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HomeMy WebLinkAboutMIN AWEEMC 2020/11/05 2018-2020 Committee on Agriculture, Water, Energy, and Environmental Management 21st Session Hawaii County Building 25 Aupuni Street Hilo, Hawai i November 5, 2020 CALL TO The regular meeting of the Committee on Agriculture, Water, Energy, ORDER: and Environmental Management was called to order at 1:02 p.m., in the Council Chambers, Hilo, by Mr. Herbert M. "Tim" Richards, III, Chair. ROLL CALL: Present: Mr. Herbert M. "Tim" Richards, III, Chair Mr. Matt Kaneali`i-Kleinfelder, Vice Chair Mr. Aaron S. Y. Chung, Member Ms. Maile Medeiros David, Member (via videoconference from Kona) Ms. Karen Eoff, Member (via videoconference from Kona) Ms. Ashley L. Kierkiewicz, Member Ms. Susan L. K. Lee Loy, Member Ms. Valerie T. Poindexter, Member (came in later) Ms. Rebecca Villegas, Member (via videoconference from Kona) STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: (There were none.) CHR. RICHARDS: Okay, thank you. Moving on to Communications, Communication 1133, please. COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. AWEEMC-21 November 5,2020 Comm. 1133: REQUESTS A PRESENTATION BY REPRESENTATIVES OF HAWAIIAN ELECTRIC LIGHT COMPANY REGARDING GRID STATUS RENEWABLE PROJECTS AND THE GOAL OF CONVERSION TO RENEWABLES BY 2045 From Council Member Herbert M. "Tim" Richards, III, dated September 15, 2020. ;and Comm. 1133.1: From Council Member Herbert M. "Tim" Richards, III, dated October 22, 2020, transmitting a PowerPoint presentation. Motion to Close File: Ms. Kierkiewicz moved to close file on Comm. 1133. Seconded by Ms. Lee Loy. CHR. RICHARDS: Now I understand we do have Ms. Sharon Suzuki and Kevin Waltjen on WebEx. Thank you, can we bring them on the screen? Is that how that works? Also I do want to recognize that Councilman Kaneali`i- Kleinfelder and Council Woman Poindexter has joined us. Sharon, can you hear us? Kevin can you hear us? And I'm going to ask HELCO-Zelko to come to the table, please. (Note: At this time Director of Governmental and Community Relations Jennifer Zelko-Schleuter came forward to address the members of the Committee.) MS. SUZUKI: Can we do a sound check, can you hear me? This is Sharon Suzuki. CHR. RICHARDS: Jen, you are here in Chambers, so I'm going to turn this over to you. First of all I'd like to welcome, Sharon thanks so much for being here. Kevin also thank you so much for being here. And Jenny thanks again for being here and being in chambers. Before us I requested a presentation by Hawaiian Electric to give us an update on where we are with our power grid and our projects coming forward. And I thought it was a good time. We're setting a new stage, we have a new Administration coming I, coming through a pretty tough economic time. So with that, I'm going to turn this over to you Jenny Zelko, and please go ahead. (Note: At this time Director of Governmental and Community Relations Jennifer Zelko-Schleuter came forward to address the members of the Committee.) MS. ZELKO-SCHLEUTER: Thanks, Tim. Sharon actually was going to start off this presentation, but there may be some technical difficulties. Page 2 AWEEMC-21 November 5,2020 MS. SUZUKI: Hey Jen, can you folks hear me? MS. ZELKO-SCHLEUTER: We can hear you. MS. SUZUKI: I got use to the audio. MS. ZELKO-SCHLEUTER: Yes. MS SUZUKI: Why don't I just start, and maybe the video will come on later. But I'll open then Jen, if that's okay? MS. ZELKO-SCHLEUTER: That's great. MS. SUZUKI: Okay. Good afternoon Chair Richards, Vice Chair Kaneali`i- Kleinfelder and members of the Agriculture, Water, Energy, and Environmental Management Committee. I'm Sharon Suzuki, Hawaiian Electric President of Maui County and Hawaii Island Utilities. I'm joined here by Kevin Wahjen who's our Director of Hawaii Island. And Jennifer Zelko-Schleuter our Director of Government& Community Affairs. Thank you again for the invitation to provide you an update on what we're doing on Hawaii Island. Thank you also for arranging for us to participate via WebEx. So what we plan to do today is to provide a brief formal presentation that covers what we're doing to serve your community, updates on renewable energy, and updates on our partnership in the community. We'll then open it up to questions from you. Next slide please. Is the slide-show up, Jen? MS. ZELKO-SCHLEUTER: I see it on the screen. CHR. RICHARDS: Hang on. Yeah, we have a copy for the public. MS. SUZUKI: Okay, I'll pause, let me know when you're ready. CHR. RICHARDS: Yeah, thanks Sharon. Hang on we're trying to catch up technology. Shall we take a recess? Okay, we'll be in recess, let's say five minutes. Recess: At 1:08 p.m., the Chair called for a recess. Reconvene: The meeting reconvened at 1:11 p.m. CHR. RICHARDS: So I'm going to turn this back over, and you don't have to put your mask on when you're talking, okay. Turn it back over to HELCO-Zelco, and take it away. Page 3 AWEEMC-21 November 5,2020 MS. ZELKO-SCHLEUTER: Thanks, Chair Richards. With that, actually Sharon and Kevin, I don't know, can you hear us okay? We have the slides up on our side. MS. SUZUKI: Okay, do you want me to start from the beginning again? MS. ZELKO-SCHLEUTER: No, I think just where you were. MS. SUZUKI: Okay, can you please advance to the next slide. (Note: At this time, Ms. Sharon Suzuki, Mr. Kevin Waltjen, and Ms. Jennifer Zelko-Schleuter provided a PowerPoint presentation to the members of the Committee. For viewing of the presentation, see the DVD copy of the meeting proceedings on file in the Clerk's Office. A copy of the PowerPoint presentation is made a part of the record, see Comm. 1133.1.) MS. ZELKO-SCHLEUTER: And with that, I think we're all ready for questions, that Kevin or Sharon, are super excited to answer. CHR. RICHARDS: Thanks, Jenny. I'm sure they're totally excited. So with that I'm going to open up the floor to Council Members, for any questions concerning our power grid here on Hawaii