 Okay, we're back. We're live. It's Hawaii 808. What's the name of this show anyway, Marco? Energy 808. The cutting edge. And that's Marco Mangostorff. He joins us by phone from Maui and he's at the Hawaii Energy Conference in Maui. It used to be called the Maui Energy Conference in Maui. Now it's the Hawaii Energy Conference in Maui. Can you explain that to me, Marco? I'll be happy to. It's great to be your faithful correspondent here on the move, so to speak. So, yeah, there is what used to be known as the Maui Energy Conference over the past year put on by our friends at the Maui Economic Development Board in Kihe, also known as MEDB. And they have been the organizers and lined up sponsors to do these conferences over the years that here before used to be the Maui Energy Conference. Well, now that this company on the mainland called Verge, which was a conference organizer of Repute that had done a number of conferences, energy conferences on Oahu, they decided last year that they were done. So, no more so-called Verge conferences in the heart of beautiful downtown Waikiki. So, that left an opening for MEDB to put on an energy conference that, as in calling it the Maui Energy Conference, they thought this is a good time to reintroduce the brand name of the Hawaii Energy Conference. Now that there's no other mainland group that's coming in with great fanfare and trying to put on a profitable show because they're not going to do it unless they make money, of course. So, I think it served as a great opportunity for MEDB to rebrand as the Hawaii Energy Conference, and so much of this is, yes, it's substance, but it's also what I call the C and B scene. So, it's interesting to see who shows up. Are they the A players, the B players, or somewhere, Kathy Griffin-like, the D list? And I can tell you that so far, this seems like a list of attendees. So, you know, it's only been less than a full day, and I'm taking a little bit of break before I go back after our show. But, yeah, I'd say, you know, they're putting on a great show. The Max is a beautiful place to have a conference, and a lot of networking going on, so it's great to be a part of it. That's great. Well, it just shows you the relationship of the islands. Each island has its own identity, and the neighbor islands, they sort of form a group in a way. It's like Oahu is in one side of the camp, and all the neighbor islands are on the other side, and this is an example of that. For myself, as I told you before the show, I really wish there was a more inexpensive way for people to get from island to island. Who knows, maybe Southwest Airlines will help us do that. But the Superferry would have done a great job if we allowed it to prosper. Unfortunately, all the legal action brought it down, and that was the end of that. But the neighbor islands need connection with Oahu. We, all of the islands need connection with each other, and somehow that issue is present when you see a statewide conference being held on one of the neighbor islands rested away from Oahu somehow. So there was a discussion about this point by Mayor Victorino, the father of baseball, as it were. He was talking about the neighbor islands and the outer islands, and what was the discussion there? Yeah, he's Michael Victorino, the mayor of the county of Maui, including Maui, of course, proper Molokai Lenai, and very affable, big kind of bearish of a guy, just very super friendly, and he kind of gave the opening address this morning, and told a couple of kind of interesting anecdotal stories in terms of why is Hawaii called Hawaii, instead of let's say Maui, or Kauai, or one of the other islands, and it makes perfect sense now that he told a story, but I hadn't heard this story before, which is that King Kamehameha, the first, was the, of course, the uniter of all the islands, and he then chose his domain, so to speak, to be called the Kingdom of Hawaii, with him as the first King, of course, and that then it became the territory of Hawaii, then the state of Hawaii, if I have my sequence straight, and if he had, for example, come from Maui, we would not be known as the state of Maui, because that's where the uniter of the islands will have come from, and that's one kind of interesting anecdote from Mr. Victorino, which I enjoyed. Another one that I also enjoyed is that he shared that he always takes a little bit of umbridge and a bit irritated when people, typically on Oahu, refer to the other islands, as opposed to the more neighborly sound of the neighbor islands, and he said, you know, there's nothing outer at all about being here, born and bred and raised on Maui, so it just kind of goes to this, oh, what shall I call it, a little bit of an inferiority complex, or maybe chip on our shoulder, of those of us who live in the state other than Oahu. I mean, I've come to believe in the 20-some odd years I've lived here full-time, and the well over 50 years I've been a part of Hawaii is that this place is rather Oahu-centric, both in terms of the political center of gravity, the economy, and the media. So I'm again really thrilled that the folks at MEDB have been able to put up a world-class conference here and attract A-list people, so that's great to see because I think there's