Report Title:

Energy Resources; Power Generation Utilities, Transportation Fuels; State Energy Resources Coordinator

 

Description:

Addresses deficiencies in Hawaii's energy resources coordination statutes.  Provides policy guidance needed to provide adequate detail on the nature and relationship of the energy data analyses functions required of the state energy resources coordinator and energy program.  (HB3069 HD1)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

3069

TWENTY-FOURTH LEGISLATURE, 2008

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO ENERGY RESOURCES.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that one of the primary functions of government is the need to coordinate, from an informed technical and analytical perspective, the development of the State's energy resources to preserve energy security.  This means improving energy efficiency, increasing the sustainable use of indigenous renewable energy, and reducing the State's overdependence on oil.  The legislature finds that energy data and statistical and energy economic analysis are integral to the State's roles in strategic energy policy planning and energy emergency preparedness and response.  The State's focus should be aimed at preserving energy, economic stability, and security.  In recent years, energy markets, resources, systems and technologies, the variety and types of fuels, environmental standards and specifications of fuels, industry and industry sectors, consumers and consumption sectors, and policies related to energy and fuels have undergone dramatic changes.  Current and future transitional trends and issues are expected to continue to influence and change Hawaii's and the world's energy situation.  These events have revealed to the legislature a critical need to revitalize the State's technical analytic capabilities and understanding of Hawaii's energy resources, markets, and systems for effective planning of longer term measures to preserve the State's energy security.  The State's energy security is a prerequisite for economic stability and resilience.

     These functions are among the statutory roles and responsibilities of the director of business, economic development, and tourism, who serves as the state energy resources coordinator pursuant to section 196-3, Hawaii Revised Statutes.

     The legislature finds that chapter 196, Hawaii Revised Statutes, assigns the responsibility to systematically analyze, develop, and coordinate achievement of the State's energy policies, programs, and plans to the energy resources coordinator.  The legislature also finds that the governor has designated the energy resources coordinator as the representative responsible for energy emergency preparedness, including support of state civil defense, under chapters 125C and 128, Hawaii Revised Statutes, analogous to the United States Department of Energy's emergency support role of the Federal Emergency Management Agency.

     The legislature finds that the energy data and analytic functions of the director of business, economic development, and tourism as the state energy resources coordinator are statutorily distinctive from those of other agencies.  The functions are not redundant of other agencies' functions, such as the functions of the public utilities commission that focus primarily on monitoring petroleum prices and industry profits, a necessary and appropriate state "watchdog" role. 

     The legislature, in Act 182, Session Laws of Hawaii 2007, acknowledged the difference between the department of business, economic development, and tourism's energy analysis role and the public utilities commission's role to conduct analysis with a fundamental focus on petroleum prices and petroleum industry profits.  Moreover, the legislature finds that section 486J-5.3, Hawaii Revised Statutes, provides policy direction to the department of business, economic development, and tourism to conduct energy analytic functions that are distinctively different than those done by the public utilities commission.  It specifically recognizes that the use and analysis of energy and fuels data functions remain critical to virtually all of the department of business, economic development, and tourism's interrelated statutory energy program functional requirements as it directs the department's use of the data to effectuate the purposes of chapters 125C, 196, and other relevant laws.

     The legislature finds that just as the department of business, economic development, and tourism and the public utilities commission have distinctive energy-related missions and functions, the types of energy data collected and statistical analysis they are required to conduct are distinctive as well.  Both agencies require appropriate and definitive policy guidance for these functions.

     Accordingly, the legislature finds that just as the data analytic functions of the public utilities commission are explicated in chapter 486J, Hawaii Revised Statutes, such functional detail is needed within chapter 196, Hawaii Revised Statutes.  Statutory language is needed to provide policy guidance and appropriate direction to the department of business, economic development, and tourism.  The department of business, economic development, and tourism should be required to provide systematic quantitative and qualitative technical analyses of integrated energy systems and markets; assess the effectiveness of, and produce unbiased analytic proposals developed for, policy and regulatory decisions; provide assessments of renewable energy, energy efficiency, and fossil fuels in all energy sectors; and ensure energy security by diversification away from the use of imported fossil fuels.