Island. I'm seeing no lights on here in the Hilo chamber. Kona do you have any questions? MS. VILLEGAS: Yes, please. CHR. RICHARDS: Go ahead. MS. VILLEGAS: Great. Thank you so much, for this great presentation. I'm going to just ask a couple of questions if I could about the map that's on page nine. And my apologies, it was really difficult to make out the presentations from those tuning in from WebEx. So if you've already mentioned this, my apologies for re-asking the question. In this map related to Hamakua energy, there is a little insignia that I guess it looks like a leaf. But I'm not quite sure, I didn't see that same icon listed on the side on the right as a source of energy. MR. WALTJEN: I can answer your question on that. This is Kevin Waltjen. That's a great question MS. VILLEGAS: Can you just try and get closer to your speaker? MR. WALTJEN: Okay, how's this, can you hear me now? MS. VILLEGAS: That's a little better, yes. Thank you. Page 4 AWEEMC-21 November 5,2020 MR. WALTJEN: Okay. So very perceptive that leaf on there, which we didn't have in our legend is actually the biofuel component I referred to in my opening on the renewable energy that we have on island. Right now, Hamakua energy uses biofuel as part of their fuel source. So in certain points and time, when they're using the biofuel it helps with the renewable energy component. And it's not a huge amount, but it still helps. Any little that you use within Hawaii as far as biofuel, and it actually stays in Hawaii. you know, it moves towards de-linking or getting off of fossil fuel. MS. VILLEGAS: Great. So when you say biofuel, what would be your specific definition, for that biofuel? MR. WALTJEN: So biofuel is, they're getting it from a facility in industrial park in Kea`au. And then Sharon can probably tell the name better than I can because I don't have that name on me right now. But they basically create the biofuel and they ship it to Hamakua energy partners, and they use that as part of their fuel mix. Go ahead Sharon, you can tell them. MS. SUZUKI: Sure,the company's name is Pacific Biodiesel. MS. VILLEGAS: Great, thank you. That's what I was MS. SUZUKI: They started on Maui. They have their refinery on Hawaii Island. MS. VILLEGAS: Got you, I'm very familiar with Pacific Biodiesel. Thank you so much for helping clarify on that. Just a couple other—when looking at the Waimea Plant, I don't see an icon next to it. What's that one run off of? MR. WALTJEN: The Waimea Plant is our diesel generators. MS. VILLEGAS: So it's oil essentially. MR. WALTJEN: Yeah oil, correct. MS. VILLEGAS: Okay, great. And then for the steam plants at Kanoelehua and Puna Steam? MR. WALTJEN: They're fuel. So their fuel is industrial fuel oil, thicker crude, but it's still oil based. MS. VILLEGAS: Okay. Got you, thank you. I just didn't see the icon, and I just wanted to confirm. And then I also note Hu Honua on here with TBD (To Be Determined), so I just thought that was interesting. I just have a couple of questions. As we look at the Wailuku River project coming online as a proposed Page 5 AWEEMC-21 November 5,2020 hydro power plant, I wondered what steps are still needed to secure long-term lease of water from the state. MR. WALTJEN: I can try answer that one as well. So right now with the Wailuku River hydro project—so there's several hydro plants along Wailuku River Hydro. So there's Wailuku River Hydro, which we have a contract with them and they're running. They're about a ten megawatt plant. We also have Waiau Hydro, which is our plant. And Pu`u`eo, which is our plant. So right now we have on our two plants Waiau and Pu`u`eo, a month to month revocable lease. On the Wailuku River Hydro Plant, they actually have a long-term lease with the state. And they have a contract with Wailuku River Hydro. So to answer your question, your next part of the question which was the long-term lease. We are currently working with the state, DLNR (Department of Land and Natural Resources) to negotiate a long-term lease. With that being said, you know, that process has many steps in order to come to fruition. So any support that we get from Council as well as state, you know, it helps with us trying to get through this 100 percent renewable. Like I said on this map, that we had showed on page nine, and thank you for pulling that map up, and asking your questions, it helps with the support when we get the support on these different agencies. And right now we're in the middle of negotiating that long-term lease. MS. VILLEGAS: Thank you, that's super helpful. Do you have or has HECO (Hawaiian Electric Company) made an offer of a price to the state or what the rent may be? MR. WALTJEN: As of right now, we've been having meetings. And I would say or meetings are anywhere from—every month we get together with DLNR, and we kind of talk through the different processes that has to happen. So the last few months we've been kind of laying out possible prices, and possible options for them to consider. But the process itself still requires them to secure an appraiser. Once we kind of go through these pieces secure the appraiser, and then utilize the information to kind of come back with an appraisal value. Once that appraisal value comes back, the law itself requires public auction. So they would then conduct the public auction piece. And then, once you get through all those kind of pieces, and they get the Board of Land and Natural Resources to approve then we can kind of secure down, and finalize the lease between us and the state. So like I said, it's a process. We wish everything could move faster, and we would get lower cost quicker. But you know, with all that being said, the state has been very good partners in this process. In helping us to understand what requirements they've got to look at, what things they have to insure that when they go through this negotiation, when they go through this discussion, (inaudible) discussion, they meet all their requirements