Report Title:

Carbon Dioxide Emissions

Description:

Allows the Director to establish a program for the reduction of emissions of carbon dioxide, set fees and penalties for the program. Establishes a Carbon Dioxide Emissions Reduction Special Fund.

THE SENATE

S.B. NO.

2771

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE REDUCTION OF CARBON DIOXIDE EMISSIONS.

 

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

SECTION 1. The Legislature finds that carbon dioxide emissions from burning fossil fuels contribute to global warming by absorbing and trapping energy reflected from the earth's surface. Hawaii would be directly affected by global warming; scientific evidence suggests outcomes of rising sea level, changes in the frequency and strength of storms, climate variability, and loss of bio-diversity, among other things.

This legislation will encourage the affected companies to assess and reduce carbon dioxide emissions by upgrading or retiring plant equipment, using renewable energy sources, improving end-user energy efficiency through demand-side management programs, using cogeneration practices, offsetting carbon dioxide emissions by sequestration, or applying other means that result in identifiable decreases in carbon dioxide emissions. It will also provide funds to identify, plan, and implement projects to reduce carbon dioxide and to provide personnel support.

SECTION 2. Chapter 342B, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . CARBON DIOXIDE EMISSIONS REDUCTION PROGRAM

§342B- Definitions. As used in this part, unless the context otherwise requires:

"Affected company" means a company that owns or operates one or more stationary fossil fuel-fired generators .that have a combined capacity of ten megawatts or more and provides sixty percent or more of the power it generates annually to a public utility grid. A company whose generators use both fossil and renewable fuels where the percentage of renewable fuel is sixty percent or greater for the year shall be considered carbon dioxide neutral and shall not be subject to the provisions of this part. The total electrical generating capacity for an affected company is the sum of generating capacity from all the fossil fuel-fired generators owned or operated by the company in the State of Hawaii.

"Annual carbon dioxide emissions" means an affected company's total annual emissions of carbon dioxide expressed in short tons and calculated in accordance with procedures specified or approved by the director.

"Cogenerator" means a generating facility that produces electricity and useful thermal energy, such as heat or steam, used for industrial, commercial, heating, or cooling purposes, other than electrical generation.

"Demand-side management" means electric utility activities designed to encourage consumers to reduce their electricity use or the timing of electricity use.

"Fossil fuel-fired generator" means an electricity generating unit that combusts fossil fuel, such as oil, coal, or natural gas, to produce electricity.

"Renewable energy" means energy generated by sources other than fossil fuels. This includes, but is not limited to, energy from wind, hydroelectric, geothermal, photovoltaic, solar thermal, biomass, municipal solid waste, landfill or wastewater treatment plant methane, ocean thermal energy conversion, and wave energy sources. Of these generators, biomass, municipal solid waste, landfill or wastewater treatment plant methane emit carbon dioxide, but shall be considered carbon dioxide neutral, nominally taking in carbon during their creation equivalent to their emission of carbon dioxide during their combustion.

"Sequester" or "sequestration" means the long-term storage of carbon in the biosphere, underground, or in the oceans so that the buildup of carbon dioxide concentration in the atmosphere will be reduced or slowed.

§342B- Recordkeeping. (a) Beginning on January 1, 2004, and for each year thereafter, all affected companies shall maintain records of their annual carbon dioxide emissions from their fossil fuel generators.

(b) Beginning in 2005, all affected companies shall submit records of their annual carbon dioxide emissions for the preceding calendar year to the department by March 31 of the following year.

§342B- Carbon dioxide reduction fee. (a) Beginning on January 1, 2005, the director shall assess all affected companies a fee of twenty-five cents per ton of annual carbon dioxide emissions based on the affected company's emissions for the previous calendar year.

(b) Beginning on January 1, 2010, the director shall assess all affected companies a fee of one dollar for each ton of annual carbon dioxide emissions that causes the total annual carbon dioxide emissions rate to be greater than 1,500 pounds per megawatt-hour (1,500 lbs/MWh) based on the affected company's emissions for the previous calendar year.

(c) The total annual carbon dioxide emissions rate is the net sum of the annual carbon dioxide emissions from all of an affected company's fossil fuel-fired generators within the State of Hawaii, minus any reductions and offsets as approved and verified by the director, divided by the total annual megawatt-hours generated by the company's fossil-fuel generators, including those produced from renewable energy sources. Carbon dioxide reductions may be accomplished by upgrading or retiring existing generators, using renewable energy sources, improving end-user efficiency through demand-side management programs, using cogeneration practices, offsetting carbon dioxide emissions by sequestration, or applying other means; provided that the decreases in carbon dioxide are verifiable and approved by the director.

§342B- Fee payment. (a) Beginning in the year 2005 and for each year thereafter, all affected companies shall pay to the department, by March 31 of each year, the fees established in section 342B-   , based on the annual carbon dioxide emissions from an affected company for the previous calendar year period.

(b) Payment shall be made to the department and deposited into the carbon dioxide emissions reduction special fund established in section 342B-   .

§342B- Enforcement and penalties. (a) The director may impose a penalty of not more than $25,000 per day for each day that the director determines that an affected company has not met the provisions of this part.

(b) Payment shall be made to the department and deposited into the carbon dioxide emissions reduction special fund established in section 342B-   .

§342B- Carbon dioxide emissions reduction special fund. (a) There is established in the state treasury a carbon dioxide emissions reduction special fund, to be administered and expended by the department. All proceeds from fees paid pursuant to section 342B-   , carbon dioxide reduction fee, and section 342B-   , enforcement and penalties, shall be deposited into this account. These moneys shall be used to administer the carbon dioxide emissions reduction program, provide personnel support, conduct public outreach, and implement special projects related to carbon dioxide emissions reduction, as the director deems appropriate.

(b) At the end of each calendar year, any revenues collected under this section in excess of $2,000,000 shall be deposited into the general fund.

§342B- Contract for administrative services. The department may contract for services to assist in the administration of this part."

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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