     Therefore, the legislature finds that to strengthen and comprehensively address deficiencies in the energy resources coordination statutes, it is necessary to amend chapter 196, Hawaii Revised Statutes to:

     (1)  Update all key definitions to account for transition issues related to biofuels and other alternate fuels and the proliferation of new categories and specifications of petroleum fuels;

     (2)  Address increasing unique economic and energy systems risks corresponding to transition issues and trends as a result of the increase in the variety of fuels and fuel production feedstocks being directly imported into the State and the new fuel- and feedstock-specific infrastructure requirements associated with such transitional issues and trends;

     (3)  Establish definitive policy guidance needed on the nature and relationship of energy data analyses to the State's energy program, to clearly delineate distinctive analytic roles and responsibilities of state agencies conducting energy data functions; and

     (4)  Provide the basis for a robust, systematic state energy analytic capacity and capability.

     The purpose of this Act is to remedy the deficiencies in existing statutes governing energy policy planning and provide definitive guidance relating to the necessary quantitative and qualitative energy analytic functions support for the role of the energy resources coordinator.

     SECTION 2.  Chapter 196, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

     "§196-    Information and analysis required for state comprehensive energy planning for energy security.  The coordinator shall:

     (1)  Use all information, including confidential information, received from all sources, including the information received from the commission pursuant to chapter 486J and information received pursuant to chapter 125C, to effectuate the purposes of this chapter and chapter 125C; and

     (2)  Conduct systematic statistical and quantitative analyses of the State's energy resources, systems, and markets as the coordinator deems necessary to:

         (A)  Produce analyses designed to:

              (i)  Determine the status of energy resources, systems, and markets, both in-state and those to which Hawaii is directly tied, particularly in relation to the State's economy;

             (ii)  Recommend, develop proposals for, and assess the effectiveness of policy and regulatory decisions and assessments of renewable energy, energy efficiency, and all fuels in all sectors; and

            (iii)  Ensure energy security;

         (B)  Produce analyses of private and public sector energy planning efforts and market-based policies to:

              (i)  Develop Hawaii's energy resources, systems, and markets in all sectors;

             (ii)  Develop programs to preserve and protect the State's energy security;

            (iii)  Effectuate the conservation of energy resources;

             (iv)  Formulate plans for the development and use of alternative energy sources;

              (v)  Determine and recommend well-informed government policies and programs that may be necessary and appropriate; and

             (vi)  Implement and evaluate the effectiveness of the policies and programs;

         (C)  Conduct systematic statistical, energy economic, and other relevant analyses for comprehensive energy planning toward determining, measuring, evaluating, formulating, and recommending specific proposals for achieving optimum development of Hawaii's energy resources;

         (D)  Establish and maintain a quantitative and qualitative technical understanding of Hawaii's statewide energy resources, systems, and markets and their relationships to the economy;

         (E)  Produce trend analyses and forecasts of energy supply and demand and trend analyses of major aspects of Hawaii's energy resources, systems, and markets;

         (F)  Produce assessments of the cost-competitiveness of developing renewable energy and energy efficiency resources and subcategories of those energy resources in relation to each other and relative to petroleum-based fuels and other fossil fuels and other energy resources; and

         (G)  Produce other relevant energy analyses that the coordinator deems necessary to administer the comprehensive energy planning for energy security policies pursuant to this chapter and to implement and evaluate other related activities in support of the coordinator's role and responsibilities pursuant to this chapter, chapter 125C, and other relevant laws.

     §196-    Confidential information.  (a)  All information received by the coordinator that is exempt from public disclosure under section 92F-13 shall be:

     (1)  Afforded all the protection available pursuant to chapter 486J; and

     (2)  Held in confidence by the coordinator and the coordinator's staff and agents or aggregated to the extent necessary in the coordinator's discretion to ensure confidentiality as required by chapter 92F.

     (b)  The coordinator and the coordinator's staff and agents shall preserve the confidentiality and protection of all information received by the coordinator to the extent it is exempt from public disclosure under section 92F-13 and, by application and extension of any other agency's respective safeguards, protect and prevent the unauthorized further release of the information.  Each agency shall afford any shared information the protections from disclosure pursuant to chapter 92F;

     (c)  Each major energy producer, distributor, major energy marketer, major fuel storer, major energy transporter, and major energy user that provides confidential information to the coordinator, shall provide written or electronic notification to the coordinator as to the specific information that it considers confidential; provided that the information specified shall only be kept confidential as provided for in this section if it is exempt from public disclosure under section 92F-13.

