 Yeah, the Hawaii Clean Energy Initiative 13 years later, Marco Mangostoff and I get together to take a look back. It's a retrospective. It's even nostalgic. But it's also a statement of where we are today and looking at the years between then and now and now in the future, making some reasonable logical objective predictions as to whether we can go where we wanna go with due regard for where we have been. Good morning, Marco, nice to see you. My dear friend Jay, I'm getting a small frisson which is French for a little shiver in the back of my neck there with the great anticipation knowing that we're gonna be going where no Toto or Dorothy has gone before. I have a feeling we're not in Kansas anymore. P.S., we were never in Kansas. Actually, my family hails from Kansas so no anti-Kansas jokes here, okay? No, no, no, no, no. So we're talking about the Clean Energy Initiative. Can you remember? And can you describe what that was all about in 2008? The world was different then. George Bush was the president. We were heavily engaged in the Middle East. The country had a terrible time with the economy if you remember. And we had the Hawaii Clean Energy Initiative under Governor Linda Lingo. Okay, is that enough of an environmental description? Go for it. It is, it is. So let me kind of give a little bit of explanation as to the genesis of coming up with today's discussion topic, Jay. So as you are very well aware, our friends at Hawaiian Electric over the past couple of weeks have been very vocal and what they say they're going to accomplish or we're gonna accomplish, they're gonna accomplish, we're all gonna accomplish across the service territories in nine years or by nine years from now, 2030, right? You had Shannon from HECO on last week who spoke to you, which I'm very appreciative of. And I got to thinking, you know, as we hear yet again about the things that we hope to see happen, they hope to see happen years from now, I got to thinking, huh, hmm, maybe it would be useful to kind of do a little retrospective on what people were saying 13 plus years ago about all the wonderful things, all the wonderful opportunities we have here in Hawaii for renewable energy becoming more independent energy wise, cleaner energy wise. So I decided to dust off my copy here, which I will show to the screen here, which I've been keeping says the Hawaii DOE clean energy. So this was in March of 2008 and it led to this HCEI, Hawaii Clean Energy Initiative being signed, if I'm memory correct, in October, 2008, you were in the room. There was Governor Linda Lingle was there, HCI Chair Connie Lau was there. There was a representative from the US Department of Energy and it could have been Bill Park, who was there. And the invited people, the honorees, come and witness this, and they came up with this. The consumer protector was there. Consumer protector was there, I believe the PUC was there. All the people who needed to be there, Jay, were there. Well, I wasn't there, but I'm glad you were there. So I decided to go back and look at what was put down on paper and what was supposedly agreed to back 13 plus years ago. And it's just an interesting to look at the aspirations and the stated goals back then and see, okay, 13 years later, how are we doing? How are we doing 13 years later with actually making progress towards these aspirational goals? So that's the genesis of why I proposed we do this show today on 13 year retrospective of HCI. So now I'm of course very interested to hear what the vibe was like in the room because you weren't there. Well, let me, let me go back a little bit, you know? There was the tech initiative and really think tech was all about that. There was Act 221 back in the first decade of the century and there was hopefulness in the air about developing a tech economy. And a lot of young people who had been exposed to the tech economy in Silicon Valley had come back. They had returned to Hawaii thinking that Act 221 was gonna make it possible. Programmers, entrepreneurs, you know, all kinds of smart local people were back to try that. And unfortunately, Linda Lingle, one of her initial initiatives and lasted throughout her two terms in office was to bust 221. She wanted to destroy it. And ultimately she destroyed it. She caused it to be repealed, advocated for that even before it's sunset day. And her replacement for 221, a political thing was in her second term which began what? 2006 went from 2006, 2010 was the innovation economy. She just replaced the word technology with innovation. And she advocated for that. It was the same in substance except that she didn't want 221 involved. She didn't wanna encourage investment but she did wanna have an innovation economy and she expanded the notion of technology and innovation. Regrettably, it never went anywhere but it had a very deleterious effect on the people who wanted to see a technology economy. So that's another environmental thing to look at in the year 2008 that Linda Lingle was actively advocating for her new second term initiative called the innovation economy. And that appears in that meeting. It appears in the notes for that meeting. It was the announcement that meeting essentially was the announcement of a multi-party agreement to seek clean energy for the state of Hawaii. Everyone was on board but in fact, and it was like over a hundred pages long. I'm not kidding, it was quite lengthy. But somebody said, and I have to looking back, I would have to agree that this was only an agreement to agree because what could you do except state and aspirational goal? I had a statement of cooperation by all the parties. There were expectations of each of the parties. I wish I could remember or had the paperwork to revisit those particular aspirations, particular expectations for each of the parties to the agreement. And there were several government agencies involved and see how those aspirations and expectations have been realized so far. That's really an interesting question. And that's the question we hear about today, Marco. Let me ask you, I mean, your perception is we had just kind of invented this whole thing about a clean energy initiative. This agreement was to advance that initiative. This agreement was to confirm, solidify, memorialize, and go forward to new heights with that initiative. It was to formalize the notion that had been discussed. But query, how far have we gotten between what, 2008 and now? Well, that's a great set of questions there, Jay, because there are five bullet points here, which I think are worth going over in some detail from this document to just kind of scroll back briefly. So, you know, the state of Hawaii has been an innovator and a substantial supporter of renewable energy going back to at least, I'm gonna say 1977, 78, with the first, one of the first the nations along with California, a state tax credit to promote solar. Now back then solar, of course, meant solar water heating of some kinds. This photo will take split and take off until 2007, 2008 here in the state. But I mean, the Hawaii too, as credit, has been a out front supporter of renewable energy, understandably so, because we're so dependent on long supply lines of energy, fossil fuels coming this way. So, the first bullet point here, this page, by the way, starts with Hawaii presents unique opportunities, both immediate, and long-term for energy sector transformation. Fully agree, unique opportunities are there for energy sector transformation. So, the first bullet point here under that heading, the state has abundant local renewable resources, including wind, sun, wind, geothermal, comma, et cetera. Sun, wind, geothermal, comma, et cetera. So, I thought, well, let's look at each of those three, the et cetera, well, that's kind of ambiguous. So, I guess I'll leave that aside. But sun, what are we done with the sun resource out here since over the past 13 years? I can make two observations. One is that rooftop solar, behind the meter solar, and now behind the meter solar and storage, has done very, very well. Very well, where we have the largest percentage of homes, single family homes in the country, on a percentage basis have solar electric systems. And that's true, truly an accomplishment on our part. And that is due to the hard work of contractors like my company and many, many others, as well as support of the legislature, support of the public utilities commission, support from Hawaiian electric companies, KIUC as well. So, rooftop solar, I would give an A. Utility- To add to that, that where it started with local investment, local companies, local rooftop solar installers, over that period of 13 years, a lot of money and companies flowed in to the state of Hawaii, where it is not nearly so much of a local phenomenon now as it is investment by mainland companies. Am I right? Well, you bring up a good point, it's been a balance of both mainland companies like Sun Run, what was then a company called Solar City, which morphed into Tesla, Vivint Solar, a number of others. So it's been both a mix of local, locally grown, locally run, locally operated and owned companies and mainland companies. And in terms of the mix, I don't have a percentage in my mind, but it's been substantial on both sides. So both local and mainland. To follow up on the solar end of it, so behind the meter, solar, rooftop solar, A. Give it a grade as an A. Utility-scale solar, very little so far. There's a lot that's on the books, there's a lot that's being planned, but in terms of actual utility-scale solar across the islands, that's still rarely Manini. So I would give a much lesser grade for utility-scale solar at this time in terms of actual on-the-ground operational projects. Let's move to wind. What's happened wind-wise? Well, the wind is blown pretty much regularly for the past 13 plus years. Are there any new wind farms anywhere? No, zero, as far as I know, zero. I remember all the excitement over first wind in Maui on the top of the mountains there. There was an awful lot of talk about that. And then there was a, remember, there was a second increment. I think that was a different investment structure, but a second increment right down the hill from the first wind original. And people were very excited about wind. However, little by little, it ran into the NIMBY problem. And I think that that had a big effect on the ability of entrepreneurs to build wind. There's Ula Balakua in Maui also developed wind. I think they have a substantial wind farm in the ranch. And I guess the saving grace there is it's the ranch. And the ranch wasn't gonna complain about its own project. And it was also very remote. Ula Balakua, you