House Standing Committee on Energy & Environmental Protection

Convening the joint hearing on Committee and Energy Environmental Protection, along with the Committee on Human Services and homelessness. This morning, 9:00am, February 10th, Tuesday, in room 325. We're hearing one bill, House Bill 2284, relating to energy assistance.

So this measure will establish the Hawai' I Home Energy Assistance Program within the Department of Human Services to assist qualifying households in paying their energy bills. It would require the Public Utilities Commission, Public Benefits Fee Administrator, to provide certain information and assistance to recipients of the program. First to testify, we have DCCA Michelangelo in support.

Vice Chair, Members of the Committee. My name is Michel Angelo, Executive Director for the Division of Consumer Advocacy. We stand in strong support of this administration bill. They'll be available for questions. Thank you.

Thank you. Next to testify, we have Department of Human Services Brian Yamane in support on Zoom. Thank you. Moving on, we have Public Utilities Commission, John Itamura, chair and support in person.

Good morning, Chairs, Vice Chairs, Members of Committee. My name is Ashley Norman, utility analyst with the Public Utilities Commission. On behalf of chair. Stand and support. Support of this bill, I'd be comfortable.

Thank you. Next we have Hawaii Hawaiian Electric, Shannon Oliveiro in support. In person. Not. Here. Hello. Next to testify, we have Shannon Oliveiro from Hawaiian Electric here to testify. Perfect. Thank you so much. Last to testify, we have Kauai Island Utility Cooperative, Scott Sato, Government Affairs Manager, in support, not present. Members, are there any questions?

I have a question that since DHS is not here, I don't know if DCCA or even the Public Utilities Commission might be able to answer. I want to find out. If we're asking them to write their administrative rules for this program, would they be able to adjust?

So, for example, right now we have an extremely generous program for TANF beneficiaries to help pay their utilities. Would they be able to adjust to account for such programs in distributing funds? Yes. Sorry, DHS.

There's some confusion. I thought my Director was on. Okay, okay, so. But we do stand on our testimony and obviously I'm here for questions, so. I did run the LI program. I oversee the financial assistance programs.

TANF does has have restrictions, and they have helped out state LIHEAP in the past few years with providing energy crisis intervention benefits to any household with a child under 18. It did not have to be a TIC recipient.

So they took a lion's share of the energy crisis intervention benefits for at least the last two or three years. Losing that funding is kind of detrimental to our program because we are back down to about 8 million for everyone.

But There are other programs, as you know, that have been established, like the NRST and other programs that actual TANF recipients can also apply for.

I guess my question was a little bit different. So if we are distributing LIHEAP or AT benefits now, can they take into account that some families using current TANF reserves are getting extraordinarily large utility subsidies this year if they qualify for those under tanf? Yes.

We'll have to work out the rules.

Just meaning logistically, is that possible? Is that something that you folks are able to do?

We could. And determine whether we would allow double disease or one benefit or the other because they're all federal as well.

And you folks would make those rules? Yes. Thank you very much. Thanks, Chair. Thank you.

Any other questions? Members on HB2284? Seeing none. We're going to move straight into decision making.

I had one more question. I don't know if you already have a budget amount to put in the Committee report.

It's in the bill. 1.5 million go straight to decision making. zero, right. Okay. On House Bill 2284, we're going to move this forward. We're going to blank out the amounts and note them in the Committee report and affect the date to the year 3000. Members, any discussion for EEP? Seeing none. Vice Chair, please take the vote.

House Rule 2284. Chair's recommendation is to pass with amendments. [Roll Call] Chair, your recommendation has been adopted.

For the Community on Human Services and Homeless. Same recommendation. Vice Chair, please.

Voting HB2284. Chair's recommendation is to pass with amendments. [Roll Call] Chair, your recommendation is adopted.

Thank you very much. All right, we are adjourned.

Right. Good morning everyone. It is 9:15am we're just gabbling in on the 9:05am agenda. It's Tuesday, February 10th. We are in Conference Room 325. This is a hearing of the Committee on Energy and Environmental Protection. We have only a few bills on the agenda today but they might take a while.

We want to have ample time for Q and A and for all the testifiers on all the bills. So for now we're not going to impose a time limit but we do ask that people be concise and if things go too long we may impose a time limit later.

So first up on the agenda we have House Bill 2486. We did hear a similar bill earlier. So anyone who feels like standing on your testimony, please consider that option. We are planning to pass something out on this. We just want to wanted to hear a couple different measures. So first up to Testify, House Bill 2486.

This is relating to plug in solar or balcony solar or portable solar. First up is DCCA Consumer Advocate.

Board Chair Vice Chair Stand on our testimony. Thank you. Providing comments.

Thank you. Climate Change Mitigation and Adaptation Commission.

Aloha Chair, Vice Chair. Leah Laramie Climate Change Commission. We stand on our testimony.

Public Utilities Commission.

Good morning. Chair, Vice Chair of Public Public Utilities Commission stands on the fruits of testimony in support of the intent of this bill.

Thank you. Carbon Cash Back Hawaii on Zoom. John Kawamoto please go ahead.

Hello Madam Chair and Members of the Committee, my name is John Kawamoto speaking on behalf of Carbon Cashback Hawaii which advocates for legislation that reduces carbon emissions and strengthens Hawaii's energy independence while protecting vulnerable Kamaina families.

Carbon Catchback Hawaii is in strong support of HB2486 which gives the 40% of Hawaii residents who live in condos and apartments an affordable option to generate boost their electricity bills in a climate friendly manner. We have an amendment to suggest in a written testimony to adjust a reference to Hawaii revised statutes.

I'd like to note that Hannah Ellis from Brightsaber has submitted testimony. She's very familiar with this balcony. Solar technology and technical questions may be referred to her with the suggested amendment. Carbon Cashback Hawaii supports this bill. Thank you for your kind attention.

Next we have Henry Curtis Life of the Land.

Stand on our testimony.

Thank you Korean Party of Hawaii and support. KUIC on Zoom.

Moring Chair Lowen, Chair Perruso Scott Saiki from KUIC . KUIC stands on its written testimony providing comments on this measure. Thank you.

Thank you. Kauai Climate Action Coalition in support. Climate Citizens Climate Lobby in Support. Greenpeace Hawaii on Zoom.

Good morning. Hi, good morning. Sorry. Yes, Dave Mulinix GreenPeace, Hawaii. We totally and completely support this legislation.

In order for this legislation to have the greatest impact in expanding clean and renewable energy, we encourage the Committee to remove unnecessary registration and reporting requirements to the PUC that places needless barriers on customers and being able to install plug in solars. As mentioned earlier, Brightsaber knows all.

If you have any questions about this, Brightsavers are experts on this. Utah has already passed the legislation and they are successfully moving forward with this system. One of the biggest problems in addressing the growing climate crisis is our ability to get off of fossil fuels.

And as we saw with fiasco with the city and county of their permitting process, they've delayed getting permits for solar panels onto rooftops up to a year and a half. They had gone with the free solar federal app plan. They would have you could have gotten it down to a few hours of getting permits.

So the unnecessary regulations and restrictions are blocking us from moving forward these solar apps and solar panels and the solar plugins and so you know, please consider that in this legislation and thank you so much for your ongoing efforts to protect our climate and our environment.

All right, we have 350 Hawaii on Zoom.

Can you hear me?

Yes, please proceed.

Okay. Good morning Chair, Vice chair, Members of the Committee, my name is Sherry Pollock and I'm with 350 Hawaii. We are in strong support of allowing plug in solar systems in Hawaii and appreciate the Committee considering this and the other plug in solar measure from last week's hearing.

Our members are very very anxious to see plug in solar implemented. These system are game changing. This is about cutting energy costs and reducing emissions by updating our rules to match the realities of new proven technologies. Plug in solar is simple and safe including safety features.

Electricity from back feeding into the grid during power outages, protecting utility workers from hazardous live wires. I encourage you, as other testifiers have mentioned, to talk to the representative who happens to be here today from Brightsaver who's an expert on these systems that can answer more questions on this.

We want to, basically we just want to ensure unnecessary barriers are avoided so everyone has the opportunity to greatly benefit from these systems and be able to install them. For too long the benefits of solar energy have been limited to homeowners with the capital to invest in rooftop projects.

Plug in Solar reinvents this narrative making it cheap and clean and viable for everyone which is sorely needed to make our electricity more affordable. So we strongly encourage you to pass this measure and keep the language free of unnecessary barriers and enable everyone to participate. Our written testimony goes into a little bit more details on this.

We just want to thank you so much for hearing this measure.

Right then we have Solar United Neighbors in support. Hawaii Solar Energy association and Support Chamber of Sustainable comments. Commerce in support. BrightSaver on Zoom. And I don't know if everyone on Zoom heard our request to be concise that we said in the start. Is she present? Yeah. Please go ahead.

Members of the Committee on Energy and Environmental Protection, My name is Hannah Ellis. I represent BrightSaver, which is a nonprofit dedicated to building the plug and solar movement in the US I'm testing to encourage the Committee to support HB 2486 to allow the people of Hawaii to access Plug in solar, saving money by reducing their energy bills.

This is a market driven solution requiring no tax credits or public funds. It's just cutting red tape systems installed according to safety standards. Safety standards, including in this bill, will not shock users, overload circuits, create fire hazards, or back feed during a power outage.

I want to clarify a point that's come up in other Committee hearings on similar legislation in Hawaii to address the question, is Plug in solar safe for utility linemen? If the grid goes down, will electricity back feed and potentially harm them? Yes, it is completely safe as soon as the grid goes down.

The Plug in Solar system has an inverter which is already Certified according to 1741. This is a required feature of this equipment and has been used for over 25 years in the solar industry. And it's impossible for the power to continue flowing when that happens based on this certification.

So in closing, I just want to say HB2486 offers a clear and equitable pathway to expand access to safe, affordable plug in solar rent for renters and houses across the Hawaii. We respectfully urge the Committee to support this bill. We're very excited to move it forward. Thank you.

All right, next up, we have Sierra Club of Hawaii in support. And then it looks like we have 27 additional individuals in support. We have Paul Bernstein signed up to testify on Zoom. Okay, please be brief. We have read everyone's testimony and heard this similar content before. Go ahead.

Okay. Aloha Chair Lowen and Members of the Committee. The only thing I wanted to say is I think the key with Balcony Solar in any of the bills is just to remove the Balcony Solar plug in solar from restrictions around feed in tariffs and interconnection fees. Mahalo.

And was there anyone else here to testify in person or on Zoom on this measure. Oh, I'm sorry. Stacey Alapai on Zoom.

Aloha. My name is Stacey Alapai. I run a program called the Second Life Solar and Battery project on Maui. It's a pilot program that we use plug and play batteries. It's kind of a step down from the balcony solar that you guys are using now.

And I just wanted to express my support for this because there is a clear need for more accessible solar energy and batteries. I did want to ask that you amend to remove this requirement to register with the PUC. That's not a mandate for any other type of generator.

And we often ask how many gas generators are running in our community and we have no idea they are. So if you are going to implement this mandate, I would ask that you also register gas generators so that we can track that data as well. And I also sent written testimony. So mahalo.

Thank you. Was there anyone else on Zoom or imprisoned to testify on this measure? Okay, please be brief.

I actually didn't know that Plug and Score was coming on. I'm a manufacturer in Kailua of energy products. We are actually integrating a plug in solar hat on top of an air conditioner to remove the energy use of that air conditioner from the grid. So this would be very, very helpful for us if this passed.

So we actually manufacture these devices here in Hawaii and that air conditioner, or airform as we call it, can connect to another device and provide more. It can provide a connection point for that solar into the air conditioner as well. So it'll be all integrated.

So I think also I'm getting caught up on here, which is that registration would not be good. I think it would create a lot of barriers to installing that system. So that's all.

Thank you. Anyone else here to testify on this measure? All right, if no one. Are there any questions? No. Okay. And we will move on to the next bill on the agenda. House Bill 1568 relating to energy. And this would prohibit the importation of or storage of LNG, construction of infrastructure to go along with it.

And we have a lot of people. All right, I'm not going to implement a time limit for now, but I am going to ask my Committee Clerk to set a two minute timer so that we all get a time check at some point.

And if people go for too long, then we will put in place a time limit. First up to testify, we have consumer advocate.

Board Chair, Vice Chair, Committee Members. We stand in opposition this bill and stand on our comments. Thank you.

Thank You. And then next up, Hawaii State Energy Office.

Chair Lowen, Vice Chair Perruso, Members of the Committee, Mark Glick, Chief Energy officer. We stand in opposition to this bill. I just want to point out that however well intended, we believe it will perpetuate use of oil for power generation on Oahu and subject us to oil price volatility.

And we believe that Bill doesn't also support the analysis that we've done that demonstrates this is the only option to be able to reduce cost of carbon. Thank you. Have to answer any questions you might have.

Thank you. Next up, Public Utilities Commission.

Morning Chair, Vice Chair. John Itumora, Chair for the Public Utilities Commission. We stand on our written testimony will be available. Questions.

Thank you. And then Hawaiian Electric.

Shannon Alibado for Hawaiian Electric. We stand on our testimony with comments and concerns. Thank you.

Thank you. Free Access Coalition in support, Clean the Pacific. In support, Pelani Farm. In support, Kauai Women's Caucus. In support, Green Party of Hawaii. In support, support Life of the Land.

Aloha Chair, Vice Chair, no Committee Members, Henry Curtis, Executive Director of Life of the Land. We find it ironic that the state would be suing the fossil fuel industry while bringing in a new fossil fuel industry. Mahalo.

Thank you. Climate protectors Hawaii. Ted Bolan in support. Chamber of Sustainable Commerce in support, Huli Pack in support, Sierra Club of Hawaii on Zoom. Please go ahead.

Good morning, Chair, Vice Chair, Members of the Committee, Wayne Tanaka with Sierra Club Hawaii. We're in strong support of this measure. I'll just really quickly say, you know, the opposition is saying, you know, not to take LNG or any energy source off the table until we have examined it. Right.

And I think what they're missing is that there already has been an analysis of lng. And what that analysis shows is that LNG will require placing a huge, huge liability and a risk on local residents like a H3 size liability. Right.

And the political and economic and technological realities that we know is that once we lock into lng, we're going to be stuck with this dependency on an imported fossil fuel pretty much indefinitely or at least until the climate crisis kills us. So please nip this bad idea in the bud and pass this measure.

And I'm happy to answer any questions you may have. Thank you so much.

Thank you. And we have Hawaii alliance for Progressive Action and support Sierra Club Oahu Group, Angela Hunter in support Greenpeace Hawaii on Zoo.

Good morning, Chair and Vice Chair Dave Mulinix, Greenpeace, Hawaii. Thank you so much for hearing this legislation. We're totally in full support. You know, it's important to note that moving from oil or coal is and then onto LNG is like jumping from the fire into the frying pan into the fire.

Over a 20 year period, the carbon footprint of LNG is 1/3 larger than coal. It doesn't make any sense at all for us to be thinking about using LNG here in Hawaii. We already know that it's destructive part to the climate and to our environment. And we need to move away from fossil fuels. This is ridiculous.

So thank you so much for hearing this legislation. Please pass it. As you can see, the majority of people in the state already are against is not popular and it's not going to really benefit us. And once again I just want to thank you for your ongoing efforts to protect our climate and the people of Hawaii.

Thank you. Then we have green 350 Hawaii on Zoom. Aloha. Can you hear me? Yes. Okay.

Good morning again, Chair, Vice Chair, Members of the Committee. My name is Sherry Pollack and I'm with 350 Hawaii. In the interest of time, they say that a picture is worth a thousand words. Please take a look at this picture. The image at the top is from just last week in Louisiana.

This is an LNG pipeline that exploded. What you see is a wall of flames. But what you can see is extremely toxic chemicals that are spewing into the environment from miles away, affecting the community that's nearby. Note that there's homes in the foreground of this picture. This just happened last week.

The picture at the bottom from a couple years ago. This is from Freeport, Texas. And again another explosion of an. This is an LNG facility there. This is a facility that Jarrah is a major investor in. And again, this is just from a couple of years ago.

I just, I just want to say thank you so much for hearing this bill. I think it's the most important bill that will be heard this entire session. Please protect us. Please don't let this come to our shores. You've said, you've read the testimony. Millions of reasons why LNG is a bad idea for Hawaii.

Thank you so much. And please, please pass this measure.

Thank you. And then we have Kupuna for the Mopuna in support, alliance in support, Hawaii gas in opposition. Ahahui O Hawaii in support. And JR Americas on Zoom.

Hi, Chair Lowen and Vice Chair Perruso. Eric Montague here with JR Americas. We have extensive experience with LNG with renewables and all other forms of electricity generation. We're in opposition to this bill we stand our testimony and here for questions if there are any. Thank you.