a heck of a lot going on on islands other than Oahu that are worth looking at emulating and learning from. Yeah, it is really a feather in Maui's cap that Canon does this. And Jeanne Skog, I think she retired, but she was the founder of the conference, as I recall. You must see her around there at the conference. I'm sure she would be involved. Yeah, Jeanne is here. Leslie Wilkins took over for her and has been, I've certainly talked to her today and she's been very much involved, so Jeanne and Jeanne as well. So it's great to see this continuity of this organization doing great things. And kind of a little sidebar note, I was, my company put up one of the early commercial photovoltaic systems on the island, gosh, way back 11 years ago, way before it really took off in terms of PV adoption and one of our first projects was, lo and behold, right on the roof of MEDB there off of Lipua Parkway in Ihe. Oh, no kidding. I know that building. I know that building. I know what it went on. I was up there yesterday doing the annual inspection for the system and I can tell you after 11 years in the hot Ihe sun, despite getting pooped on big time by flocks of passing birds that seem to take a liking to perching themselves on top of solar modules, other than that, the system is working after 11 years. That's great. That's great. That's a beautiful building, as I recall. It was really well designed, well executed and of course it was energy. It was built around clean energy. So tell me about some of the things that are happening in the conference. Aside from the A-list people there, what about the program itself? What about the speakers? What about the subjects? A couple of things. Two things come to mind. There was a joint announcement between our PUC chair, Dr. James Griffin, also known as Jay Griffin, and the PUC chair of the California PUC, whose name is Michael Picker, P-I-C-K-E-L, P-I-C-K-E-R Michael Picker, and they announced this warning that they had come to a memorandum of understanding or move for short that California and Hawaii Public Utilities Commissions were going to increase their cooperation and collaboration in terms of moving forward further, faster, deeper as I put it, as far as bringing cost-effective renewable energy online as soon as possible. So there's a definite partnership synergy between ourselves and our neighbors to the east there, California. So I think that's really, you know, you could say, well, this is largely symbolic and kind of fluff, but I think it's more than that. California and Hawaii share so much, I mean, the single place on the planet that sends more people to Hawaii than any other places, of course, are neighbors to the east. It's a great state of California. I'm a native California as well. And there's also a commitment on the part of the Democratic governors, formerly Governor Jerry Brown, who was there for eight years up until last year, and Governor David E. Gaye on our side and now Governor Gavin Newsom in California that these are two states that, both from the executive to the legislative branch to the regulatory bodies, have made really firm, solid, and aggressive commitments towards dramatically increasing the deployment of cost-effective renewables not just in power generation but to EV transportation. So there's a lot I think California can learn from us and a lot we can learn from California. I think it's just great. So what does this agreement mean, Marco? I mean, does it speak of collaboration? How? Again, on the phone, they have meetings, and they come to the other guy's U.C. hearing room. What does it portend? Well, I haven't actually read the MOU. Jay, I saw it from backstage because I was helping out backstage. But I haven't actually read it, so I can't comment on the actual substance, but I got to believe that it's more than just fluff because people like Jay Griffin and Michael Picker and their respective commissions and commission staff aren't into it for signing ceremonies, but it's got to be something substantive, so I can't give you specifics yet because I haven't read the actual document, but I got to believe it's more than fluff and more like filet mignon or scallops just quick and right. We'll have to follow up, see how it works out. Now you said that Jennifer Potter was also there. What did she speak about? Yeah, this afternoon before I came back to my room, Jennifer Potter, aka Jenny, she was on stage with a number of interesting people, including Michael Picker, the president of the California PUC, the governor. Our governor, David E. Gay, was there speaking about his and on our commitment, the state's commitment from the executive on down to renewables, and then there was a woman by the name of Abigail Anthony, who was a commissioner from the Rhode Island Public Utilities Commission, and one of the subjects that was discussed during this panel was public benefits regulation, PBR, to be confused with PB&J, PBR for short, which is to the uninitiated is kind of daunting in terms of what in the world is PBR. PBR would effectively change what has been the traditional decades-long business model of an investor-owned utility, which is essentially has been cost of sales plus. And what that means is that utilities get permission to