Report Title:

Utilities; public utilities commission

Description:

Attempts to lessen Hawaii's dependence on imported oil by encouraging greater use of renewable energy and strengthening the electric grid through the establishment of Hawaii island as a testing ground for new and innovative ways to transform Hawaii into a sustainable energy state.

HOUSE OF REPRESENTATIVES

H.B. NO.

995

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO UTILITIES.

 

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

SECTION 1. The Brundtland Report states that "sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." Sustainable development focuses on improving the quality of life for all of the Earth's citizens without increasing the use of natural resources beyond the capacity of the environment to supply them indefinitely. We must develop within our means and not beyond them. Sustainable development also requires an understanding that inaction has consequences and that we find innovative ways to change institutional structures and influence individual behavior. It is about taking action and changing policy and practice at all levels.

The World Business Council, a coalition of one hundred sixty multinational companies, calls for the recognition that companies must meet social, environmental, and economic bottom lines.

As Asia and other nonindustrial nations become more industrialized, the continued use and expansion of fossil fuels will negatively impact global warming, national security, and the world's sustainability. Islands will serve as barometers of sustainability and global warming as ocean levels rise.

The drive for sustainability will occur on many fronts. For energy it requires that the world move from a non-sustainable, fossil-fuel based economy to a sustainable, renewable energy based economy and then a restorative, hydrogen-based economy. The Hawaii Constitution and Hawaii State Plan recognize the need to begin this transformation. This transformation will lessen Hawaii’s dependence on external energy sources beyond our control.

The State Constitution supports greater use of indigenous fuels. Article XI of the Hawaii State Constitution states: "the State...shall conserve and protect...natural resources, including...energy sources, and shall promote the development and utilization of these resources...in furtherance of the self-sufficiency of the State."

The Committee Report of the 1978 Constitutional Convention Committee that wrote this section noted: "The consensus of your Committee with regard to self-sufficiency was to constitutionally recognize the growing concern and awareness of Hawaii as being overly dependent on outside sources for...energy. ...it was concluded that...the achievement of increased energy self-sufficiency would be adequately covered by the provisions of this section."

State law requires the State to establish policies designed to increase energy self-sufficiency and energy security, including the use of renewable resources. In particular, section 226-18(a), Hawaii Revised Statutes, of the Hawaii State Planning Act requires planning for the State’s facility systems with regard to energy to include "increased energy self-sufficiency where the ratio of indigenous to imported energy use is increased...and "greater energy security in the face of threats to Hawaii’s energy supplies and systems...."

Similarly, section 226-103(f), Hawaii Revised Statutes, establishes priority guidelines for energy use and development to "encourage the development, demonstration, and commercialization of renewable energy sources...."

The legislature finds that Hawaii is dependent on imported oil for over ninety-two per cent of its energy needs, making it the most vulnerable state in the nation to economic disruption in the event of upheavals in the world oil market. Moreover, during periods of supply curtailment, the need to ensure basic public services to safeguard public health, safety, and welfare, such as police, fire, hospital, ambulance, and utility emergency services, competes with the need to maintain Hawaii’s economy and employment levels, not to mention the continued operations of the State’s transportation, commerce, industry, construction, government, the military, and agriculture. Other factors, including Hawaii’s geographic isolation and lack of overland access to energy sources, make the State unique in its near total reliance on imported oil and vulnerability to supply disruptions. The catastrophic events of September 11, 2001, underscore the need for Hawaii to severely reduce its dependence on foreign oil.

The legislature further finds that Hawaii is blessed with an abundance of renewable energy resources, including wind, solar, hydropower, biomass, geothermal resources, ocean thermal energy conversion, and wave energy. In particular, Act 272, Session Laws of Hawaii 2001, recognized "the economic, environmental, and fuel diversity benefits of renewable energy resources" and the need to "encourage the establishment of a market for renewable energy in Hawaii using the State’s renewable energy resources...." Act 272 further noted that "while Hawaii is a national leader in the development of renewable energy resources for electricity production, there may be more that the State can do to encourage the development and implementation of renewable energy. These efforts can reduce the amount of imported oil used for the generation of electricity."

The legislature further finds that renewable energy systems increase employment, diversify the economy, strengthen the state’s balance of trade, encourage foreign investment, protect coastal and marine areas, decrease the use of the shoreline for aesthetically-unpleasing structures, reduce global warming gases, provide for energy security, protect the environment, provide income for agricultural land owners, protect against catastrophic damage to a portion of the electric grid, decrease spills and required clean-ups, and improve health.

The legislature takes note of Amory and Hunter Lovin’s 1981 report, "Energy Policy for Resilience and National Security," carried out under the auspices of the Federal Emergency Management Agency, through the President’s Council on Environmental Quality. The report analyzes and documents the vulnerability of centralized generation and transmission from both accidental and terrorist incidents. A dispersed grid consisting of numerous smaller, independent generators utilizing different types of fuel sources significantly strengthens the grid ability to handle disturbances. A similar transformation has already occurred in the telecommunications and computer industries.

Renewable energy accounts for almost thirty-one per cent of California’s electrical production, nineteen per cent of Hawaii island’s electrical production and seventeen per cent of New York’s electrical production. New York’s governor has announced a drive to increase the rate to twenty-five percentage by 2013. Nevada’s goals call for fifteen per cent by 2013. Iceland has announced that all electricity and fuel for vehicles will be renewable by 2020. Clearly some states and some nations will lead the pack toward sustainability, and others will follow. Hawaii Island shall lead.

Hawaii Island should be involved in leading the world toward sustainability and to capture a large share of the financing that will occur worldwide to test new innovative approaches. Accordingly, the purpose of this Act is to:

(1) Lessen Hawaii’s dependence on imported oil;

(2) Encourage the greater use of renewable energy; and

(3) Strengthen the electric grid by establishing Hawaii Island as a petri dish to test new and innovative ways to transform Hawaii into a sustainable energy state.

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

"Part Energy security

§269-    Short title. This Act shall be known and may be cited as the Hawaii Island Energy Security Act of 2003.

§269-    Definitions. As used in this part:

"Baseload hybrid renewable energy system" means an electric generator using only renewable fuels with no one fuel accounting for more than ninety per cent of the electricity created and which can maintain a constant electric output.

"Baseload hybrid renewable-non-renewable energy system" means an electric generator using renewable fuels for at least seventy-five per cent of the electricity created with no one fuel accounting for more than ninety per cent of the electricity created and which can maintain a constant electric output.

"County energy commission" means a county created commission with nonpaid commissioners consisting of a balance of government, industry, environmental, community, and cultural members, who shall monitor the implementation of this part.

"Local grid" means a grid attached to the utility grid with one meter. Generators on local grids shall not be regulated by the public utilities commission.

"Smart electric systems" are distributed energy resources that can provide real-time, web-based, data on kilowatt/hour output, efficiency, and pollution emissions.

"Wheeling" means paying a tariff to the utility for the right for a company with excess electricity to sell the electricity to a customer via the grid."

§269- Renewable energy requirements; Hawaii Island. (a) Hawaii Island shall test an aggressive approach to renewable portfolio standards. By 2010:

(1) Twenty-five per cent of the island’s electricity shall come from renewable energy resources;

(2) Fifteen per cent of the island’s electricity shall consist of grid-connected distributed energy resources with at least five per cent being combined heat and power systems; and

(3) Ten per cent of the island’s electricity needs shall come from reducing the demand through the installation of energy efficiency devices and solar water heaters.

(b) