puc chair morita's letter to attorney caliboso

NEIL ABERCROMBIE i / . - ^ ' W A \ HERMINA MORITA GOVERNOR ( l y n S J W s l ^ X \ CHAIR

MICHAEL E. CHAMPLEY COMMISSIONER

LORRAINE H. AKIBA STATE OF HAWAII COMMISSIONER

PUBLIC UTILITIES COMMISSION

TBiephone (808) 586-2020 DEPARTMENT OF BUDGET AND FINANCE Facsimile (808)586-2066 465 S KING STREET fl1Q3 e-maii: Hawaii.PUC01 fl*aii.|jw

HONOLULU, HAWAII 96813

August 15, 2013

Carlito P. Caliboso, Esq. Yamamoto Caliboso 1099Alakea Street, Suite 2100 Honolulu, Hawaii 96813

Re: Docket No. 2013-0168, Public Utilities Commission - Proceeding to Review the Progress of Castle & Cooke Resorts, LLC's Proposed Lanai Wind Project

Dear Mr. Caliboso:

Hawaii Administrative Rule ("HAR") § 6-61-13 states:

§6-61-13 Code of ethics, (a) Any person who signs a pleading, brief, or document, enters an appearance at a hearing, or transacts business with the commission, by that act represents the following:

(1) That the person is lawfully authorized and qualified to so act;

(2) That the person will comply with the laws of this State and the several counties, and the rules of this commission; and

(3) That the person will maintain the respect due to the commission and will not deceive or knowingly present any false statements of fact or law to the commission.

(b) The commission may at any time require any person appearing before the commission in a representative capacity to furnish proof of authorization and qualification to . act in that capacity.

Hawaii District Office • 68B Kinoole Street, #106, Hilo, Hawaii 96720 • Telephone: (808) 974-4533, Facsimile: (BOB) 974-4534 Kauai District Office • 3060 Eiwa Street, #302-C, Lihue, Hawaii 96766 • Teiephone: (808) 274-3232, Facsimrie: (808)274-3233

(Maiiing address: Kauai District Otfice • 3060 Eiwa Street, Suile 307, Lihue, Hawaii 96766) Maui Distnct Office'State Office Building #1,54 South High Street, #218, Waiiuku. Hawaii 96793 • Telephone: (808)964-6182, Facsimile: (806)964-8183

Carlito P. Caliboso, Esq. August 15, 2013

HAR §6-61-13.

Rules 1.11 and 1.12 of the Hawaii Rules of Professional Conduct, which prescribes a lawyer's professional responsibility and governs the legal profession, presently state in part:

Rule 1.11. SUCCESSIVE GOVERNMENT AND PRIVATE EMPLOYMENT.

(a) Except as law may otherwise expressly permit, a lawyer shall not represent a private client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee. No lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter unless:

(1) the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom; and

(2) . written notice is promptly given to the appropriate government agency to enable it to ascertain compliance with the provisions of this rule.

(b) Except as law may othenwise expressly permit, a lawyer having information that the lawyer knows is confidential government information about a person acquired when the lav\/yer was a public officer or employee, may not represent a private client whose interests are adverse to that person in a matter in which the information could be used to the material disadvantage of that person. A firm with which that lawyer is associated may undertake or continue representation in the matter only if the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefrom.

(c) Except as law may othenwise expressly permit, a lawyer serving as a public officer or employee shall not:

(d) As used in this rule, the term "matter" includes:


(1) any judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, investigation, charge, accusation, arrest or other particular matter involving a specific party or parties; and

(2) any other matter covered by the conflict of interest rules of the appropriate government agency.

(e) As used in this rule, the term "confidential government information" means information which has been obtained under governmental authority and which, at the time this rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose, and which is not otherwise available to the public.

Rule 1.12. FORMER JUDGE OR ARBITRATOR.

(a) A lawyer shall not represent anyone in connection with a matter in which the lawyer participated personally and substantially as a judge or other adjudicative officer, arbitrator, or law clerk to such a person, unless all parties to the proceeding consent after disclosure.

(b) A lawyer shall not negotiate for employment with any person who is involved as a party or as attorney for a party in a matter in which the lawyer is participating personally and substantially as a judge or other adjudicative officer, or arbitrator. A lawyer serving as a law clerk to a judge, other adjudicative officer or arbitrator may negotiate for employment with a party or attorney involved in a matter in which the clerk is participating personally and substantially, but only after the lawyer haS'notified the judge, other adjudicative officer, or arbitrator.

(c) If a lawyer is disqualified by paragraph (a), no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in the matter unless:


Carlito P. Caliboso, Esq. August 15,2013

(2) written notice is promptly given to the appropriate tribunal to enable it to ascertain compliance with the provisions of this rule.

