House Standing Committee on Energy & Environmental Protection

Alright. Good morning, everyone. We are jumping right in right on time because we have we wanna get everything in time. We have enough time here this morning, but we have some Members that might have to leave by 10:30 for a training for upcoming conference.

So we're starting right on time, but we are here. It is 9AM, April 16, Row 325. We're here for an informational briefing of for the committee on energy and environmental protection. Good morning. Thank you all for joining us today and good morning to anyone watching online.

We will, be hearing from our presenters this morning and then we'll take questions at the end. And, this briefing is really about making sure that we are asking all the right questions as Hawaii.

Charts its path forward for its energy future there's been a lot of time spent recently looking at certain pathways that include high use of oil or LNG both fossil fuels and today, in contrast, is an opportunity to broaden that conversation,

especially around scenarios that move more quickly toward renewable energy and what that means in practice.

You know, we're always trying to balance priorities as policymakers for keeping energy affordable, reliable, resilient, and then meeting our decarbonisation goals. And these don't always wind up easily easily. Sometimes there are trade offs and it's important to understand all those challenges.

Today we have a great panel that I think brings, both real world experience and analytical expertise as well as perspectives from other jurisdictions. We will have starting with a presentation from Kauai Island Utility Cooperative,

and then moving on to some economic analysis from doctor Mathias Shrimp and Michael Roberts, professor of economics at University of Hawaii and his and a PhD student, David Hartley. And then we will wrap up hearing from David Hochschild who's the chair of the California Energy Commission.

So without further ado, we will have PIEC come up and and get us started. Thank you all for being here again.

Good morning, Chair, Vice Chair, committee Members. I'm David Bissell, President and CEO of Kauai Island Utility Cooperative. Thanks for having us today. Gonna go through a briefing on what's going on on Kauai. Little overview of KIUC.

We're a small cooperative. We're the only cooperative in the Hawaiian Islands with the Non Hawaiian Electric owned utility. Got about 73,000 members. We were formed in 2002, and we're one of about 900 electric cooperatives in the country serving mainly rural areas.

We've got 35,000 members, and we are fully regulated by the public utilities commission here in Hawaii. Looking back in 2002 when we were founded, we had the highest rates in this state of Hawaii by about 70%, higher than Oahu. Low percentage of renewables about 8%.

We used to traditionally have higher upwards of 40 or 50% when the plantations were around. But when they went out of business, our renewables dropped. And we had one larger primary generating station in Port Allen and some small hydro facilities interspersed throughout the app.

We've had a number of strategic plans put together by our elected board of directors. The most recent one was in 2023. That came up with a 100% carbon free goal by 2033, which is twelve years ahead of the state's mandate. We're currently at about 51%.

We've hit as high as 70%, but kinda come and go with sales and how some of the units are performing.

We are excited. We have two very large for Kauai solar and battery projects in the works that when they get built in service, we would be in about almost 90% by 2029. And our plan calls for doing them and supplementing with some other source of renewable energy.

We're not sure what it would be. It likely would be some type of a renewable liquid fuel to get us to the 100% strategic target. This is a look at our fuel mix in 2025. Last year, you can see the fossil fuels about 49%.

The yellow pie chart or pie areas are solar both utility scale and customer generated and 11% hydro and a very small slice of a biomass. The biomass plant on the on Kauai was not performing well last year. So that could be as much as 10% of our energy if it's fully performing.

So how do we get to where we are on the island? Well, we've been very aggressive in developing renewables really from the start of the cooperative. We've been pushing for having a self sufficiency on the island and lowering our exposure to fossil fuels.

So we've developed 80 megawatts of utility scale solar, which is about equal to our peak. That's roughly 85 megawatts. We were an early adapter throughout the industry of battery storage. We've been bringing on various types of batteries for probably a decade now or more.

We've got 47 megawatts of battery capacity and 222 megawatt hours we can store. So that's about 60% of our peak load we can meet with batteries today. We've also developed a model of bringing on renewables that we think is works well for us where we share the risk between the utilities and the developers.

We at Kauai, we actually find the sites for the projects that we work with the landlords, landowners to try to get terms that work for us. We try to find good solar locations with good interconnection. And then we bring in the developers to bid on the projects on those sites.

So we take responsibility for siting interconnection, the controls for the facilities and dispatch, and the developers handle the financing, the permitting, procurement, and construction.

Frankly, the large developers are better at bringing in low cost renewables than we are, so we try to optimize their skill set. Had some advantages on Kauai that I think support people understand.

One advantage is we've got low population density and we have a lot of available land which is a natural for solar that takes a lot of land. We've also been very effective in utilizing federal and state tax incentives.

The two large projects we have are grandfathered in under federal investment tax credits. It's about 40% of the of the price of the project. And we sell high and volatile cost of oil as an advantage.

That's really been an advantage because that's pushed us to aggressively develop renewables and set a high bar so renewables work for us on the island. Challenges though are the opposite. We're a small grid. We don't have good economies of scale that traditionally makes projects cheaper.

We have not very good wind resources and really unavailable to do wind projects because of our endangered species, the endangered seabirds on the island. Got no essentially no geothermal. So really, solar is our opportunity, solar and biomass.

We have to maintain our grid and that we're a 100% responsible for it and have to meet all our our load ourselves. So we have to balance renewables and conventional or other sources to make sure we can always be in balance and have the grid operating reliably.

We have to have long term storage. That's kind of a a problem that's came from our success. Because during the day now, typically, when the sun is shining prime hours, we have a 100% of our load filled by solar.

So it's gotta go somewhere, and we have to have storage to to bring on more renewables to move it to the non prime sunlight hours. So we have to have storage now for essentially all our solar.

This is a chart I'd like to show. It's going back to 2011 and shows how is our renewables have grown, reaching a peak of almost 70% in 2021. Down below is our price of energy. And you can see we we used to bounce from high rates to lower rates depending on what oil was when we were highly exposed to oil.

Now we're we're at least half hedged against oil, so we're not our rates don't move as much. And that's been really valuable in this higher oil price environment and with the oil spikes.

So that's really our there's environmental goals to get to a 100%, but also significant financial goals trying to minimize our exposure to to fluctuating oil prices. So how do we get to a 100% better cheaper storage solutions we need?

We've got the two large renewable projects, renewable battery projects we're working on and ultimately, some type of renewable fuel. We are using biodiesel and small amounts now and biodiesel and potentially hydrogen could be our remaining, 10% or so.

Looking at the two projects we have going, the AS is doing both of those. The Kavanui one is 43 megawatts of PV, which as I talked earlier right now, we have about 80 megawatts. So that's half of our current utility skills sold. They're going in on one project. It's about 20% of our island's energy use.

Over 25, it'll offset almost a 180,000,000 gallons of of a fuel. Significant savings to the island, almost $400,000,000 from that project, and it is compatible with agriculture. It'll be on the sites to make use of it for, purposes other than just solar.

I mentioned earlier, we do have we are qualified for federal investment tax credits, so that helps keep the price reasonable for us. Second project that also on the, West Side Of Kauai is the Minot project that's on state land, ADC land.

That's a little smaller, 35 megawatts, but still 15% of our energy. So looking at those two projects, it's about 40% of our island's energy that hopefully will be coming online in the next few years. 142,000,000 gallons of fossil fuel offset and combined with our other projects, very significant savings for the island.

Always like to show this chart. This just shows where all our renewable projects are throughout throughout Kauai. We've got hydro on the North Shore. Solar projects really interspersed throughout the, Northeast and West side of the island.

So I'd like to say it really does take all our island resources to help us achieve our goals, and we've had good support from the state and from private landowners to help us get to where we are and wanna be.

This is looking forward a few years when our new projects hopefully come online. You can see we're down to about 8% renewable. We project fossil fuels that we project.

Huge amount of utility scale solar, almost 60% of our energy with utility and customer sighted solar that's we have about 20% of our members have solar on their homes or businesses. We'd be about 75% coming from the sun. So pretty exciting. We really look forward to to being at that way.

We are counting on the biomass plant to get back to to full output and provide almost a 10% energy from that on a stable basis for us. Interesting on the island, we have proven that we can operate at a 100%.

There are a lot of people in the industry that didn't think that you could do it, work at a 100% renewable with all the inverter based system that we have in particular from the solar. But we've proven it. We hit a 100% frequently on the island.

Our record time is ten hours in a row that we ran without a drop of oil being used. So technically, we can do it. And as we get more storage in these new projects, we'll be doing it more and more often heading towards hopefully a 100%.

Some things we've done to help our reliability, I've talked about our batteries, but batteries have really been key. We've dispatched 47 we have 47 megawatts available today.

We have almost, well, over a 100, a 108 megawatts in the works to add to that. So when these projects come on, we'll have multiples of our peak load that we can hit from batteries. So that's been fabulous with helping us avoid load sheds.

Before we had the batteries, when we had to control our output, if we're out of supply demand at any time, if we didn't have a generating unit trip, we'd real we'd have to literally shed load to to balance.

And now the batteries will step in instantaneously, and we don't have the load shed.

So it's been very good for reliability. Another thing for the reliability side, I mentioned our inverter based system that causes some technical problems. So we brought in converting two of our generators to be able to hold the work of synchronous condensers.

So even when they're not running on fossil fuels, they can still produce inertia and fault current and voltage support from these synchronous condensers to help us have a stable and reliable grid.

That's a picture in our Port Allen facility that we're now converting one of our old generators to synchronous condenser mode.

And that's with a federal grant that the state energy office, cosponsored with us and that's a monitoring visit on the project in the picture.

