 Yeah, ThinkTech. Energy 808, the cutting edge. I'm Jay Fidel, and the magic word today is Jim Alberts. Hi, Jay. Hi, Jay. Hi, Jay. How are you? Thanks for coming down. Let me explain. Jim Alberts is the vice president of business development and strategy. You get that right? At Hawaiian Electric. Yes. Wow, what a job. Yeah, it's an exciting time, and thanks for having us here today. I think it's exciting for everybody to understand what's going on, so we need to have lots of different communication channels, and you're certainly an important one here in Hawaii, so thanks for having us. Well, thanks for coming on, and we appreciate Hawaiian Electric. We consider Hawaiian Electric Hawaii's electric company, and we keep thinking back to what is it, 1910 or so, when you guys were organized, and you've been keeping the lights on ever since. I wake up in the morning and I see the lights are on. Oh, wow. This is really important that the state has grown with the lights that you've turned on every day. Yeah, the economy runs on electricity, so we're proud to provide that service to our communities. They say a great economy has great electricity. Yes, that's true. But you're working for the past few years on renewables. It's all about renewables, and Hawaii's a leader in that. Hawaii's learning a lot, and we're here today to talk about how much you've learned about the grid and all the technologies that make the grid and connect up our renewable system and allow us to go further with it, you know, and reach our goals. And one of the things that you're doing is you're inviting executives from mainland utility companies to come here and take a look at what you're doing. Can you talk about it, Jim? Sure, there's a group called the Smart Electric Power Alliance, SEPA for short, and it's a nonprofit group that looks across the industry, not just electric utilities, but all the other parties that participate in the energy infrastructure. And it's a nonprofit group looking at a carbon-free energy environment by 2050. So trying to pull all the right people together to accomplish that. So every year there's a fact-finding mission, and that group goes to places like the UK, Australia, and this year they came to Hawaii. And the reason they come to Hawaii is because there's a lot of great stuff going on here. A lot of innovation, a lot of things happening here much faster than anywhere else in the world. So it's a great place to see what's happening. So we helped arrange for that. SEPA brought this group over here, and we met for a week. And they got a chance to go out into the field, look at what's going on out there, and we had a chance to talk to them in a room for a couple of days, too. So it was really great for us to showcase what's happening here. We heard some really nice feedback from everybody that came. So I know we brought a short video. Yeah, let's look at it. Let's look at the short video and see what this looks like. I think learning how Hawaii has dealt with the fact that its physical constraints are limiting its options, whether it's the lack of interconnection between the islands, whether it's the lack of land mass to fully deploy the renewables, learning how they have dealt with the physical limitations of the islands has been a real eye-opener. And the ability for them to embrace what their customer wants to do and really affect their own utility culture and make that happen is a testament to all the folks that work hard at HIKO, the leadership at HIKO. And I think is really a great example of what we mean when we talk about being a customer-centric utility. I think that's a great example for all of us as we go back home and do that in our communities because at the end of the day we are part of the community. The community is part of us. And we need to make sure that we incorporate that. All right. Hawaiian Electric, bringing people from everywhere and telling them, talking to them, helping them, being part of this group, this floating group around the country that shares, I like sharing, I like collaboration. And you must be involved in this whole national or international change of having utility companies talk to each other. Because a few years ago, I don't think that was happening. It certainly is happening now, yeah. Yeah, it really is. I mean, we're aware of things that are happening around the globe. Likewise, people are aware of what's happening here. So the good news for our industry is we like to collaborate and people are willing to share what's happening. Now, we never lose sight, though, of what's important. So we got to stay focused on our customers and our communities because they really want affordable, reliable, resilient, clean energy. So we can't get too focused on, excuse me, any one thing. We want to make sure and provide the right balance to keep the economy moving. You know, a few weeks ago, President Alan Oshima was part of a very important panel called Co-Opetition in the TechForce conference. TechForce talking about technological workforce here in Hawaii. And on the panel, Brennan Morioka, Peter Dames of Servco. Brennan Morioka, one of your own graduates. Yeah, now the College of Engineering. You must be proud. Very proud. Brennan is awesome. He's a great guy. He's sat in that chair a number of times. And then Mike McCartney, formerly the Chief of Staff to the governor now. He runs D-Bed. And finally, Alan. There were four of them. And I hope I got them all. And Alento Snead was the lawyer, a labor lawyer, was