Thank you. And then we have Clint Churchill on zoom not present. Moanalua Garden foundation in support. IQ360 in person. James Pakele.

I submitted testimony that looked a little bit more pretty. I don't talk as pretty as the ChatGPT, but ChatGPT, you know, I probably about year ago I would have been in support of this. Today I am opposing it.

And you know, I've spent probably about the last seven years, I guess focused on affordability and stuff like that, you know, and I've heard a lot of talk about affordability. And in the past, I guess two or three months I had all these people come and talk to me about something like this and affordability.

And so I've been, you know, looking into a lot of this and I realized that, you know, we get one refinery that come here and they make all of the stuff that make money, then they sell them and at the very end, like the least, the least making money thing, this is what we power our electricity.

And I found it weird and I asked the question, I said if this lowest form, like almost a residual fuel is what we power in our electricity with how we paying three times the electric as everybody else? I said that's weird to me.

And then as I look somewhere and I realize that we have this thing called import parity pricing where because we only have one people that bring them in, we pay as if we're shipping the fuel in. So we're paying for shipping. That don't even happen because it's being created here on the island.

But because the only other option is to ship it in, that's the price we pay, which is wild to me. And then on top of that there's this something called ECRC which I just learned about a couple weeks ago called the energy cost recovery clause that allow that cost to be pushed straight to the people.

And I said what? So I look at my bill and I turn them over and sure enough says energy cost recovery. If that's not the highest price on my Bill, you know what I mean?

So not only apparently we supposed this is on fuel that usually still for about, I don't know, $10 under what they sell over here. We they sell them to ECO for 34 times the amount because they're the only ones that make them. Now I don't mad at the refinery. They're doing what they're supposed to do.

That's what they're supposed to do. They want business they're supposed to do that. And I'm mad at Hico, they operating in an environment that we wouldn't create. And so here I oppose simply because I like create an environment or at least have the discussion about what would happen when you introduce competitors into the market. Right.

And I'm not saying I like the refinery go away either because I would like the refinery to be strong and be a competing force that would keep the other one. You know, like we supposed to have harmony and balance that's supposed to keep each other honest. I like them stay strong competitors as well.

But you got to keep each other honest and we out of balance. And this is how we spend. We fuel our our energy with the lowest cheapest fuel that can get and yet we spend three times the cost of anybody else, almost the state. And so for that I oppose. Thank you.

Thank you. And then next up we have Maka Gibson Polluters Pay Hawaii Coalition Aloha Chair.

Lowen Vice Chair Peruso. My name is Maka and I live in Kaneohe and I'm here today because I strongly support HB 1568. After living in Oregon and Washington for 14 years, I moved home in the summer of 2023. In the past two and a half years I've watched our HECO Bill rise from about $100 to nearly 200.

Granted, my Ohana has grown since then, but this monthly Bill affects our affordability to live at home. For local communities, energy decisions are more about power generation. They're about our Kuleana to aloha ina and to protect the ability of our Kiki and mopuna to thrive here.

Our high electricity costs are driven by dependence on imported fossil fuels that expose us to global price shocks and long term financial risk. LNG is often described as a bridge, but it keeps us tied to the same volatile systems and asks our communities to pay for costly infrastructure that conflicts with our state's 2045 renewable goals. True independence.

Energy independence honors ina and community by investing in clean energy that is locally produced, price stable and resilient. We're already seeing this approach work in Hawaii showing that reliability and affordability can be achieved without new fossil fuel infrastructure.

This Bill helps us uphold our Kuleana to future generations by keeping Hawaii focused on an energy path that is affordable, responsible and aligned with our values. Thank you for your support.

Thank you. And then we have Earth Justice.

Hello, Chair and Vice Chair. My name is Harley Broyles. I'm an attorney with IRF Justice. We sat on our testimony in support of this measure. But I wanted to highlight a few things. The Green Administration waves the LNG wand as if this is what will save us from rising energy prices and our climate crisis.

But LNG is not and will never be the solution for Hawaii. Hawaii does not currently have the infrastructure for lng and this alone would be a billion dollar investment or even more. It will prolong our fossil fuel dependence and maintain or even increase our high electric rates which are already three times higher than US average.

And LNG comes with the risk of fire and explosion threatening the lives of our people and the health of our aina. Frankly, the Green Administration, the state energy office is wasting our time with this LNG scam.

This Bill is the legislature's opportunity to veer us off the dangerous path that the Governor has started, started us on and put us on the right track to investing our time, effort and money in renewables which will save our climate and rate payers money.

Please pass this ban to reassure the people of Hawaii that our government will keep true to its renewable energy goals and its public trust duty. Mahalo.

Thank you. And then we have Environmental caucus of the Democratic Party in support, Castle and Cook Homes in opposition, our Hawaii in support here in person.

Aloha Chair and Vice Chair Mahal for hearing this bill. My name is Evan Weber. I'm here on behalf of our Hawaii and our thousands of supporters across the Paina in strong support of this legislation and I stand in support today.

In the interest of energy efficiency, please pass this bill so you can save all of our energy time and resources. When the question, if the question is what is the best way to reach our 100% renewable energy goals and achieve affordable energy, we already have an answer. That answer is renewables.

We've seen it on Kauai, we've seen it in communities around the world. We see it from the strength of local businesses and entrepreneurs who are advancing towards a solution despite the lack of help that they frankly received from Hawaiian Electric, the state and the counties since the state made the bold decision to set us on this path.

And you know, we've heard kind of in opposing this legislation today, we saw it in the pages of the Star Advertiser that we should have this debate about what can be our best affordable energy solutions. The truth is we've already had this debate. When I read that opdad, I was like, is this Groundhog Day?

We had this debate in 2014 when they passed our 100% renewable energy legislation. We had it again and again when they passed climate goals and our 100% transportation goals. We had it under Governor Ige when people were proposing LNG as a solution at that time and he rejected it.

And the only real thing that has changed since then is that there has been some more people approaching this current Administration with the proposal to move forward on LNG and this current Administration has decided to give that more of a consideration. The affordability option of LNG has not gotten any better.

This is really a political thing that is before us today. I think for legislators, passing this bill would save us, would save you all a lot of trouble.

Do you really want to be the people that could have stopped the next multi billion dollar rail boondoggle, creating stranded assets that will end up burning both rate payers and taxpayers in the future by building out all this infrastructure that will ultimately be sunk in costs and when we have to transition to renewable energy if we're serious about those goals.

So you know, I insist, please don't give in to the politics, stay the course and pass this bill.

Thank you. And then we have Blue Planet Foundation.

Good morning Chair. Good morning Vice Chair. My name is Francois Rogers, I represent Blue Planet Foundation. We are a local nonprofit. We've been here since the early 2000s. We're also part of the team of collective nonprofits who passed the 2045 bill. In 2015, we've seen the trend of shifting of the energy portfolio in Hawaii.

And it is really saddening to see that we're trying to retreat to something that we shouldn't be going for. My testimony stands. We are against, I mean, we're supporting this bill. We're completely against bringing another form of fossil fuel. There were some people that mentioned the volatility of the price exactly the same.

As long as you continue to import any type of fuel into here, the volatility will keep on rising. This does not even put into calculation that once we build this infrastructure, we're going to have to continue to feed that infrastructure to pay off our bills and this will end up in the ratepayers bills.

I think we have to be mindful the solution is here today. We already know renewables works. It works in many jurisdictions. And as the Blue Planet team, I work with many countries around the world, reported 45 countries just last two years to learn from Hawaii.

So Hawaii, needless to say, is a leader, an example to the rest of the world. So by retreating and going in the wrong direction, we're sending the wrong message to the world that we are not leaders and we're not doing the right thing. So please make sure that this bill passes through and that this also happens.

Thank you.

Thank you. And then we have Stanford Carr in opposition and 113 individuals in support and eight in opposition. I think I also see Rick Rochel from HNEI here. Did you want to testify?

You know, I'll just say a few words. I've listened to the concerns about LNG and I share many of them. And in regard to the state energy office report, we've expressed a number of concerns to them that we think have impact on what the potential cost is.

That said, our studies and the studies of other people do indicate that even if we meet our aggressive renewable goals with the variable renewables, we will need to have a significant amount of firm power.

And at the current time, without other options being available in Hawaii that will require some type of fuel, it will be some type of imported fuel. I think there are issues that need to be addressed with the proposals for both types of green fuels post 2045.