by law. Page 6 AWEEMC-21 November 5,2020 MS. VILLEGAS: Okay, thank you. Just a couple more questions. I was wondering if you could explain to the Council, how the water license revenue is supposed to benefit the state in general, and Native Hawaiians. MR. WALTJEN: Okay, that's a tougher question. And the reason why I say it's a tougher question, is because for us as a user of the water and the manager of the plant we don't have control over how does it manage, or how does it translate on the state side. But what happens isI can tell you this much, is that there's components within this lease, or part of the lease or part of the discussion, which also looks at the watershed management piece. Anyway, on the water shed management is, anytime the water runs off of the adjacent land then comes back into the river, it does do certain things to the river. So some of that is part of the discussion. How do help with the watershed management? How the state ends up using the water lease component, that's probably a question you would have to ask DLNR separate, if that makes sense. MS. VILLEGAS: Okay, thanks. Because something that was recently brought to my attention is that, according to the Hawaii State Constitution Article 12 Section 1, in part, it says that, "Thirty percent of the state receipts derived from the leasing of cultivated sugarcane lands under any provision of law or from water licenses shall be transferred to Native Hawaiian Rehabilitation Fund, Section 213 of the Hawaiian Homes Commission Act, 1920, for the purposes enumerated in that section." So in just taking a look at this, while this doesn't directlyI mean this is what—it's the state's responsibility to then funnel the funds from leasing or the agreements made about using this water. I'm totally pro hydro power, I'm really excited to see these platforms and this map and these opportunities. I'm not so pleased about Hu Honua. But hydro power is really fantastic. But as we look atI did a little bit of a,just a little bit of research. And I just really want to encourage as HECO offering the price, and as you negotiate this, that it's taken into consideration what 30 percent of those funds are supposed to go back to Hawaiian Homes. And in that capacity, I think it's very important that price that's being paid is indicative, or benefitting people in the best capacity. MS. ZELKO-SCHLUETER: And this is Jen, if I could just add, appreciate those comments. And one of the things we are also in discussion with DHHL (Department of Hawaiian Homes Land) about these leases since the constitution as you mentioned does require the 30 percent back to DHHL, so really is kind of balancing the benefit to the beneficiaries cost to customers, and then the renewable energy. And so those are all things that we are definitely looking at, so really appreciate you bringing that up. MS. VILLEGAS: Thank you Jennifer, I really appreciate that as well. Because the number I had heard bounced around was one one-thousandth of a dollar per kilowatt hour, making it one-tenth of a cent per kilowatt hour. And 30 percent of that doesn't come up to a whole lot, when transitioning to Hawaiian Homes. So just as we look at that broader—when we look at it historically for so many things Page 7 AWEEMC-21 November 5,2020 on our islands, you know, vast amounts of property we lease for a dollar for 65 years. I just really want to make sure that we are not perpetuating those cycles, and we make sure those resources return to and support our host culture and the people. So thank you for taking that into consideration, and allowing me to ask these questions this afternoon. I yield. CHR. RICHARDS: Thank you. Any other questions fromoh, I'm going to come back to Hilo. I have Matt, go ahead, please. MR. KANEALI'I-KLEINFELDER: Thank you, Chair. Hi guys, thank you for being here today. Good to see you again. Thank you for the presentation. Question on the presentation, do the current renewable energy numbers at about 35 percent, does that include all of the projects that are on your list, including like Hu Honua and the Kona solar projects coming in. Or is that the 70 percent you're looking at in 2030? MR. WALTJEN: Thanks, that's a great question. The 70 percent does not include the Hu Honua project, but it does include the PGV (Puna Geothermal Ventures), AES (AES Waikoloa Solar, LLC), Puako Solar, and the Kuawehi solar projects. So with that being said, and that's why that is a great question because should something happen, because, you know, we're all in transition right now with COVID and the impact with what's happening with COVID. And the support that's needed from the community, as well as our government officials. All those pieces are very important for these projects going forward. But with that being said, you know, if you look at PGV, prior to PGV going offline back in 2018, at that time we were at 57 percent with PGV, 56.7 percent, 57 percent round up. With PGV coming back, right, after the fact we can expect that number to kind of go up, you know, in a full-year time because you got to look at all the kilowatt hours being generated in a full-year time. So this year you won't see it as drastic change, but next year it will be a drastic change just because of the amount of kilowatts hours are generated. So we expect to be, you know, within the 60 percentile, the lower 60 percentile once PGV comes back and starts operating at full capacity. But great question, because the solar will contribute, the various solar projects along that line will contribute. And as the last question we're dealing with hydro. Hydro also helps, you know, every part of it helps. MR. KANEALI'I-KLEINFELDER: Thank you, for that answer. So I think—as Sharon and I met in Maui to walk one of the solar system there. And it has beautiful system. Coming from the industry too, I mean I did this for 10 years, so I always appreciate seeing a nice solar system. But we talked about in Maui, was energy curtailing. So as you start hitting higher amounts of solar penetration on your grid, is there the opportunity for curtailing? May be not opportunity being a good word. Will there be curtailing going on during the daytime, and if so what are you going to be doing with that curtailed energy? Page 8 AWEEMC-21 November 5,2020 MR. WALTJEN: That's a beautiful question. I'll try to attack it first, and then I'll let Sharon jump in and Jen jump in, to kind of save me as I go through this answer. But let's try this way first. So as you start to gain more energy, if your energy exceeds the amount of load, doesn't matter if it's solar, wind, hydro, geothermal, any energy that comes into the system, when your energy starts to exceed the amount of loads you have there's a potential to curtail that energy, right. So the idea behind it is to—when you look at some of these solar projects when they came in, they came in with battery energy storage systems. Which then allows us to store some of that energy, and then shift it to other times when there is no solar on the system. But yet you can utilize it, to feed the load. So those things are some of the things that are being taken into consideration, enhanced with our RFP-1 and RFP-2, right? Which you kind of briefly touched upon. They kind of put in there to be both renewable energy sources and storage, or storage by itself. And they did that because they knew as you start to get more and more renewable energy, you would need these types of energy storage systems to help take in that energy from those various different resources, and then put it to where you don't have the energy sometimes throughout the night. Because like you said, with all the solar coming in—and I had mentioned the 100 megawatts on residential. It's starting to see, and show that kind of thing. So that's the first part of your question. The second part of your question was what kind of things can we do with you once it's in the system if you have to curtail, right? So like anything else as we start to look at the various different things, and we're kind of looking at hydrogen as one of those things to kind of look at how do we accommodate hydrogen in our system, where does it fit within our system with the current type of generation that we have, and where does it become reasonable? Because as you know, and I'm pretty sure most of you know some things about hydrogen one way or the other. Hydrogen has been coming up, and (inaudible) the hydrogen process. It does allow for energy usage, which does create another option for fitting it into our mix of load with the changing generation as we move forward. I hope I kind of answered. I'll let Jen or Sharon jump in, if I missed anything. MR. KANEALI'I-KLEINFELDER: I think you did a good job. Sharon you have anything to add? MS. SUZUKI: No, I thought he did a good job, too. The only thing to add is of course, you know, he already talked about electric fication of transportation, or Jen did, right. So we're looking at both right? It's not either or, but multiple solutions. Because to the extent that there's an increase in energy use especially say in the middle of the day, like we have some EB (Extended Benefits) time of use rates that are lower in the middle of the day to encourage charging, and up- taking advantage, right, of the abundance of PV (Photovoltaic) energy available. Then I think it helps to reduce that curtailment potential. That's all I wanted to add. Page 9 AWEEMC-21 November 5,2020 MR. KANEALI'I-KLEINFELDER: Okay. Thank you, Sharon. Yeah, I'd love to see that energy going to good use. And remind me, if I remember correctly it's either HELCO who orders hydrogen already. Because you use it in your turbines to decrease windage. Is that right? MR. WALTJEN: Yes, you're correct. We are using hydrogen for the windage component, and basically it's because hydrogen causes less resistance than air. So your very akamai, in the fact of how that works. But I don't know if we're the biggest inputter of hydrogen, but we're one of the ones that import hydrogen from Honolulu. And Honolulu also uses hydrogen in some of their plants. MR. KANEALI'I-KLEINFELDER: Almost be in your best interest to start producing hydrogen with curtailed energy as you get down the line. I have couple more questions. I appreciate that you're decoupling your price from fossil fuel, regarding PGV. I guess the bigger question is, are residents going to see decreases in their bill as we start to hit more and more renewable energy? And we start to decouple old agreements that weren't really serving the community as well as they should have. I mean can we expect, because that's really the big question to me is can we see a price drop as we hit higher renewable energy amounts in a grid? MR. WALTJEN: So that one is a tougher question. And I'll take a stab at it first, okay, and then anybody jump in and add. So the first thing is, couple things that you got to look at and you framed that question very well. Because even for us, we're constantly wanting to lower the cost of energy for our customers. We're constantly looking for better pricing. To the point where in the last eight years we've reached out to our various different contracts, and asked them to see if they would want to delink some fossil fuel and renegotiate parts of the contract. Some were excited to do so, some was not so much, yeah. But with that being said, you bring up the point, right. We're adding more and more renewable energy type contracts. So such things like our RFP phase one, and our RFP phase two, have been showing that we can negotiate lower cents per kilowatt hour from these facilities. And I'll give you an example, right. We'll look at AES which is that eight cents per kilowatt hour, and Kuawehi Solar which is nine cents per kilowatt hour. It's not the lowest you could see, but it's actually starting down the path. Because you've got to remember AES and Kuawehi came in, in 2018. The contract