the moderated panel. Anyway, Alan's remarks were very interesting, because he talked about this. He talked about collaboration. He also talked about collaboration within the company, horizontally and vertically. I mean, he's always talked about that. Since the day he took office as president. But he was talking about sharing information as you talked and collaboration with other utilities. And the fact is that we have best practices, techniques, you know, we have systems that they don't have necessarily on the mainland. And one of the reasons they like to come and talk to us is that we have things that they want to do. We're ahead of them in many ways. It's not just in the, you know, the metrics on renewables. It's on how we handle the renewables, how we deal with all the challenges and all the issues around renewables. They want to know what we're doing. And one of the things he said was that, you know, Hawaiian Electric could and maybe will, maybe is actually consulting on a business basis with other utilities on the mainland and in other continents, too. What do you know about that? Yeah, we have done some consulting. We'd like to do more. So if people hear about this on ThinkTech Today, call me. And we'd be happy to help out. The one thing you have to think about when you think about Hawaii though, Jay, is where we're at. So everybody else looks at us because we're a series of islands and we don't have connections to the mainland. We don't have transmission lines between the islands. So we really have to solve problems that other people may not see for a while, which is why they like to come and learn about what we're accomplishing here. And especially when it comes to private rooftop solar. We've got one in three homes on Oahu and that continues to grow. And if you look at our plan out to 2045 to get to 100% renewable energy, we want solar on every roof. We're going to need it. And one of the reasons that's driving that is land use. So, you know, land is more scarce on an island. So long story short, they're wrapping all that together on an island. If we can accomplish that here, people want to learn about it and take that process and technology back. They view us as innovators. They really look how we've solved these problems and how they can take that back and replicate that. We're in a laboratory. Yes. Let me add one thought to all of that. It's a continuing laboratory. It's not a static laboratory. It's not a one shot, one issue, one problem laboratory. It's as you go forward, you find new issues you have to solve. As you go forward, new technologies come under the platform. And you have to deal with them and you have to be a laboratory for that. So, it's a constant, evolving laboratory is what it is. It really is. But you've got to come back to again what customers and communities want and need. So, they want affordable, reliable, resilient, clean energy. And doing that on an affordable basis means we have to innovate not just on the technology for the systems, but also in the process. So, a couple of years ago, the company came up with a new purchase power agreement. The renewable dispatchable purchase power agreement. And that was a game changer that we also worked on with SIPA. And what that does is give the developers a fixed monthly payment instead of having to worry about curtailment and dispatch order. And all the things people worry about in other markets. So, that gives developers more certainty. And with that certainty, we hope drives down pricing for customers. Now, people, when they hear about that, they want to study that notion too and take that back. So, it's about the whole process that comes around this that serves customers. It's not just about the technology, although the technology is important. Now, the way it works, though, is you have to attract developers. You do. If you can't attract developers, no so. That's right. Especially when you're dealing with new technologies, new energies that require expertise on something that happens right now. That's right. So, the question is, and as the business development and strategy guide for Hawaiian Electric, you have to be aware of the marketplace for those people who would respond to an RFP nationally, and I suppose internationally. Right. So, you've managed to do that. You've managed to have a lot of people come in to respond to your RFPs. There are a lot of active RFPs going on right now. I mean, incipient contracts for renewables. And there are a lot coming down the pipe. Can you talk about that? Sure. Well, first I'd point out, you know, online on our website, we track and show all of the projects that are in flight. So, anybody that wants to go out and look at that, anytime they'd like to see where these projects are at in progress, they can see it. Now, if you think back to the late last year, early this year, we finalized our Stage 1 RFP, and that put 260 megawatts of capacity on the system and about a gigawatt of storage. Gigawatt hour of storage. And then in the second round, which is coming right on the heels of that, 900 megawatt hours of energy, 500 megawatt hours of storage, and 210 megawatts of grid services. Now, the grid services is new, and we look at that first, so those bids come in first. We see what we can solve locally before we work on the other things. So, it's all about finding the best fit at the best cost for customers and do it in the right order. Now, the first round, because of this renewable dispatchable EPA that we put in