can quote me on this Marco, Ula Balakua is remote. And there were some small towns in the area, but they were all brought into the fold, so to speak. So nobody was complaining. There was no NIMBY in Ula Balakua. Aside from that, which I think that took place right around 2008. Aside from that, oh, and of course we have the wind on the North Shore of Oahu, a number of places where local communities at first said, hey, that's good, we're on board. They came and spoke at the ground breakings and the completion ceremonies and all. But over time, I think they've kind of separated from that point of view. And there's been a fair amount of NIMBY over the wind on the North Shore, so much so that I think developers would be reluctant to put more in. And finally, there's Ted Pex, who used to be the state energy officer. Before Neil Abercrombie, as I remember. He supports and was working on offshore wind off the South Coast of Oahu. Oh, and it's a very interesting project which hasn't gone anywhere. And although there are people who say, no, no, no, there's really no problem. This is as good as it is in the North Sea, where there is a tremendous amount of offshore wind. People are not going to object to this. I don't think it's gotten off the ground in any way. And there are those who say, we'll never get off the ground. So anyway, I think as you say, wind has become static. Well, and thank you for reminding me, Jay. I'm embarrassed to say, well, not embarrassed, but I'm correcting myself that, yes, you reminded me that since 2008, there is new wind generation, that as you noted correctly, North Shore of Oahu that has gone online, or will go online. And that as you know, it's a terrestrial or land-based wind seems to be not in the cards these days than others have been looking at offshore wind as the possibility, which would be, big question mark in terms of whether that comes to fruition. So I think in terms of wind development over the past 13 years, we'd have to give a grade of a D or a C at the best, right? Very little new wind generation has come online. And the last one. It's too bad, by the way. I like to offer that thought. It's too bad because back in 2008, wind was a player. Everyone thought wind ought to be in a diversified portfolio, but it didn't work out that way because people didn't like having it near them. And that wrecks projects, you know? Yeah. So moving to the next wind energy source here, geothermal. So what's up with geothermal? What's going on with geothermal in the past 13 years? Is there any new developments in terms of geothermal? Well, we had an active volcanic eruption here, 2018, that took out PGV for quite a while. Now they're back up and running somewhere over 20, around 25 megawatts working their way up to 30 plus. There's a revised and amended power purchase agreement that would allow PGV and ORMAT to go up to close to 50 megawatts a generation at a fixed price for the entire production of PGV that will be taken up, I believe, in the months to come by the Public Utilities Commission. And, but other than PGV, there's no, as far as I know, no other geothermal, serious geothermal plants or inklings anywhere else on this island. Anywhere else in the state. So geothermal, again, the potential is there. We'd love to talk about potential, but in terms of actual plans to go beyond what PGV could conceivably get to in the high 40s, as far as megawatts, there's nothing that I know of this in the cards. And geothermal, when it comes to drilling down into Madame Pele is anything but a slam dunk in terms of getting local and environmental buy-in for that, so. Let me add a little bit to what you're saying. Yeah. And that is, since 2008, geothermal really hasn't gone anywhere. There was talk about years back, right around that time, actually. Geothermal had hundreds of years to go, thousands of years to produce dispatchable energy to the state, possibilities. And I think these are still in consideration of converting that to hydrogen and moving the hydrogen around the state. I don't think that's come to fruition yet, or will it. And then, of course, there's the cultural argument, fight, controversy about Madame Pele, which actually brought the geothermal plant down for a while in the 90s. So lawsuit and an injunction and all that. And they gave up for a while and sold it to ORMAT. And ORMAT continued it. But there still is the cultural ceiling, if you will. It's capable of far more than what, 38 megawatts or 40 megawatts. It's capable of multiples of that. But the cultural ceiling stops it. It's a kind of an unspoken truce. If you don't try to build more of it, we'll let it go. If you do, we'll be complaining. And then finally, there's all the talk that's happened over the years then and since then about the existence of other geothermal facility, other geothermal resources in other parts of the Big Island. And for that matter, even Maui. And Mili Lali Trask wanted to have a native Hawaiian company develop those resources. And she even went to the legislature about it. But it never happened. She was asking for special consideration that the legislature wasn't willing to give her. Bottom line is that whole idea, that the one advanced by Mili Lali Trask got stopped or it never went anywhere. So here we are 13 years later and it's still the same Pune Geothermal