negotiation team piece and the new ones that are coming up, the PUC (Public Utility Commission) has already set standards to kind of frame it to the point where they're wanting to see energy cost coming down in four to five cents per kilowatt hour price ranges. Now once you start to get into those, and the other contracts start to negotiate lower prices. We're heading in the right direction. It's just how much does it improve the bill, how much change? That kind of stuff we've got to evaluate as it comes up. Page 10 AWEEMC-21 November 5,2020 MS. ZELKO-SCHLUETER: And then I think just to add, because Kevin that was a very good answer, I think we really want to focus on stabilizing cost, so that it doesn't go up and down and people can kind of plan their bills and, you know, over the year. I like to joke, but I think there's some truth in it that we were in the game of renewable energy early on when it was required that when you did these contracts. And I think you're aware of that, that we had to link it to the cost of fuel. And so these newer ones aren't like that. But we really would like to focus on stabilizing so people can make their plans and do their budget. I think that's a big part of it. MR. KANEALI'I-KLEINFELDER: Yeah, I mean you talked earlier about, you know, different foundations and community organizations that are looking at trying to help people. And if you really break it all down, the cost of living is huge. And we don't need to kind to beat around the bush, electricity is expensive here. And by right we live on an island, and everything is brought in. So I love the direction, but I think for the people that's a big one. Can we help our communities by decreasing the cost of living, electricity being one of the main bills we all pay, whether you're a business or a small family. Thank you for the answer, good answer. I know you're saying probably harder to answer, but you know, I appreciate the thought. Any thought towards title energy? Being that we live on an island, we're surrounded by an ocean. And a lot of other countries are starting to implement title energy. I'm just wondering if you're in for discussing that, if that's any upcoming project of pilot projects that you're looking at? MS. SUZUKI: I guess I'll start then Kevin. You know, in the past the Hawaiian Electric Companies have looked at pilot projects. And on Maui, I think we even worked with a developer way back when, right, on wave energy technology. The interconnection from off the island, right, to the island was very expensive and cost prohibitive. And their prototype was damaged in a storm down in Australia. So I think it became more developmental. So what we've done recently in conjunction with PUC Directives, is to go through a competitive bidding process where we're trying to find what the market bears. We're not necessarily only tied to solar and battery. But if the market presents itself and it's a competitive price that's what we're looking for. Because to address your earlier question, right. We know our communities and our customers want lower bills, and we're trying to do our part. MR. KANEALI'I-KLEINFELDER: Okay. Thank you, Sharon. So maybe, it sounds like a maybe, we got something floating out there. I like that. Okay, well again, coming from the industry when I first started, you know HELCO was kind of almost like a nemesis for solar companies. That's what I get from some of our customers, but as I went through the years of working there doing solar. I really came to think of—and it was kind of engrained to me that HELCO is actually the best generator that you can buy. And I've said that to Jen in our interview, and Page 11 AWEEMC-21 November 5,2020 you really are. And that's one of the base cost of your company, is that you guys provide energy 24 hours a day seven days a week. To every customer on this island, and every household, every business. Without you we'd have a lot of warm beer, and hot food. So I appreciate what you guys do. I look forward to seeing, you know, new projects, I'm very tied to renewable energy. And I appreciate your time today. Mahalo. CHR. RICHARDS: Thank you, Matt. I'm going to go back to Kona, is there any other questions coming from Kona side. MS. DAVID: No, Chair. Thank you. CHR. RICHARDS: Okay. Thank you. Over here I have Ms. Kierkiewicz. MS. KIERKIEWICZ: Thank you, Chair. Great to see you Jen. Hi Kevin, Hi Sharon, nice to see you again. Thank you for all of your support for community, not just the emergency assistance that you guys have been providing. But what you're doing to help insure that folks still have the ability to turn their lights on, you know, no late fees no service disconnections. So really appreciate this support during this really tough time. You know, I have to say when I heard the words fair, equable inclusive, that's a really big deal for the utility. I mean prior to being on the Council having worked in the communication and outreach, and having worked on a number of renewable energy projects. It wasn't the tactic, of the utility at that point. And so it's so amazing to see how in such a short span of time, there's been this huge cultural paradigm shift within the utility to really embrace and partner with community and come up with solutions that work for the people that are going to be impacted. So thank you. I think it's just worth saying that. A couple of questions. They weren't really part of your presentation, so I hope I'm okay, to veer off script. I'm just curious about work to modernize the grid. It's just an antiquated system, not super flexible, so just wondering if there's an update you guys can provide on that front. MR. WALTJEN: Yeah, I'll take a stab first. And then Sharon can jump in, and Jen can jump in to kind of correct pieces that I miss or add. So that's a good question. I mean you know, we're constantly trying to look at how do you improve the way we serve and the way our system serves, right? So when you say modernize the