HOUSE OF REPRESENTATIVES             H.C.R. NO.            
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                     HOUSE CONCURRENT

 1       WHEREAS, in the Public Utilities Commission Docket 94-0226,
 2   Renewable Energy Resource Investigation, one of the barriers to
 3   the use of renewable energy is unresolved avoided cost issues;
 4   and
 6       WHEREAS, unresolved avoided cost issues are also a factor
 7   in protracted contract negotiations for power purchase
 8   agreements between electric utilities and qualifying facility;
 9   and
11       WHEREAS, these unresolved issues increase the cost of doing
12   business and cost of living in Hawaii and contribute to
13   Hawaii's negative image as a place to do business; and
15       WHEREAS, utilities are required to purchase power from
16   qualifying facilities at or below their avoided costs unless a
17   different price is negotiated pursuant to the Public Utility
18   Regulatory Policies Act of 1978 (PURPA), as amended, and the
19   Commission's Standards for Small Power Production and
20   Cogeneration in the State of Hawaii, Hawaii Administrative
21   Rules Title 6, Chapter 74, the PUC's Avoided Cost Rules, which
22   implement PURPA and Section 269-27.2, HRS; and
24       WHEREAS, as defined in the PUC's Avoided Cost Rules,
25   avoided costs means the incremental or additional costs to an
26   electric utility of electric energy or firm capacity or both
27   which costs the utility would avoid by purchase from the
28   qualifying facility, HAR 6-74-1; and
30       WHEREAS, avoided costs are comprised of two components -
31   avoided capacity costs and avoided energy costs, and avoided
32   capacity costs include avoided capital costs and avoided fixed
33   operation and maintenance costs; and
35       WHEREAS, examples of costs that may be included in the
36   avoided capacity cost component are firm generating capacity
37   costs, transmission and distribution capital costs, fixed
38   operation and maintenance costs, and transmission and
39   distribution demand losses; now, therefore,

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                                  H.C.R. NO.            

 1       BE IT RESOLVED by the House of Representatives of the
 2   Twentieth Legislature of the State of Hawaii, Regular Session
 3   of 2000, the Senate concurring, that the Public Utilities
 4   Commission complete Docket No. 7310, short-run avoided energy
 5   costs for as-available resources and Docket No. 94-0079, long-
 6   run avoided cost for firm capacity resources and issue a
 7   decision and order; and
 9       BE IT FURTHER RESOLVED that the Public Utilities Commission
10   implement a plan to calculate avoided cost within 120 days from
11   the filing of a petition by a qualifying facility; and
13       BE IT FURTHER RESOLVED that the Chairperson of the Public
14   Utilities Commission shall report the decision and order and
15   the implementation plan to the State Legislature no later than
16   twenty calendar days prior to the convening of the 2001 Regular
17   Session.
19       BE IT FURTHER RESOLVED that a duly certified copy of this
20   Concurrent Resolution be transmitted to the Chairperson of the
21   Public Utilities Commission.
25                         OFFERED BY:  ____________________________