So overall, the benefits to Kauai from our renewable movement, improved reliability, more stable rates at a lower cost. We're now essentially on par with Oahu from the 70% higher we were in 2002.

Some months were higher, some months were a little bit lower, but we've gone from 70% to even or better. So we're really proud of that.

It's helped their greenhouse gas emissions get radically reduced and it uses a Kawhi's abundant resources to produce energy and benefit the island. And that is all I have. I'm available for questions.

Alright. Great. Thank you. We will have questions for you. And I also neglected to introduce my committee Members prior.

So this is my wonderful Vice Chair, Rep. Perruso, Member Rep. Kusch, and then we're also joined by Vice Chair of the, Committee on Consumer Protection and Commerce at Grandinetti.

And next up, we will, I think, be starting with, Dr. Roberts. If you wanna come forward and and introduce yourself, then we'll turn it over to you.

Yes. I should I share slides on Zoom?

Yes. Sorry. Yes. You should join the Zoom, and then the Zoom will project onto onto the wall.

That's a great presentation.

I can also share from here if that's helpful.

So maybe he doesn't have to chime in.

Oh, are you on the Zoom now, Dr. Roberts?

Yes.

Okay. I think we're good.

Okay.

Thank you. Chair Loewen, Vice Chair and Members of the Committee on Energy and Environmental Protection and other guests who are here. Thank you for convening this briefing and for the opportunity to present our work.

The question is this committee is wrestling with how Hawaii manages its clean energy transition, what it costs and how it affects ratepayers, and the risks they bears, especially, are among the most consequential the state faces and we're really honored to be able to contribute to your deliberations.

I'm Michael Roberts.

I'm a professor in the Department of Economics at Manoa. I am also a Sea Grant affiliate and a fellow at UHERO, University of Hawaii Economic Research Organization. With me today at least virtually is Matthias Fripp, who I think you all know from last month.

He's the director of global policy research at Energy Innovation and the original developer of Switch, an open source electricity planning model that underlies the analysis that you'll see today. There's also, virtually joining us, Ethan Hartley.

He's a PhD student at Manoa in the economics department. And I want to say something specifically about him. His contribution to this work has been really remarkable. Even it's on the heavy lifting of updating and extending the switch model that was developed by the bias a number of years ago.

With up to date inputs and, fine grain treatment of land use, and he's extended the model to consider not just rooftop solar, but also, potential on on carports, kind of cap canopies, which hasn't been considered yet to my knowledge.

He's run well over a 100 scenarios so far. And, just to kind of stress test our findings and look at every single angle we can. And he's also built a GitHub repository that contains all of the inputs, the whole data pipeline, all of the code, all of the output.

It's really nicely formatted and we will make that public so that any analyst or any interested party can replicate everything that we present today and more.

That kind of transparency is really rare and it reflects Ethan's technical rigor and its commitment to open science.

He's going to be available to answer questions here today. Anyway, I wanna be transparent about where this work stands right now. We've been rushing to put this together, in a pretty short period of time. The results are genuinely new. We're still pouring over them, to tell you the truth.

We've been working and we're gonna show you we can, of course, show you all 100 scenarios, so we'll show you the the highlights. But we intended to run additional scenarios that based on your questions today or any requests that you might have, before we, finish this and compile everything

in a report that we'll publish through UHERO. So think of this as a substantive preview offered in the spirit of informing your deliberations real time rather than waiting for the finished document. Okay.

So with that, I'll turn to the substance. Here's what we're gonna talk about today. Kind of four major themes. First, you know, why LNG and why now?

I know the big picture motivations and some of the the larger risks associated with this. And then I'm gonna talk about a simple comparison of levelized cost, kind of a bird's eye view of things rather than the nitty gritty details.

And then I'm gonna hand it over to Matthias who will give an overview of switch and then go over the results. So why LNG? Why now? I kind of I when this was cropping up a little while ago, I was kind of surprised by it and I thought it would just kind of go away because it seemed strange.

We had considered this about ten years ago in 2016. And it seemed like an interesting idea at the time.

LNG was unusually cheap at the time and, but it was also a big cost and, you know, it wasn't obvious but Matthias did some work on this and it didn't really pencil out. It it didn't really look economic. And so today, you know, we're ten years closer to our 2045 deadline.

It seems even harder, because you need to have enough fuel savings over a long enough period of time to to be able to recover, the cost.

So, so what's changed? What's changed? So I've tried to take a close look at this and I can see three basic things that have changed since then that might be substantive.

First of all, the LNG contracts that people are kicking around are a bit more attractive than what they were talking about in 2016, which is kind of surprising because LNG is a little bit more expensive on average. And and I think it's important to ask why that's the case.

It's about 15% lower based on the the numbers that I've seen kicked around or the the rough contracts I've seen. There's some recent solar projects have been canceled and the bids more recently have been higher than the ones previously to that. So that's a little bit of a concern.

And one thing that's really struck me over the last few years and I didn't do a deep dive on it until till just recently is that, Hawaiian Electric's low sulfur fuel oil prices have been unusually high relative to world oil prices. And that may have made LNG a bit more attractive.

So, I had to do a deep dive on that to make sure we had the right inputs in our model. And and that's that's what I've learned. So here, this is just a picture of that. On the horizontal axis here, we have Brent three month moving average.

I use a lag three month moving average because Hawaiian Electric uses the price of reports is the average of its inventory and they tend to have around three months inventory, although that can change a little bit.

And and then there's the low sulfur fuel oil, their cost in the vertical axis and and their cost has always been above the world benchmark of Brent about 20% or so and more so at at higher prices than at lower prices.

But starting in 02/2022, things really went up a lot more and that was because of a new new contract with par with the par refinery and there's some pretty good reasons for that. We had Covid 19 that put a lot of pressure on par.

Big drop off in demand for their all of their products. And so they were they were hurting and then at the same time or there was this pretty remarkable development or agreement by the International Marine Maritime Organization.

They agreed to really cut emissions globally from the shipping industry. And they did by about 70% by switching to low sulfur fuel oil. This, I mean, I it's a wonderful thing, but it really drove up the price of low sulfur fuel oil and that was why electric's alternative to par.

So that really changed the, I guess, the the negotiating terms between our and and Hawaiian Electric. So, the details of these contracts, we know roughly what they're like, but we don't know the details.

And trying to back them out is kind of hard. But I was able to do that with kind of a fancy econometric model and I can explain more about that if you really want me to. But I think this is these are pretty good estimates. They're not exact, but I think they have pretty small standard errors.

But the old contract basically went up $1.9 for every dollar Brent went up under the 2022 contract.

And then the renegotiation 2024 brought that down to about 70¢, but a higher intercept on the relationship. So it's kind of a nice compromise. It means higher prices for par when oil prices or prices are lower.

But considerably lower prices, they don't get a huge windfall when oil prices go up. Now currently, low sulfur fuel oil prices have really spiked a little bit like LNG because of the war in Iran.

So right now, they're it's about a $145 a barrel. That's really high, and that's gonna translate into much higher electricity prices for us. And while we're gonna be really disappointed with about an 8¢ per gallon, 8¢ per kilowatt hour increase in electricity prices.

I think we should be thankful that's not 20¢because that's what it would have been. We could have seen a 50% increase in our electricity prices from the current, energy crisis if it wasn't for that renegotiation.

So anyway, that's kind of useful for us to to then make comparisons, fair comparisons with LNG. So I wanna make a brief, one thing that hasn't been talked about a lot with these long term contracts is the risks that are associated with them.

It's a very different it's kind of a unique market for LNG. And so I'll talk about that kind of in light of this picture.

This this translates prices of Henry Hub, which is natural gas in the Mainland, which is remarkably cheap because of hydraulic fracturing.

Can vary a lot. There can be short term spikes that are quite high. But LNG is much more expensive and it tends to fall world oil prices, but there can be breaks from that relationship. And when those relations when the relationship breaks with Brent, the contracts are renegotiated.

That happened during the invasion of Ukraine and it's happening right now with the Iran War.

There's a lot of pressure here. They they simply can't deliver on those contracts. It's impossible to expand LNG production very quickly because it is limited pretty severely by the export capacity at these liquification terminals.

It takes a very long time to build those and they're very expensive. But like a five year lag at least possibly more before you can get, an expansion.

So you do have much more volatility in LNG than you do in oil. And the contracts, I think it's probably better to think of these long term LNG contracts as designed to protect the seller, not the buyer because they need to ensure that they're gonna get enough of a return on their investment.

There's these very large investments in in the ships and in the liquefaction, gasification facilities that, go ahead and do that. So think of it as a lower bound on price, not a hard contract.

So kind of summing up, there's four major risks that we have with oil and with LNG.

There's oil price volatility. These contracts are gonna be tied to oil or they might be tied to Henry Hub, but there's still gonna be a volatility there. Unfavorable contract renegotiation,

that's gonna be a much larger sort of issue with LNG because you're facing a world market and we are very small in that world market. It's a little different with par because they're really local and their options are limited too. The take or pay commitment is pretty unique to LNG.

You have to commit to buying a certain amount of LNG for a certain period of time. And then cost overruns. Reports on this suggest that 40 to 70% cost overruns are typical. So other people have have have made this. We are really we'll talk a bit about oil price volatility.

We've done some modeling to look at the range because we really have no idea what oil prices will be. And I can talk a little bit more about what why we could have a glut of oil and very low prices and of course we're seeing right now what we might have high prices.

But we're gonna look at that but we really disregard risks two, three and four. And those fall heavily on the side of LNG oil.

And so that's important to have in the back of your mind.

