STAND. COM. REP. NO.460

Honolulu, Hawaii

, 2001

RE: H.B. No. 173

H.D. 1

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Energy and Environmental Protection, to which was referred H.B. No. 173 entitled:

"A BILL FOR AN ACT RELATING TO RENEWABLE ENERGY RESOURCES,"

begs leave to report as follows:

The purpose of this bill is to require qualified electric utilities to implement renewables portfolio standards.

Generally, renewables portfolio standards require qualified electric utilities to possess a minimum percentage of renewable energy resources within their overall resource portfolio. In addition, this bill provides for the issuance of renewable energy credits to renewable energy generators, and establishes separate renewables portfolio standards for solar electric production. This bill also requires the public utilities commission to impose penalties, and allows persons to commence civil actions, for violations.

Your Committee received testimony in favor of this measure from the Department of Business, Economic Development, and Tourism; the Public Utilities Commission (supports encouragement of renewable energy, but with amendments); the Consumer Advocate; Hawaii Renewable Energy Alliance; Sierra Club, Hawaii Chapter and Maui Group; the Hydrogen Renewable Energy Enterprise, LLC; Ka Makani o Kohala Ohana, Inc.; and four individuals. Testimony in opposition to the measure was received from Hawaiian Electric Company, Inc. Comments on the bill were received from Goodsill Anderson Quinn and Stifel on behalf of Ogden Energy Group, Inc. (operator of HPOWER); Kauai Electric; and Life of the Land.

Your Committee agrees with the intent of this bill, and finds that because the benefit of electricity from renewable energy resources accrues to the public at large, consumers and electric utilities share an obligation to develop a minimum level of these resources in the State's electric supply portfolio. Your Committee finds that this bill will help to establish a market for renewable energy in Hawaii using the State's significant renewable energy resources, and will lower the cost of renewable energy to consumers.

Upon further consideration, your Committee has amended this bill by:

(1) Amending the definition of "qualified electric utility company" (in section 2 of the bill) to include all subsidiaries of a distributor. Your Committee finds that this amendment will provide assistance to those utilities that may have difficulty in siting cost-effective renewable resources or otherwise meeting the requirements of this bill;

(2) Adding target percentages for both the renewables portfolio standards (in section 3) and the solar renewables portfolio standards (in section 6), and deleting the blank percentages for periods after January 1, 2010. Your Committee finds that it is preferable to establish numerical targets for periods after that date at some point in the future, when more information is available on future technology;

(3) Deleting all of section 11, regarding the commencement of civil suits, and the second sentence of section 10, regarding the penalty to be imposed by the Public Utilities Commission for violations of the bill. While your Committee seeks to ensure compliance with the provisions of the bill, your Committee finds that the section allowing for civil suits is vague and ambiguously worded, and that it is preferable to allow for greater flexibility by the Commission in setting administrative penalties; and

(4) Making technical, nonsubstantive amendments.

In addition, your Committee finds that the issue of energy offsets may be appropriate for inclusion in part I of this bill relating to renewables portfolio standards. Energy offsets include such renewable technologies as solar hot water, solar air conditioning, and cold water air conditioning, that provide usable direct use energy which offsets a portion of the electricity that the qualified electric utility company would otherwise need to generate.

Your Committee finds that since there are a number of renewable technologies that can be used to conserve or avoid electricity use, it may be appropriate to include these technologies as energy offsets based on the amount of electricity avoided. In addition, implementation steps may include support on utility demand-side management programs and removal of market entry barriers to energy service providers. It is the intent of your Committee that the issue of energy offsets be deliberated by the second referral committees of this bill, namely, the Committees on Consumer Protection and Commerce and Judiciary and Hawaiian Affairs.

Your Committee defers to the subsequent committees to consider Ogden Energy Group's recommended language to include "waste-to-energy" in the definition of renewable energy.

As affirmed by the record of votes of the members of your Committee on Energy and Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 173, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 173, H.D. 1, and be referred to the Committees on Consumer Protection and Commerce and Judiciary and Hawaiian Affairs.

Respectfully submitted on behalf of the members of the Committee on Energy and Environmental Protection,

____________________________

HERMINA M. MORITA, Chair