Industry sign banking hawaii iou myself
[Music] [Music] I never get to start speeches that way at home it's sort of a regular thing so this is nice I'm going to condense what it's probably an hour and a half long discussion or presentation into about 15 minutes so forgive me if I fly through this but I did want to say thank you so much for the opportunity to speak here today of course the weather outside is beautiful when I left it was actually really dull and rainy so don't let this mislead you when I start with this because this is this is my district I represent on the island of Oahu but it's also a place where obviously the Sun rises every morning and it seems appropriate because for us in Hawaii that is obviously one of the key things as it is everywhere that we're looking at to get us to our 100% renewable future but Hawaii itself just to give you a little lay of the land briefly it's actually six different grids one on each island each radically different in resources and each radically different in size ranging from about 20 megawatts all the way up to about 1,700 where there's about a million people in Honolulu right now and what we're seeing as a result of this is a different resource profile on each Island but one thing that's sort of ubiquitous every word today in the state is pictures and neighborhoods just like this about one in three single-family homes throughout the state today is adorned with solar panels or some sort of solar hot water heating element right now we're leading an Eevee growth tremendously 2016 saw a 30% increase in adoption of Eevee cars then 2015 and we're far outstripping are charging capacity both in the public sector as well as private so things are moving fast what it really means for us with context to this discussion of course is progress toward our 100% RPS this is actually a couple years old this was 2015 when we passed this today we're about 26% renewable by and large so we're a little bit beyond that our utility is on track right now to hit and exceed our 2020 goal of being 30% by 2020 on and on up to our 2045 goal of being 100% renewable in our electricity sector what we've actually seen is a doubling of our renewable portfolio over the last 10 years this is something that is taken off not because of our RPS but because of a lot of efforts tied to our previous 30% excuse me 40% RPS that really got things going and I want to walk through where that's evolved to today because what we've seen during that period is a huge boom in the solar industry in the rooftop industry in jobs throughout it's been about a quarter of all building permits in any given year in Honolulu at the peak of the recession of all things I mean this has been an industry that has taken off and literally saved our economy when we needed it most today that's amounted to approximately as of I think December this year about a third of a billion dollars in avoided cost savings for us in Hawaii that's replacing imported fossil fuels mostly low sulfur fuel oil with our own resources our own Sun our own wind and that's something that people can take home to the bank our commitment really has made us also a destination for project investment whether it's geothermal solar wind there's a lot of folks I see in the audience who have participated in one form or another and these different kinds of projects but I want to talk about one because these things are changing rapidly this is a ocean thermal energy conversion plant on the Big Island that was dedicated about maybe about six months or a year ago it uses cold ocean water to generate power and the short of it is it's 100% clean its scalable that we're not there yet but this is the first one that's grid connected anywhere in the world and it is hopefully a model for many more to come but what's fascinating about it is that as we were doing the ceremony the governor's flipping the switch and we're all there one of the guys decided oh I'm going to pull my Tesla to this thing and literally plugged it into this which I think for us we all we all sort of step back in astonishment thinking wow this is we think the first time a car has been charged by the ocean but it signifies sort of a lot of a change that's come in because no one thought this was possible the marrying of Transportation and our own ocean waters this sort of thing is new and it's it's a wave of technology that's that's coming that we're starting to take advantage of as we move forward but where we are right now everything is shifting to storage both in the small scale of course with tesla powerwall x' and everything else on the utility scale as well this is a gafoor megawatt hour installation on the island of Kauai and I bring it up because it was a unique testbed for something that was sort of unexpected this half the island is powered by 28 mega watt gas plant which had some issues and was about to trip offline until these batteries were able to discharge immediately and provide stabilization that was able to basically save that from a brownout I mean this is something that we're seeing more and more often on a Wahoo the amount of distributed PV that's been on the grid in the last few years has prevented additional brownouts and blackouts because our coal plant which believe it or not still have a coal plant in Hawaii which provides about 20% of our islands load fell offline could've been a lot worse years past we've had successive cascades of outages that have not plant after plant offline meaning to island wide outages for 24 hours or more so these are things that are starting to change because of the kind of technology that's being integrated into the grid pump hydro all the other things that we're hearing about hydrogen storage there are projects for them all in the works and it's important because for us when we look at this number this is four thousand dollars this is roughly as of last year the average price that every resident in the Hawaii pays for fossil fuels it's something that hits particularly in the pocketbook and more than anything it's what drives us to meet and fulfill our obligations under our RPS because for us there's a lot of lessons learned that we don't want to repeat that left us here back during the gas crisis in the late 70s we had a chance to change our fuel source and we opted not to because a small investment seemed the more prudent investment in upgrading the grid rather than the wholesale revolution that was necessary but yet looking back now 30 to 40 years we can see that we paid billions tens of billions in excess of what we probably needed to and that's something that we don't want to repeat for our kids generation down the road so right now we've got our RPS which was done largely because we wanted a couple things we didn't want to repeat this scenario we wanted that planning horizon we wanted to make sure that utility started making the right investments today beginning today as well as helping the unions and helping the workers and everybody else plan ahead because we know they're going to be plants that are going to be shut down we know there's going to be transition and we want that certainty and we want to set that stage today what made this whole transition possible in this RPS is the solar industry and the general public because we had rooftop proliferation that changed the mindset of the public because you drive down the street you see your neighbor with a few panels on their house and people began conflating renewables and solar panels with cheaper power which wasn't always true at the time you know five six years ago today for sure it is but that gave us the basic framework in a public under which we wrapped up our renewable push on the policy side 97% is a number that was pulled about a year and a half ago maybe two years ago now of the public that's supportive of renewable energy generally a much smaller number but still a significant majority roughly 68 percent said at the same time that they would be less likely to vote for someone and when I told this to my colleagues they all perked up less likely to vote for someone who didn't support renewable energy and all the sorts of other things that go with it so we were able to do this when we passed our hundred percent RPS we did it seventy four to two in the state legislature a commanding victory not that any of us take credit for but that I think we owe to all the folks who've been players in our renewable energy industry who set that stage and made that possible for us but the same time it's important to note that there's been different changes in our in our community that have really complicated situation a little bit and actually asked us more difficult questions than we ever thought we'd ever be asked as policymakers some of which we've been discussing already here today you know you have a solar interconnection rooftop interconnection which has been legitimately in some cases in other cases not delayed or denied by our utilities that's produced the kind of public backlash that you'd probably expect when your electric bills average $250 a month and yet you have this opportunity now to save that's something that is is still ongoing it's a challenge and a public angst that is out there in the ether meanwhile the utilities own planning process has been rejected a number of times now we spent six years coming up with a five-year infrastructure plan moving forward largely because it didn't meet the expectations of the Public Utilities Commission when it came to putting in distributed generation lowering cost for the appropriate infrastructure and taking the right path that makes sense for a changing marketplace and a changing energy grid the PUC as well ended our our popular nem program and replaced it with a basically a less customer friendly cheaper nem which has definitely legitimacy but also raised a lot of concerns and meanwhile throughout all of this we reached grid parity in Hawaii where now for the first time in many places actually it's as cheap to leave the grid and put in your own batteries and PV panels as it is to stay on this is the first grid connected a few power walls that were put in at a house of a friend of mine and they're the first of many that are now out there and of course it's easy to talk about Tesla but there's so many other companies as well that are now in the marketplace so much so that you get on to Costco I think you can in other states now for the first time and get quotes for these sorts of things and have someone come to your house and do an install but these sorts of things are creating kinds of questions that we don't yet have answers to but the utility opposition and some other stakeholders as well to this sort of new competition has definitely been riling up the public and that's made things harder for us because ultimately the question that we have to ask is what happens now that we're at grid parity if you have a rising cost of oil now all of a sudden you've got some real problems because you are well underwater and it makes so much more financial sense for anybody to step off the grid that's not likely to happen for everyone but there's definitely a small market there and a portion of the population that can do it today so we're really in a battle of time market and the text that you guys are all we are all involved in and seeing pull or liberate at cheaper and cheaper prices is driving it is no longer RPS it is no longer our policy it is no longer the utility or any individual stakeholder and that's something that we don't have an answer to yet because we need a grid we need a grid for resiliency we need a grid for the folks who can't afford to leave it we need a grid for all sorts of things but the one thing that we do have to acknowledge I think is as responsible policy makers is that at some point that may not be true someday probably not anytime soon but maybe not even in our lifetime the analogy of the telecom and everybody ditching their cell phones I mean there are landlines for for cell phones I think is no longer the primary future that we look to because everyone still got that service contract we look to this where everybody once had to go and get their ice from the ice dude or eventually we're able to lease their own small freezers which would then be filled with ice but yet there came a time when everybody could afford their own refrigerators and have no service contract that ultimately once you put Steve Jobs or someone like them in the driver's seat of the kind or Elon Musk in the driver's seat of modular energy home tech that can be bought for pennies down at your hardware store inevitably will arrive someday and we cannot ignore that fact because there is no political will to stand in the way of a populist uprising that empowers people for the first time to be able to control their own electric bill and that definitely plays into what we're trying to do and what we have to acknowledge as we managed print flight and all the things that come with it so what are we doing in Hawaii let me try and run this through this rule real quick here the first thing we got to do is policymakers under our PS is protect ratepayers from risk and there's a lot of risk out there everybody except some of it but the first thing that means for us is that we have to align our utilities incentives with the public interest performance-based rate making making sure that the Tilly's are incentivized to do what we believe to be the right thing supporting efficiency reducing load where appropriate managing the kinds of grid resiliency that mean a different kind of electric grid that's built out the second thing for us independent system planning and obviously we've had a lot of folks up here talking about that this morning we don't have a lot of that yet in Hawaii right now the utility manages the entire build-out and so what we want to do is eliminate some of the conflicts of interest reduce costs make sure we have a grid that is built to be the most robust and future proof but yet at the same time not over built to the extent that it becomes a stranded asset and we're spending hundreds of millions of dollars or billions of dollars in rate payer assets building something we may not need so for example we just came back this year and took out the statutory authorization for ratepayer Recovery to build a billion-dollar undersea cable connecting Islands which probably no longer is a smart idea we really want to encourage private investment in infrastructure this is something that we can talk about but in real terms what it means for us is that we're creating mechanisms on electric bills to channel money into energy efficiency everybody pays a few bucks on this we're leveraging that down on bond financing to create pools of hundreds of billions of dollars that can be put out there to tackle the low-hanging fruit we're creating programs to incentivize DG whether it's PV panels or batteries or any sorts of other things that people can take advantage of tax credits on bill refinancing excuse me on bill repayment we have community solar projects that are for the first time finally in the works we hope to be able to open up markets to people in condos and apartment buildings that previously never had the opportunity to take advantage our PUC is working on distributed energy resource dockets which will create programmatic rate design that hopefully ties all these pieces together with time-of-use rates with transportation and the advent of electric vehicles we have on our books right now a law we passed two years ago which says it is official state policy to eliminate fossil fuels for ground transportation in the state of hawaii and we're well on our way now toward with our Department of Transportation and our Energy Office to taking the first crack at implementing and even asking the hard long-term questions about how to finance that sort of revolution and that sort of infrastructure all of this is being done with a focus on middle and low income first how do we make sure that there's a fair and equitable distribution of resources and the benefits that they all have on our grid for the folks who need it most so that no one is left behind the last piece of this is grid resiliency two of the bills we passed in the last two years require that our entire public
niversity system and our public k-12 schools across the state all our Energy Net Zero generating their own renewable power by 2035 largely that's because for us not only is it a cost savings measure for taxpayers because our university system and our Department of Education are expected to spend roughly two billion dollars on power bills over the next 20 years so instead let's put that money into the infrastructure upfront and use those savings to lower tuition to save taxpayers money but also to make sure that our schools which also serve as disaster shelters are tied into their community and have power when they need it most the DoD as well as some other stakeholders in our community are looking at for the first time at micro grids and building those out one of those interesting cases in one community found that it's actually cheaper to build from scratch an entire community electric grid poles wires the whole deal as well as renewable generation and a pump hydro storage project it's cheaper to do that than to continue paying the existing electric bills for that region it's something that is game-changing for us the last thing is assessing the alternative utility business models that will work to give us this entire framework of future growth and development and change we want utilities that want to be proactive and work with us toward this goal that we can help incentivize to help get us there rather than work at odds and have to be dragged kicking and screaming the whole way Hawaii just recently rejected a utility takeover from a large utility it was a 4.3 billion