spend money, they find the money to spend, and they're guaranteed a certain return on equity that the commission decides on. So the slam has been against that model is that utilities are incentivized to spend more money, because the more money they spend, the more they're going to get back as a return. And public benefits regulation turns that model on its head, in my opinion, and essentially establishes a new business model for an investor-owned utility like Hawaiian Electric that would set out specific metrics and incentives that would be in the public benefit for the utility to reach. And depending on how well they reach and achieve those goals and hit those metrics, they will be rewarded accordingly. With the flip side being, if they don't hit the agreed-upon metrics, then they won't be rewarded accordingly. So it is essentially rewarding, in this case an investor-owned utility, rewarding them to do well and disincentivizing them to do poorly. So the process right now, yeah. Could you get a handle on the kinds of metrics that would go into this? Could you get a handle on how firm they were? It's been a while since this first came up, six months anyway. And I wonder how far along the track we are and whether we are seeing the outlines of what it will look like being developed here. What does it look like from the point of view of this conference? Oh, great question. And now we're just going to get there, which is that, you know, a little bit of background. As far as I know, no state in the United States has fully implemented a PBR model. So this is really terra incognita, or if you want to be on land, or an unexplored ocean if you want to stay on the water, in that it hasn't actually happened yet in the U.S., full-blown PBR. So there is a docket that's, like you referred to, that's been open for, gosh, more than a year, I think, for the Commission and various parties, some of the 11 parties to look at public benefits regulation, and they established, the Commission established Phase 1 and Phase 2. Phase 1 was discovery where the participants in the Commission were kind of, you know, making it a bit of a free-for-all in terms of, okay, bring us everything you've got. And Phase 2 is going to be a significant winnowing down. Carter stated an hour or two ago that they started off with essentially 24 options, 24 directions to go in. This is at the end of Phase 1, and that they winnowed that down further to 12. So they're in a winnowing process taking this immense amount of creative energy, data, ideas, has to go down, and winnowing them down from 24 to 12 to, you know, what's next, 6, 4, 3, 2, 1, and so forth. So progress is definitely being made, you know. It's a complex docket, it's a complex subject matter, and I have not been keeping up breathlessly day-to-day looking at the PUC's data management service website saying, oh, what has been uploaded today? See, another 200 pages for me to read. I have not been that hardcore. So it's great to get Jenny's kind of high-brow, high-altitude look, but she seems very excited, and she seems both she and Jay Griffin, I think, I have no doubt, understand the importance, the critical importance of getting this right, because you're dealing with one of the most important corporations and companies in the state of Hawaii, Hawaii Electric, that has been around since the days of King David Kawakawa in the 1890s, and these folks provide something critical in terms of infrastructure to the vast majority of people in the state. And if you're going to be changing the business model from the ground up for a company like that, you better make darn sure that you're doing it in a judicious, thoughtful fashion, and I think that's exactly what's taking place. Well, you know, it strikes me that when you're on, you know, you're having an experiment, it's new ground, nobody's been on before, then you can expect, you know, that first efforts may not work as well as you want. And the stakes are high, because if you make it too hard for the utility, you know, that has one profound result. If you make it too easy for the utility, that has another profound result. And so, you know, it seems to me that whatever the commission decides, and however the community reacts to it, and however the utility reacts to it, there's going to have to be multiple iterations of fine tuning going forward before this settles down. And I suspect we will all know much more about it before it settles down because there will be maybe some arguments about exactly what's fair and not fair, what works, it doesn't work. I don't know if there's any discussion about that, but it seems to me that this is an experiment that will go through multiple, you know, reconsiderations. Yeah, absolutely. And one kind of sidebar note to that, Jay, which I find just really fascinating and rather puzzling is, you know, I've been public in one or more places that both PBR and another pending docket, called the Affiliated Transaction Docket, regarding Hawaiian Electric, that those two dockets have the potential to kind of shake things up at a fairly deep level how that company does business and that, you know, how is the investor class looking at HCI, which is traded on the New York Stock Exchange, with this background