place, we got a lot of interest, and we signed contracts with eight developer, eight projects, and seven of those projects are already in flight, the eighth one still pending approval. But we saw prices from 8 to 12 cents per kilowatt hour, levelized cost of energy in those bids, and that's with storage. Now, compare that to fossil fuel, avoid a cost generation of about 15 to 16 cents. So, we're really doing some innovative things that are driving down costs for customers. And if you look at our components of every bill, it's important to note that 50 to 60% of the bill is energy, whether it's purchased power green or power from us. So, we worked on that really hard and are working hard to drive those costs down because that's the biggest bang for the buck right now. We started out, we mean the state, started out looking at renewable energy and realizing that we really needed to do that in the future as a complete transitional change, a transformational change. The initial discovery is, well, this cost a lot of money. Somebody has to pay for this. All the new technology, all the infrastructure, everything, the grid is going to be completely different. Somebody's got to rebuild it. Who's going to pay for it? And then the realization in there somewhere, that's going to mean that your utility bill will be higher because the utility bill is going to pay for at least a part of this enormous cost. But in recent years, it seems to me that that whole thing, that whole concern has been ameliorated, moderated because in fact renewables, the way you're handling it anyway, are coming down in price. And they're below fossil fuel. That's really an extraordinary development. Yes, it's a game changer. When you think about what was forecast and how quickly that technology's improved and how quickly we can implement it, it's helping to drive those prices down. Now the fixed cost part of the bill to integrate all of this and make it work may be a little higher than it was in the past, but when you, that's the smaller part of the bill, when you put the energy cost and you start lowering those, we hope to drive that cost down as low as we can get it. Now the other thing it does for all of our customers is provide bill stability. Over time, you've seen oil prices go up and down like this with changes in politics and weather, storms, whatever might happen. But with these long term, 20 year power purchase agreements that are fairly flat over time, people won't see that big lumpiness in their energy part of their bill going forward. So that's a real plus for the economy. Now people can plan and budget very thoughtfully and make some good forecast. It seems to me we're in a good space. So much so, I think we can relax for one minute and take a one minute break. That's Jim Alberts, Hawaiian Electric. We'll be right back with more about strategy. All right. Thank you, Jay. Aloha, Stan, energy man here. You can see me every Tuesday at 3 p.m. here on ThinkTech Hawaii. We're not on Friday anymore, so don't be looking for me on Friday. I'm on Tuesday at 3 p.m. here on ThinkTech, coming to you live and direct from the local studios in downtown Honolulu's Pioneer Plaza. So please join me and we'll talk everything about hydrogen and clean energy, not only for Hawaii but for the whole wide world. Aloha. Aloha. My name is Wendy Lowe and I want you to join me as we take our health back. On my show, all we do is talk about things in everyday life, in Hawaii or abroad. I have guests on board that will just talk about different aspects of health in every way. Whether it's medical health, nutritional health, diabetic health, you name it, we'll talk about it, even financial health. We'll even have some of the Miss Hawaii's on board and all the different topics that I feel will make your health and your lifestyle a lot better. So come join me. I welcome you to take your health back. Mahalo. Okay, energy 808 to Cutting Edge with Jim Alberts of Hawaiian Electric and one of the things he does is strategies. So I wake up in the morning and it's really easy. I turn the switch to lights go on. With you, you've got a lot more issues and you've got to figure out what the resources are, what the challenges are, what the future is, markets hither and yon. You've got to figure out a timeline and a series of strategies all the way to 2045. Can I give you a headache? Yeah, it's complicated for sure, but the exciting thing is we've got a bunch of people who like to help. So there are many people in our industry you included like to get together in stakeholder workshops and help map that future out. I heard Mike McCartney say something like this. If you want to go fast, go alone. If you want to go far, go together. It's so insightful and I love that statement, but it's so true especially here in Hawaii. We really have to work hard together to make this happen because we can't do it alone. It's the whole infrastructure. It's the whole economy that centers around this energy sector and what drives it, including by the way transportation. So one of the big things I think about a lot is how we move more toward electrification especially as transportation because you see that two-thirds of the emissions that come from here are from transportation. We're working really hard on lowering those emissions from the power generation sector but a lot of opportunity in transportation. So I love that idea. Just a year ago I bought my Nissan Leaf and I love it. I wish I would have done it sooner. The technology has improved so much and with the tax credits, it's very economic now and I think all of the car manufacturers say in a couple of years it's going to be on par with fossil fuel cars. Well I looked at a list of right now we're 10,000 or more electric cars in the states we need more than that to hit critical mass but there are at least half a dozen manufacturers who are adopting electric cars and more in the pipeline yet. So you know that on a national level there will be more electric cars out there and you know that means we'll have more electric cars here because it's a function of how many they want to allocate to the state of Hawaii and we want to encourage them to allocate a lot. Yes absolutely and I think the demand here speaks for itself I think we're a second per capita in the nation for electric vehicles even though we're at 10,000 million growing every month by the way I think I see more every night on my commute home than I did the night before which is a great thing but then you take electric vehicles and you start to talk about how do you make this you know a smart resilient community and how do you connect all this stuff together so you don't have to over build and over manage things and keep the cost low for customers we've been working really hard on how do we make that happen and engaging with communities to get their input on the best solution to go forward and you know one that our team Public Affairs is working on out in the Kolaupoko area they've been going at this for a year so if you know anything about the windward side of the island over there there's no power generating facilities so really going out and talking to people about what that means and engaging them and trying to figure out what the solutions are from their perspective not us going to tell them it's them telling us what the right solutions are and if we do that then the community gets what it wants and we can provide resiliency services that they want for their community yeah everybody has to buy into this not everybody is on board just yet that you know we all know that takes a little while because everybody has his own little silo his own self-interest but at the end of the day if we're going to do this we have to have everybody on board we have to have people collaborating cooperating and doing it together you know in the words of Mcartney yeah me you really do this this takes everybody working together to make this happen not any one group do it and especially here because the fact we live on a series of islands makes it even more important now the good news is I think the people of Hawaii were built for that so we're really good at collaborating and making things work yeah we can't forget about it the problem with the news and the news cycle is you know something comes up and it's very distracting so you look at that next time you next time you look at something else and you forget what you were doing before and so forth this is something we have to think about all the time this is our economy our future we have to work together to to make it the best we can make it and furthermore you know for one more thought that is we have to be confident in our own ability to be confident in our own capability of developing these systems that's why this trip from the utility companies to Hawaii to look around and be impressed with what we're doing that's why it's so important because hopefully people understand we're proud we have reason you know from confidence and pride we're doing so many great things here Jay I just I've been with pride our whole team when I think about that and talk to people like you that we're doing great things for our communities and you know there's there's reasons to move fast and we're moving really fast everybody that comes in looks at us and says wow you guys are really moving fast we can't believe it we want to do it in a way too that helps manage risks we want to manage some pricing risk some technology risk and development risk so if we do this in a staged approach even though we're accelerating and we're moving faster than anybody expected we want to do it in a way that's good for customers and there is risk and then we're cutting new territory here I remember David Bissell he had a speech one time he said it's all about appreciating the risk managing the risk and getting people to understand there is risk that's right it doesn't happen without managing the risk yeah that's right that's part of any transformation and I think that's what the whole industry is going through now is how do you make this transformation in 20 years people that are growing up are going to see that as just the way it is for those of us who live through this transformation period are going to have a different perspective about it and a lot of lessons to be learned along the way we're innovating we're piloting new things all the time technologies out on the distribution system that help manage voltage to allow more people to connect with private rooftop solar so our our company is really on it yeah you got to be you got to keep the lights on you got to be safe because electricity is dangerous in the wrong place you have to you have to keep the price down you have to keep the business end of it going there's a lot of things that you have to deal with to to keep it on the channel so my question to you here in the waning minutes of our discussion Jim is strategies strategies it's not only business development although that's a long-term project obviously