grid, that kind of touches like a whole bunch of different aspects of the utility itself. And the reason why I say that is, because you can modernize a substation. And a substation for us is a place where energy comes in as one voltage, and we distribute that voltage out and energy out to a different type of voltage, right. That substation does that job for us. In there we have been upgrading the protection, the way things run, how we connect, what we see over the years and we have constantly done those things. Page 12 AWEEMC-21 November 5,2020 So those parts of it still work, really well. Some of the other modernization things that we can talk about is when you get to the end-user customer and how we see or how we that information or how they get information back from us. Those things is part of the modernization grids that we are kind of looking at now. How do we get to that point? What do we do in order to implement something like that? That helps our customer get real time information, and helps us get real time information. Without and here we go back to something that Matt had talked about earlier, which was how do you keep the cost of the bill, or cost of energy or cost of the service down? So part of that discussion when we start talking about that part of grid modernization at the end user part. How do we do that? Implement the communication piece is going to cost some money, and not blow up so much that it then makes the bill too expensive to pay. So good question, and I'm probably not answering it exactly the way you wanted, but I can say this, we have plans to help stop that part of it which is the end user, which is implementing some kind of AMI (Advanced Metering Infrastructure) that allows communication to the utility, and the utility to the customer to make some decisions. And that moving forward. But again, we're looking at what is the best way to do it without increasing the cost to the customer to point where they can't afford it. That's one. The other part to that is as far as our substation and our different facilities that interconnect those pieces in, we've been constantly upgrading over the years, because it's within our control, it's within our means to change the older type equipment; equipment that was put in the 60's, and now they're actually in the 2000, right. We'd been constantly doing those. I hope I'm kind of getting it, and Sharon or Jen please add in all the things that I missed. MS. SUZUKI: I think that was good. A couple things. A lot of times we're replacing our poles with more resilient, stronger, larger poles to fair the weather right, or our storm situation. And also on the technical side, I call them smart devices, I'm not an engineer. But like for example can communicate where the fault on the grid is directly to our control room, so the response to restore power is quicker. Okay Jen, now we're already at two o'clock. MS. KIERKIEWICZ: Sharon, you actually, touched on the next question that I wanted to ask, which was, you know, what exactly is the utility keeping in mind as it comes to climate change? I mean Hawaii Island has been hit with a number of disasters in recent years, and with climate change we're going to just see more intensity and frequency of different storms and other weather patterns. So I'm just curious how are you keeping this challenge in mind, and insuring that all of our infrastructure and services are resilient and that we're able to really bounce forward, and insure people are connected specifically in times of disaster when they need to be kind of connected to each other, and to resources most. Page 13 AWEEMC-21 November 5,2020 MS. ZELKO-SCHLUETER: Well I can start with that one. I think one of the things that you know I'm extremely proud of is the vegetation management that Hawaiian Electric does in probably all of your districts. But that's been really important, and you saw what happened in Tropical Storm Iselle in Puna. And you know, as we look at the wildfires on the mainland, you know, you can see the devastation. So vegetation management is one of those things. And Kevin may be able to speak to this better, but I think there was an earthquake in 2006. Am I right about that? And it was after that, that there was a lot of hardening of the system back then. But Kevin I'll let you take that,because I was in high school in 2006. MR. WALTJEN: So Jen brings it up and she described it really well. But yes, in 2006 we had an earthquake, and we actually went through a large outage due to operations around the system activating due to the shaking of the earthquake. So after that we did a study and we did upgrade, and change protections and field holders and pieces of equipment throughout the system that contributed to the larger outage. Once we went through that, and we actually had to file a work report with the Public Utility Commission as well. Once we went through that, we had an earthquake in 2014 that when it shook we didn't lose the system the same way. And it was actually strong enough, that it matched the 2006 earthquake. So that showed that all the improvement that we did within the system, withstood the earthquake condition. So you know, going back to what you had said about, with the changing environment and all the environmental things that's happening. You know, we see it, we hear it on the news, we see more storms, stronger storms, all these things are happening. And how you attribute it one way or the other, for us as a utility, once we get something that happens we start to try to look at what was the root cause, and then we try to improve it to the point where it can withstand the next evolution of that type of event. So we seen it in Iselle, and Jen touched upon it very well. That you know, we had all the albizia trees that came down during that storm that kind of impacted. And then the county and the state got together, and then had that albizia trees mitigation group that kind of worked on a plan to kind