of uncertainty, in my opinion, with these various kind of critical dockets. And lo and behold, I don't know if you've been following HCI stock price at all, but Hawaiian Electric has been trading over 40 bucks this year over the past week, and they've been even going as high as 41, and this is record high for them. I mean, they've never hit 40. In fact, during the proposed acquisition from next year, I think the buyout of next year purchasing HCI stock was somewhere, if I'm not mistaken, in the 37 range, which was the premium on top of what the shares were trading at, of course, right? So what in the world accounts for Hawaiian Electric trading at record highs right now when, if you look at their financial performance, I mean, there's nothing, they're not doing necessarily poorly, but they're not doing fantastically well, that would necessarily reflect a record high stock price. So we get into a very interesting discussion, I guess, about the animal spirits, like John Maynard Keynes would describe how stock markets and the markets work sometimes, but rather interesting, at least in the real world, and all this background talk of what's going to happen with PBR, what's going to happen with affiliated transactions, what's going to happen on grid modernization, all these important things for Hawaiian Electric, and yet, at least as far as the market is concerned, the stock price keeps on going up, up, up, so go figure. Well, I, it's a thought on that. Of course, CBR is, you know, it's an unknown right now, and it could be a bad time, it could be a very good time, but, you know, you don't know yet. Same time seems to me, and we're going to have a show about this on our Hawaii State of Clean Energy series, which begins at four o'clock today with Peter Rosick, the spokesman for Hawaiian Electric, about various positive things that have been happening, approvals by the PUC of their bus rate and their utility-scale solar, and they got an award recently on their crisis management communications. So, I mean, they're out there, and they seem to get positive press and positive results and if I were an investor in Wall Street, you know, I like certainty, I don't like uncertainty, but I like to see a given company do well, do well in the eyes of the regulators and do well in the eyes of the public, and I think they're probably doing well, and that may be one factor, but who knows if that's the real answer or just, you know, one among many elements. In any event... I hope you get a chance. Please ask my friend Peter Rosick, looking into the eye and say, Peter, what's going on with the stock of your company? What accounts for you being a rarefied territory? See what Mr. Rosick says. Yeah, I hope you'll listen to the show, Mark, or it's on right away. I would never miss you, my friend. So, tell me more. I mean, what about, you know, the old traditional classical issues for discussions at conferences like this, you know, new technology, new solar, new inverters, new grid equipment, new fasteners to be more resilient in the case of storms and the like. You know, new technologies to develop renewable energy. What's the conversation and is that a major part of this conference? Yes, it is. I mean, there's been a fair... There were a number of sessions on distributed energy resources, a DDR or DR for short, which, you know, over time, there's this kind of evolution of various techno-babel phrases. It was distributed generation at one point before it was DR, and then before that it was rooftop solar, and before that it was, you know, knives and bare skins. I'm kind of making that up, but it's kind of a challenge sometimes to keep up with the jargon, as I guess it is in any industry, and there is a commitment, I think, on all parties, including a really sharp contributor from HECO, Elise, who was on one of the panels this morning, and she reiterated that Hawaiian Electric is firmly committed to a significant increase in rooftop solar, and that's not the first time I've heard that. So the question is, well, how do you make that happen, and net energy metering is gone and ain't never going to come back in terms of retail credit for power fed into the grid, and the existing interconnect agreements, which again have a bunch of kind of alphabet soup coupled to good names to them, they're also a relatively interim. So there's a big effort in the part of Hawaiian Electric, and the commission to come up with programs that will allow consumers some degree of predictability and confidence that won't go away necessarily once a certain cap has reached in six months or in 12 months or 14 months. So what comes next for distributed energy resources, aka rooftop solar and storage? How do we integrate... Essentially, how do we build this new grid, this smart grid that is a radical departure from the Edisonian large central power plants and transmitting and distributing energy thousands of miles away, at least in the case of the mainland, which has been the backbone of utility planning up until recently, over 100 years. Where do we go? How do we get there as far as integrating energy generation on a rooftop by rooftop by rooftop by rooftop level so that it's not just I'm supplying power for me, as I do for my NEM system in