Okay, so here's the high level cost comparison, that I've summarized. And this is takes a little bit to unpack. But I think it gives you kind of a fair and fairly clear comparison between LNG and low sulfur fuel.

These are all gonna be tied to rural Brent prices or it could be, it's easier to comparison with Brent because that's what the contracts are most typically. And we know that that energy prices are very volatile.

So the the black line on top shows the cost, the fuel cost in cents per kilowatt hour in HECO's existing steam power plants. They're old power plants that are pretty inefficient.

The proposal really combines a new power plant that's a lot more efficient, very efficient power plant at 6.5 MMBTU per megawatt hour. So, but you can, I don't know that we can have the exact same power plant, but you can definitely invest in more efficient power plants and burn low sulfur fuel oil not LNG?

So if you have the same efficiency, then it would be the dashed line down below.

So then we have three different prices for LNG. One, the highest LNG price is about 25% use, 25% of the point for kind of the capacity that they're proposing for this FSRU, this offshore LNG gasification facility. And that's tied to Hawaiian Electric's plan that has high solar.

And I don't think that's the least cost amount of solar, but it's their plan that has relatively more solar. And you know, the the the less you use of this facility, the higher the LNG cost.

So that's pretty high. If you use if if you use Hawaiian Electric's land constrained model, this is their what they're now calling their preferred plan, then it drops to the blue line. It's pretty close to LSFO. And it's a little bit flatter, so you get a little bit of, less volatility, but not that much. It's pretty similar.

Now they're proposing having much higher volumes than that, much higher volumes than even Hawaiian Electric's severely land constrained scenario. So how that squares with the clean energy goals of the state, we haven't really reconciled.

We don't know all the details of their plan, we just have what they posted right. So that's a little hard to understand. Now I have two graphs here. One the choice of what kind of power plant you have is much more complex decision, especially when you're combining it with renewables.

And it's not obvious that you want a more efficient plant because you wanna start and stop it and it has to integrate with the renewables that you have and there's it's it's more complicated and that's what's Matthias is gonna talk about.

But we we look at two different power plants, a more efficient one and one that you can start and stop and ramp very quickly, a combustion turbine on the right hand side.

But at least you can make apples to apples comparisons holding efficiency fixed and see how that differs for different power plants. Last thing I'll mention is the cost of solar at the bottom.

That's probably controversial and worth a very good conversation at at some point. This this number is taken from the, NREL's ATV, which is what everyone tends to refer to for cost projections. And we've added this is solar plus four hour battery , their projection for 2030 from the 2024 IGP.

I used 2030 because that's the year they're supposed to bring LNG online, at least under the proposal. And I've added 62% to it because that's what NREL estimated in one of their reports back in 2018.

So I've added 62% to the the baseline that NREO has. And that's 9 to 11¢per kilowatt hour for solar plus four hour back battery. So for the most part, of course, that doesn't have the risk.

We already heard about the benefits of that. Solar really has that advantage and it tends to be much cheaper than everything.

Okay. With that, I'm gonna hand it over to Matthias.

Thanks. So I hope you bear with me while I'm switching slides. Can I can you hear me okay in the room there?

Yes. Can you hear the slides? Okay. Thanks. Well, thanks, Michael, for that great introduction. And thanks, Ethan, for all your work going into this.

So I'm gonna talk for a few minutes about the about the switch model itself, which is a capacity planning tool that we used for this work. Well, mainly Michael and Ethan, and then present some of the results.

So I have the privilege of showing the work really that that mainly Ethan's been doing for the last couple weeks, kind of night and day.

So first about Switch, this is a sort of next generation well, it was next generation when it was first written about ten, fifteen years ago. Now it's kind of current generation state of the art for planning power systems that are considering using high shares of renewable energy.

So it's it's different from more traditional, well, older capacity planning models for power systems and that it's it treats renewables and storage and demand side flexibility much more fairly than than older models were able to do.

There are other models that are similar to this that are used quite widely now, some based in fact on Switch. So Plexos is the commercial version that has a their capacity planning formulation is is not too different from this.

Resolve is one based on switch that that HECO has used a lot for from the consultancy e three. And then there's a few others that have more kind of academic use.

So and the key point is it it try it it's designed to choose subject to whatever policy constraints and technical constraints you're facing, it will choose the the cheapest system you can build.

It's open software, so anyone can download it and use it and run it. And for this project, all the data also will be open or a lot of it is already.

It co optimizes how you build and run the power system to minimize costs, taking account of variability of renewables and all the other concerns. So it's been used in quite a few areas.

A lot of these are are academic studies, but it also, among those models that I listed, it's unusually strong in kind of getting close to the metal of things that utilities worry about, like, spinning reserve margins. I guess that's a key one, and part load heat rates and that kind of thing.

So it's an optimization model. Every optimization model has this sort of set of things. One is a set of decision variables.

Those are the numbers that it's gonna choose for you. And in this case, the two main sets of of choices it's making are what to build looking out at sample several sample years into the future.

So in this case, 2027, 30, 35, 40, 45, 50. So there's sort of a snapshot in time for each of those years, and there's a choice of what you build to be ready for that year of all the different types of assets that are available. So renewable and conventional power plants and so on.

And then it's co optimizing that with operational decisions, which are basically which plants are you gonna turn on and how much power will you get from them every hour? All of this is subject to constraints.

Like you can't produce power from a solar farm if it's not sunny, or if you haven't built it, that kind of thing. The RPS constraint is an important one as well. And working within all that information and the rules that it has to follow it, it seeks to minimize the the net present value.

So if you take every dollar you're gonna spend for the next thirty years or so and discount that and convert it into how much money you'd need in the bank today or in the economy today to pay for that, it tries to minimize that total cost.

So it's seeking to minimize the burden of of producing enough power for everyone over the next thirty years. The inputs are pretty big. There's a lot that goes into this kind of model.

So one of them is a catalog or a supply curve of potential renewable energy projects.

There's the operational details. So, essentially, weather data and load data for the renewable resources and loads that have to be served. Those are for a collection of sample days that it's gonna make sure it could it could handle the weather conditions on those days in future years.

The sample days are are chosen to sort of span the range of conditions that the system might see from very low load in wind and solar, maybe with high loads up to sort of much more attractive days.

You also have forecasts of what will your equipment cost that you might build and what will fuel cost in each of these future years.

And also electric vehicle adoption, switch is quite strong on demand side flexibility. That doesn't tend to show up in any of those other models. So in this study, we've got electric vehicles, a detailed analysis of when they would want to charge under business as usual, and then also how much the charging could

be optimized. And we've got them sort of halfway between a fully optimized charging plan and just what they do on their own. Alright.

So those are the inputs. This is a little bit of what that looks like. So top left is solar screening for Oahu. The orange colors are sort of allowed amount of land for utility scale solar on class a, or sorry, class B agricultural land.

I think purple is other and class C doesn't really show up, but you have to screen how much land could you get, could you use for this.

Here, they're shown in sort of big patches, but it's probably more, a little more scattered than that. The photo there is showing like a roof inventory for distributed PV. The blue down here is all the places that might be suitable for wind. Over the years, we've kind of just edged towards no new wind.

It doesn't really seem like a big option for Oahu, not attractive to many people. This curve is showing, on the bottom axis, it's showing how many megawatts of wind or solar, or whichever resource it is, you could install. And on the vertical axis, it's showing the capacity factor.

So, that's the average output as a fraction of the nameplate. So, if you have a solar array that could give you a megawatt of power, the first sort of 200 megawatts of solar that you can put in will give you 30% of what they're labeled as.

And eventually you get to sort of lower quality resources that are less economically attractive. So you put all this information in, you turn a crank, you get a result. This is what a least cost plan for Oahu, this is, I think, showing oh, this is all the years.

Looks like out to 2050. This is under medium fuel cost assumptions and medium equipment cost assumptions. So that's about 18¢a kilowatt hour for solar plus storage with four hour batteries.

Sorry. That's the equipment part. The fuel costs are just sort of mainstream ones from the the US Energy Information Administration. So similar to what we've seen in past years.

And it's a pretty big swing from the fossil plants and biodiesel plants kind of fade out fairly rapidly, well, not that rapidly, but gradually from today out to 2050.

They're replaced largely with batteries, although we do keep some thermal plants around, and we'll talk more about that later. In the very late years, you start to see some hydrogen possibly coming in. That tends to be kind of on the fence. That could be biodiesel instead and comply with the RPS.

There's a little bit of wind, mainly what we have, what Oahu has already. Quite a lot of utility scale, PV comes in, and quite a lot of rooftop as well.

The over here, the top right corner, I'm showing looking over that same time span, the the dashed black line is what the law requires of shares of renewable energy in in the state and presumably on Oahu as well.

The orange line is how much, if you just wanna minimize costs, which is what this plan does, this is how much renewable energy you would have, and it's largely solar and wind.

And in all the years until 2045, it's above what the law requires. So it's, you kind of just ignore the law and just put this stuff in to save money.

And every day, every year that you're below these sort of least cost levels that I'm showing, you're spending money extra money on oil that you don't need to be spending. So there's you know, that's sort of the optimal path to minimize costs.

And this green line shows if you take the cost of all the equipment, the new equipment, at least, a rough estimate of the old equipment, and the cost of fuel, but ignore transmission and distribution, this is what, tends to be relatively small.

This is what the sort of cost per kilowatt hour looks like over time. So as you phase in these cheaper resources, you get a savings in cost, which is, I assume attractive for people.

This is what the production looks like. So previously I was showing the equipment that gets built. This is the, how you use it. So where do you actually get your energy from?

