STAND. COM. REP. NO. 991

Honolulu, Hawaii

, 2005

RE: H.B. No. 1434

H.D. 3

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1434, H.D. 2, entitled:

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

begs leave to report as follows:

The purpose of this bill is to improve the Renewable Portfolio Standards law by, among other things:

(1) Repealing the requirement that the Department of Land and Natural Resources (DLNR) develop and publish a catalog of potential sites for the development of renewable energy;

(2) Clarifying that the calculation for avoided costs, under the definition of "cost-effective", account for risks attendant to fossil fuel generation, including environmental, cultural, and economic costs, where fossil fuel generation is being avoided;

(3) Deleting electrical energy savings brought about by the use of heat pump water heating, ice storage, quantifiable energy conservation measures, central station power projects, and rejected heat from co-generation and combined heat and power systems that sell electricity to electric utility companies from the definition of "renewable energy";

(4) Inserting electrical energy savings brought about by the use of all renewable electricity generated by eligible customer-generators into the definition of "renewable energy";

(5) Providing clarification on the kinds of events or circumstances that are considered outside the electric utility's control in meeting the renewable portfolio standards;

(6) Clarifying that electric utility companies' opportunity to earn a fair rate of return is not diminished as a result of the implementation of a proposed ratemaking structure;

(7) Requiring studies of the renewable portfolio standards to include:

(A) The effect of power purchase agreement terms on the viability of renewable power producers; and

(B) The capability of Hawaii's electric utility companies to implement a green power pricing program; and

(8) Requiring the Public Utilities Commission (PUC) to investigate and, if feasible, implement:

(A) The intra-state trading program;

(B) The green power pricing system; and

(C) The photovoltaic buydown program.

The PUC, Hawaii Solar Energy Association, Hawaii Renewable Energy Alliance, Conservation Council for Hawaii, Inter-Island Solar Supply, Hawaii PV Coalition, Rocky Mountain Institute, and a concerned individual supported this bill. PowerLight Corporation and Honolulu Seawater Air Conditioning, LLC, supported this bill and suggested amendments. The Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs, Energy Extension Service of the Office of Economic Development of the County of Kauai, Hawaiian Electric Company, Maui Electric Company, and Hawaii Electric Light Company supported the intent of this measure.

Your Committee has amended this bill by:

(1) Retaining the existing requirement that DLNR develop and publish a catalog of potential sites for the development of renewable energy;

(2) Deleting the provision clarifying the calculation of "avoided costs", under the definition of "cost- effective";

(3) Retaining electrical energy savings brought about by the use of ice storage and quantifiable energy conservation measures under the definition of "renewable energy";

(4) Including additional events or circumstances that are considered outside the electric utility's control in meeting renewable portfolio standards;

(5) Clarifying that the PUC, if time and resources permit, may:

(A) Examine the capability of Hawaii's electric utility companies to implement a green power pricing program; and

(B) Investigate and, if feasible, implement:

(i) An intra-state trading program;

(ii) A green power pricing system; and

(iii) A photovoltaic buydown program;

and

(6) Making technical, nonsubstantive amendments for style, clarity, and consistency.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1434, H.D. 2, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1434, H.D. 3.

Respectfully submitted on behalf of the members of the Committee on Finance,

 

____________________________

DWIGHT TAKAMINE, Chair