Hilo, but is there a way for my system and my battery, my Tesla battery, to hook up with my neighbor's system and his fill-in-the-blank battery and his neighbor's system and his fill-in-the-blank battery so that there can be the beginning of a nascent micro grid that would be ultimately much more resilient, reliable, durable, and able to absorb hits to the system from a hurricane, for example. So we all, I think, agree that that's where we are going. That's where we need to go. It strikes me that you mentioned before there's a certain amount of networking going on. It strikes me that a conference like this, and good that it's statewide or beyond that, is very valuable for the networking and the networking is very valuable to come together on these various siloed, otherwise siloed technologies and come up with solutions where people are cooperating across the aisle. We really need to think together on a project so complex as, you know, green energy for the state. So I think a conference like this is very valuable. Everything you hear there, everything you, you know, schmooze about is important because it may lead to solutions, call it social, it's like they say, real estate is not about land, it's about relationships. Well, so is energy. It's not about energy, it's about relationships. And the more deals that can be made, the more, you know, common solutions can be achieved, and so that's why a conference like this is so important. So question, what are you hearing about, what kind of reaction in the hallways and passageways at the back of the conference rooms, what are you hearing about the legislature's failure to adopt the bill that's been proposed now for three years for the solar tax credits and wrapping around storage? That, that sad subject has not come up. We don't, we'll have Chris Lee, House Rep Chris Lee, who was the long-time chair of the Our House Energy and Environment Committee after Mina left to become a UC chair. You might remember, and Chris mows the dot over to the Judiciary Committee this session. So I'm not sure why he's coming back in energy capacity, but I guess maybe he just misses us all. Chris is going to be, Chris will be on a panel tomorrow and I haven't run into him yet, but I can guarantee you that if I, if I have someone on one time with Chris, I'm definitely going to get his take on it because I am, I'm more than just kind of disappointed in our legislature at this point in terms of not, not able to recognize the critical. Any, any note, I'm not really into hyperbole. That's not really moi. So when I say critical, it's something I've given some critical consideration to. The critical need the state has to dramatically exponentially increase the deployment of energy storage all across the grid. And I believe that a separate state tax credit to incentivize battery storage is well worth it in terms of the hit on the state's general fund. But there doesn't seem to be any movement that I can tell in our legislature this particular session to do that whereas the last three sessions at least have made a bill that included energy storage tax credit made it through to the conference committee. I don't think that's going to happen this year. Instead, a bill is going to be considered, Senate Bill 1163 is now in the House, that would ramp down the state's renewable energy investment tax credit. And this will be on top of, if it were to get to the governor's desk, I don't know if he's signed it, on top of the ramp down of the federal investment tax credit which starts January 1st of this year. So, you know, the macro question is, is now a good time, reasonable time to start disincentivizing or lowering the incentives both on the federal and the state's side for the deployment of cost-effective renewable energy. You want the short answer? No, that's not a good time. You know, it amazes me that the state makes statements about its direction, it sets goals and targets and the like and then it does nothing to actually move the needle ahead. It does nothing to incentivize. In fact, it withdraws previous incentives which is a disincentive. You know, people, the reality is industry and the people in general seek and need state leadership and when they don't get state leadership, they're left to their own devices and you can't move ahead on initiatives. You can't pronounce things and have them happen. You actually have to follow through and it's really sad that the state is in a situation where it made pronouncements and now it's not following through. Will we reach those targets? It'll be super optimistic and say, oh, yeah, sure. But I don't think so. I don't think if we don't follow through, we're not going to reach those targets and then looking back down the road, it's going to all seem very silly. So now's the time, not later. Now's the time for that. It's also a time to, you know, to motivate people to buy electric cars which we're not doing. So all in all, I mean, I hope this is discussed in that conference and some statements made that will motivate governments to take a leadership role. It's not enough that the governor shows up. He's got to actually do stuff and he's got the energy office under him. He's got DBED under him. And he could make suggestions to the legislature