That's the green ammonia in the HSEO report and the biofuels that he go proposal, whether it's availability or cost or both. And so in conclusion, I think we need to be very cautious about anything we do with LNG. And I don't believe we're in a position to make a decision now.

But I do not think we should close off our options because we will need to have a fuel that is available to maintain reliability of the grid in the future.

Thank you. And then I think we have one individual signed up on Zoom. I missed earlier. Taisha Kukuyakana on Zoom. Not present. All right, was there anyone else here to testify? Please come forward.

Hello, my name is Marty Townsend, and I'm testifying in sequel. Thank you very much, Chair Lowen and. Vice Chair Perruso for hearing this. I'm old enough to remember when NXTERA came here and tried to take over our utility and what the absolute waste of time and distraction that was.

And JR is lining up to be exactly the same type of activity. And I just want to encourage and reinforce that. You guys need to be the leaders here. Right. It feels like the Green Administration is going off the rails.

They're panicking at the last minute, and instead of staying focused and getting the job done, they are leading us off into the bushes. And I feel like it is your job as a Legislature to provide some guardrails to help keep them on the path.

I do agree with Mr. Bukele's testimony about the absurd prices that HECO is charging. And I think that is the fundamental problem that we need to look at when it comes to affordability. Energy is a public trust resource. It's listed in the Constitution, just like water.

We shouldn't have a company that makes such absurd amounts of profits and pays their executives absurd salaries be in charge of how that public trust resource is distributed. We should treat our electricity the way we do water, and the entity that runs it should be more like the board of Water Supply. Thank you very much.

Please ban LNG and keep us focused on our renewable global. Thank you very much.

Thank you. There was a couple other names on Zoom I skipped over. Apologies. So we had Kamala PI and then Stacey Alapai again. Please go ahead. Okay. Not present anymore. Is there anyone else here to testify? Please come forward.

Hi, I'm Josh Leong and we are in support of this bill. I wanted to give our perspective.

As local manufacturers, my co founders and my team have built a technology company here in Oahu that designs and manufactures energy infrastructure projects with products with a strong belief that the island can fully accelerate the deployment of renewables that will far outpace central fuel generation on every possible dimension from economics, reliability, weather, resiliency, safety, even beauty.

And I think, most importantly, speed to Deployment. So we manufacture air forms in Kailua. Strange. I know. Which are battery powered integrated air conditioner heat pumps that reduce the cost of installation and relieves one of the largest power burdens to the grid and helps create smarter, more resilient infrastructure to challenging weather events.

We could not build this without the incredible success renewable investments made so far here. And we are doubling down to supercharged this. Solar renewables are the winner of power generation but still held back by infrastructure, physical design and software to integrate them well.

Every day renewables, batteries and electrified products grow cheaper, more intelligent and more powerful, more integrated and more reliable than before. Because they are powered by the unstoppable momentum of the arc of semiconductor improvement.

They are improving so fast that every year fuel based central generation looks worse for the fact that it's central in an aging grid and worse as a baseload as it will never catch up on cost, return on investment.

And this just speaking from like a technology perspective, maybe more importantly, is that that technology investment we are proposing can return back to our community in a meaningful way. Brain gaining the island by keeping that intellectual muscle here and using it to build new products that adapts to our unique environmental and civic needs.

Such as converting every parking lot to solar battery plant that implements EV charging. Investing more into battery integrated agrivoltaics so that we can give farmers an economic hand and allowing everyone in Oahu the ability to become a renewable power plant to their community. Building more resilient microgrids across the island.

One year ago we were a team of two. Now we're a team of 20 engineers and designers in Kailua that produces one of the most efficient and intelligent heat pumps on the market.

Please keep your comments to the merits of the bill.

Oh, okay. Well, if you ban LNG, we can export products. And that's what we do is that we can export green technology off the island, we do it right now to California, New York City.

We also are one of the only US manufacturers to export to Singapore in Japan and it allows us to invest in local developers improving affordability for building and retrofitting housing. We work with commercial clients to reduce the cost of running their business.

And we even power our own industrial lasers using the same technology providing us the clean high power so to build more energy saving products. So there are much smarter people than myself that have done the legwork and homework on this. But I hope this was valuable as a perspective from a manufacturer that's based here in Hawaii.

Thank you. And one day next step to testify. Please come forward.

Aloha. Thank you for the opportunity to testify. My name is Keila Iconomo and I'm current resident of Kuku. I strongly support HB 1568. A defining moment in my life was witnessing the Kukuai Kabuku movement where hundreds of my community members were arrested for protesting the development of industrial wind turbines.

Watching my neighbors fight for their voices to be heard in decisions that shaped their community fundamentally shaped my own understanding that climate solutions need to center the communities that are most impacted and not replicate the same extractive patterns that created the climate crisis. This experience is why I'm testifying today in strong support of HB 1568.

Not because I oppose clean energy, but because I believe how we reach our 2045 goals really matters. And it's important that we maintain climate credibility as a state and move forward and not backward. Faulty has made significant commitments and sacrifices to reach our 2045 renewable energy goals. In Kahuku.

Our community has lived through the realities of large scale renewable energy and projects like AES and the wind turbines that were built there were a necessary step toward our clean energy future.

To potentially introduce LNG infrastructure would undermine all of that work and it sends the message that after everything our communities have shouldered to advance clean energy, the state would be willing to backtrack and lock us into decades more of fossil fuel independence.

It also sends contradictory signals to investors, developers and communities about whether or not we're serious on 100% renewable energy. This bill would protect against that and LNG is not the path. It would only take us backward. Furthermore, I think we need to stop fighting yesterday's battles and really focus all of our energy on what can work.

So HB 1568 provides that essential clarity for us to move forward with that our limited time and resources and focus on solutions that align with our mandate. Mahalo for the opportunity and.

Thank you. Was there anyone else here to testify that we missed in present or on Zoom?

Aloha Chair and Vice Chair Members of the Committee My name is Chad Conway and I strongly support HB 1568 to keep liquefied natural gas out of Hawaii. I began my career at Tesla working on battery and solar deployments.

This was over 15 years ago and I was able to experience and support hurricane relief in the Caribbean where solar and battery were a lifeline for hospitals, shelters and water systems. Just like here in Hawaii after the Maori fires. I went on the ground to support and found battery and solar powered homes became community living places.

I've seen firsthand that local renewables with Storage are most reliable infrastructure we can build on islands. We are told the LNG is needed because Oahu diesel and oil generators are aging. I agree those plants must be retired. But replacing old equipment does not require replacing it with another imported fossil fuel.

Solar batteries, geothermal, wind and demand response can provide the same current capacity. Faster, cheaper and with far more resilience. We already have proof Kauc now exceeds 70% renewable energy with lower and more stable rates than Oahu. Without lng, Maui and Hawaii island are planning to replace oil and clean resources, not gas.

Oahu is no different and it simply is just larger. We can do the same thing here. The investment math is clear. Building LNG would require roughly 2 billion for terminals, pipelines and new gas turbines. Probably taking at least 10 years just to deploy.

If that same 2 billion were invested in solar and batteries here, we could have 1 gigawatt of solar and 4 megawatt or 4 gigawatt hours of batteries. Enough for to get us to 75 to 80% of energy's needs here on the island. Without LNG and the benefits compound.

The fuel we stop importing becomes the capital to build the next wave of clean generation. By displacing Oahu's oil and not paying for lng, hundreds of millions of dollars per year would stay in Hawaii. Money that could finance more batteries, more rooftop solar and just save all of us money. LNG would do the opposite.

It would require weekly tanker deliveries and expose families to global price swings that have tripled and quadrupled in a single year. That continues to tie us to global pricing volatility. Resiliency is the most important issue. Storms are getting stronger and ports close when we need power most. Has anyone seen the harbor this week? The waves are crazy.

And an LNG system would create a new single point of failure on Terminal 1. One terminal one pipeline, one harbor. Local renewables keep the lights on even when ships stop. And they avoid the environmental risks of methane leaks and coastal fuel infrastructure. And Once we build LNG, it is nearly impossible to escape.

These projects demand 20 to 30 year contracts to recover. This is why Jarrah is so excited to invest. Because they want to tie us to a really long term contract and that we will not be able to get off of. Hawaii has a better path that is already working. More solar, more storage, more geothermal.

Smarter grids with controls. Please pass HB1568. Choose Clean, Local, Resilient Power for Hawaii's future. Mahalo for the opportunity.

Thank you. All right, anyone else here to testify on this Measure. All right, we will move to questions. I imagine we'll have a lot. I'm going to start and then we'll take turns, I guess. First up, consumer advocate.