dollar deal it was rejected in large part because it was sort of a standard 20th century centralized business model didn't really account for a lot of the stuff that we're talking about here it also relied heavily on liquid natural gas for the next 30 years which is not something that the state wants the governor the legislature everybody came together and said largely with one voice this is not the direction we want to go they came in pulling this is just a fun fact that came in polling at 45% public approval 18 months later after spending 22 million dollars on a PR campaign probably the most expensive one in States history they were pulling at 16% at the end so of all these things been to wrap that up the state's got a 1.2 million dollar study going on looking at what are the best utility models that are appropriate for each island over the long term what will provide pans of least resistance as well as currently the Big Island looking at transferring from an IOU to a co-op and now he's looking at going from an IOU to a Muni that's not to say those are the necessarily best answers but they're asking questions about not what is the best for today but rather what is going to be the best for the long I come back to this picture now as I wrap up because this is not only the district I represent this is where I grew up and when we talk about the RPS when we talk about all these things that we're seeing change we have to ask why and for me this is an area it's all rocks now as far as you can see but that used to be a beach when I was growing up I am only 36 in addition to this we've lost 17 miles of beaches around the state over the last few decades largely because of accelerated erosion impacted by sea-level rise and a number of other things we have a huge liability on our hands here if only economically if only speaking in pure numbers the loss of Waikiki Beach which is now I mean it's our iconic diamond has the background tourist postcard it's artificial it is replenished every year and it was businesses and hotels in that area that came forward and said you know what tax us more to protect this Beach and to restore it because for us if we lose it it's a two billion dollar annual loss to our economy but that's not the only thing we're losing our fresh water supply we have more invasive species to deal with this is a satellite image of every hurricane from 2015 excuse me 2016 at its closest point to Hawaii all overlaid it is a miracle that somehow in the middle of that we were not run over but had just one of those had just one of those hit us that's a 40 billion dollar impact on our economy and who knows what value in lost lives and resources to our community and all of that this is real for us this is why we have to step up Hawaii has made progress in the last ten years I would have never thought possible we've doubled our renewable energy from less than 12 percent to 26 and with no end in sight we've got 80,000 PV panels to the 80,000 homes with PV on them we've created thousands of jobs we have a sort of a billion dollars in savings we can we can write home about that our hard and true real numbers and our utility says we can hit 100% not by 2045 but before 2040 and this is the utility which is the most conservative of any stakeholder things are moving in it's an exciting time but here's the real thing if we can do this in Hawaii on a series of broken up mishmash grids that are way out of date anybody else in the country then have bigger more flexible resources and the ability to finance things at a far cheaper rate and the lessons learn from us and many others to be able to install the cheaper options to do the same thing if we can do it anybody can that's the bottom line here and that's why this is a time of sure incredible risk but also opportunity its opportunity for all of us the truth is we have to work together we cannot look at ourselves as individual stakeholders if we want to make these things come true if we want to hit our goals Hawaii is racing to integrate innovation before it disintegrates the electric grid and I mean that it's not going to be long before stakeholders and investors in our IOUs in other companies that are taking part start to notice things beginning to change if a thousand homes leave the grid that's enough to do it according some folks on the East Coast we have to move fast it's a battle of ideal grid policy versus populist demand what does the public want what is the market going to deliver we have to balance that what we ultimately come up with may not be ideal grid policy but it may be what's possible politically because nobody nobody is going to step in and say as a consumer you're unable to install your own batteries in PV that is political suicide of the highest order it's about freedom there's about independence it's about lowering costs and is about saving our way of life here in this state because for people renewables are not about disruption and defection and all these other numbers and graphs that we talk about it's not about an RP s or government or any of us it's about a revolution that empowers them for the first time to be independent and to make decisions for themselves that is the ultimate psychological driver and pocketbook driver that we have to deal with it's a revolution but here's the thing you guys still have an opportunity to direct it we all do we have time but we have to act quickly we have to do it to achieve our clean energy goals to avert the worst in a climate because ultimately it's not about business plans and all the rest of it it's about this it's about the world we leave those who are coming next so that I say best of luck everybody you guys are inspiring I've never been in a room with so many impressive people who are working on this and who are going to solve this problem and tell us what to do because we're looking for answers just like you guys but I wish you all the best thank you very much [Applause] [Music]