And it is again, a big swing towards solar kind of as soon as possible, and some wind, I'm a little surprised to see wind going up so much, but there's some offshore wind that comes in that's quite productive in those later years.

The thermal plants gradually get phased out and replaced by plants running mainly biodiesel. And by the end, by those, the a 100% years, you're only getting like six to 8% of power from biodiesel. So it's really switching towards these other renewable resources.

That could raise questions about reliability, so I'm just gonna show this is what this system looks like hour by hour. I'm picking twenty thirty five because that's in some ways, that's the time that's at issue here.

The questions are really, at least around LNG, are will this middle time around 2035 be dominated by LNG, or will it be dominated by renewables? And meanwhile, you've got thermal plants, existing plants phasing out while renewables come in.

So you could potentially have a sort of awkward middle there where you don't have everything you're eventually gonna have for the 100%, but can you make it? And so this is how the operations look like on thirteen sample days in 2035.

You can see sort of a daily peak in production from solar that's matched at the bottom by you're basically rescheduling loads to follow solar as well.

In this case, we're not rescheduling the sort of conventional loads, but you're scheduling battery charging to midday to match when solar's available, to some extent that you can hardly see it, but there's a dark gray band that's EVs should be charged midday if they could.

And so you've got supply, which are the thick bands of color on the top, matching demand, which are the thick bands of color on the bottom. On top of that, on the bottom here, this solid line is the amount of spinning reserves that the system needs to carry.

And this is a formula that's a fraction. It's basically the size of your largest plant that's online plus a fraction of your load in case you missed your forecast on the load that day, plus a fraction of the wind and solar in case you missed your forecast on the wind and solar for the next hour.

And the dotted line shows how much reserve capacity is actually available in each of these days as the system's running. And you can see there's tons of spare capacity midday. That's partly because you could always cancel battery charging if you're short of power.

And it's partly because there's just other capacity available, or curtailment also provides some reserves.

The only times when the system, and at night as well, the system has quite a lot of spare capacity, largely because load has gone down, and so you still have these batteries available to dump power in if they need to during the night, but they're not really being called upon to do so.

So there's really just these shoulder periods when things get a little bit tight, and really the system is designed to make sure it's it's not too tight. That's part of the rules it's following. So there's a little bit of sort of critical time early morning and evening when you're like, your sun hasn't come up yet.

Your batteries your loads have come up, and you're delivering from batteries as fast as you can, but it still can get through, and you've got thermal plants as well running at that time. So in this sense, it seems to be reliable.

Another way to look at reliability, here I'm taking all all six of the study periods looking out to 2050 with all the sample days, and this is showing the gray band is loads. The dark gray is EV charging. Those spikes, I wouldn't worry too much about.

It basically has the choice of whether to charge batteries or charge EVs during the day. And it it sort of is like, I don't care which ones I do at what time. So you can get sort of little random spikes there.

But the blue band is conventional power plants that run on oil, and this is how much capacity is online. So currently, it's a little bit above the peak loads and in 2027 even. And that does decline eventually to sort of roughly equal to your nighttime base load is how much thermal capacity you keep.

But there's a ton of extra battery capacity that comes in. So if you add in the batteries plus the thermal plants, there's just way more than the load at any given time.

And the reason you still need to keep some thermal plants is even though they're only providing a small fraction of the load overall, you still do get these days, and this is part of how you do this modeling right, is this day is, like, the lowest wind and solar day that occurred in I think it was 2007, 8,

and we've just moved the weather forward to 2035. And so this is a difficult day.

It's something like 10 or 20 10% or something of the average solar and wind output level. And so on that day, you turn on all your thermal pan plants and you use them.

To some extent, you still charge batteries and use them at night. But even if you get days like this, there's enough capacity to get through those days. So those are days a lot like what came in last month where it's not super windy and it's quite dark and you're just not getting a lot of power.

And that's why you keep some thermal capacity around because you need something to charge the batteries. On land use, this work, I'd say, differs a bit from Hawaiian Electric from theirs their public statements about available land use.

So and this is something that I discussed with them a lot in the last round of integrated grid planning. We came to sort of a compromise that something like so what I'm showing here is on the left is is our estimate of how many megawatts of solar you could build on Oahu.

So the bottom gold band is utility scale PV, the big arrays, like behind me in this picture, with panels that track the sun or maybe flat.

And then on top of that is an estimate of rooftop area that you could use. And here, I've just identified good quality, which is sort of the above 75% of the best site available on Oahu in in production potential.

There's Canopy PV, which Ethan's done a lot of work to now estimate how much of that might be possible. And this blue band is actually from the IGP land use screens that HECO commissioned from NREL.

This is their estimate of how much solar potential there is on military land from they ran an alt two case. So, I don't wanna get into land use too much, but HECO's in that IGP land use screening, they were down around 3,500 megawatts for this large utility scale solar.

And here we're showing closer, a little above 5,000. It's about 25% more. A lot of that is because Oahu, the recent solar projects have packed solar panels tighter.

So you can you need about five acres per megawatt of solar on Oahu, it seems like, and some have been as low as three or four, although that's more typical for flat ones that that don't track the sun. But even some tracking ones have been, like, 4.4 acres per megawatt.

HECO, I think, in their screening was assuming more like 7.5 acres, which is more than people are using for solar now. So that's a big part of why it's there. But so this is our estimate of the land the amount that's available.

In all the scenarios that we're talking about today, we didn't consider military land, but this gives you an idea of what might be there. We also ruled out all the class a land and 90% of the class b and c land, agricultural land. So that's this is the inventory after doing all that.

This second thing is this second column is how much PV gets deployed in the reference case, which I've been talking about, on utility scale and rooftops.

And then the third one is in a canopy case where you you have access to that canopy land and otherwise pretty similar how much would get deployed. So I guess the point of this graph is these bars are a lot shorter than the leftmost bar.

So it's something like half the PV inventory potential for Oahu is getting used in these cases. It is a little bit tight on the utility scale land, And so it may be it it there's work to be done to sort of discover and explore how much of that land can be brought into service and should be brought into service.

And but if it can't be, there's quite a lot of other options, either rooftop or canopy, PV, sort of in the wings as as a reasonable substitute, or this military land. In fact, you know, the military has a mandate to make productive use of land.

They have a good number of solar and wind projects already on military land, including a couple on Oahu. So ruling it out completely seems a bit excessive given that it's actually being used for solar and already in some cases.

So that's the land use. I'm gonna talk I'm almost done. I think we're a bit overtime. Sorry about that. So as Michael said, Ethan ran a lot of cases.

Here, I'm gonna look at nine cases, which are a grid of so going crosswise, we're looking from what we're labeling as low solar costs, medium, or high solar costs. And this is the 2027 price in these cases, ends up about 15¢a kilowatt hour, 18 or 24¢a kilowatt hour.

So I actually am a little inclined to think the leftmost one is is more realistic, but we'll call the middle one our our reference case, and that's the one I've been showing you.

And that's that's above the cost that solar projects have gone in recently in Oahu and Maui and Kauai. But, you know, we've seen a lot of inflation since then as well.

So a lot keeps changing. The IRA tax credits have dropped, but then also the import tariffs on solar panels have also dropped. So and meanwhile, this the tax credits continue for batteries, and they keep getting cheaper every year as well.

So taking this middle one, which I think is kind of conservative, and then going top to bottom, we say low fuel price forecast, reference fuel price forecast, or a high fuel price forecast. So that's this matrix. And what I'm showing here is we're back to the Jira LNG plan.

This is a very rough estimate, I would say. I think there's a lot more to be done to to firm this up, but this is a rough estimate of how much extra would you have to pay to follow the Jira plan. So we've already said that it it appears to be not cost effective to use LNG.

So compared to essentially to what I've just showed you, a sort of least cost plan without LNG at all, what would you extra would you have to pay to build that 500 megawatt power plant that Jira is proposing and the LNG infrastructure and use it, and you would be reoptimizing around that,

so putting in a lot less solar. But how much extra would you pay for the the privilege of using LNG? And in the reference case, it works out in today's money about $100,000,000 of losses from doing that.

And in fact, in all the cases, these positive numbers indicate you're paying extra to use LNG. And if fuel prices are high, LNG prices also get high. And if solar is low, you could be spending quite a bit extra for that.

The only case where it would be worth doing the Jira LNG, and you might save a little bit of money, is if we have high equipment costs, higher than we've seen historically, and neither very low nor very high fuel costs. And that's so moderate fuel costs.

And that's because at low fuel costs, the the difference between LNG and oil is too small to be worth making the investment. You just stick with LNG stick with oil. And at high fuel costs, the difference between LNG and solar is is not attractive, and you'd rather have solar.

So out of these nine sort of cases, there's only one that that would be worth doing LNG, and and there's not much savings. They're they're small compared to the potential losses in all the other worlds you might find yourself in.

And finally, this is showing for those three different renewable cost cases, which are blue, gold, and purple. So we'll take gold as the sort of middle case I've been talking about. The bottom line is how much renewables you would do if you built the Jira plan.

And, essentially, you you don't you get a bit above the RPS, but really not very much. And the top band is how much renewable power you would have on Oahu if you didn't do the LNG plan and just optimize costs.

So the point of this is that if you build Jira with the same cost structure, you would turn away from this much renewable energy.

So something like 20% of your power that you would have wanted to get from renewables, now instead, you're you're paying extra to the for LNG and giving up 20% share of the the grid in renewables.

So LNG, if you decide to do it, okay, yeah, it becomes competitive with renewables on cost, but it then ends up crowding them out in your sort of least cost design.

So and it doesn't end up really saving you much at all anyway in total cost. It just replaces some oil and quite a bit of renewable power. And there's other benefits from this, but we're kind of out of time.

But mainly, these are things that weren't included in the study, but protection from the volatility of oil and gas prices, self sufficiency where there's not a concern about imports. Local air quality could be important, especially with the older power plants.

Climate impact, we haven't even talked about. But if you were to actually factor in the harm that CO2 emissions cost, it would be a much stronger case for renewables and against oil or gas.

And I think flexibility is a really important one as well that, like, the LNG case, you're locking in and saying, this is how much fuel we're gonna buy for the next fifteen years, and it's there's no option then.

If you say if you find fuel prices are high and you, you know, you could be paying half as much for solar, sorry, you're stuck. You have to buy that fuel. Whereas, on the other hand, if you stick with oil, if renewables get super cheap, you can do more renewables.

And if they come in more expensive than expected, you can do less renewables, but you have that flexibility to adapt, which you lose at least in the LNG case. So I'm gonna stop there. Thank you for your patience, and and thanks very much for inviting me here and all of us here today.

Thank you so much. I wanna acknowledge Chair Matayoshi who's also joined us, Chair of the Consumer Protection and Commerce Committee. And finally, we have our last presenter. So, this is David Hochschild. Thank you so much for joining us.

He's Chair of the California Energy Commission and here to talk more about, you know, how, California is embracing their energy transition. So, thank you for your patience, and, go ahead.

Well, good day, everybody. I'm glad to be here. I think Jean Marie and my staff is gonna be doing my slides. But I just wanted to the outset to say, really, Hawaii played an extraordinary role in the advance of renewable energy around The US by adopting the first 100% clean energy law in 2015.

And the law that we adopted in 2018, you know, continues to guide us. And now we have this law in place in in almost half the states of the country. And, at a very high level, I just wanted to say that, we're gonna get there.

There's nothing about the challenge of committing to a 100% clean energy on the grid that's outside the realm of a solvable problem. You know, we can send a crew to see the other side of the moon. The problems that you have toward the very end getting that last little bit those are resolvable.

And one thing that we didn't talk about today, I didn't hear from the other speakers, but I just wanted to share. I don't think I have this in my deck, but I'll just mention it. You know, long duration storage is a really important piece of the puzzle.

We're putting about $300,000,000 into that technology sector, and these are chemistries that, you know, lithium ion typically is four hours dispatch. But, you know, long duration chemistries now are going up to a hundred hours.

Right? You know, companies like Form Energy, which Google's investing in and others, and EOS and others. And so I just think the tool belt is gonna continue to expand. But even if you were to freeze all technology development just like we have today we are in a very good position.

So I wanna just walk through and give a little bit of an overview of what's happening in California, then happy to take any, any questions.

So, next slide. So in our state, today, we're at, just over two thirds of our power coming from clean energy sources like solar and wind and geothermal, so and so forth. So really, alternative energy is the wrong word to use to describe renewables, fossil alternative by our grid.

And the law that governor Newsom signed requires us to get to 90% clean energy by 2035 with a grid, and a 100% by 2045. Next slide. Just to give you a sense of where some of this power is coming from, this is the world's largest thin film solar PV project.

All this innovation happens just over the course of construction. You know, this is a fixed tilt system. They are now doing your tracking PV. You get, you know, about 25% more generation from tracking systems.

Next next slide. Home as well to the world's largest geothermal power plant. The geysers outside of Napa. Lake County, about a gigawatt in size enough to power a city like San Francisco twenty four seven. Next slide.

And this is the second largest wind project in The US, the Alta Wind Energy Center in Kern County. Next slide. We also have the world's largest solar roof. This is the Apple headquarters in Cupertino. I had major building envy when I visited this facility.

All the so that donut, by the way, is about a mile in circumference to walk, and has the largest curved sheets of glass, in the world on 17 megawatts of the roof. And they filled the the middle of that donut hole with, fruit trees, pears, and apples, and plums. So, next slide.

Then we have the world's largest battery storage project as well. Storage has been a colossal success story for us here in California. This project, as big as it is, is actually about to be displaced.

We've just started the construction on what will now be an even bigger world's largest solar project, a 5 and a half billion dollar project in West Fresno County called Darden.

And what we're finding with these storage facilities is very, very fast to construct, you know, to build a new natural gas combined cycle plant in The United States. It's about a seven year lead time.

You know, the last nuclear plant that was constructed in USA, it was local two and three in Georgia. That was seventeen years.

You know, these are twelve to eighteen month build cycles for your storage and coming online quickly and performing really well. Next slide. And one thing we're seeing just generally with these industries is that the rate of growth for the new energy technology industries like solar wind far exceeds

the rate of growth of its predecessor industries like coal and gas. And in many ways, we're just getting started on this stuff.

So next slide. And that's, you know, because of cost reduction. There are three things that drive cost reduction. It's innovation, automation, and scale, and it's mostly scale. And so as much as the cost has come down in recent years, you know, there's still a lot more cost reduction to go.

I got into the solar industry in 2000. Modules were $5 a watt. I just finished a project for a non profit. I'm on the board of and, you know, the panels were were 12¢a watt. Right?

So it's actually, like, cheaper to buy a piece of wood than it is to buy a solar panel the same size. It's just extraordinary. And there's more cost reduction to come because every year, we're continuing to see, you know, steady gradual improvements in the conversion efficiency of this solar panels.

And same thing with wind. Bigger and bigger wind turbines, you know, where we just we have a project that's being installed down in California.

You know, it's six megawatt turbines, and that was the size of offshore wind turbines a few years ago. And we get much much better cost with these larger sizes. So next slide. I mentioned battery capacity. I'll just add this is a colossal capacity addition just since Gavin Newsom was elected governor in 2019.

Just for context. Okay? Electricity came to California in the gold rush, 1850. The first electric light bulb, went on in San Francisco. So in that hundred and twenty six years, we've added a 105 gigs of the total capacity on the utility side of the meter.

30 of that has come in the last seven years since Newsom became governor, and half of that, 17 gigs of storage. So I just wanted to highlight the point that it's possible to build vast quantities of renewables and storage in relatively short order to meet our our growing loads around the country.

Next slide. This is the total capacity there. Next slide. This is enabling us to do something quite extraordinary, which has never happened before.

So last year, for the first time ever, we hit a 100% clean energy on the grid for two hundred and seventy nine days out of the year. So the majority of days in the year we're hitting a 100% for a period of the day.

You know, some days would be five hours, some days nine hours, some days three hours, but that's a milestone that's never happened before and really enabled by by renewables and storage. So next slide.

We also had a quite extraordinary act during our, one of our toughest years in the middle of the worst wildfires in state history. And during the middle of Covid, the governor signed this order to set the goal to get to a hundred percent zero emission vehicle sales by 2035.

Next slide. And we're now at two and a half million electric vehicles on the road in California. We're adding 1,200 EVs a day in California.

And it's about a quarter of electric sales in the state. Next slide. We're also seeing incredible innovation in sectors that people considered mythology even a few years ago. I just came back from visiting the Tesla electric semi truck factory in Sparks, Nevada.

That's a $3.7 billion facility that will open in July, manufacturing a thousand of these electric long haul semi trucks a week.

So over 50,000 a year. We have 200 of these trucks on the road today in California, mostly supporting the Pepsi facility in Modesto. I've been in one. I've driven one. They have a 500 mile range.

They recharge in thirty five minutes. Actually, the new fast chargers are even even faster than the slide shows. And they have an interesting feature too, which is that because of the way the electric drive train works, they don't have to slow down going up steep grades.

So these big electric trucks and pass a car going up a hill, get your goods to where they need to go faster. So this is just all part of what we're seeing as the electrification of almost everything that's now, underway.

Next slide. This is another really exciting project. So Oakland, California was the first city in The United States to fully electrify its school bus fleet. So a 100% of the students going to public schools in Oakland are going on an electric bus.

We know now the science shows that the diesel fumes of conventional buses get into the cabs and affect students' health. So this is very much a student health issue.

But it's also an interesting use case because these buses, which have about a 140 kilowatt hour pack, you know, they might use 50 kilowatt hours on the route. They're back and plugged in at 04:00. They still have a lot of battery capacity.

They're feeding power back into the grid and getting paid for that from those four to nine time period, which is when we have a lot of need on the grid.

So I think this is the kind of thing that really we should think of as a as a postcard from the future, and yet another tool that will help us get to a 100, clean energy future. Next slide. We do have more EV charge plugs in California than we have gasoline nozzles.

So about a 120,000 gasoline nozzles, about about 200,000 public and shared EV charge plugs in the state, and about 800,000 privately owned, EV chargers in the state. Next slide. And then we're doing a lot around, reducing energy consumption through really aggressive appliance efficiency.

So some years ago, we did the lighting standard, which moved us beyond incandescent lighting towards LEDs. Now that's saving $6.7 billion a year, cut the cost of lighting by 80%. We cut the cost of electricity for televisions in half with our TV standard.

And even things like your cell phone or your shaver that, you know, you would plug into the wall prior to our standard. The devices would have what's called vampire load. They would continue to use power because they weren't installing a 25% shut off dial.

We mandate that. You can't sell those wasteful products into the state of California market without complying with our appliance code, and that saves, you know, hundreds of millions of dollars for for consumers. Next slide.

And then all electric new construction, this is a particularly significant development. About a decade ago, you know, we were 1% of new construction being all electric. And today, we're over 80% and really driving heat pumps mainstream. Next next slide.

We also operate the largest virtual power plant in the world. It's about 1.2 gigs enrolled, about a 100,000 customers that have home loan battery systems, for example, can roll and get compensated with a feedback power onto the grid.

And this is, I think, a big part of the the future of having smart sort of, you know, consumer engaged programs that help meet our needs. Next slide. And I will stop there. Happy to take questions.

But I'll just close by saying, look, one of the main critiques we got as a state when we launched down this path was, oh, this is not possible. It's gonna crash your economy. You know, it's a big big strategic mistake to the state.

And I'll just close by saying, as we have leaned heavily into clean energy, you know, we were the tenth largest economy in the world twelve years ago.

We passed Russia, we passed Brazil, we passed Italy, we passed France, we passed The UK, we passed Japan, and now we're the fourth largest economy in the world. We have six of the 10 most valuable companies in the world are California companies.

And innovation and leaning into, clean tech innovation in particular, these have been really good decisions for our state, and they've brought in a lot of investment, help clean up our air. And I think it's a real mistake to bet against these technologies.

So I remain absolutely confident we're gonna get to a 100% clean energy goals. And I really wanna thank Hawaii for the early leadership on setting a 100% as a state goal, and and, that was a really landmark, policy.

And and now it's it's, you know, spread around the country. So, stop there. I'm happy to take, any questions.

Great. Thank you so much. I have a ton of questions, but some of our members have to leave for conference training shortly. So I'm going to see if you guys have questions first. So.

I have a quick question for Kia. You see? So you spoke mostly about your work around the supply side. And I'm wondering, are you also doing work around the demand side?

Yes. We have quite a suite of products we offer, incentives and rebates from everything from solar to efficiency, various efficiency products out there. So, yeah, it's it's a part. It's it's a bigger challenge for us to get large scale movement on that. We we do work towards it.

I mean, I asked that question because I think that's a systemic lever rather than using, like, replacement approaches, which is the LNG than kind of changing the whole system. I think efficiency is something that is undervalued. So are you planning to do more work in that space in the future, or?

We will I think it's safe to say where it makes sense financially for us to incentivize, we will. We really cover a lot of home now with air conditioning incentives and lighting, and we'll send our people out to help look at the how they're using service.

Could can they cut energy demand to help save cost?

So I guess my question would be, like, could you I mean, that we've I've seen this presentation before, but, could you, at some point, provide data around that, the impact of that work? Yeah.

Thank you. Thank you, Chair.

Absolutely.

Sure. I'm gonna jump in really quick. A quick question that should be a softball question for you.

But just given all the rest of the analysis we saw today, your Kauai's goal of a 100% by 2033, I'm assuming that's based on some analysis that that's a least cost pathway to actually adopt renewables at a faster pace. Is that is that what you found?

Yeah. And Kauai is interesting because we don't have to do a ton of very sophisticated analysis. The price of solar to date has been so much lower than what we forecast for the next available option that it's really pretty close to a no brainer what we've been doing to bring it on.

So, yeah, it is definitely the least cost. And as I talked about, we really don't have many options. It's it's oil or solar for the most part. So and it is cheaper under almost any scenario.

Yeah. What lessons do you think from Kauai are relevant to Oahu? Because obviously they're quite different cases.

You know, as I saw this presentation, I think the speakers have done excellent work on a relatively short time analyzing this LNG option. The biggest takeaway I see is the availability of land. And I was really taken by the amount of land that would be needed in a Oahu .

I was looking closely at, like, 6,000 megawatts at five acres of megawatt is 30,000 acres under PV. And I I think it's the actionability really needs to be factored in as you look at this.

Because we can do it when because we have a lot of land. But the numbers seem to work, seem to be a compelling case to try to follow the QI model here. But the the actionability really needs to be looked at.

Because it it'd be great if it if you really can do it and bring that much land on your solar, it it makes sense. But I think any analysis has to look at that, the actionability of LNG versus the renewables.

That's probably what we don't wanna do is stay on the same course we're on today because we can't get either done.

Do you have do you have a question?

I do. But that's alright. You go ahead Chair.

No. No. No. No. No.

No. Please go ahead. Sorry. I'll get to these guys.

Did you have a question? Go ahead. So I had a couple, but thank you for coming up. You know, on your biomass, what are you guys burning? What's your source?

It's albizia trees that are grown for the, specifically for the use on the power plant. It's close to the system.

You guys are recently farming albizia?

Yeah. It's a plantation system.

Oh, okay. And how much acres does that yield to well, now we'll get into the weeds later. Do you feel like listening to the, like, pretty incredible story in California and your own success.

Do you feel like renewables and their cost effectiveness is gonna take a turn with the federal tax credits changing, hopefully, it'll change back, but for the next three years, tune tune and change.

Yeah. Without a doubt, the cost has gone way up for solar. New projects today would be considerably more expensive than what they were even a couple years ago.

We've had our projects go up about 15 to 20% as they've been in the the approval process, and those are eligible for the investment tax credit. So right now, the cost is high and how long it takes to get the cost down.

Technology is improving. The main.

The same road.

Cost is going down, but it's gonna take a period of years to equal offset the tax credits lost and to start getting back to where we were a couple years ago. So that's a very good question. It's a it's a real challenge now with higher cost.

Will that impact your 2023 2033 goals?

It won't for us because we have so much if we do these next two projects that we believe we will, we'll be well on our way. So we won't be that exposed to the new technology cost.

Okay. And last quick question. As you had mentioned, AG solar component, is that elevated panels where they're higher and you can do shade crops underneath?

I don't know if it'll be shade crops or they're looking at actually a taro production, dry dry land taro between the facilities. And also it's the agriculture of having the sheep on them as well. So various products that AES is looking at. They've been pretty aggressive with trying to develop agricultural solutions.

Okay. Super. Thank you.

Grandinetti, any questions?

I have a question, for, Director Frick. Thank you.

So my question has to do with, like, what was just shared about the land use question on Oahu. And I'm wondering if given the constraints and I'm really interested in using military land, frankly.

But if that's not available to us, is have you looked closely at, like, shifting that aggressivity towards rooftop solar? Because I think that or if does your model kind of Max out rooftop solar?

We haven't I don't know that we've looked at, like, a super land constrained case. The what I'm showing on this is is cost optimized. So I often, at least in the early years, just follow the forecast for rooftop solar because there's there's an awful lot involved in in how much rooftop solar you're gonna get.

But in the later years here, this is cost optimized. So the red bar is is how much decent rooftop how much PV you could put on rooftops and get decent productivity.

And it looks like in the reference case I just showed you, it's on it's using about a third or a quarter of that. Overall, it looks like between rooftop and utility scale, you'd you would like to have something like 5,000 megawatts total.

And you can get that out of these canopies plus full use of rooftop is getting pretty close to that amount. And I did do some work earlier.

I don't have graphs to show today, but where if you really restricted the land, I think it was down around 3,500 of this utility scale solar, and no option to add more rooftop.

You could still get by. So like there's trade offs here. Like, eventually, if you start restricting land, yeah, there's there's room to do quite a lot on rooftops. There's this this canopy resource that nobody's really been talking about before. There's offshore wind becomes another substitute as well.

And I think, actually, Ethan did do some cases with more restrictions on land and Ethan did do some cases with more restrictions on land and offshore wind started showing up. And then there's this whole somewhat unknown sort of military.

Like, I did a very rough estimate of the military land, and I think it could be as high as, like, 9,500 megawatts, but that would be covering all of it. But this this third 3,000 or so is from the HECO from the NREL study.

So we haven't studied it, but there there is a lot there, and I think it's important to do things to make it easier to take to make use of rooftops.

Like, this is not land. This is roofs. So you could put solar there with with, you know, no almost no noticeable side effect. So it would be nice to make that easier for people to to produce more than they need and sell back.

Thank you. Thank you, Chair.

I guess I'll I have a lot of questions for Dr. Fripp and Dr. Roberts, but I'm gonna come back to that in a minute, I guess. For for Chair, I'm curious from a kind of big picture perspective. What do you think some key lessons from are from California that that transfer to Hawaii?

Because, obviously, they're two very different places. And, I guess, from from your per perspective and given the successes that you've had in California with really embracing the energy transition and renewables. What's your kind of gut reaction to the the LNG proposals you've seen here?

Well, yeah, for starters, I just think what has happened in the last two months is something that should hold really, really important lessons for all of us. Because we were at $4.60 a gallon for gas two months ago. We're at $6 now and rising.

And this kind of volatility of course, it's for all fuels. We're seeing this. You know, it's something that will it's a risk that will always be with us with fossil fuels.

Okay? And that I think that's this basic feature of clean energy that is really underappreciated is that there's no fuel cost for sunlight and wind and geothermal heat. The cost is to build the infrastructure. And so we are insulating the public and taxpayers from this volatility as we decarbonize it.

So I think that's the lesson of this year. I think the lesson, generally speaking, has been for us as we've leaned into this incremental. You know, we started with a 20% clean energy mandate, then we went to 33%, then we went to 50, then we went to 100%.

It kind of took a while to get confidence about the I think the lesson is that as you proceed, we have what's called the market transformation effect, which is these technologies get better, and they get cheaper, and you get economies of scale.

And so long term, well, you may have year to year volatility and solar prices may tick up one particular year.

Over time, the trend is a downward one. And that is gonna continue to be the case. And just taking solar is one example in in 2004, it took a year to build a gigabyte of solar globally. 2010, it took a month to build a gigabyte. 2016, it took a week.

2023, it took a day to build a gigabyte globally. 2024, half a day. And now solar is the lowest price and biggest investment on the global electric grid. Right? And we're still, in many ways, just getting started.