I mean, just to level set the discussion here, can we talk about the cost of today's electric bills and what makes them high?

In Hawaii, a big component of the electric bills at the moment is the expense. The expenses is imported fossil fuel.

So what are the cheapest forms of energy on the grid?

Historically, it's been renewable energy most recently.

What's the cost per kilowatt hour on average of utility scale? Solar, for example.

I don't have the exact number. It varies by island. But I think what we've seen coming in has been most recently, at least.

For Oahu, we're talking about Oahu, 15.

Cents, but Oahu more recently, 23.

And what is the cost per kilowatt or what's the current cost of oil.

On a marginal cost basis? I don't have a number off the top of my head, but I believe. I don't want to speculate. But it's lower than that currently.

Well, you don't know what avoided costs.

Not off the ecrc. I could look at.

The gentleman who mentioned the energy cost recovery on the bill. That's the fuel pass through. What is that exactly?

That's a mechanism for passing the costs of electricity generated while the fuel prices generated back onto customers.

So that's a fuel cost for fossil fuel or that's the cost of the PPAs?

I believe that includes both.

Okay. And your testimony implies, I mean, I'm curious, implies what seems like maybe a foregone conclusion that this investment will.

I wouldn't say it's a foregone conclusion. I would say we have to. This is to leave options on the table to review before the Public Utilities Commission and our office.

Okay. That wasn't. I mean, that's the testimony I think I would have expected, which would be. It's not necessarily the right policy to completely eliminate options. Agreed. I would say that that wasn't how I read your testimony.

I guess to clarify, I would say that it would be an application that would come before our office and the Public Utilities Commission that would have to be reviewed to see the Public Utilities Commission whether that's in the public interest. Ours obviously in the public interest and the ratepayer interest. And we balance different aspects.

Safety, reliability and resilience. Cost effectiveness and affordability are big things. Customer equity and progress on our state's clean energy and climate goals. And we still expect to see progress on the rps. RPS is the one.

So how much of those four considerations that you're looking at and the PUC is looking at would include, I mean how sort of flexible is it open to interpretation to include the consideration of sort of the opportunity cost or what risks it poses to the future to lock in to a long term contract in the present for bringing in a new fossil fuel source and building out an all new infrastructure to accommodate it.

I think in terms of, I think what you're getting at is there's a sunk cost and we have a big thing that repairs on the hook. For any contract that would have to come before us, we would need to make sure that there was a plan to utilize that resource.

And I think what we're hearing, what's before us, at least on Oahu there will we need firm thermal renewable that has a fuel source that has a good degree of availability. So what do we do about that? And I think that's what we would expect to see in a contract.

We would expect to see a contract that delivers the month savings to customers, actions to reduce risk that customers are going to be on the hook for paying for a resource that wouldn't be used.

But I would say we, we do need modernized thermal generation and how we would handle that risk that would be baked into our review and we would expect to see contracts that dealt with that risk and dealt with better. We would expect to see more cost effective, better pricing.

So to be clear, as you're discussing the impact on ratepayers or the affordability or the potential for savings, you haven't seen any numbers that we haven't seen. Have you seen.

I haven't seen a proposal proposal.

Have you seen anything put down on paper that JR is willing that would be tied to submit to if you approved it? Has there been anything that you have access to that we don't have access to?

I don't know what the Legislature has had access to, so I don't know exactly. Well, I mean we've seen rough numbers, I don't know off the top of my head.

Okay, so right now we still have no way of knowing without seeing solid numbers, we have no way of knowing what the considerations are on the question of the need for modernized generators. Are there ways to accomplish that without it being tied to LNG? I mean cannot heco. That's not part of the plan or Bernie?

Well, it depends on what's the fuel, right. And what's the cost of the fuel. So there's different fuel options available. There's continuing with residual fuel oils, which we have now, or you could burn biofuels or biomass as an example.

But my understanding is that the more modern, more flexible generators will accommodate many kinds of fuel.

Yes. And those are the things that we would be looking for that the technology, any technology that comes before us, we would want to make sure that it has fuel flexibility or at least a plan within how those generators are built, maintenance to adjust to renewable fuels, depending on what that might be.

Because we don't have a crystal ball to know what in 2044 look like to have that transition over onto whatever that thermal fuel is. Right.

But the investment in new generators would save. Could save customers a lot of money in efficiency, no matter the source of fuel. Right. Even if it would get.

There would be a gain if investing in more efficient generation because you would burn less fuel.

And a more modern, more efficient generator would allow more flexibility.

So you would have more flexibility in operating the units and presumably hopefully enable more renewables to come onto the system.

All right. I have more questions for you, but I know others do too. So I'll start with my Vice Chair.

Okay.

And also my question is for you. So thank you for staying up there. So I'm curious if in your estimation, or you know, as things stand now, if the LNG infrastructure becomes obsolete. Before. Amortization, then that financial risk is borne primarily by shareholders or by ratepayers.

We don't know the exact amount of risk that would be borne. So the infrastructure that would have to come online. It depends on what the proposal looks like. We don't know at this time. So who builds it depends. It matters how they determine to recover. That cost ultimately matters and what the structure of the contract looks like.

But I would imagine if it was a business, they would at least attempt to recover some of that.

Right. And then I guess I'm just to follow up because it's my understanding with the return on equity policy with private energy companies, shareholders benefit they have above a 9% return on their investment, which is. Sorry. On infrastructure investments. Is that accurate?

That's roughly. I mean, we would prefer to see lower, but yes.

So and then given that return on investments, their profits, then the remainder of the cost, the financial risk would be borne by the ratepayers. Is that accurate?

Yes. If it's a utility that has, that owns that infrastructure and has ratepayers, then the S that would get passed through presumably get passed through the rates.

Thank you. I guess my only follow up question is whether or not. Your consumer protection analysis includes things like methane leakage, fuel price volatility. Yes. Carbon risk. And I know you talked about some of those things a little bit, the HRS269.

Yes, those are all part of our analysis. The factors that we weigh that. That falls under the climate progress under climate goals and the state's cleanup controls.

And you won't be able to conduct that analysis until you see a contract.

Well, firm numbers before us. Yeah. In a proposal that would go to the Public Utilities Commission.

Thank you. Thank you, Chair. Okay, I'm going to do a quick question. Have you considered impacts to neighbor islands.

In terms of the climate aspects?

Is that what you're in terms of if, for example, PAR goes out of business and all the fuels are imported, what impact will this have on costs on all neighbor islands?

We haven't done that specific analysis, but it's something we would be concerned about if there was a business that was going that falls a little bit about all the things that come before our office. But it's something, it's a factor that we would consider, I think, in our decision, in our recommendation.

So you're not sure you would consider if you were analyzing top cost on customers, you would only look at Oahu.

And not consider neighborhood. If there was a linkage between, a direct linkage between the impacts to neighborhood.

I mean, what kind of. It could be not only direct, the cost of direct imports, but all the downstream products that par produces, propane, etc. Anyone who uses those could see their cost increase as well. Potentially. Potentially. Okay. Would you support. I mean, would you support.

I guess, given the many questions that we have about, you know, the alternative fuel report from HSEO sort of indicates that all this infrastructure that might be built specifically for LNG pipeline, etc. Would be able to be used for some other type of fuel source come 2045. There's a lot of questions about the realisticness of that claim.

Given that, would you support the idea of requiring that any proposal brought to the Commission for approval would have to include all the entire costs of fully amortized infrastructure by 2045?

I can say we would certainly any application we would, we would ask for that information as part of the process, and I believe PUC would too. I don't want to speak for them, but it's certainly helpful to have as much of that information upfront as possible.

Right. And to prevent customers from being stuck with the cost of stranded assets. Okay. Let's see if other Members have questions. Okay. Vice Chair, go ahead. I'm good with my questions. I'm fine. Okay, let's see. Get up here. Next, I guess, at the energy office. And thank you, Michael.

I'm just curious, for the alternative fuel reports, how was that funded?

Alternative, that was paid through coronavirus funds. It was provided by the government.

Which funds were those specifically?

They were. There was a coronavirus, but I can get you the exact number.

Yeah, I'd like to know that exact line of exactly how that got funded.

And it's also my understanding that JIRA did their own study in advance of the Energy Office's study to look at Hawaii and that that was brought to the Energy Office and that maybe kicked off your decision to do an Energy Office study, is that correct?