Rules 1.11 and 1.12 of the Hawaii Rules of Professional Conduct.

Effective January 1, 2014, Rules 1.11 and 1.12 of the Hawaii Rules of Professional Conduct will state in part:

Rule 1.11. SPECIAL CONFLICTS OF INTEREST FOR FORMER AND CURRENT GOVERNMENT OFFICERS AND EMPLOYEES.

(a) Except as law may othenwise expressly permit, a lawyer who has formerly served as a public officer or employee of the government:

(1) is subject to Rule 1.9(c); and (2) shall not othenwise represent a client in connection

with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency gives its consent to the representation, confirmed in writing after consultation.

(b) When a lawyer is disqualified from representation under paragraph (a), no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter unless:

(1) the disqualified lav\^er is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and

(2) written notice is promptly given to the appropriate government agency to enable it to ascertain compliance with the provisions of this Rule.

(c) Except as law may othenwise expressly permit, a lawyer having information that the lawyer knows is confidential government information about a person acquired when the lawyer was a public officer or employee may not represent a private client


whose interests are adverse to that person in a matter in which the information could be used to the material disadvantage of that person. As used in this Rule, the term "confidential government information" means information that has been obtained under governmental authority and which, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose and which is not otherwise available to the public. A firm with which that lawyer is associated may undertake or continue representation in the matter only if the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom.

(d) Except as law may otherwise expressly permit, a lawyer serving as a public officer or employee:

(e) As used in this Rule, the term "matter" includes:

(1) any judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, investigation, charge, accusation, arrest or other particular matter involving a specific party or parties; and

(2) any other matter covered by the conflict of interest rules of the appropriate government agency.

Rule 1.12. FORMER JUDGE, ARBITRATOR. MEDIATOR, OR OTHER THIRD-PARTY NEUTRAL.

(a) A lawyer shall not represent anyone in the same or substantially related matter in which the lawyer participated personally and substantially as a judge or other adjudicative officer or law clerk to such a person or as an arbitrator, mediator, or other third-party neutral, unless all parties to the proceeding consent after disclosure, confirmed in writing.

(b) A lawyer shall not negotiate for employment with any person who is involved as a party or as a lawyer for a party in a matter in which the lav^er is participating personally and substantially as a judge or other adjudicative officer, or arbitrator.


mediator, or other third-party neutral. A lawyer serving as a law clerk to a judge or other adjudicative officer may negotiate for employment with a party or lawyer involved in a matter in which the clerk is participating personally and substantially, but only after the lawyer has notified the judge or other adjudicative officer.

(c) If a lawyer is disqualified by paragraph (a), no lawyer in a firm with which that lav\^er is associated may knowingly undertake or continue representation in the matter unless:


(2) written notice is promptly given to the appropriate tribunal to enable them to ascertain compliance with the provisions of this Rule.

See Supreme Court of the State of Hawaii ("State"), In re Hawai'i Rules of Professional Conduct. SCRU-11-1047, Order Amending the Hawai'i Rules of Professional Conduct, filed June 25, 2013 (Rules 1.11 and 1.12 of the Hawaii Rules of Professional Conduct, effective January 1, 2014).

You previously served as Chairman of the State Public Utilities Commission ("Commission"), from April 2003 until March 2011, and as a Commissioner from March 2011 until August 2011.'' I began my term as Chair of the Commission in March 2011, while Commissioners Michael E. Champley and Lorraine H. Akiba began theirterms in September 2011 and July 2012, respectively. Thus, our terms overlapped from March 2011 to August 2011 (approximately 5-1/2 months).^

During your capacity as Chairman and a Commissioner, you participated as a decisionmaker in the following Commission matters: (1) In re Public Util. Comm'n.

^See Commission's Annual Report for the Fiscal Year 2011-2012, dated November 2012, at 11-15; Commission's Annual Report for the Fiscal Year 2010-2011, dated November 2011, at 9-10; and Commission's Annual Report for the Fiscal Year 2002-2003, dated December 2003, at 2,

^See Commission's Annual Report for the Fiscal Year 2011-2012, dated November 2012, at 11-15; and Commission's Annual Report for the Fiscal Year 2010-2011, dated November 2011, at 9-10.

Carlito P. Caliboso, Esq. August 15, 2013 Page?

Docket 03-0372, the Commission's competitive bidding proceeding for new energy generation; (2) In re Public Util. Comm'n. Docket No. 2007-0331, the development and issuance of Hawaiian Electric Company, Inc.'s ("HECO") request for proposal ("RFP") to acquire approximately one-hundred megawatts ("MW") of non-firm renewable energy for the island of Oahu; and (3) In re Hawaiian Elec. Co.. Inc.. Docket No. 2009-0327, HECO's petition for declaratory ruling relating to Castle & Cooke Resorts, LLC's ("Castle & Cooke") proposed Lanai wind farm project and First Wind Hawaii's ("First Wind") proposed Molokai wind farm project. The proposed Lanai and Molokai wind farm projects are cornmonly referred to as the Big Wind Project or Projects.

Descriptions of the actions taken by the Commission during your capacity as Chairman and a Commissioner include:

In re Public Util. Comm'n. Docket No. 03-0372

1. On October 21, 2003, the Commission initiated a proceeding to evaluate competitive bidding as a mechanism for acquiring or building new generating capacity in the State. Order No. 20583, filed on October 21, 2003.

2. On June 30, 2006, the Commission issued its proposed Framework for Competitive Bidding for the parlies' review and comment. Decision and Order No. 22588, filed on June 30, 2006.

The Commission's proposed Framework included waivers from the competitive bidding process for certain generation resources which meet a governmental objective or are othenA/ise in the public interest. Part II.A.3 of the Proposed Framework for Competitive Bidding, dated June 30, 2006.

3. On December 8, 2006, the Commission adopted its Framework for Competitive Bidding to govern competitive bidding as a mechanism for acquiring or building new energy generation in the State. Decision and Order No. 23121, filed on Decembers, 2006.

The Commission's Framework for Competitive Bidding adopted the waivers from the competitive bidding process for certain generation resources which meet a governmental objective or are otherwise in the public interest. Part II.A.3 of the Framework for Competitive Bidding, dated December 8, 2006.

Carlito P. Caliboso, Esq. August 15, 2013 " Pages

In re Public Util. Comm'n. Docket No. 2007-0331

1. On October 9, 2007, the Commission .opened a proceeding for the purpose of receiving filings, reviewing approval requests, and resolving disputes, if necessary, related to HECO's proposal to proceed with a competitive bidding process to acquire approximately one-hundred megawatts of non-firm renewable energy for the island of Oahu. Order No. 23699, filed on October 9, 2007.

2. On May 19, 2008, HECO submitted its Proposed Final RFP for Non-Firm Renewable Energy Projects, Island of Oahu ("Final 2008 Oahu RFP"), to the Commission.

The Final 2008 Oahu RFP solicited proposals for renewable energy contracts between 5 MW and 100 MW ("conforming bids"), but contained a clause that allowed bidders to submit alternate proposals larger than 100 MW ("non-conforming bids") for HECO's consideration.

3. By letter dated June 18, 2008, the Commission approved the issuance of the Final 2008 Oahu RFP.

4. Thereafter:

. . . In September 2008, HECO received a non-conforming bid from Castle & Cooke for a 400 MW wind project to be sited on the Island of Lanai. HECO also received non-conforming bids from [First Wind] for construction of a 50 MW wind farm as well as a 350 MW wind farm on Molokai, with the [Molokai] projects to be known as "Ikaika Wind Power."

On December 31, 2008, HECO, Castle & Cooke, and First Wind executed an agreement seeking to bifurcate the Castle & Cooke and First Wind wind farm proposals from the Final Oahu RFP ("HECO Wind Farm Bifurcation Agreement"). Under the HECO Wind Farm Bifurcation Agreement, the three stipulating parties agreed that HECO would seek commission approval for Castle & Cooke and First Wind to transfer their September 2008 project proposals, as submitted in response to the Final 2008 Oahu RFP, into a separate negotiation and evaluation process for the Lanai/Molokai wind projects.


In re Public Util. Comm'n. Docket No. 2013-0168, Order No. 31355, Initiating Proceeding, filed on July 11, 2013, at 2-3 (footnotes, text, and citations therein omitted).

In re Hawaiian Elec. Co.. Inc.. Docket No. 2009-0327

1. On November 16, 2009, HECO filed a petition seeking a declaratory order that HECO's bifurcation of Castle & Cooke's and First Wind's non-conforming proposals from the Final 2008 Oahu RFP was proper.

In Its petition, HECO noted that "[wjith respect.to the Big Wind projects, the two developers have each agreed to develop up to a 200 MW wind farm on each of the two islands." Petition for Declaratory Ruling, filed on November 16, 2009, at 4.