but it's strategies if you could just identify for us the strategies that you're focused on now and the issues you'll have to cope with you know going forward to reach 2045 which was a number they threw on the wall and which now we live with and we believe it's possible right yeah so exciting times even in the strategy front we're kind of ending our five-year strategic planning window and we were focused on three important pillars so customer experience is the first one because we're really centered on what that means modernization is the second piece and clean energy is the third leg of the stool so all three of those things have to work together to make the whole system work now we're out in the communities and talking to community leaders all over about what's the next five-year window look like and that's what excites me is this isn't our plan and we're just telling people what it is we're out talking to everybody saying what does it mean for you because we know not everybody's the same many residential customer segments if you live in a high-rise your needs are different than if you live in a single family home somewhere else so we really want to be able to start to customize and differentiate what those services are for the different types of customers wherever they are same time you got to wrap around the possibility of climate change effect we do sea level rise about extreme weather and you have to build that in to make us resilient this further complicates the strategies how would you say it complicates the strategies and what strategy do you employ and deploy to deal with those really unknown risks so we've hired a company called Jupiter Research and they're helping us develop scenarios around sea level rise and climate change and when you lay those scenarios out and you start to say okay how does that affect our strategy including where do we put our infrastructure and how do we keep that safe so we can continue to provide service no matter what the conditions are affects our strategy a lot now the overall big picture strategy for us comes back to that and we started with which is customers you know how do you do what's right for customers absolutely so given this group that came and given the fact that you have been talking with and doing business with various people who respond to the RFPs not only in their paperwork but in talking with them meeting with them getting a handle on who they really are what their capability is what they can do what they want to do how they would integrate with the Hawaii Energy transformation where do you think the strength is now in terms of the RFP responders is it here or to what extent is it here is it on the mainland what states on the mainland is it from Europe is it from Asia where is the strength going to come from as we go to 2045 yeah the strength comes from all over the place I expect we're going to see bids from companies that have global representation and the exciting thing for us is they bring a lot of skill sets to the islands now many of them have already been doing projects here for the stage one RFP that is in stage two is in oh by the way 75 projects in the stage two bucket so that's really really exciting to have that many projects with different developers lined up so all of those people we've got experience now in stage one so it's going to get better we've improved EPA process we've improved the IRS process and now we're moving into stage two we've had workshops with the developers the PUC has helped host these things and that's been really good for us because they've been a huge help PUC in the first round they issued an order to approve contracts in three months Jay that's wonderful it's such a big help we really appreciate what they're doing for us I think I remember the first PPA before that over a year do one and then we did eight and three months so I think everybody developers included are excited about the speed and the certainty of the process now is getting better still lessons to be learned we got a ways to go and you know we'll have to learn how to work our way through those but everybody's collaborating we want a great job that's part of the best practices that we can share with these visiting firemen and it's also you know something about the legal environment that you have created that you know we now employ it's part of the transformation the contract documents are different they're smarter the way you handle the RFPs different and smarter the way the PUC understands that and moves faster all of this you know was something we didn't know about a few years ago now we're getting really more expert in putting the show together yeah we're getting better for sure there's always things we can improve on or get better at and we're open to feedback on that but the reality is it's like anything you just keep doing it over and over and you get really good at it now for us our team we got a team of experts that's dedicate their lives to this I wish everybody outside could come in and see how hard those groups work to make this happen this is for me the most exciting time in the energy industry ever well we have to do this again and again as they say let me teach you how to do it which means you get better if you do it more and it's Latin on the way which means you and I will have to drill down on some of these things going forward Jim I look forward to seeing you here again yep I look forward to it Jim Alberts thanks again Jay I appreciate being here thank you