That's somewhat correct. I mean, what happened was that Dara had approached our office and I think they had been making the rounds about being interested in making an investment into Wine Electric and had talked about the possibility of natural gas in June of 2023.

And I rejected that, but told them that if they were serious about it, they should do a study with someone that actually has done studies on our electric grid in Hawaii and then come back. And then of course, in August 8th, we had the tragic wildfires.

And shortly after that, JRF returned and said that they were interested in providing funds to cover liability risk of the utility. That gave the whole thing a new complexion and started to be deeply interested in that. Anybody that was willing essentially to help maintain operations of our largest utility was something that we were interested in.

And then later in the year, they actually did release a report and basically that showed that the path that we were currently on under the integrated grid plant batteries and biofuels would be extremely costly.

Just to clarify though, your. Your report followed on JIRA doing a report, and then the Energy Office decided to do a report. How different were the conclusions of the two reports?

A really good point. The Governor basically said after seeing Jarrah's report, asked me to actually independently do an analysis. And the fundamental difference between what Jarrah did, which only looked at the fuel, was that I knew that we had a power plant deficit issue and we had aging power plants.

So I insisted that our analysis also include the power plant issue, which needed to be changed. Fundamentally needed to be changed. And that was a complete sort of change in the whole approach.

And so we had the look at the power plant system, replacing that with extremely high efficiency plants and the idea of removing oil price volatility in the system. And then we also decided that we would only limit that to Oahu.

Okay, let's. Okay, well, I have two questions then. Did you consider the cost to neighbor islands at all?

Yes, absolutely.

Where is that in the report?

It's throughout the report, in fact, the initial report, in fact, some of the initial drafts, of course even looked at natural gas beyond Oahu and we decided to not do that.

And if you look into the appendices from Fax Global Energy and also from our technical analysis of the cost comparison, we looked at essentially what would be the impacts on the refiners of our loan refiner and that we determined that through independent energy services, ies or through a combination of them providing or expanding their terminal system, which they currently have, they'd be able to supply all of those fuel products at similar prices to what we have today.

But it also gave the opportunity for para to retool and to be able to turn itself into a terminal as well or to make upgrades in its refinery to be able to make biofuels.

Okay, I'm not convinced all the downstream costs of having our one refinery close have been fully considered, but that was.

Looked at by Fax Global.

I keep hearing this claim that gas prices aren't volatile.

And I think natural gas.

Yes, I feel like it's widely understood that gas prices are volatile. I mean they are tied to the cost of fossil fuel, albeit they are less than fossil fuel, but it's a curve that mirrors. So that implies volatility. And by nature they would be tied to a global market subject to impacts from global events.

Many kind of things that are fixed contracts for renewables are not. So you know, while we can both agree those prices would be lower than the price of oil, I think these claims that it's not volatile are. I'm not sure how you can justify saying it's not volatile.

So I'm glad you asked that. I'm glad you asked that question. I think that involves, I think the rhetoric around this issue involves a kind of a misunderstanding.

And I mean I just. Are gas prices volatile or not.

Natural gas? Well, if it's under a fixed contract.

If I say gas, just assume. I mean lng.

Yeah. So power plant contracts for power for generation are not purchased at the spot market. The spot market can be volatile.

So you would say the gas costs for LNG would not be a pass through to customers the way that that oil is. The contracts would do. We know the contracts would be structured differently.

So the contracts will be structured as power plant contracts restructured on a fixed price, which could be indexed to oil if you want to kind of take advantage of the differential in that price. But it can also be purely on a fixed contract which would guarantee differential always so from oil. So it's essentially.

But it would still be tied to oil. I hear you say it could also.

Be on a purely fixed price, which essentially if oil would drop significantly, then you wouldn't be able to take advantage.

Of that fixed price. The same as our renewable contracts.

Same as the renewable.

Okay, so we could, we could require that. We could require a fixed cost.

You could, but again, getting anywhere where you set in advance requirements that don't look at market conditions may very well shortchange the consumer. So you should give our recommendation. We give the commission the ability to.

Hey, but then you have to decide because either you have a fixed cost contract and maybe you are, maybe you aren't missing out on some potential benefit, or you don't say it's, you cannot say it's not volatile.

Certainly when you have a blended contract that has some indexing involved in it, it still has been demonstrated through historical look at contracts to be less volatile. Much, much less volatile in oil contracts.

Less volatile, but still volatile.

If it's a blended contract, but you can also make it a fixed contract. So that's just something I think the commission and the consumer advocate would review.

When these proposals come in frequently, contracts also exist that are not either blended or fixed. I mean, on the mainland, I don't know. Do you know contracts for supply power plants supplying energy from natural gas would be a contract that. Would it always be a blended contract or would it be a contract?

There could be instances where there are contracts that are just directly tied to the cost of oil or the cost of LNG on the market, which is tied to the cost of oil.

Yeah, I mean there's different models for this and it's done differently. Companies make a choice or utilities make a choice of what level of benefit they want to bring consumers. And so they make a value judgment on whether or not they'll do a blended contract or a fixed contract, which may be a little bit higher in price.

Right. So a fixed contract or a blended contract would provide more certainty but maybe slightly higher prices or a contract that didn't include. That would be volatile, would include the volatility.

There would no be. There would be not a third. There's not a third option. No utility buys on the spot market for their large natural gas needs. That doesn't happen.

Okay. Okay. All right, thank you. Other questions, Members, I have a follow.

Follow up, a quick just clarification if you don't mind. Sure. So just to understand the timeline better, because I hadn't actually considered this before. So you're saying that your report came After JIRA had already approached you, hadn't you had substantive multiple interactions and they had offered financial partnership or support?

Yes.

Okay. And then to.

To the utility, Correct. Not to the state.

You saw that as a benefit to.

The state, saw it as a potential benefit, something that needed to be explored. We certainly were not going to say, go away, that's fine.

So, and then I'm curious about the. You yourself did not write the report that you're talking about, correct?

It was my office. Yes.

So your office did the research, the writing, the analysis.

We had a contractor as well. We had multiple contractors. Because it's a very, very complex issue. But Monique Zanvest, who's our head of energy efficiency and renewable energy, she's an environmental scientist, and actually she went into the project as a skeptic on natural gas, was the lead on the project.

So she was a lead. But did you have any consulting firms that specialized specifically just in lng? So LNG consulting firms. Were any of those kinds of firms involved in that study?

Well, engineering firms that had expertise over all of this. So HDR was a principal contractor in this. And of course, they have local experience. They also understand siting things offshore. So we wanted to find somebody that we wanted to work with, somebody that actually had that experience and the knowledge of permitting processes and all of that.

And the report was meant to. Or the title of it says alternative fuels, but did you.

And Energy Transition Study.

Okay, so. But you didn't really look at renewables and increased emphasis on storage. You can consider those as pathways. Is that accurate?

No, we did. What happened was we did a complete, robust modeling of all the alternatives. In meeting and potentially exceeding the renewable portfolio standard, the Governor actually made it clear that he wanted to lower costs and lower carbon, but only if it helped maintain or accelerated our renewable transition.

And so we modeled it so that we looked at every single target and that we had to meet those. So we fixed the model to say, you cannot go beyond that, you cannot essentially circumvent that, or you can't create solutions that would back out renewables.

And we also understood that there, like even in our analysis, we didn't even take consideration of things we know today which make it even more difficult, like the 400 megawatts of offshore wind that has now been taken out of the integrated grid plant. So that even makes it more challenging to meet the renewable objectives. But.

And at the same time, we conducted meetings with stakeholders to find out how and where could we accelerate the renewable transition. And from that, we created Executive Order 2501. And that has a whole series of things, and particularly on Oahu, about increasing rooftop solar by using all of the roofs.

And then we pose the challenge to the commission to help us review what it would take from a rulemaking standpoint and all of that to do that. So we were trying to pursue this parallel path to ensure that we continue to push ahead aggressively on the renewable front. Took all of the neighbor islands off.

In fact, on Executive Order 2501, we said you can do it sooner. You can actually achieve 100% by 2035 on the neighbor islands because of, you know, the land ability to place more solar and batteries and the geothermal opportunities which we were all promoting.

It was only for Oahu, which has this problem that we saw is that you will most certainly perpetuate the use of oil for that firm power that has been discussed that thermal generation need if you don't essentially find something to replace it with.

And only in that time period between now and 2045, we designed the analysis to show what options. That's the alternative fuels analysis portion.

Thank you.

Yeah, so that was the methodology follow.

Up question a lot. This has been discussed in several occasions already. But a lot of the assumptions in the alternative fuel report hinge upon the timeline and being able to deploy this infrastructure in a timely way.

So question if there are delays based on permitting, supply chain litigation, what in your analysis is the amount of delay that can still hold up and be cost effective for customers? I mean, if it's delayed by one year from your predictions, from by two years, by three years, like what's the breaking point?

Well, our ideal scenario was that by 2031 infrastructure needed to be in place. So that gives us a timeline, you know, from today of five years. It's a very difficult, challenging timeline, as we know, for anything. So that you want to build in.

Hawaii for building a pipeline down along the freeway? Yeah, yeah.

zero, yes. So the notion is that at least under a reasonable time frame, this shows permitting under normal kind of permitting time frames, expectations that that could be achieved if things proceeded, let's say, by the end of the year, that could be.

So the question is what is the, what amount of additional delay beyond the five years can your assumptions hold up to?

Well, under the analysis that we did, and I call it a straw mat that was in where we had proposed the new power plant at the AES coal site. And again, the power plant would be able to. This gets back to your point about stranded costs.

We believe that much of the analysis and Much of the infrastructure would not be stranded cost.

So the power plant though, is what, what, how many additional years of delay can your assumptions hold up to?

That's right. But I'm saying the part that will.

Not be affected, you're saying not all of it is a stranded cost.

That's right. So some of this will not be affected by that timeline.

Understood.

So, but in terms of the natural gas contracts, it's. We made it based on assumption that you could have a 15, a 10 to 15 year kind of contracting period that would be viable for these fixed price contracts.

So 10 years would be the. That's what you're telling us is on the minimum 10 years.

It's not. We would love to see proposals that showed whether or not that is accurate, whether it's 10 years or whether it's 15 years or whether it's 17.

I'm just trying to get at hypothetically, something came before the PUC and was approved and then that's locked in and now all the energy and, you know, attention is going towards making that happen. But there's litigation and there's supply chain issues and there's permitting issues and there are delays.

And then it gets built five years later than you expected or maybe more. Are we stuck with it?

So again, I think.

And who bears the cost of that?

I think it's a wonderful question. And what we've seen since we released the report back in January of 2025 is that there have been now new scenarios that actually make a lot more sense than what we proposed from the private sector.

And it definitely shows that that time period, there's a greater extension of that time period that this could be built. That could still be in great financial benefit to the ratepayer, but it would.

Be less of a financial benefit to the ratepayers the longer it takes the savings for ratepayers to decrease.

Again, that's.

I mean, come on, just. Is that accurate or not accurate?

Again, some of the information that I've seen in the last couple weeks demonstrates that it's actually not a significant cost difference.

Okay. All right, thanks, consumer advocate.

Just same question, I guess in your just big picture gut reaction, if there's a contract that gets approved and the assumptions it's based upon, or that something gets built in five years and then it takes 10 or more years to build before the infrastructure actually gets deployed, is it as big a savings to customers or how does that.

Who bears the cost of that?

My assumption is it would be lessuel savings because the area under that curve where you're replacing fossil fuel fuel oil with natural gas presumably at A. Cheaper, which we want to see more. Cost effective price would be decreasing.

Okay, thanks. I think for hnei. You I have also reviewed HSEO's Alternative Tools Report.

Yes, we have.

Yes. And I think a lot of it depends on a commitment to a certain volume. Right. A lot of the cost effectiveness depends on there being a certain volume of LNG that's able to be off. Off taken in the state.

That is one of the factors. Yes.

So I guess in looking at that, I guess similar question to what I asked previously, if that. Well, actually no, let me not confuse the two.

I guess in looking at that commitment, if there was a contract in place that had a commitment to a certain metric that related to volume, what kind of risks could that pose for the state in the future?

What kind of sort of opportunity costs would there be in being locked into one fossil fuel source for presumably at least 15 years? Right is what we're hearing, but possibly longer.

So I've not seen any new information that state energy office was just referring to but in our analysis and the facts report that was in the appendix showed that that given a certain amortization time there was some total amount of fossil fuel that allow you to recover that cost.

That was one of the factors in that cost recovery. You've already identified some of the others. You know what happens if there's timing or other changes. Anything that would reduce that number would either reduce the cost benefit to the consumer or conceivably even change it from a cost benefit to a more expensive source of power.

You can't look at just the quantity by itself. You really have to look at all the other assumptions in the model and look at the number of integrated scenarios.

And I think one of the things that the state energy office looked at, you know, a word to get overused maybe, but looked at bookends, they looked at the state energy or the electric company's IGP plan that was developed with certain constraints and guidelines and did include a conversion to biofuels, which I agree is likely to be expensive, but that was the option.

And on the other side there was a conversion to a lower cost ammonia, which in HNI's opinion or my opinion for this purpose is unknown at this time. I'm not sure we even need to make that distinction into two studies.

If a fuel is available for an engine that runs on LNG, it would probably work in an engine that runs on oil as well. So there are a number of elements of the assumptions that are all linked together.

So quantity of LNG is certainly important, but it's only one of three or four or five factors that need to be looked at in an integrated fashion to understand the impact.

I mean, so I guess in what ways does your analysis differ from the energy Office in terms of conclusions?

We've not run the full analysis yet, but areas that we think need to be looked at more carefully. I've already identified. One is the assumption that 11 pathway would go from oil to biofuels and the other would go from LNG to a lower cost green ammonia source.

We think that can be looked at on an entirely neutral basis and have that not be a factor. Another one that has already been asked by the Committee, a significant amount of the fuel gain can be achieved by repowering and putting in more efficient units, whether they run on LNG or oil.

But again, that's not a simple answer. You have to look at the entire operation over that period of time. Because you put a more efficient engine, you're going to save fuel, you're going to save emissions, but it has to be tied to the total cost of putting those generators in.

So it's going to depend on, you know, the infrastructure you need to put it in, the cost of actually doing that conversion, the fuel transport. So again, it has to be an integrated study. Saving fuel can be achieved with either one. But it's not just saving fuel doesn't necessarily mean saving money.

And then this proposal that was in the alternative fuels report that the infrastructure, the pipeline infrastructure that's specific to LNG would then be reused for hydrogen, ammonia or some combination. I mean what there's, the future is far away.

So I guess we don't know what technology advances there will be either in that or in the price of other types of renewables coming down, et cetera.

But I mean to make that assumption at this point, what's your take on how realistic that is and whether it's even there would even be fuel available or that it would really be renewable?

You know, I will make my comment and stand to be corrected by state energy office. My understanding was that the offshore infrastructure, the floating REGAS facility and the underwater pipeline for LNG was not intended to then be used for the future fuels analysis.

Now I may be wrong about the well, the re-gas facility would not be needed if the fuel of the future is a green ammonia, that's a liquid source. So that, you know, to my understanding would be handled similarly to any other liquid source with some additional Requirements, maybe some. Also some relaxation required because it's a liquid fuel.

So I'm not entirely sure exactly what. Components are you on a cost?

Right, right. But on a. I guess on a cost basis to. I mean, if someone proposed having a pipeline, I mean, what's in the alternative fuel report is a transition to hydrogen.

Yes.

I mean, is that something that you view as realistic?

I think it's questionable at best. We've been working in that area for a long time. Certainly people are proceeding to try to make ammonia. And my assumption is that hydrogen would be a green ammonia source, not hydrogen per se. The efficiency of that production process from renewable electricity to ammonia back to electricity is very low.

It certainly is technically feasible, but I think the costs are very uncertain at this time at scale.

High cost, higher cost than biofuels.

I think they're just unknown. Yeah, I don't think we have any idea, but high cost is certainly a possibility.

Okay. And I guess have you, or would you think it would be valid to do some kind of analysis against possible other future alternatives? It just seems like this discussion is very much centered around comparing a future of continued use of LSFO versus switching to lng.

And we do have interest in investing in trying to see if there's geothermal resources available as well as continuing, you know, opportunities to bring more of the variable renewables online and improvements in technology that would make that more possible.

So do you think that adequate analysis has been done of all these possible future pathways next to each other? Are we having blinders on by only looking at these two alternatives?

Yes. The short answer is yes, I think we have our blinders on. I think there are other scenarios. Even within the LNG to oil scenario. They're the intermediate ones of repowering units and looking at it with oil versus LNG and doing that comparison. There's the more equal comparison of what that future fuel might look like.

Are they applicable to both oil and the LNG pathways and what are the implications of that? And then for both, if we're, if we're saying we're going to contract or we're dependent on a certain amount, we do have leave open the option of what if.