Venture. And just to kind of as a sidebar note to that because I was crunching the numbers, recently Hawaiian Electric updated their very useful spreadsheet showing what the renewable production has been for their three utility companies here. And they just posted numbers for Q2, Q2 of this year. And by my extrapolation, if and when PGV were to go up to close to 50 megawatts of output, that would push Hawaii Electric Light Company, AKA Helco, into well into the 70% plus range in terms of our electric power generation in terms of RPS Renewable Portfolio Standard. So we would be duking it out essentially with KIUC, especially if KIUC gets their pumped hydro online. It would be Hawaii and Hawaii Island. That would be the two leaders in terms of renewable energy for power generation. So, and this is not decades from now, this is several years from now. So I'm hopeful that we'll be able to lead the state in that. So let me go to the next bullet point here. One more point about that, Marco, is this, is that eruption a couple of years ago, it's troubling, it's troubling to anyone because it could happen again. And if you rely on a Boone or Geothermal Venture, you have that risk at all times going forward. So you have to have a plan B if you wanna rely on Geothermal Venture. Point taken, point taken. Well, I'll remind you, my friend, that the plan is to also get online, a substantial amount of solar, megawatts and megawatt hours worth of storage, and that is well underway here on this island. So let me go on to the next bullet point here in this document. Hawaii pays the highest electricity costs in the nation and among the highest transportation costs in the nation, I'll just reread that. We pay the highest electricity cost in the nation and the highest transportation fuel cost in the nation. So let's look at that 13 years later. Have we made any progress in terms of lowering our electric costs to be less the highest in the nation? And the answer to that is no. For example, right now on Lanai, they are pushing close to 50 cents, 50 cents a kilowatt hour residential. This island, this past this month, the highest tier, the highest tier, the most costly tier for residential is now 40 cents a kilowatt hour. So Anahu is now mid-30s. So we are still by a factor of at least three acts, higher, three acts higher than the average cost on the mainland. So I think we can safely say that we have made very little to no progress in terms of lowering or reducing that ratio, right? What about transportation fuel costs? Well, I hear California is actually the highest in the nation right now. They're pushing six bucks a gallon. We're not too far behind. So I think it's safe to say that we're still amongst the highest transportation fuel costs in the nation and we will as long as we continue to be so dependent on these long supply lines of petroleum coming into the state. So we can't get very good grades for reducing high electric costs, nor can we get very good grades for the high cost of transportation fuel. Well, let me add something that springs off 60 minutes yesterday. The first segment on 60 minutes had to do with what is wrong exactly with our supply lines. And they was very good piece because it's not clear. And they ultimately concluded that there were a lot of things wrong and we're all feeding into a huge and growing problem which itself feeds into the cost of transportation for the cold country that's a transport goods coming and going. And that means, guess what Marco? Are you sitting down? That means higher transportation costs lead to higher prices in general. It's inflation, okay? Now, if the state of Hawaii continues to be dependent in any substantial way, any substantial way on the shipment of oil into the state, we are going to be subject to those very same elusive supply line problems that this segment was talking about. And that will be visited in higher costs for a kilowatt hour, right? You're absolutely right. You're absolutely right. And again, my main takeaway here is that in terms of reducing this high electric cost, reducing the cost of transportation fuels, not much progress, if any really has been made over the past 13 years. Let me move to the next bullet point here. And just as a kind of an intro, you remember a dude by the name of Captain Ahab and Herman Melville's Moby Dick? Of course. And his obsession with the Great White Whale? Yes. So with that lead, we have long had an obsession towards going after quote, unexploited opportunities for efficiency. We love to talk about all these untapped areas where we can create megawatts, not megawatts, but megawatts, where we are essentially cleaning up our act as far as using less energy, right? Greater efficiency. Now, I don't have that data in front of me and I'm not even sure what the metrics are. But I mean, there are metrics out there, but I haven't looked at it prior to the show here. But my guess is that here in Hawaii, in terms of efficiency, probably haven't made all that much progress in the past 13 years. Why? Because despite the cost of energy being as high as it is relatively speaking to the mainland, it's still not that super high that really drives all that much in terms of incentives to really up our game as far as energy efficiency. That's my point, I'm sticking to it. And I would add about the frog, the