2. On December 1, 2009, the Commission noted that it would be inappropriate to resolve the limited issue of whether the bifurcation was proper, without addressing'the larger issues of:

Whether the Big Wind Projects comply with the Framework for Competitive Bidding, i.e., whether the Big Wind Projects were competitively bid, including:

Whether the scope of the Oahu RFP was proper;

Whether there was sufficient notice to potential bidders of the ability to file non-conforming proposals;

Whether the bifurcation of the non-conforming proposals was proper;

Whether the selection of all non-conforming proposals was appropriate; and

Whether a waiver from the Framework for Competitive Bidding for the Big Wind Projects is appropriate.

See Order Instructing the Parties to Submit a Stipulated Procedural Order, filed on December 1, 2009, at 3-4; and Order Approving the Stipulated Procedural Order, as Modified, filed on December 29, 2009, Exhibit 1, Section I, Statement of the Issues, at 4.


3. On November 18, 2010, the Commission issued its Decision and Order, declaring that the proposed large wind farm projects, as described in HECO's petition, were not properly submitted through the Framework for Competitive Bidding. However, the Commission found that in light of the public interest and to achieve a stated governmental objective, HECO was entitled to a waiver from the Framework for Competitive Bidding for the Big Wind Projects, provided that: (A) fully executed term sheets for each project were filed within four months from the Decision and Order, unless ordered othenwise by the Commission; and (B) documentation supporting the fairness of the price negotiated between HECO and the independent power producers were included In any application for approval of a power purchase agreement. Decision and Order, filed on November 18, 2010 (the "Waiver D&O").

4. On January 10, 2011, Corrimissioner Leslie H. Kondo issued his written opinion, dissenting from the Majority's decision to waive the competitive bidding requirements for the Big Wind Projects. Dissenting Opinion of Leslie H. Kondo, Commissioner, to Decision and Order Filed November 18, 2010, filed on January 10, 2011.

5. On March 21, 2011, HECO filed under confidential seal its fully executed term sheet with Castle & Cooke. However, no term sheet was executed between HECO and First Wind due to First Wind's inability to secure a suitable site for its proposed project.

6. Thereafter:

According to HECO, on March 25, 2011, the utility notified Castle & Cooke that it had the option to develop a larger wind farm on Lanai, since a term sheet was not executed with First Wind by the March 18, 2011 deadline. The Castle & Cooke term sheet included an option for it to assign a portion of its larger project development opportunity to a project developer on Molokai, subject to the commission's acceptance of this option, as well as the development of acceptable terms and conditions for a Molokai wind farm including pricing and community benefits. By letter, dated April 7, 2011, Castle & Cooke informed HECO that It selected the "Second Option," which provided that Castle & Cooke would develop a 200 MW wind farm on Lanai and arranged for the development of a wind farm on Molokai, such that the capacity of the Lanai and Molokai Wind Farms total 400 MW.


On May 23, 2011, in Docket No. 2009-0327, HECO filed its Assignment Request Letter, seeking confirmation from the commission that it is acceptable for HECO to submit a supplemented term sheet for a power purchase agreement with Castle & Cooke. Specifically, HECO requested commission confirmation that it is acceptable to supplement the existing term sheet with Castle & Cooke to reflect an assignment of a portion of the development rights-associated with the Molokai portion of the Big Wind Project to a new party, namely Molokai Renewables, LLC. By Order Denying HECO's Request and Directing HECO to Submit a Draft RFP Pursuant to Framework, filed on July 14, 2011, in Docket 2009-0327, the commission denied HECO's request ("Order Denying Assignment Request").

With respect to the non-conforming bids HECO received during its Final 2008 Oahu RFP, as a result of HECO's actions and the commission's decisions on the non-conforming bids, just one project remain[s] - a potential 200 MW wind project to be developed by Castle & Cooke on Lanai ("Castle & Cooke's Lanai Wind Project"). First Wind, [which] proposed to develop the second 200 MW of renewable energy originally carved out by HECO, Castle & Cooke, and First Wind under the Bifurcation Agreement as a potential wind project to be developed on Molokai, failed to meet the requirements set forth by the commission under the Waiver D&O. By the commission's Order Denying the Assignment Requests, HECO and Castle & Cooke's attempt to assign the development rights for the 200 MW project that First Wind intended to develop was rejected. Instead of approving the Assignment Request, the commission instructed HECO to solicit proposals for an additional 200 MW or more of renewable energy, which became the basis for [Docket No. 2013-0168].

In re Public Util. Comm'n. Docket No. 2013-0168, Order No. 31355, Initiating Proceeding, filed on July 11, 2013, at 5-7 (footnotes, text, and citations therein omitted).