Even if there's something as modest as 100 or a couple hundred megawatts of geothermal that does make a significant difference, similar to whether geothermal will be there or not. There is, in my opinion, a lot of uncertainty on our trajectory for meeting, if you want to say it, our variable renewable goals getting to 70%.

I presented some numbers at the Hawaii Energy Policy Forum that show we need a lot. Not only do we need a lot more utility scale solar, we need a lot more rooftop solar. And the numbers show that we need a faster growth rate than we currently have. So we need to double down on that and do that.

But even with that, there's uncertainty meeting that if we don't meet it or it goes a little slower, that's going to require more fuel for a longer period of time. We also have uncertainty about what the actual load will be, and that could drive it either direction.

So what we're going to try to do in a study is to look at what the implications of each of these changes are to identify the risk and the magnitude of that risk. And then ultimately it would be the policymakers that have to decide which rift has sufficient benefit that it's worth taking and which ones may not.

Got it. Okay, thank you. All right. PUC. I guess. Just going back to the prior conversation about if a contract was approved and then there were delays, how would you, in the process of considering that approval, protect ratepayers from bearing any of those.

Costs, if there are any. Well, if there are delays in the contract itself.

Delays in the execution of building infrastructure?

Well, we typically look at that part of the analysis, you know, in terms of building in whether we still want to approve it or not. You know, I mean, the delay also factors into the cost and the benefits too of that. So I mean, it would depend how long the delay is.

Well, but you wouldn't know in advance how long the delay was. So how are ratepayers protected?

Yes, take one. Okay, so thanks, Chair. So part of that is going to be, you know, we look at the PPA and we approve the PPA. So if the, if the, if someone outside party, IPP decides, independent power producer decides, hey, we want update pricing, you know, the cost of balloons. We want to get recovery.

You know, we have the opportunity to review an updated PPA, amended PPA, and at that point in time we say, hey, you know, the prices are too high and we could just totally reject the new, the new amended PPA and say, you'll either take the first one or, you know, so get away.

Yeah. So once the PPA is approved, right. If there's any change in amendments to substantial material changes, especially like a price or anything like that, they have to come with amendment. We have to prove that.

How would the analysis, I mean, what, how would it differ? Because my understanding is JR wants not just to supply fuel or cell power, they want to build the new, they want to build the whole new power plant.

So in that case, you know, and of course we don't know what it's going to look like because they have not come before us. So I want to revise with that real quick. But in that case, I imagine they would put in their proposal into the PPA.

They'd be able to terms of PPA so that they would cover the cost of plant, cover the cost of the fuel, perhaps cover their ongoing expenses. So that would all be covered within the. Could, sorry, could all be covered within the PPA itself.

So they would, you know, if they had delays that resulted in increased costs, changing terms, as Anand has said, you know, that would be subject to initial approval from us for us Second Amendment, third Amendment, fourth amendment to the PPA.

And we've had that in the past where we had to, you know, had amendments.

How does it work with the competitive bidding law? I mean is that just what just. Yeah, as a General question, I mean what parts of this would be subject to competitive bidding? Or how would. How. What's the mechanism by which this entire proposal would land in the lap of the PUC?

So typically, you know, there's an RFP, right. A request for proposal and you would have everything. They come to us and we'll approve the RRP structure and then the utility will issue the RRP and then through that process, you know, they'll receive bids.

There's actually an independent observer there too as well and sometimes an independent engineer as well to help the cost. And then it goes to that and then they, the utility will eventually have to select based on the RP and RP includes price and non price criteria.

For this type of project, for this type of proposal. Would there be an rfp?

I believe so. It should be. I mean we haven't done it yet. So I mean I would think so. I can't say, you know, sure, maybe.

But you would think it would be required by law or not required by law.

Well, the, the utility at any time can ask for a RFP waiver. So I mean again, we don't want to be prescriptive to utility how they want to provide their application. You know, they could seek a waiver they could put in the RFP framework, you know, through our, whatever RFP framework we have going forward.

You know we currently have that framework in place at times has been very successful. So we would hope they would do it through the RFP framework.

Yeah, and they can request. I mean there are certain requirements. If it's certain, above a certain amount, they have to ask us, you know, for approval. You know, and also for an RFP, it depends on the megawatts too. So to come to us, they would have to come to us, you know, for approval. Obviously, most likely for.

Yes, I would think so for any type of large scale projects, either through a docket application or through an rfp.

Okay. I mean, there's no commissioner here, I guess, to answer this question. But if it happened, right, There was a PPA and then there were delays and then they came back and asked for an amendment to the PPA and then the cost went up considerably. I mean the savings would be less.

What was sold to the public would be changing or potentially the entire project could fall through.

I mean, how would all of this impact in the meantime, in the years that had elapsed since that initial contract was approved, which would probably be quite a process in and of itself, what would, you know, how would the commission continue to push forward on deploying renewables, on making HECO do the best that they can and bringing their generators, modernizing their infrastructure and providing affordability and the best value to customers?

I would say that case would apply to any project. Renewable project, lng, We've had that renewable projects, we have delays with stage 2 RPS, lots of days supply chain issues, delays and all that. So we've had that even with renewable energy projects like utility scale too. So it's not just for, you know, potentially LNG project too.

What is the commission doing to address that issue? I mean, how is the commission looking into what are the issues with delays in these projects, particularly as it relates to HECO and addressing that issue effectively.

So I know when we developed, when you go through an RFP process like the IGP regulation now Integrated Resource Plan, so that one, we are making sure that when they develop the RFP that we have built in mechanisms to kind of expedite the process if possible.

Does that happen? Do you feel like there's enough accountability? Well, again, there's some external factors connection. That are being appropriately addressed by the utility. Is our sense of, by the PUC, is there a sense of urgency?

Oh yeah. I mean we, I mean we, if you look at inclinations too, we were pushing forward more renewables, you know, in the future. Right. So I mean, not just, you know, at the utility scale, but at the DER level too. At the rooftop too as well.

I mean that's part of the challenge too because you know, we have, what.

We see on our end is a lot of nice things being said, but not enough action being taken to hold the utility accountable for the role that they play. And you know what is sort of effectively laying the groundwork for us even having this conversation.

So one thing we also consider into is in our PBR docket we have PIM sort of performance incentive mechanism. That's where something we can actually put in there too. We have to stick in the carrot as well too. Right. That's being considered as we evaluate the next multi year rate plan.

Well, hopefully there's something strong in there and it's not too little too late.

Definitely be considered. Yeah.

Okay. All right, thank you. Any questions, Members? I guess from. I'm not sure who to ask this question of maybe Justice, I don't know. Or Marty or someone. Oh, someone from the PCC, maybe Henry, I don't know. Wave your hands if you feel like you can answer this question later. I'm just curious in looking at. I.

Don't know how much the situation in Hawaii is comparable to other jurisdictions because we're tip of the spear in a lot of the energy policy stuff. So it's hard to say.

But I'm just, I think there's a lot of concern that locking into a long term fossil fuel contract now, given our goals, et cetera, will create will lead to some opportunity cost and lack of focus on pushing where we should be pushing and also lead to a sort of path dependency.

Like there's a fear that, well, we'll get used to this, we'll get locked in and then there'll be an effort in the future to roll back our renewable energy goals, et cetera. Have you seen any evidence of this happening in other jurisdictions?

I haven't seen evidence of that in other jurisdictions, but I've seen evidence of it in this jurisdiction. I mean there are already bills being introduced to try to roll back our pss, viz. And you know, you talk about the sweet spot, spot for the HSEO report. Right.

You did a really good job of helping to outline and just in this hearing how narrow of a needle head that they're trying to thread right here. And so once we don't nail it and get it through that hole, the pressure to, you know, it's like a snowball. Right. The more momentum you get going in that direction.

Right. The pressure to just, you know, push it back 5 years, push it back 10 years will be immense. And especially when you have a foreign energy company like JR who's going to make all this money off of it, they will have an incentive to lobby to make sure that it happens. And they are definitely investing.

They've hired two or three lobby firms to help them get this done. It's a serious risk. About other jurisdictions?

I don't know other jurisdictions per se, but I know what I understand from. This model is that the investment we're making in LNG is to then convert to renewable hydrogen and renewable ammonia, and that that conversion makes the whole thing economical, with the understanding that those two future technologies are unproven and may never come.

And if they don't come, then we either have to maintain LNG or. Or we have huge stranded costs. So that's a major problem.

All right, thank you.