Report Title:

Electric Utilities; Fuel Mix Disclosure

 

Description:

Requires the establishment of a consumer disclosure standard under which retail suppliers of electricity disclose information on the fuel mix of the electricity products they sell.

 

THE SENATE

S.B. NO.

874

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to public utilities.

 

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

SECTION 1. The legislature finds that consumer disclosure ensures that retail electric consumers purchasing electric energy receive basic information about the characteristics associated with their electric product in a form that facilitates consumer understanding of retail electric energy service and the development of new products responsive to consumer preferences.

The legislature finds that there is a need for reliable, accurate, and timely information regarding fuel source, that is consistently collected, for all electricity products offered for retail sale in the State. The desirability and feasibility of disclosure has been clearly established in nutrition labeling, uniform food pricing, truth-in-lending, and other consumer information programs.

The intent of this Act is to establish a consumer disclosure standard under which retail suppliers in Hawaii disclose information on the fuel mix of the electricity products they sell. Fundamental to disclosure is a label that promotes consistency in content and format, that is accurate, reliable, and simple to understand, and that allows verification of the accuracy of information reported. To ensure that consumer information is verifiable and accurate, certain characteristics of electricity generation must be tracked and compared with information provided to consumers.

SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . FUEL MIX DISCLOSURE

269-A Definitions. As used in this part:

"Biomass generation" means electricity derived from burning solid organic fuels from wood, forest, or field residue, or dedicated energy crops that do not include wood pieces that have been treated with chemical preservatives such as creosote, pentachlorophenol, or copper-chroma-arsenic.

"Coal generation" means the electricity produced by a generating facility that burns coal as the primary fuel source.

"Declared resource" means an electricity source specifically identified by a retail supplier to serve retail electric customers. A declared resource includes a stated quantity of electricity tied directly to a specified generation facility or set of facilities either through ownership or contract purchase, or a contractual right to a stated quantity of electricity from a specified generation facility or set of facilities.

"Electric meters in service" means those meters that record in at least nine of twelve calendar months in any calendar year not less than two hundred fifty kilowatt hours per month.

"Electric utility" means a consumer-owned or investor-owned utility.

"Electricity" means electric energy measured in kilowatt hours, or electric capacity measured in kilowatts, or both.

"Electricity information coordinator" has the same meaning as "coordinator" as defined in section 196-2.

"Electricity product" means the electrical energy produced by a generating facility or facilities that a retail supplier sells or offers to sell to retail electric customers in the State. It does not include electrical energy generated on-site at a retail electric customer's premises.

"Fuel mix" means the actual or imputed sources of electricity sold to retail electric customers, expressed in terms of percentage contribution by resource category. The total fuel mix included in each disclosure shall total one hundred per cent.

"Geothermal generation" means electricity derived from thermal energy naturally produced within the earth.

"High efficiency cogeneration" means electricity produced by equipment, such as heat or steam used for industrial, commercial, heating, or cooling purposes, that meets the federal energy regulatory commission standards for qualifying facilities under the public utility regulatory policies act of 1978.

"Hydroelectric generation" means a power source created when water flows from a higher elevation to a lower elevation and the flow is converted to electricity in one or more generators at a single facility.

"Landfill gas generation" means electricity produced by a generating facility that uses waste gases produced by the decomposition of organic materials in landfills.

"Natural gas generation" means electricity produced by a generating facility that burns natural gas as the primary fuel source.

"Oil generation" means electricity produced by a generating facility that burns oil as the primary fuel source.

"Resale" means the purchase and subsequent sale of electricity for profit, but does not include the purchase and the subsequent sale of electricity at the same rate at which the electricity was purchased.

"Retail electric customer" means a person or entity that purchases electricity for ultimate consumption and not for resale.

"Retail supplier" means an electric utility that offers an electricity product for sale to retail electric customers in the state.

"Small utility" means any consumer-owned utility with twenty-five thousand or fewer electric meters in service, or that has an average of seven or fewer customers per mile of distribution line.

"Solar generation" means electricity derived from radiation from the sun that is directly or indirectly converted to electrical energy.

"Waste incineration generation" means electricity derived from burning solid or liquid wastes from businesses, households, municipalities, or waste treatment operations.

"Wind generation" means electricity created by movement of air that is converted to electrical energy.

269-B Annual fuel mix information; disclosure label; requirements. (a) Beginning January 1, 2002, each retail supplier shall provide to its existing and new retail electric customers its annual fuel mix information by generation category as required in section 269-C.

(b) Disclosures required under subsection (a) shall be provided through a disclosure label presented in a standardized format as required in section 269-C(f).