So I think it's really unimportant as you look ahead to know that the winds are really at our back when we think about building our state's economy and our electric system around clean resources because we're gonna continue to see progress in terms of cost reduction and energy density.

I mean, and I mentioned they were a big success where batteries are. That's with the existing technology. I mean, battery energy density is getting better by 3% every year. And so that reduces costs.

So those plans are very much at our back. And now we know those trends, and we can kinda plan around them, which is why we see no need to invest in LNG facilities. There's no support for that at all because what we have is working.

And we're also investing a lot of our data to kind of accelerate the cost reduction improvements along the way.

Thank you. Alright. My committee Members all had to go to conference training, so you guys are stuck with just me. Let's see. I have a number of questions, I guess, either Dr. Fripp, Roberts or Ethan, whoever is is best situated to answer.

Madam Chair, sorry. Could I be excused, or is there anything else you needed from me?

Let's see. I do I do have we really appreciate your time today.

Yeah. Of course.

Let's see. I have some questions lined up. I think I guess, have you what would you say about reliability? Because whether it's whether there's truth to it or not, there's always a lot of public perception that renewables are unreliable, that they're intermittent renewables.

If the sun's not shining or the wind's not blowing, you're not gonna have reliable energy system.

And now that California has moved so far forward on your transition, have you seen increased Yeah. Incidences of outages or decreased or just similar? What kind of reliability issues have you faced?

Yes. I think that's a very fair question. And the answer is storage has saved our bacon. You need storage, but once it's in place, it you know, the storage fleet for us has been I would call it the single biggest success story on the California grid in the last twenty years. It has performed beautifully.

We have had the hottest temperatures in the history of the state. In recent years, the highest loads in the history of the state because we're adding two and a half million electric vehicles, and the electrification, all these things. And we've not had any outages really since 2020.

It was was when we had the three and a half hours over two nights. We had a system outage, and that's when we really ramped up on the storage.

And now we have a system called a flex alert, which is what the dispatch signal that gets sent to the public if they're if we get anywhere close. And we haven't had a flex alert in three and a half years in California, and really storage is the primary reason.

So I think it's fundamental to your strategy, you know, in Hawaii to have storage. You know, but but with that in place, you're in really good good shape.

And as I mentioned, you know, these systems are being installed at scales we've never seen before, and they go in very rapidly. So we're really happy with the performance of storage and and believe it's, you know, sort of foundational technology.

Okay. Well, thank you so much. I know you're really busy and just your insight has been very valuable. Appreciate it. And California is really, I think, setting an example for the rest of the world.

We like to say and why we like to talk about being first and being an example, but I think we're falling a little bit behind. So thank you so much.

Well, you look forward to the partnership. Thanks for having me. Take care.

Aloha. Alright. So, I guess, I had a a number of questions, not in any particular order. In some of the modeling you guys have done, the role that wind plays, I think, has been minimized, and it seems like that's largely based on public opposition potentially or just the idea that the wind projects

don't seem to to have legs or be bidding in anywhere. Do you think that we're kind of prematurely writing that off?

I mean, it would be interesting to better understand the potential cost savings involved with with wind and where that stands because I think sometimes when you spend time talking about how much savings could be realized, that can change public opinion. So, I mean, I'm just curious about that piece.

I think there's probably two answers to that, and Mathias can fill in a little bit. There isn't as much wind on O'ahu as there is on on the other islands.

As a resource, you mean?

As a resource. And now there's larger setbacks and I think that's kind of understandable. There have been a lot of studies in economics where people because a lot of people scream about wind. It seems I don't know why wind is more controversial. I think the windmills on the North Shore are beautiful.

Other people probably have different views, and I can really understand the complaints about Kahuku because they're right on top of the houses. But most studies and there have been quite a few that have looked at whether vocation of windmills really ex housing values, for example.

Most of that finds that there's no effect unless, like, unless they're like really, really close. But, so there wouldn't be as much potential here, but I do think that there is some potential.

And part of it's, you know, if we're tied on land and I think that's, you know, if there's any place that's tied on land for solar, it's probably a lot but it looks like there is enough.

Especially if we're really willing to compromise on on some fronts. But if you have more wind, you don't need as much land for for solar. And you can still, of course, use the land that's that's in wind or even solar for other uses like agriculture.

So but does wind oh, this is a bit not exactly what you were asked to come here today to talk about, but does does wind development tend to pair better with land versus agrivoltaics? Or do you have a sense of that?

You need more in some sense, there's more of a footprint for wind because you have to space the windmills so far and, you know, so if you talk about the whole area where you have a wind farm that's much larger per megawatt than you have for solar. Solar is actually a pretty small footprint. I don't think

that's compatible with things with but is it more compatible with some types of agriculture that you can then do in between the

I think you can pair it with almost any kind of agriculture with wind, but it depends on how that pairs the the sites for agriculture, how does that pair with the wind sites?

And I'm not entirely sure if the if the really good ag sites are also really good wind sites. I don't have my finger on the pulse of what's actually being selected in our scenario.

Okay. Sorry. It's a bit it's not really on top. Yeah.

So so it would be interesting actually to look at that, what's actually selected. The model picks certain areas for for wind. And I think in the models that we've just run, we do have some wind being selected. There's some wind that falls off, and then there's a little bit that's selected.

So the land the land with high wind with, you know, decent wind resources is not that much overlapping with the land that you would be looking out for solar, which overlaps a lot with the prime AG lands, obviously.

Yes. I yeah. The solar overlaps with AG land really well. Like, the best the best solar sites are the best AG land, and I realized that's controversial. I do think it would be we really wanna bring more agriculture back and there have been lots of really good studies that show that solar can work really

well with agriculture. And I think we should really look at that. In fact, if we're really serious about bringing ag back, it's just not economic. That's my other hat. I'm an agricultural economist. Yeah.

We're thinking of a lot about that.

And I haven't done as much in that area because it's just really hard to see how agriculture is economic here. But maybe maybe solar could make it work. I again, if we haven't I haven't looked. That's a good question and it's something we'll go back and look at.

But I haven't seen I haven't looked at which sites are actually being selected, when we run the model. I mean, I know what the map looks like for what we're saying is available, for onshore wind. And of course, there's offshore wind, but offshore wind is a lot more expensive.

But you could fill in with that certain and that's what's in Hawaii Electric's kind of high renewable water, faster renewable path has a lot of offshore wind, but that is much more expensive than offshore.

Okay. Then speaking of Hawaiian Electric's high renewable path, I guess, for, again, either you or Dr. Fripp, It's my understanding that it's like the past iteration of the IGP, there was the preferred pathway, which is the higher oil earning pathway, and then there was the higher renewable pathway,

which did show more savings. But for whatever reason, the higher oil pathway has been what Hika calls their preferred pathway.

Have you like, what what's your take on that, or have you do you feel like Hawaiian Electric has ever sufficiently justified why that's their preferred pathway? On what basis? Have have they made that decision, do you think, in your opinion?

I'll let Matthias answer that because he's been in the room Yeah. Wrangling with them a little bit, I think, on that front.

I don't really like, I can't I can't really speak to their motivation. The public statements about it have been a little bit frustrating over the years. So when they were getting going on the IGP process, they were initially using what I thought were overly conservative land use screens for solar.

And I said, so, like, they had the National Renewable Energy Lab doing the work, but I think they were using parameters that were made more sense on the Mainland where there's plenty of land to spare.

And so you can be very conservative, and there's still just plenty of land for anything you wanna do.

And so I pushed them on things like how many acres per megawatt and how steep are the slopes and and with reference to, like, the slopes that people are actually building projects on in Oahu.

And we ended up getting to a point where they their their mainline estimate of how much solar could be deployed, it still excluded the military land, but it was it was in that sort of 3,500 megawatts range. And they agreed. They said, okay, yeah, you've convinced us. Let's go with this.

And that's what they used in their studies. And then at the same time, they said, well, we're gonna do this other land constrained case, just in case we have trouble lining up these projects.

Like if we can't get people to bring us these projects, let's see what we would do instead. And so that became this land constrained case in the original work in IGP. And then a few months later, the PUC asked them, well, you've given us two different plans.

You've given us your base one, which has more solar, and your land constrained one. Which of these is actually the plan you wanna go ahead with? And at that point, they did this next steps report. And at that point, they did a very strange switch.

Previously, they said, well, we've got this land constrained one just in case we have trouble deploying enough solar.

But then they did this flip where they said the land constrained one is our main one, and what was previously the base is now if we can find more land, we'll do that.

And so there was this weird change of perspective from, like, our mainline plan and something conservative just in case to it became the conservative one was their mainline. And somehow what had previously been their mainline expectations became the optimistic ones that maybe it'll work out that way.

And I don't really know why that is, but it's frustrating because I never saw an effort to actually go out and try to procure as much solar and really test the limits of of how much solar could be procured.

And so I think there's there's a lot of need for them to do a much more transparent, much simpler sort of all solar projects procurement process and get a get a feel for, like, if you made it easy for people to bring you solar projects, how much would they bring you and at what cost?

And I've just never seen that done. And instead, there's always been this tendency to pick the more conservative plans. And and so they're kind of going ahead with that more conservative plan.

And I don't see any effort being made to expand to the what they I mean, the part that's frustrating is even in the original work, the higher solar plan, they said, this is the one designed to minimize costs.

And the land constrained was like the just in case we can't get there, but they, they're not going after the cheaper plan and I don't really know why.

It I don't think it's ever been tested.

You know, one thing that we were just discussing this the other day, but, you know, it's really hard to get data sometimes, key information. But, in one case, not too long ago, I was able to see, like, the proposals for and what they'd be paying for land to the people who own that.

You normally, the the solar developers are leasing the land from someone and in fact, one landholder can get multiple proposals from from various developers who will put in the bids.

And so I saw what what the land owner was being offered. And, if land is truly constrained, basic economics says that that the people who have the scarce land that's really valuable for solar would would be able to command a really, really high price for it.

And from what I've seen, unless that's changed dramatically in the last few years, that's not the case at all. It's very low. These rates were being offered. So if there isn't enough land, we I haven't seen the evidence that's clear clearly says that's the case.

On this question of cost, I guess, just to clarify, in your analysis, you talked about the the the LNG contract cost being lower than what you typically see, but, like, what's been proposed here. When you say contract, you just sort of mean what they've put out there.

I mean, there's no contract that we know of, or have you seen things?

Well, there is there is a lot that's published in kind of this this media, and there is a lot of

But it's media that's just kind of focused on these stuff. Stating this is what we're saying it is, but there's not there's there's no obligation. I mean, we have no way of verifying that's actually what they would agree to.

Yeah. I mean, I would there's not a contract on the table and certainly not one that I've seen. Maybe maybe there is somewhere, but I haven't seen it. But what's commonly quoted is this 12% or 11.8% slope with Brent. So And that's kinda what we're talking

You use the more standard cost for that or in your analysis you use the cost that Jira has been talking about that we can't really verify?

Well, they're now talking about tying it to Henry Hub and that I'm not really sure what that would look like. There is a big margin, you're not gonna pay Henry Hub. One thing in HSCO's report, they show like the price in Canada of pipe gas and say, look, prices aren't very volatile.

So this is a good thing and of course, that's apples and oranges with that in LNG. But I so I don't know what the standard terms are on that contractor exactly what they're proposing and translating that would be kind of difficult.

So we haven't gone there yet, but that would be an interesting thing to explore and I will when I get a chance. A lot of people quote the 12% slope with Brent. That is a very common thing out there right now that's in the air.

But that slope, it's cheap in the sense that if you look empirically at the relationship between LNG and Brent, it's more like 13 and a half to 14% slope.

So it's a big discount From market pricing. And if you're if you're offering someone less volatility and a lower price in in this commitment, you have to ask, why are they offering me such a good deal?

And I think their interpretation of that is well, the price has really spiked. You know, we're gonna sell it to someone else unless you give us that price too. But we we need assurance that you're gonna buy even if the bottom falls out of the market.

And there's a distinct possibility of that. Before the Iraq or before the, you know, the war in Iran, a lot of new capacity is coming on particularly in the Gulf Of, that's been planned in recent years and is now starting to open up for for LNG export. And demand for LNG is really starting to fall off.

You know, you can see that in Japan, Jira has been involved in long term contracts for a while since Fukushima when they they got out of nuclear and really had to write up up LNG and it's been very expensive.

But now they're switching back to nuclear and they're they're trying to build a lot more renewables and their demand for natural natural gas is really falling.

And that's happening in other countries too just as supply is really coming on. So you could really have a glut. And all of these export terminals which are incredibly expensive are some costs. I mean they're done. So you could you could see prices really fall through the floor.

We'd be on the hook for that price. So they're looking for insurance against a glut. And that's Yeah. That's the most logical explanation of that. And relative to 2016, they were looking more at the 14% slope which was which is is empirically what we see.

And I guess for the cost of solar that you included in your analysis, and I know there were different, you know, different testing sensitivity testing around what that could be. But I think, we have seen it be higher in recent years. Right?

And I understand there's that anticipation it will decline again at some point, but timing would really matter here because there are fixed costs on the contracts for solar projects.

So depending when it was built in that contract was entered into, you would be locking in a higher cost because costs are high right now.

And we're also currently having this discussion about alternatives right now. Has that been addressed in the analysis?

Well, we just can look at different cost structures. I mean, this is kind of an engineering analysis, but when we look I think we should ask hard questions about why the prices are so high. And they are a little higher everywhere in the last few years.

And I think it's I think a lot of that is very temporary issues. There were even under Biden, we had really big tariffs on on imports because they wanted to protect the local industry.

And then the Trump administration came in and they had their own tariffs and they were, of course, really punishing local they they certainly weren't encouraging domestic manufacturing of clean energy like the Biden administration was. So and then there's a big rush.

Everyone's trying to get solar on in time to get the tax credits. So there's kind of an excess demand in only so many providers in a short period of time. So you really have supply constraints and supply chain issues.

But these are are very temporary sorts of things. Another big factor is probably rising interest rates that I don't think people take into account because this is all capital. So higher borrowing costs really affect renewable energy more than conventional energy.

But the long run trend is down and but above and beyond that, what's a local concern I think is that we've always been paying a lot more than elsewhere.

Much more than the Mainland United States and people in on the states, you know, in the continent also complained that in The United States we seem to pay too much.

But we pay twice what they pay.

What's your take on the reasons? I mean, obviously, we always account for shipping costs as adding but is it does it go beyond that? What else what else do we do in Hawaii that we could change, that we have the ability to change to to facilitate moving renewable energy forward?

The procurement process the the solar companies will complain about the RFPs being very burdensome, very risky for them to put in these proposals and they can get killed on a technicality at any time.

So there is a lot of risk for them that's not kind of fundamental, but it's the process and contracting risk. So anything you can do to streamline interconnection and make it as easy as possible for people to enter is is going to lower the cost.

And, you know, on so many dimensions, we do things to limit solar. So we have put on the gas with heavy subsidies, but then there's a kind of a hard, ceiling on how much you can export, say, on rooftop solar.

You know, my less than a third of my roof is covered with solar and I over produce. So for me, electricity is free at the margin and that that doesn't really make any sense.

I mean, if we really wanna save land, we should be able to export and get avoided cost and that's I think if you just let people, anyone interconnect to the grid and get avoided cost, we'd have solar really really fast. Yeah.

You know, some people say that they they all like this commitment to have a PPA and they're gonna get this guaranteed price but there there there are lots of examples where that works and the the avoided cost here is so high.

I think a lot of it is just the contracting cost because if you look at the fundamentals, I don't see any evidence that our labor costs are significantly higher. I don't see any evidence yet that our land costs are significantly higher.

Our panel costs and the shipping costs, those are a little higher, but that's still gonna be marginal, particularly if you're importing the volume. So I don't see how the fundamentals explain the price increase. So it probably has to do with policy.

And so I think we should take a hard look at our policies and see if we can find a way to to streamline that. And what you do there is you look at the places that interconnect the fastest and for the cheapest, places like Australia, Texas.

Jump in. Sorry. I have a couple other questions that we have limited time because I do have a hard stop at eleven. I guess for for, Mathias, for your analysis on reliability, does that cover multiple consecutive days of of low renewable production?

Yeah. It that's getting in into fairly technical stuff, but the way that it models the way that switch models each of those days is that it has to be able to serve an infinite sequence of those days. So, like, it has to be able to serve that low energy day as many times in a row as it might occur.

So the it that's why basically, it never stores energy from one day and delivers to the next. And that's that makes the modeling easier.

It's also inherently fairly conservative because realistically, you probably can use batteries to move some you don't usually wanna cycle batteries every third day or something, but you you still have some room to move a little bit of power from one day to the next.

Okay. So we do have to start wrapping up. Really appreciate everyone's time today. I think this is just the beginning of a conversation we wanna continue having, and it's, I think, been interesting.

I mean, the takeaway for me really is the the analysis that you guys have done that just show well, I think we've known, but that I think gets often missed in the public conversation that just more aggressively pursuing this

renewable pathway is the least is the least cost pathway and would bring the most savings to Hawaii's customers.

And I think, you know, Hawaii is an example of of that in action. I wanna give everyone a chance if there's any, you know, last words brief last words. Maybe starting with KIUC, we haven't had you up as much, but if you if there's any takeaway you want us to have before we before we dabble out today.

No. I just wanna thank you. Thank you for the opportunity to be here today. Appreciate it. Alright.

Thank you for coming. And, although we'll come to you last. So, Mathias, any takeaways or or last points you wanna touch on before we have to gamble out?

Yeah. I mean, just to reiterate, like, solar and batteries and possibly wind, if there's appetite for that, are the cheapest resources that Oahu can build. They're already cheaper than oil.

So to get to your question before, it's worth the model chooses when to build them, and it knows they're more expensive now than they'll be later.

But it's still worth building early because every year that you know, it's cheaper to put in solar today than to keep burning oil, and it'll be even cheaper next year to put in more solar.

So it's always the message from this kind of modeling is build as much solar as you can as early as possible. And and so anything that can be done to streamline that and to sort of help encourage Hawaiian Electric to procure more solar more quickly would really be helpful.

Yeah. I mean, I guess I don't have too much to add. I of course, agree with Matthias, but we do have some runs where we have pretty land constraint, more land constraints. And we haven't actually looked at everything yet.

But if there are any particular things that you want us to look at, we do have things kinda set up right now with current costs, and it's a good time to to look at them.

And I think it's transparency about a whole portfolio of options is useful for folks, so just let us know.

Yeah. No. Certainly, it's not without challenges to go down this pathway, but I think you can kind of California's just a good example because you can see what's achievable when you have enthusiasm and are sort of embracing this transition and are meeting challenges with people energy that they deserve.

So keep that in mind. And, again, I think there's so many more conversations to have on all of these topics, and we'll be continuing this work over the interim and and bringing people together to have these conversations, I hope.

So thank you all so much again for being here, and sorry that we don't have more time today. It's a it's a busy time of year, but appreciate you all, and we're gonna adjourn.