frog in the water. I mean, if it was a grand increase all at once, the frog would jump out of the water. But gradual increases or the perpetuation of troubling incremental increases, the frog stays in the water. And guess what? It gets to be frog soup. And I think that process is happening. People somehow are willing to pay the extra freight. And so they don't particularly get concerned about efficiency. The point for here, oil provides, this is again, 13 years ago, oil provides approximately 85% of the safe energy leaving Hawaii vulnerable, vulnerable to supply disruptions in energy and security. What's key here? 85% energy security supply disruptions. Are we any more secure energy-wise as far as the threat of supply disruptions? Hard to make much of a case that I don't feel much more secure. I don't think a lot of people feel much more secure. And importantly, I haven't looked at the D-bed numbers for a while, but I believe the state of Hawaii is still somewhere in the 80 plus range percent, as far as dependent on imported oil coming into the state for the total net consumption of energy here in the state. We're still in the 80% range. So 13 years ago, they said 85%. Now we're down a little bit to 80%. How have we made progress? Well, numerically, yes, absolutely we have. Is it as fast enough as we want? Hell no. Yeah. And as I mentioned, as we discussed, you pointed out a minute ago, is that the oil market is subject to all kinds of geopolitical events. And if we have no control over the price, and we don't, not over the long term, we don't. But therefore, that detracts from any notion of energy security. If we can get the oil at all, going forward in an unstable world, seems like it's becoming more unstable all the time. I want to add one more point to that. Oh, just kind of a propo to supply disruption. I read over the weekend, there is a record, J, record 81 container ships off the coast of California ports, waiting for a slot to come in and offload. 81 container ships. Yeah, they've been waiting weeks, even months. And that was in the 60 minutes segment. Which could, you know, the equivalent of you do 80 towards, I think, an average cargo container ship is somewhere in the 10,000 plus range as far as containers. So 80 times 10,000, now you're starting to get into real numbers, right? So, I mean, one of the things that really scares me, my friend, is the disruption of our supply lines, both for energy and then food. Energy and then food, or food first, and then energy for both. You know, they're both critically important. So we're still very, very insecure in terms of this addiction that we have to imported fossil fuels to run our state. I wanted to follow up on that exact point. And that is this, in a time of climate change, and it isn't clear now, it will be, climate change generates extreme weather. And the extreme weather, you know, could take our towers down, telephone poles with the power lines, take them down. And you use- Swamp the harbors, swamp the harbors. Right, and make bringing, sure, disrupt the supply lines, big time, extreme weather, climate change will disrupt the supply lines, including food, goods and merchandise in general, and of course, you know, energy. And so if the power lines come down or the system, the grid is disrupted, and plus we have a problem in the generation side of things for the lack of this fuel, even if it isn't 80%, even if it's 75%, even if it's 70%, this is going to be a problem. And climate change, aside from the geopolitical events that could disrupt the supply lines, climate change could disrupt the supply lines. And query, you know, whether there's anything we have done to make that stronger, make them more resilient. And the answer is only one thing and goes back to the very beginning of this discussion. And that is having more rooftop solar for individual owners and batteries, for individual owners, but that's not for the community in general. So it's a solution only for a few, not for the many. And that would help, but as you say, it's not enough. So last point here is we kind of wrap things up. Quote, each island is an isolated microgrid providing an opportunity to focus on the whole system. I'll repeat, each island is an isolated microgrid providing an opportunity to focus on the whole system. I'm not really sure what they mean by that, what was meant by this, but my take is that this was envisioning connecting the islands over time. Absolutely, this was a big discussion in the room in 2008. It was gonna be the undersea cable connecting Oahu, which needed the resource, didn't have it, and Maui. And there was a big question mark about the big island. I think the view of it then was that we can't do it yet. The technology's not there with the cable, but someday, well, it was more than that. It was the depth of that channel. It was so great that the cabling ships didn't have the ability to lay the cable in a way that it wouldn't break in the process of being laid. This was a big problem. Anyway, it was gonna be Linai, I suppose, maybe Molokai. It was, you know, those islands in County versus- Four islands. The Four Islands. It was a big deal, everybody talking about it. And it died a horrible death because of, you know, activists on, I guess it was on Linai. Molokai as well. Molokai, okay. And, you know, we