1. On July 11, 2013, the Commission initiated the subject proceeding. In re Public Util. Comm'n. Docket No. 2013-0168, for the purpose of reviewing the progress of Castle & Cooke's Lanai Wind Project. The Commission: (A) named HECO, Castle & Cooke, and the Division of Consumer Advocacy as parties; (B) instructed Castle & Cooke to file a notice of appearance to indicate its representative for service of future filings and orders; and (C) instructed Castle & Cooke to file a written statement within twenty days, specifying in detail the status of its Lanai Wind Project, given the uncertainty created as a result of the overall purchase and sale of the ownership interests In Castle & Cooke, Castle & Cooke Lanai Properties, LLC, and Lanai Institute for the Environment, from Castle & Cooke, Inc. to Lanai Island Holdings, LLC. Order No. 31355, Initiating Proceeding, filed on July 11, 2013.

2. On July 19, 2013, Lanai Resorts, LLC, formerly known as Castle & Cooke, through its counsel, informed the Commission that: (A) Lanai Resorts, LLC did not hold any interest in the Lanai Wind Project; and (B) all rights related to the development of the Lanai Wind Project remained with Castle & Cooke, Inc., through one or more of its affiliates. Accordingly, Lanai Resorts, LLC requested the Commission to dismiss Lanai Resorts, LLC as a party to Docket No. 2013-0168.

3. By letters dated July 19, 2013, both filed on July 22, 2013, you and your client informed the Commission that: (A) Castle & Cooke Properties, Inc. is the entity that is developing the Lanai Wind Project, in cooperation with its corporate parent. Castle & Cooke, Inc.; (B) Castle & Cooke Properties, Inc. requests that it be named as the party in interest in place of Castle & Cooke; (C) Castle & Cooke Properties, Inc. requests an extension of time to file its written statement; and (D) your law firm, Yamamoto Caliboso, represents Castle & Cooke Properties, Inc.

4. By letter dated July 26, 2013, you requested, on behalf of Castle & Cooke Properties, Inc., an extension of time to respond to any motions, contingent upon Castle & Cooke Properties, Inc. being named as the party in interest in place of Castle & Cooke.

5. On July 29, 2013, the Commission: (A) named Castle & Cooke Properties, Inc. as a party; (B) dismissed Castle & Cooke, now known as Lanai Resorts, LLC, as a party; (C) instructed Castle & Cooke Properties, Inc. to file the written statement; and (D) granted Castle & Cooke Properties, Inc.'s request for


additional time to file its responses to any motions that were filed up until July 29, 2013. Order No. 31380, Naming Castle & Cooke Properties, Inc. as a Party and Dismissing Castle & Cooke Resorts, LLC (now known as Lanai Resorts, LLC) as a Party, filed on July 29, 2013.

6. The pleadings you have signed and filed in the subject proceeding on behalf of your client. Castle & Cooke Properties, Inc., include:

Memorandum in Opposition to Motion for Intervention of Renewable Energy Action Coalition of Hawaii, Inc., filed on August 2, 2013;

Memorandum in Opposition to Nextera Energy Hawaii, LLC's Motion to Intervene, filed on August 2, 2013;

Memorandum in Opposition to Life of the Land's Motion to Intervene, filed on August 2, 2013;

Memorandum in Opposition to Motion to Intervene Filed by Friends of Lanai, filed on August 2, 2013;

Memorandum of in Opposition to Kaulana Kaho'ohalahala and Matthew Mano's Motion for Leave to Intervene in Docket No. 2013-0168, filed on August 5, 2013;

Memorandum in Response to Hawaii Interisland Cable LLC's Motion to Intervene, filed on August 6, 2013;

Memorandum in Opposition to NextEra Energy Hawaii, LLC's Motion for Leave to File Reply Memorandum in Support of its Motion to Intervene, filed on August 12, 2013;

Memorandum in Response to Request to Stay Consideration of any Proposed Protective Order Until After Orders Entered on all Motions to Intervene, filed on August 12, 2013; and

Memorandum in Opposition to Life of the Land's Motion for Leave to File Reply Memorandum in Support of its Motion to Intervene, filed on August 12, 2013.


IV.

To reiterate, HAR § 6-61-13(b) provides that "[t]he commission may at any time require any person appearing before the commission in a representative capacity to furnish proof of authorization and qualification to act in that capacity."

By August 23, 2013, please provide written proof of your authority and qualifications to act as legal counsel for Castle & Cooke Properties, Inc., including your compliance with the Hawaii Rules of Professional Conduct (the current version and the new version that will take effect on January 1, 2014).

Thank you for your attention to this matter.

Sincerely,

Hermina Morita Chair

HM:do

c: Jeffrey T. Ono, Division of Consumer Advocacy Dean K. Matsuura, Hawaiian Electric Company, Inc.

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