Report Title:

Renewable Energy; Standard Power Purchase Contract

Description:

Requires the public utilities commission to develop and adopt a standard power purchase contract for the purchase of electricity by public utilities from nonfossil fuel producers. (HB1032 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1032

TWENTY-SECOND LEGISLATURE, 2003

H.D. 1

STATE OF HAWAII


 

A BILL FOR AN ACT

 

relating to renewable energy.

 

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

SECTION 1. As early as 1974, the legislature recognized the significant dependence of the State on imported fossil fuel to generate electricity for use by the public and, as a result, enacted Act 237, Session Laws of Hawaii 1974. At the same time, the legislature acknowledged that this was an anomalous situation because the State is generously endowed with natural energy: geothermal, solar radiation, ocean temperature differential, wind, waves, and current, all nonpolluting power sources.

Section 269-27.2, Hawaii Revised Statutes, authorized the public utilities commission to direct the public utilities supplying electricity to the public to arrange for the acquisition of available electricity generated from nonfossil fuel sources. The purpose of the authorization was to maximize the reduction in consumption of fossil fuels in generating electricity for the public.

Presently, there is no standard form of power purchase contract for nonfossil fuel producers of electricity to use in selling the generated electricity to public utilities. Additionally, there is no standard interconnection agreement specifying the necessary equipment required to connect the electricity generated by producers to the public utilities' power grids. Therefore, it may take producers more than five years to negotiate a power purchase contract with the public utilities for the sale of electricity. The length of time to negotiate a contract discourages many potential producers of electricity using renewable energy resources to invest the capital required to develop the facilities.

A standard form of power purchase contract may eliminate the long delays in negotiating a contract between nonfossil fuel producers and the public utilities. This could encourage private investors to fund the construction and operation of renewable energy facilities generating electricity to be sold to the public utilities. This kind of actions helps to further the goals in promoting energy self-sufficiency and encouraging the development of nonfossil fuel sources of electrical energy.

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

"§269-    Standard power purchase contracts. (a) The public utilities commission, after receiving testimony from the public, shall develop and adopt, within months of the effective date of this Act, one or more standard form of power purchase contracts for the sale of electricity to the public utilities from nonfossil fuel producers using renewable energy resources.

(b) A standard power purchase contract shall contain provisions including but not limited to general terms and conditions, interconnection requirements, price, duration of contract, installed capacity, and any other matters deemed appropriate by the public utilities commission and in the best interest of the public. These provisions shall be as specific as possible, but shall also be designed to accommodate a variety of renewable energy resources, technical and other variables based on site location or other project specific factors, and key provisions such as price and contract duration."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.