STAND. COM. REP. NO.249

Honolulu, Hawaii

, 2003

RE: S.B. No. 1609

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Energy and Environment, to which was referred S.B. No. 1609 entitled:

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

begs leave to report as follows:

The purpose of this measure is to require the Public Utilities Commission (Commission) to establish a renewable energy credits trading program to ensure compliance with the State's renewable portfolio standards and to require the Department of Business, Economic Development, and Tourism to investigate the feasibility of Hawaii becoming a member of the Chicago Climate Exchange to generate needed revenue for the State.

The Sierra Club and Life of the Land submitted testimony in support of this measure. The Department of Business, Economic Development, and Tourism, and Hawaii Renewable Energy Alliance submitted testimony in support of the intent of this measure. Comments on this measure were submitted by the Hawaiian Electric Company, Inc. and its subsidiaries, the Public Utilities Commission, and the Department of Commerce and Consumer Affairs.

Your Committee finds that the Chicago Climate Exchange, also known as "CCX", is a voluntary attempt to create market incentives for participants to cut emissions by reducing and trading greenhouse gas emissions. Funded by grants from the Chicago-based Joyce Foundation and administered by Northwestern University’s Kellogg Graduate School of Management, the goal of the exchange is to implement a voluntary pilot program for trading greenhouse gases in North America, to be later expanded to include international sources. Founding members of the exchange include American Electric Power, the City of Chicago, DuPont, the Ford Motor Company, International Paper, and Motorola, Inc.

Your Committee also finds that the establishment and operation of a renewable energy credits trading program will help facilitate the State's renewable portfolio standards law. Specifically, establishing a credit trading program and participating in the Chicago Climate Exchange offers utilities a mechanism for trading renewable energy credits for renewable energy generated in excess of renewable portfolio standards requirements, and trading renewable energy credits needed to meet renewable portfolio standards requirements. Effectively, trading renewable energy credits is a market-driven solution to help wean the State off of imported fossil fuels.

Your Committee has amended this measure by:

(1) Deleting the January 1, 2004, deadline by which the Commission must adopt program rules;

(2) Creating an advisory group to assist the Department of Business, Economic Development, and Tourism and the Commission in exploring and establishing a renewable energy trading credits program for the State; and

(3) Delaying the implementation date of a renewable energy credits trading program to July 1, 2005.

Your Committee finds that these amendments are to provide the Public Utilities Commission and the Department of Business, Economic Development, and Tourism sufficient time and assistance in developing an effective renewable energy trading credits program.

As affirmed by the record of votes of the members of your Committee on Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1609, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1609, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection and Housing.

Respectfully submitted on behalf of the members of the Committee on Energy and Environment,

____________________________

J. KALANI ENGLISH, Chair