Report Title:

Renewable Energy

 

Description:

Establishes comprehensive measures for increasing the production and use of renewable energy in the State.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1468

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

relating to renewable energy.

 

 

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

 


PART I.  RENEWABLE PORTFOLIO STANDARDS

     SECTION 1.  Section 269-91, Hawaii Revised Statutes, is amended by amending the definitions of "renewable electrical energy" and "renewable energy" to read as follows:

     ""Renewable electrical energy" means:

     (1)  Electrical energy generated using renewable energy as the source;

     (2)  Electrical energy savings brought about by the use of renewable displacement or off-set technologies, including solar water heating, seawater air-conditioning district cooling systems, solar air-conditioning, and customer-sited, grid-connected renewable energy systems; provided that, beginning in 2015, electrical energy savings shall not count towards renewable energy portfolio standards; or

  [[](3)[]]    Electrical energy savings brought about by the use of energy efficiency technologies, including heat pump water heating, ice storage, ratepayer- funded energy efficiency programs, and use of rejected heat from co-generation and combined heat and power systems, excluding fossil-fueled qualifying facilities that sell electricity to electric utility companies and central station power projects[.]; provided that, beginning in 2015, electrical energy savings shall not count towards renewable energy portfolio standards.

     "Renewable energy" means energy generated or produced utilizing the following sources:

     (1)  Wind;

     (2)  The sun;

     (3)  Falling water;

     (4)  Biogas, including landfill and sewage-based digester gas;

     (5)  Geothermal;

     (6)  Ocean water, currents, and waves;

     (7)  Biomass, including biomass crops, agricultural and animal residues and wastes, and [municipal] solid waste;

     (8)  Biofuels; and

     (9)  Hydrogen produced from renewable energy sources."

     SECTION 2.  Section 269-92, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

     "(a)  Each electric utility company that sells electricity for consumption in the State shall establish a renewable portfolio standard of:

     (1)  Ten per cent of its net electricity sales by December 31, 2010;

     (2)  Fifteen per cent of its net electricity sales by December 31, 2015; [and]

     (3)  [Twenty] Twenty-five per cent of its net electricity sales by December 31, 2020[.]; and

     (4)  Forty per cent of its net electricity sales by December 31, 2030.

     (b)  The public utilities commission may establish standards for each utility that prescribe what portion of the renewable portfolio standards shall be met by specific types of renewable electrical energy resources; provided that:

     (1)  [At] Prior to January 1, 2015, at least fifty per cent of the renewable portfolio standards shall be met by electrical energy generated using renewable energy as the source[;], and after December 31, 2014, the entire renewable portfolio standard shall be met by electrical generation from renewable energy sources;

     (2)  Where electrical energy is generated or displaced by a combination of renewable and nonrenewable means, the proportion attributable to the renewable means shall be credited as renewable energy; [and]

     (3)  Where fossil and renewable fuels are co-fired in the same generating unit, the unit shall be considered to generate renewable electrical energy (electricity) in direct proportion to the percentage of the total heat input value represented by the heat input value of the renewable fuels[.]; and

     (4)  The public utilities commission shall not issue permits to build additional fossil-based electric generation units with rated capacity greater than two megawatts."

     SECTION 3.  Section 269-95, Hawaii Revised Statutes, is amended to read as follows:

     "§269‑95  Renewable portfolio standards study.  The public utilities commission shall:

     (1)  By December 31, 2007, develop and implement a utility ratemaking structure, which may include performance-based ratemaking, to provide incentives that encourage Hawaii's electric utility companies to use cost-effective renewable energy resources found in Hawaii to meet the renewable portfolio standards established in section 269-92, while allowing for deviation from the standards in the event that the standards cannot be met in a cost-effective manner or as a result of events or circumstances, such as described in section 269‑92(d), beyond the control of the utility that could not have been reasonably anticipated or ameliorated;

     (2)  Gather, review, and analyze empirical data to [determine]:

         (A)  Determine the extent to which any proposed utility ratemaking structure would impact electric utility companies' profit margins [and to ensure];

         (B)  Ensure that the electric utility companies' opportunity to earn a fair rate of return is not diminished; and

         (C)  Ensure that the electric utility companies' profit margins do not decrease as a result of the implementation of the proposed ratemaking structure;

     (3)  Using funds from the public utilities special fund, contract with the Hawaii natural energy institute of the University of Hawaii to conduct independent studies to be reviewed by a panel of experts from entities such as the United States Department of Energy, National Renewable Energy Laboratory, Electric Power Research Institute, Hawaii electric utility companies, environmental groups, and other similar institutions with the required expertise.  These studies shall include findings and recommendations regarding:

         (A)  The capability of Hawaii's electric utility companies to achieve renewable portfolio standards in a cost-effective manner and shall assess factors such as the impact on consumer rates[,]; utility system reliability and stability[,]; costs and availability of appropriate renewable energy resources and technologies[,]; permitting approvals[,]; effects on the economy[,]; balance of trade, culture, community, environment, land and water[,]; climate change policies[,]; demographics[,]; and other factors deemed appropriate by the commission; and

         (B)  Projected renewable portfolio standards to be set five and ten years beyond the then current standards;

     (4)  [Revise] Evaluate renewable energy portfolio standards every five years, beginning in 2013, and revise the standards as appropriate based on the best information available at the time [if the results of the studies conflict with] to determine whether the renewable portfolio standards established by section 269‑92[;] remain achievable; and

     (5)  Report its findings and revisions to the renewable portfolio standards, based on its own studies and [those contracted under paragraph (3),] other information, to the legislature no later than twenty days before the convening of the regular session of [2009,] 2014, and every five years thereafter."

PART II.  NET ENERGY METERING

     SECTION 4.  Section 269-101.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§269-101.5[]]  Maximum capacity of eligible customer-generator.  The eligible customer-generator shall have a capacity of not more than fifty kilowatts; provided that the public utilities commission [may increase], by rule or order, may:

     (1)  Modify the maximum allowable capacity that eligible customer-generators may have [to an amount greater than fifty kilowatts by rule or order.]; or

     (2)  Replace the maximum allowable capacity with a limit on a per-circuit basis for designated electric utility companies and direct those affected electric utility companies to perform a circuit-specific analysis to determine how the limit may be increased or mitigated for those circuits where the interconnection requests are approaching the specified limit."

     SECTION 5.  Section 269-102, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Each net energy metering contract or tariff shall be identical, with respect to rate structure, to the contract or tariff to which the same customer would be assigned if the customer was not an eligible customer-generator[.]; provided that the public utilities commission, by rule or order, may allow designated electric utility companies to assign eligible customer-generators to other applicable rates, tariffs, or contracts that are determined by the public utilities commission to encourage increased use and development of renewable energy systems in the State.  The charges for all retail rate components for eligible customer-generators shall be based exclusively on the eligible customer-generator's net kilowatt-hour consumption over a monthly billing period.  Any new or additional demand charge, standby charge, customer charge, minimum monthly charge, interconnection charge, or other charge that would increase an eligible customer-generator's costs beyond those of other customers in the rate class to which the eligible customer-generator would otherwise be assigned are contrary to the intent of this section[,] and shall not form a part of net energy metering contracts or tariffs."

     SECTION 6.  Section 269-104, Hawaii Revised Statutes, is amended to read as follows:

     "§269-104  Additional customer-generators.  Notwithstanding section 269-102, an electric utility is not obligated to provide net energy metering to additional customer-generators in its service area when the combined total peak generating capacity of all eligible customer-generators served by all the electric utilities in that service area furnishing net energy metering to eligible customer-generators equals .5 per cent of the system peak demand of those electric utilities; provided that the public utilities commission, by rule or order may increase [, by rule or order,] or eliminate the limit to the allowable percentage of the electric utility's system peak demand produced from eligible customer-generators in the electric utility's service area, whereupon the electric utility [will be obligated to] shall provide net energy metering to additional eligible customer-generators in that service area [up to the increased percentage amount]."

PART III.  ENERGY RESOURCES COORDINATOR

     SECTION 7.  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;

     (3)  Formulate and recommend specific proposals, as necessary, for conserving energy and fuel, 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] those 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 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 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)  Formulate a systematic process, including the development of requirements, to identify geographic areas that contain renewable energy resource potential that may be developed in a cost-effective and environmentally benign manner and designate these  areas as renewable energy zones;

    (13)  Develop and recommend incentives plans and programs to encourage the development of renewable energy resource projects within the renewable energy zones;

    (14)  Assist public and private agencies in identifying the utility transmission projects or infrastructure that are required to accommodate and facilitate the development of renewable energy resources;

    (15)  Assist public and private agencies in coordination with the department of budget and finance in accessing use of special purpose revenue bonds to finance the engineering, design, and construction of transmission projects and infrastructure that are deemed critical to the development of renewable energy resources;

    (16)  Develop the criteria or requirements for identifying and qualifying specific transmission projects or infrastructure that are critical to the development of renewable energy resources; and for which the energy resources coordinator shall assist in accessing the use of special purpose revenue bonds to finance; and

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

PART IV.  RENEWABLE ENERGY RESOURCES

     SECTION 8.  Section 209E-2, Hawaii Revised Statutes, is amended by amending the definition of "qualified business" to read as follows:

     ""Qualified business" means any corporation, partnership, or sole proprietorship authorized to do business in the State that is qualified under section 209E-9, subject to the state corporate or individual income tax under chapter 235, and is:

     (1)  Engaged in manufacturing, the wholesale sale of tangible personal property as defined in section 237-4, or a service business as defined in this chapter;

     (2)  Engaged in producing agricultural products where the business is a producer as defined in section 237-5, or engaged in processing agricultural products, all or some of which were grown within an enterprise zone;

     (3)  Engaged in research, development, sale, or production of all types of genetically-engineered medical, agricultural, or maritime biotechnology products; or

     (4)  Engaged in [producing electric power from wind energy for sale primarily to a public utility company for resale to the public.] the development or production of fuels, thermal energy, or electrical energy from renewable resources, including:

         (A)  Wind;

         (B)  The sun;

         (C)  Falling water;

         (D)  Biogas, including landfill and sewage-based digester gas;

         (E)  Geothermal;

         (F)  Ocean water, currents, and waves;

         (G)  Biomass, including biomass crops, agriculture and animal residues and wastes, and solid waste;

         (H)  Biofuels; and

         (I)  Hydrogen produced from renewable energy sources."

PART V.  RENEWABLE ENERGY FACILITATOR

     SECTION 9.  Section 201-12.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The renewable energy facilitator shall have the following duties:

     (1)  Facilitate the efficient permitting of renewable energy projects[;], including:

         (A)  The land parcel on which the facility is situated;

         (B)  Any renewable energy production structure or equipment;

         (C)  Any energy transmission line from the facility to a public utility′s electricity system; and

         (D)  Any on-site infrastructure necessary for the production of electricity or biofuel from the renewable energy site;

     (2)  Initiate the implementation of key renewable energy projects by permitting various efficiency improvement strategies identified by the department;

     (3)  Administer the day-to-day coordination for renewable energy projects on behalf of the department and the day-to-day operations of the renewable energy facility siting process established in [[]Act 207, Session Laws of Hawaii 2008[]]; and

     (4)  Submit periodic reports to the legislature on renewable energy facilitation activities and the progress of the renewable energy facility siting process."

PART VI.  RENEWABLE ENERGY PERMITTING

     SECTION 10.  Chapter 201N, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§201N-     Designation as a renewable energy facility.  Upon application to the coordinator, the coordinator may designate a qualifying biofuel production facility or electricity production facility with a capacity between five megawatts and two hundred megawatts as a renewable energy facility.  Designations shall be made at the sole discretion of the coordinator."

     SECTION 11.  Section 201N-1, Hawaii Revised Statutes, is amended by amending the definition of "renewable energy facility" to read as follows:

     ""Renewable energy facility" or "facility" means a new facility located in the State with the capacity to produce from renewable energy at least two hundred megawatts of electricity[.] or a biofuel production facility or electricity production facility designated as a renewable energy facility by the coordinator pursuant to section 201N-   .  The term includes any of the following associated with the initial permitting and construction of the facility:

     (1)  The land parcel on which the facility is situated;

     (2)  Any renewable energy production structure or equipment;

     (3)  Any energy transmission line from the facility to a public utility's electricity transmission or distribution system;

     (4)  Any on-site infrastructure; and

     (5)  Any on-site building, structure, other improvement, or equipment necessary for the production of electricity or biofuel from the renewable energy site, transmission of the electricity or biofuel, or any accommodation for employees of the facility."

     SECTION 12.  Section 201N-4, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:

     "(g)  Each appropriate state and county agency shall diligently endeavor to process and approve or deny any permit in the permit plan no later than twelve months after a completed permit plan application is approved by the coordinator.  If a permit is not approved or denied within twelve months after approval of a completed permit plan application, the permitting agency, within thirty days following the end of the twelve-month period, shall provide the coordinator with a report identifying diligent measures that are being taken by the agency to complete processing and action as soon as practicable.  If no further processing and action are reported by the permitting agency within five months, the permit shall be deemed approved.  If a permitting agency fails to provide this report and if the permit has not been approved or denied within eighteen months following the approval of a completed permit plan application by the coordinator, the permit shall be deemed approved."

SECTION 13.  There is appropriated out of the renewable energy facility siting special fund the sum of $1,000,000 or so much thereof as may be necessary for fiscal year 2009-2010 and the same sum or so much thereof as may be necessary for fiscal year 2010-2011 for the operation and administration of the renewable energy facility siting process.

The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

     SECTION 14.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 15.  This Act shall take effect upon its approval; provided that section 13 shall take effect on July 1, 2009.

 

INTRODUCED BY:

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