of reduce the albizia tree impact. So going back to what Jen had said, you know, that part has been working really well. Is it perfect? I would say it's not perfect. There's ways we can always improve. The good thing is, we do improve. And with support from you folks, support from the community, things that people bring up, information, stakeholders, the collaboration. I think that is what makes it possible for us to get better. So you know,that's the only thing I could say, is that to answer your second question on what are we doing? We're always kind of listening, we're always kind of watching what comes of it and we take those pieces to heart and we try to look for improvement. Page 14 AWEEMC-21 November 5,2020 MS. KIERKIEWICZ: Thanks, Kevin. Thanks you all for your time. It's great to see you. Chair, I appreciate you bringing this forward. I yield. CHR. RICHARDS: Thank you. Looking around our chambers, I don't see any more lights on. Kona, I'll check with you one more time. Do we have any questions? MS. EOFF: No,thank you. And thank you very much, for the presentation. CHR. RICHARDS: Alright. So with that, I'll bring it back to myself and we'll close this out. First of Kevin this is probably maybe questions for you,just touching on some things. If I recall right, we are Big Island grid is about a 200 megawatt grid. What projections are we looking to go to 2045, and if we're supposed to be 100 percent renewable by then how are we planning for that? MR. WALTJEN: So that one there is even a tougher question, Tim. Because I don't have the data in front of me, I don't want to give you the wrong data. But I will—what I can do is I can look that up for you and back to you. Because we did do a study on our power supply improvement quote "plan"that actually lifted what generation mixes we would have going all the way out to 2045, and what that load requirement was going to be. So everything we plan is what we do, we're always constantly looking at what the next 10 years is going to look like. But in that plan we had to project out further. So I don't want to give you the wrong answers, say well we were planning for, you know, 345 megawatts and be totally wrong. So instead of that what we'll do, can I look that up for you, and then get that to you. And then you can get that to the rest of the members. CHR. RICHARDS: Yeah, if you could send it to the Clerk, that could be great. Okay. MR. WALTJEN: And then on that what I'll also include is that will have the mix of generation that we had projected in the PSIP (Power Supply Improvement Plan) on how we were planning to kind of get to, Now you got to take that with a grain of salt, right. Because the PSIP we plan so far ahead, and as things start to change technology changes, load changes, all the pieces start to change. We have to re-update and reiterate what is important. And some of the things might be stuff like, which I kind of touched upon with earlier about the hydrogen, right, you know, in that mix, you might not see it in the PSIP. But as we talk about today, and we look at what's going around in our nation today. We can see hydrogen as being something that the nation itself is looking at trying to move closer and closer too, yeah. So all information as it comes in is important. But we'll get that to you via—so I get you the right information. CHR. RICHARDS: Okay, I appreciate that, Kevin. I know this is part of our conversations we've had, where we have a big island. So our infrastructure is large, meaning we have lines and relatively speaking low use. So our Page 15 AWEEMC-21 November 5,2020 infrastructure costs are very high, and I'm appreciative of the fact we're paying close attention to that infrastructure cost because that's a true capital investment. To that and part of the resilience I think answered some of the questions, we posted a question concerning the circle around the Big Island, I know there was working towards completion of crossing Volcano National Park. Where are with that, as finishing that up? MS. ZELKO-SCHLUETER: So I can take that one. Oh, go ahead. No, Kevin you are so much more eloquent let me let you answer it. MR. WALTJEN: I'll let Jen start, and then I'll add in. But you know,that's a great question, Tim. MS. ZELKO-SCHLUETER: So that is our 3400 line, and that project is almost completed. In fact, I think by the end of this month, and I hope I'm not misspeaking. I believe that will be completed, that's through the volcano area. And that actually closes the communications loop, which is a big deal for 911 and first responders. And so I'll let Kevin take the technical part of that. MR. WALTJEN: So the technical part of it is, basically, you know, we're very fortunate here on Hawaii Island that we have many different communications groups that have been looking at—how do you improve the communication here for us on Hawaii Island, right? And I'm not going to mention it, because I don't want to seem like I'm picking one or the other. But we do have very good communications groups on the island. And with that being said, they've always looked at that one section that Jen had mentioned as being a stumbling block or an impossible piece to make this communication ring complete. With that being said, and going back to Ashley's last question about, you know, what are we doing to improve? Our 3400 line rebuild project, which is 34 kb line that goes from Kilauea, the National Park side going back along that Puna area all the way back to Puna power plant. We have been reconstructing that line from 2012. So every year we do pieces of that and we've rebuilt that line, so that way the cost of rebuilding is not so huge that it's an impossible journey, right. So that line with what Jen just talked about we're finishing up that part in National Park. Which is probably one of the harder places, because of how we've got to work within the National Park, helps us create this point where these communications groups can connect to our pole, and when they connect to those poles coming to through the park it then links up to our other line which is our 59 kb line going down towards Ka`u. And then they run their communications connected that link all the way from East Hawaii to south. And then coming back from south to west, and west going back to north and then coming back along Hamakua. So if you look at that ring, the rings will be a beautiful thing, the communication will be as beautiful. Page 16 AWEEMC-21 November 5,2020 CHR. RICHARDS: Thanks, Kevin. I know that's important for our county, for our internet linking thorough out the county. So I appreciate that. Also now touching back on the hydroelectric plant, and I know there was good questions brought up there. I know you're online, and the concern of getting these water licenses secured. I've toured these facilities, and literally this equipment is 100 years old. And I know by getting those water licenses secured, we can upgrade those equipment. Are we close with those water licenses, and can we facilitate that for you? MS. ZELKO-SCHLUETER: We'll I'll let Kevin and Sharon, kind of clean up my answer. But as Kevin had mentioned earlier, we have been in regular discussions with DLNR. We made sure that we were pushing forward even though COVID, and so continued meeting with them. You know, one of the things with Waiau, it was damaged during Hurricane Lane. And so it's been offline since then. And we'd like to start making improvements, and this water lease is really important. And as Kevin mentioned, I think DLNR has been a really good partner and in working with us, and we hope to get that completed very soon. Kevin. CHR. RICHARDS: You have the thumbs up. Okay, we've handled that one. The solar equipment, and Kevin this may be a question for you we're talking about equipment life cycle, and with the new solar projects we have a lot batteries that are going to be coming forth. End of life of those batteries, is that part of the RFP, is that part of the management? Because again, we are an island, and we don't want a bunch of old batteries being stacked up here. So is that how we're going to be managing it, is that part of the program? And I'll turn that over to both of you. MR. WALTJEN: Okay, let me try, start on that one. Okay, so that question, is to do with the way the contract is written. So when we write the contract with these different independent power producers, they're required to provide us the service of both the energy and the capacity or the storage of that capacity, or the storage of that energy, sorry. So when we look at the contract they will maintain, they will operate,they will replace, and they will be contracted with us for x amount of years. And required to keep it running. So as part of their cross analysis, when they figure out what is the best price, or what price can they provide on the fence for kilowatt hours. They have to look at the maintenance and the operation of that facility and plant. Now you bring up a good point, right. And this is where, I don't know if we as a nation, right, or we as a, even the world, has figured out how much issues will we get in the future when we have to start to decommission a battery or recycle a battery, or process the battery, whatever way you want to look at it. I don t think we're there yet, but as we start to evolve this process and then some of the older ones start to happen, we start to kind of lay out that process and how we as a society, as a community, as a nation, as a world have to deal with it. So not really Page 17 AWEEMC-21 November 5,2020 totally answering your question completely, but answering it only in the sense that the contractor will handle that part. But not being able to answer your question as far as what happens in future, when these things start to have to degrade and we got to do something with them. I think that part still has to be worked out, and that with time will tell with that. CHR. RICHARDS: And Kevin, I appreciate that. Not having the answer, but knowing that it's a question on the table is the important thing. Because as we go forward we have to figure this stuff out, and it's going to become more of a problem. Jen. MS. ZELKO-SCHLUETER: Yeah. And then if I could add, and maybe it doesn't directly answer your question. But one of the things that we've changed quite a bit, as we evaluate the different proposals that come in. There is a thing called non-price criteria. And so they do look at things like environmental concerns, community concerns. So you could be technologically great, and you could maybe even the economics be there. But if the developers don't show this community outreach plan, what they're planning on doing. And if they don't show, you know, what they're working on, on the environmental side, the project doesn't go forward. So I just wanted to mention that, because that changed quite a bit. CHR. RICHARDS: I appreciate that. That is a concern, because we can go back and touch on the whole global warming and all that. And this is to the point. So with that,touches pretty much most of my questions. I want to thank Hawaiian Electric for coming in. Sharon Suzuki, thank you so much, we really appreciate your Zooming in. Kevin, as always great talking stories with you guys. I'm hearing a shift for Hawaiian Electric going from an electric company, to an energy company. And I like the concept, and the conversations on hydrogen. I think this direction is right, so I appreciate that. We have a motion on the floor to close file. I'd like to call for the vote. All in favor please signify by saying "aye." Vote on Comm. 1133: The motion to close file on Comm. 1133 was carried by the Filed following voice vote: Ayes: Committee Members Chung, David, Eoff, Kaneali`i-Kleinfelder, Kierkiewicz, Lee Loy, Poindexter, Villegas, and Chair Richards —9. Noes: None. Absent: None. Excused: None. ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. (There were none.) Page 18