and push on certain bills. He could. I don't know if that's being discussed, but that's my view. What's your view? Well, I mean, keep in mind that no shortage of his own party members in the Senate were very much hoping and banking on one colleague, Hanabusa, to be Governor Hanabusa instead of Governor David Ige, having a second term. So, you know, I'm not a tea leaf reader. I don't prowl the halls of the Capitol Building, getting all the scuttle but I can. But I don't know to what extent Governor Ige has a whole lot of sway with his former colleagues. And, you know, my take, and again, this is very, very tentative from one of the neighbor islands, my take is that this particular legislative session, there seems to be a greater skittishness on the part of especially the money committees, the finance committee on the House side and the Ways and Means Committee on the Senate side. There seems to be a greater nervousness about hits on the general fund and a concern that we can't afford 10 million, 20 million, 30 million dollars, for example. And those are kind of out of the air, but they're not completely out of left field as far as additional hit on the general fund to support a storage tax credit only. So, I don't think it's just regarding energy issues, but, you know, this whole kind of semi-fiasco about cutting 140 somewhat positions of UH, which caused the folks at UH Hilo, UH Bonoa, and elsewhere in the system to kind of, you know, start wringing their hands and almost crying, crying in their Simon, that this was going to be devastating, and then somehow, you know, the legislature backed off of this. But that's just my impression, Jed. You've just been hearing your take as to is there a greater kind of concern right now in this particular legislative session about the state's finances and that we can't afford to do this, we can't afford to do that. Well, it's a zero-based budgeting concept that Sylvia Lukas put into play, and it means you have to justify every petty and you can't assume you're going to get what you got before. You're going to have to start from zero base. Anyway, I want to ask you, are you involved in any of the panels, Marco? No, I wasn't on the panels per se, but Ed Fenster, who's one of the founders of a company called Sunrun, they started in 2007 in the San Francisco Bay Area, so they've been around for about 12 years, and Sunrun is the biggest provider of residential third-party-owned affordable take systems across the U.S. They used to be a strong number two while Tesla slash Solar City was number one, but Solar City, Tesla, their activity in the solar PV realm has decreased dramatically over the past several years. Sunrun is the biggest in the country. They're the biggest player in Hawaii as well. So Ed Fenster gave the keynote this morning to start things off, and the MEDB folks were kind enough to ask me to be Ed's interlocutor, aka question poser. So I had 15 minutes with Ed on the stage posing questions to him, which was great. That's the limit of my participation. So the conference goes again tomorrow, and will it be a whole additional day or part of a day tomorrow? Correct. Correct. There are a bunch of interesting panels tomorrow, including folks from the utility company, our friend Colton Ching, senior VP at Hawaiian Electric, and a number of other notable people from the A-list. So yeah, it's a good group, and they serve really good food, so hey, no complaints. One last question before we run, Marco. Talk about the Big Island. I guess you can still call it the Big Island instead of Hawaii Island. Pardon me for doing that. It has this huge, big, tall issue about geothermal. Has there been any discussion about geothermal and PGV? Not so far. That said, I ran into our friend Mike Calichini. Mike is the kind of on-the-ground manager head dude there for Pune Geothermal Venture, and I have a very cordial relationship with Mike, and the last thing I heard about PGV that was announced last week at a community forum meeting in Pahoa is that they're spending some of their money to give road access across the lava to dozens of homeowners who have been essentially left stranded in terms of being able to drive to their places that have been cut out by lava flows. So that doesn't really have much to do necessarily with PGV coming back online. But I think there's still, how do I put this? There's still a lot of writing and chapters left to be written in the saga of Pune Geothermal Venture coming back online or not coming back online. Well, and that goes to the larger picture. There are many chapters left to be written in the development of clean green energy in Hawaii in general, and you and I will cover them one by one, Marco. So I really appreciate you reporting in from the conference, and I hope you have a good time and I look forward to talking to you next time a couple of weeks from now. Well, we make quite the team, Jay. You there anchoring the studio and the world headquarters of Think Tech Hawaii in the gathering place of beautiful O'ahu and Honolulu and me, your faithful correspondent out and about amongst the very friendly neighboring islands. I couldn't have put it better myself, Marco. Thanks so much. You take care. You rock, my friend. Thank you. Aloha.