(c) Except as provided in subsection (e), each retail supplier shall provide the disclosure label:

(1) To each of its new retail electric customers at the time service is established;

(2) To all of its existing retail electric customers, as a bill insert or other mailed publication, not less than semiannually; and

(3) As part of any marketing material, in paper, written, or other media format, that is used primarily to promote the sale of any specific electricity product being advertised, contracted for, or offered for sale to current or prospective retail electric customers.

(d) In addition to the disclosure requirements under subsection (c), each retail supplier shall provide to each electric customer it serves, at least two additional times per year, a publication that contains either:

(1) The disclosure label;

(2) A customer service phone number to request a disclosure label; or

(3) A reference to an electronic form of the disclosure label.

(e) Small utilities shall provide the disclosure label not less than annually through a publication that is distributed to all their retail electric customers, and have disclosure label information available in their main business office. If a small utility engages in marketing a specific electric product new to that utility it shall provide the disclosure label described in subsection (c)(3).

269-C Fuel mix disclosure; electricity product categories; disclosure format. (a) Each retail supplier shall disclose the fuel mix of each electricity product it offers to retail electric customers as follows:

(1) For an electricity product comprised entirely of declared resources, a retail supplier shall disclose the fuel mix for the electricity product based on the quantity of electric generation from those declared resources for the previous calendar year and any adjustment, if taken, available under subsection (e);

(2) For an electricity product comprised of no declared resources, a retail supplier shall report the fuel mix for the electricity product as the fuel mix of net system power for the previous calendar year, as determined by the energy resources coordinator under chapter 196; and

(3) For an electricity product comprised of a combination of declared resources and the net system power, a retail supplier shall disclose the fuel mix for the electricity product as a weighted average of the megawatt-hours from declared resources and the megawatt-hours from the net system power mix for the previous calendar year according to the proportion of declared resources and net system power contained in the electricity product.

(b) The disclosures required by this section shall identify the percentage of the total electricity product sold by a retail supplier during the previous calendar year from each of the following categories:

(1) Coal generation;

(2) Hydroelectric generation;

(3) Natural gas generation;

(4) Nuclear generation; and

(5) Other generation, except that when a component of the other generation category meets or exceeds two per cent of the total electricity product sold by a retail supplier during the previous calendar year, the retail supplier shall identify the component or components and display the fuel mix percentages for these component sources, which may include:

(A) Biomass generation;

(B) Geothermal generation;

(C) Landfill gas generation;

(D) Oil generation;

(E) Solar generation;

(F) Waste incineration; or

(G) Wind generation.

A retail supplier may voluntarily identify any component or components within the other generation category that comprises two per cent or less of annual sales.

(c) Retail suppliers may separately report a subcategory of natural gas generation to identify high efficiency cogeneration.

(d) Except as provided in subsection (c), a retail supplier cannot include in the disclosure label any environmental quality or environmental impact qualifier related to any of the generation categories disclosed.

(e) A retail supplier may adjust its reported fuel mix for known changes in its declared resources for the current year based on any changes in its sources of electricity supply from either generation or contracts. If a retail supplier changes its fuel mix during a calendar year, it shall report those changes to the energy resources coordinator.

(f) Disclosure of the fuel mix information required in this section shall be made in the following uniform format: a tabular format with two columns, where the first column shall alphabetically list each category and the second column shall display the corresponding percentage of the total that each category represents. The percentage shall be reported as a numeric value rounded to the nearest one per cent. The percentages listed for the categories identified must sum to one hundred per cent with the table displaying such a total."

SECTION 3. The public utilities commission, in coordination with the department of business, economic development, and tourism, shall:

(1) Convene a work group of interested parties to suggest modifications, if any, to the disclosure requirements required in section 269-B to improve information content, readability, and consumer understanding, and to suggest modifications, if any, to the responsibilities of the energy resources coordinator to improve the accuracy and efficiency of the tracking process. If the director of business, economic development, and tourism serves as the energy resources coordinator, these evaluation and reporting requirements relative to the responsibilities of the electricity information coordinator and the tracking process shall be assigned to an independent third party;

(2) Invite interested parties, including representatives from investor-owned utilities, consumer-owned utilities, the commission, the attorney general's office, consumer advocacy groups, and the environmental community, to participate in the work group convened in paragraph (1); and

(3) Submit to the legislature no later than December 1, 2003, a report with suggested modifications, if any, to the disclosure requirements and responsibilities of the energy resources coordinator, as referred to in paragraph (1).

SECTION 4. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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