it pops up as a hotel project, I think, in Oahu. And they wanted an EIS because the old one was old. And the trigger here is a sort of regrettable act of God, kind of the eruption. And wow, it is putting PGV through the paces at all levels, including legal. Well, to be clear, actually, what one of the triggers here is the time extension. Whether the eruption happened or not, a 30-year extension on top of the existing 30 years. Oh, sure. I see. Yeah, I see. I think that's one expansion of the plan as well. Okay. Well, let's go ahead. No, I got to, well, as far as on the tactics of opposition understood, but I guess, again, what I take as one of my lessons as a decision-maker here, you know, ignoring those, those asks has not served the public well either. We have lots of other controversial projects where you ignore this. And, you know, people are asking government to listen to their concerns. And so if we ignore, we're not helping either. Yeah, this is only one real realistic answer for sure. Okay. Well, the last thing, which we don't have a whole lot of time for is the status of PBR. PBR with all the expectations, not only the PUC, but the legislature and, and of course, COVID gotten away. How's it doing? And I have a leading question for Jay, which is, it says multiple choice, okay, and you can choose to elaborate or not, Jay. So has the rollout of PBR, A, exceeded your expectations, B, met your expectations, or C, not met your expectations? And you could, you could have answered D, too, if you don't like any of my three. Oh, my answer is D, all the above. Oh, no, let me, okay. That's too zen for me, man. You got a, it's an appropriate response to Marco's question. Let me see if I can parse some of that, right? Because it's a big, there's a lot of moving pieces. One, officially, the PBR started June 1st. That was roughly six months after the decision we made in December. That was time to finalize all the details. And so I want to continue to credit our staff and all the stakeholders. We've met, to my estimate, we've met every milestone on this on time. And it's really testament to the work that they did. And so where do I see that it exceeded? Some of the positives, the credit agencies have upgraded to wire electrics debt rating. That was viewed as nearly impossible times in the past. And they credit the process we've used to come up with the framework here, largely is instilling confidence that, you know, we're taking a balanced perspective. We're going to see the direct savings to customers start going to June 1. So we've looked at trying to find the efficiencies and pass them on in the near term. And if you look at wire electrics performance so far, they've been internalizing that and started on the cost management programs. And so they're already, you know, going after this. You know, going after this. So I think those, you know, that was what the theory and concept tell you. You put a cap on the costs. You give utility a strong incentive to control them. And they'll find the things that, you know, no one else knows about. Basically, they know their internal cost structure better than anyone. But I think that's, you know, things have gone as hoped and if not exceeded. And that standpoint met, you know, as I said, we met timelines. We just established the final versions or to know the performance incentive mechanisms offer three different, at least three different areas. So utilization of advanced metering infrastructure, something that will be innovative for the industry collaboration between Hawaiian Electric White Energy Program on offering improved energy efficiency programs to low, moderate and income customers and interconnection of rooftop solar systems. So to me, that's a DVD on how that works out. The final form of that was just set in place. So we'll see, you know, how that works out where I have to be honest, where I think Jerry's still out. You know, we put the central part of this framework was a positive upside incentive for accelerating renewable project, you know, the RPS achievement into renewable integration. And, you know, the thinking is providing a sufficient care there. You know, we'll organize the company to all efforts to bring projects online. And, you know, if you look at where our discussion here started today, you know, we spent the last nine months trying to, you know, unravel the interconnection delays. And so the, you know, the question is what more can be done for the larger scale projects and some of this attention to the costs of delays. I think I closed our last FAS conference meeting saying it looks like there's still some performance gaps here. So, you know, I think it's still a work in progress. I think, you know, from where we started with PBR more than two years ago with all the hype and all the concern, you know, I think we did bring it to a place where we're all moving forward under it. And we're going to look at where we can make improvements. Well, it sounds like it's already affecting what's happening. It's already, it's already changed things. It's already having a positive effect. And it's already affecting you as the PUC and the utility and your way of thinking and dealing. It sounds like it's in some ways it's already in place. Would you agree with that? Yeah, I mean, it is. But I guess maybe my own expectation is I would get to sleep a little better. That hasn't really happened either. No, I mean, just be able, you know, I think there is a, you know, I think what will part of the lesson will be, you know, this will continue to take time, focus and attention on how they, how the framework itself is being implemented. It was supposed to, the intention is to relieve some of the regulatory burden overhead, both on our side and the utility side. And, you know, I think we'll see how that goes. Yeah, great. Okay. Well, at that point, Marco, will you get a chance to summarize? You can take up to two hours. Well, thank you. I'll try to do it in considerably less time. You know, you mentioned now a lot of difficulty sleeping there, Jay. I'm sure I could find some type of herbal, non-addictive sleep remedy out there, especially targeted towards utility regulators. Because of course, you're not the only one probably who may have difficulty sleeping. So see if I can get you a jumbo case on that. And just kind of as a sidebar note, you know, I'm actually seeing with my own eyes, right close to White Coloa Village here on this island, a bunch of hardware being delivered right next to the highway. And that is one of the stage one or phase one utility scale plus storage. So it's nice to see stuff actually, you know, at least positioned, hopefully it's not going to sit there and rust too long. You know, it's actually going to be going up. So it's very nice to see material progress going on. And gosh, you know, the three of us could just babble on interesting and superficial stuff forever, forever. And at the same time, I'm very grateful for the time that we've had with my brothers, Jay Squared there. So I'll turn it over to you, Jay Fidel to wrap it up. Thank you, Jay. You're really special. We really appreciate you coming down. Really appreciate what you're doing. And it's so important that the public has some glimpse of it. And you provide that. We appreciate it. Aloha to you both, Jay and Marco. We'll see you soon. Thank you.