     (d)  Unless otherwise provided by law with respect to the  information that is exempt from public disclosure under section 92F-13 that the coordinator obtains, purchases, receives, or otherwise acquires, the governor, the coordinator, and their staff and agents shall not:

     (1)  Use the confidential information for any purposes other than the purposes for which it is acquired;

     (2)  Make any publication whereby the confidential information furnished by any person can be identified; or

     (3)  Permit any person, other than the governor, the coordinator, the coordinator's staff, or agents thereof, to examine any confidential information, individual reports, or statements acquired."

     SECTION 3.  Section 196-1, Hawaii Revised Statutes, is amended to read as follows:

     "§196-1  Findings and declaration of necessity.  The legislature finds that:

     (1)  The global demand for petroleum and its derivatives has resulted in a significant and fundamental market escalation in oil prices and has caused severe economic hardships throughout the State and threatens to impair the public health, safety, and welfare.

              The State of Hawaii, with its near total dependence on imported fossil fuel, is particularly vulnerable to dislocations in the global energy market.  This [is an anomalous] situation[,] can be changed, as there are few places in the world so generously endowed with natural energy: geothermal, solar radiation, ocean temperature differential, wind, biomass, waves, and currents--all potential non-polluting power sources;

     (2)  There is a real need for comprehensive strategic [comprehensive] planning in the effort towards achieving full utilization of Hawaii's energy [resource programs] resources and the most effective allocation of energy resources throughout the State.  Planning is necessary and desirable in order that the State may recognize and declare the major problems and opportunities in the field of energy resources.  Both short-range and long-range planning will permit the articulation of:

         (A)  Broad policies, goals, and objectives;

         (B)  Criteria for measuring and evaluating accomplishments of objectives;

         (C)  Identification and implementation of programs that will carry out such objectives; and

         (D)  A determination of requirements necessary for the optimum development of Hawaii's energy resources.

          Such planning efforts will identify present conditions and major problems relating to energy resources, their exploration, development, production, and distribution.  It will show the projected nature of the situation and rate of change and present conditions for the foreseeable future based on a projection of current trends in the development of energy resources in Hawaii[;] and include initiatives designed to fundamentally change how Hawaii consumes energy by accelerating the production of renewable and alternative energy, increasing energy efficiency, developing and adopting new technologies, and ensuring the State's energy security;

     (3)  The State requires an in-depth understanding of the causes and effects of any transitional issues and trends related to changes in the State's energy resources, systems, and markets;

    [(3)] (4)  There are many agencies of the federal, state, and county governments in Hawaii, as well as many private agencies[,] and a broad set of non-governmental entities, engaged in, or expressing an interest in, various aspects of the exploration, research, distribution, transportation, storage, conservation, and production of all forms of energy resources in Hawaii.  Some of these agencies include the University of Hawaii[,]; the department of land and natural resources[,]; the department of business, economic development, and tourism[,]; the division of consumer advocacy[,]; the commission; the state civil defense; the federal energy office[,]; and various county agencies, as well as [the oil companies, gas stations, and other private enterprises;] Hawaii's energy and energy-related companies; and

    [(4)] (5)  There is [immediate] an ongoing need in this State to coordinate the efforts of [all these agencies,] statewide industry and government energy sectors; maintain the technical capability and adequate capacity to quantitatively and qualitatively evaluate, analyze, develop, and coordinate implementation of private and public sector energy planning efforts; recommend market-based policies to develop Hawaii's energy resources, systems, and markets; establish and coordinate programs to preserve and protect the State's energy security, maintain a robust energy emergency preparedness program, effectuate the conservation of [fuel,] energy resources, [to] and provide for the equitable distribution thereof[,]; and [to] formulate plans for the development and use of alternative energy sources.  There is a need for [such] this coordination, capability, and capacity so that there will be maximum conservation and utilization of energy resources in the State."

     SECTION 4.  Section 196-2, Hawaii Revised Statutes, is amended to read as follows:

     "§196-2  Definitions.  As used in this chapter, unless the context requires otherwise:

     "Commission" means the public utilities commission.

     "Coordinator" means the energy resources coordinator.

     "Department" means the department of business, economic development, and tourism.

     "Distributor" means:

     (1)  Every person who refines, manufactures, produces, or compounds fuel in the State and sells it at wholesale or retail, or who utilizes it directly in the manufacture of products or for the generation of power;

     (2)  Every person who imports or causes to be imported into the State, or exports or causes to be exported from the State, any fuel;

     (3)  Every person who acquires fuel through exchanges with another distributor; or

     (4)  Every person who purchases fuel for resale at wholesale or retail from any person described in paragraph (1), (2), or (3).