supported it, Abercrombie supported it, but he really didn't go far enough to make it happen. And after a while, the government, you know, in the face of all this objection, they faded. And it stopped. A whole emergency cable. And by the way, plenty of money was spent in, you know, in surveys and the like and in research about the path of the cable. But it faded and that was the end of that and hasn't been discussed again in several, in many years. And the tragedy is that I don't think people really understood the point here in what you're reading and the benefit to the state, you know, the state has migrated away from being an island state to a state of islands. And I think it was a big thing back around that time where every island had its own personality and you had to let every island, every county develop its own personality and it was okay if it wasn't like the other personalities. And that has, in my view, now you may not agree, but in my view, that took a toll on the, you know, statewide integrity of things like this. It would be, it would have been so great to have this, you know, this cable. They were even opposing wind, remember? And the Garden of the Gods in West Lanai, big fight about that, even to have wind. And they said, oh, it will ruin our lives in Lanai city. You couldn't even see it in Lanai city. Anyway, my point is that the actors were very active in that period and they stopped all these projects, including undersea cable. Well, I would imagine, J.F. Senators Maisie Hirono and Brian Schatz, great folks, great folks who are representing Hawaii along with Ed Case and who am I forgetting? Who's the other rep? Oh, shame on me. Tell me out here. Oh, Ed Case and who's the other? Oh, my, how could I forget? My friend Kai Kehele. Shame on me. He's a big guy. Kai Kehele, right. Can't forget Kai. You know, they're all doing a great job representing Hawaii. I mean, if those four could pull a magic trick and get three, four, five billion dollars, you know, kind of strings, no strings attached to do inner island cable, you know, I think we could probably make a lot of progress, but you know, the days of Danny Akaka, or excuse me, missing my, mixing my Danny's. Danny Akaka was a great guy. Daniel Inoue, you know, who was quite the patron saint of good causes of Hawaii, you know, but there's no Danny Inoue anymore in the Senate and days of getting two, three, four billion kind of in strings, no strings attached money for something like underwater cable probably not going to happen anytime in the near future. So. Yeah, well, but there's still, there's still a public problem, a public opinion problem where people say, you want me to spoil my environment here on Maui and I or Molokai in order to help the people in Oahu? Yeah. Take a walk. I'm not interested in that. I couldn't agree more. You're absolutely right. Not going to happen. So, I mean, again, to kind of tie this all up with a bow, nice bow, pretty or otherwise, you know, it's just so interesting too. And I feel like I've maybe come across as too much of a grumpy Marco today or Cassandra in terms of poo-pooing the progress we have made because we have made progress. It just is to me woefully inadequate in retrospect. So now again, we have these aspirational goals, 20, 45, 100% renewable and power generation. How many years away is that? 24 years, 2030. One electric is saying once the cut emissions by 70% as you pointed out talking to Shannon, you know, we're already on our way to that. They want to add another 50,000 rooftop solar on top of the existing 90,000. Why can I not support that? I mean, all these are great aspirational goals. I'm just, you know, also focused on what's going on in the trenches right now trying to get systems in. We have an epically challenged permitting system now on the big island that has been a slow moving train wreck over the past several months. And that's hindering my ability to install systems and everybody's ability to install systems. So there's the words and the aspirations up here and the press releases and the high-faluting sounding words. And then there's reality in the trenches which can often be something rather different. Well, let me offer this to make you feel better. Thank you. The alternative to not having aspirations is much worse. So I have to compliment whoever is involved in looking at this and finding aspirations and talking about it publicly. If one electric believes this can be done, if the state energy office believes this can be done, all the power to them, that's upon you enough, all the power to them. And it's our job, it's the public's job and the media's job and our job, Marco, to remind them of the aspirations and to track and connect the dots on the aspirations. Because one of the things that is inherent in expressing and announcing these aspirations is the notions that it will affect public opinion and the public will remember it and get on board. So let's get on board. Let's follow the dots, connect the dots and let's comment on it going forward. What do you think? From aspirations to words of J. Fidel, inspirations. I'm left speechless and almost close to tears, but not quite. Thank you, Marco. Always, always good to talk with you. I really appreciate you coming on and having these conversations. Thank you, my friend. Always a great pleasure. Aloha.