     "Electricity" means all electrical energy produced by combustion of any fuel as defined in this section, or generated or produced using wind, the sun, geothermal, ocean water, falling water, currents, waves, or any other source.

     "Energy" means work or heat that is, or may be, produced from any fuel or source whatsoever.

     "Energy resources" [means and includes fossil fuel, nuclear, geothermal, solar, hydropower, wind, and other means of generating energy.]:

     (1)  Means fuels, whether liquid, solid, or gaseous, commercially usable for energy needs, power generation, and fuels manufacture, that may be manufactured, grown, produced, or imported into the State or that may be exported therefrom, including petroleum and petroleum products and gases, including all fossil fuel-based gases, coal tar, vegetable ferments, biomass, municipal solid waste, biofuels, hydrogen, agricultural products used as fuels and as feedstock to produce fuels, and all fuel alcohols; and

     (2)  Includes all electrical energy produced by combustion of any fuel or generated or produced using wind, the sun, geothermal, ocean water, falling water, currents, waves, or any other source.

     "Fuel" means fuels, whether liquid, solid, or gaseous, commercially usable for energy needs, power generation, and fuels manufacture, that may be manufactured, grown, produced, or imported into the State or that may be exported therefrom, including petroleum and petroleum products and gases to include all fossil fuel-based gases, coal tar, vegetable ferments, biomass, municipal solid waste, biofuels, hydrogen, agricultural products used as fuels and as feedstock to produce fuels, and all fuel alcohols.

     "Major energy marketer" means any person who sells energy resources in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

     "Major energy producer" means any person who produces energy resources in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

     "Major energy transporter" means any person who transports energy resources in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

     "Major energy user" means any person who uses energy resources in the manufacture of products or for the generation of electricity in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

     "Major fuel storer" means any person who stores fuels in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

     "Townhouse" means a series of individual houses, having architectural unity and a common wall between each unit."

     SECTION 5.  Section 196-4, Hawaii Revised Statutes, is amended to read as follows:

     "§196-4  Powers and duties.  Subject to the approval of the governor, the coordinator shall:

     (1)  Formulate plans, including objectives, criteria to measure accomplishment of objectives, programs through which the objectives are to be attained, and financial requirements for the optimum development of Hawaii's energy resources;

     (2)  Conduct systematic analysis of existing and proposed energy resource programs, evaluate the analysis conducted by government agencies and other organizations and recommend to the governor and to the legislature programs [which] that represent the most effective allocation of resources for the development of energy [sources;] resources;

     (3)  Formulate and recommend specific proposals, as necessary, for conserving energy [and fuel,] resources, including the allocation and distribution thereof, to the governor and to the legislature;

     (4)  Assist public and private agencies in implementing energy conservation and related measures;

     (5)  Coordinate the State's energy conservation and allocation programs with that of the federal government, other state governments, governments of nations with interest in common energy resources, and the political subdivisions of the State;

     (6)  Develop programs to encourage private and public exploration and research of alternative energy resources [which] that will benefit the State;

     (7)  Conduct public education programs to inform the public of the energy resources situation as may exist from time to time and of the government actions taken [thereto];

     (8)  Serve as consultant to the governor, public agencies, and private industry on matters related to the acquisition, utilization, and conservation of energy resources;

     (9)  Contract for services when required for implementation of this chapter;

    (10)  Review proposed state actions [which] that the coordinator finds to have significant effect on energy [consumption] resources and report to the governor their effect on the energy conservation program, and perform such other services as may be required by the governor and the legislature;

    (11)  Prepare and submit an annual report and [such] other reports as may be requested to the governor and to the legislature on the implementation of this chapter and all matters related to energy resources; [and]

    (12)  Adopt rules for the administration of this chapter pursuant to chapter 91, provided that the rules shall be submitted to the legislature for review[.]; and

    (13)  Develop and maintain a comprehensive and systematic quantitative and qualitative capacity to:

         (A)  Analyze the status of energy resources, systems, and markets, both in-state and those to which Hawaii is directly tied, particularly in relation to the State's economy;

         (B)  Recommend, develop proposals for, and assess the effectiveness of, policy and regulatory decisions; and

         (C)  Conduct energy emergency planning."

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect upon its approval.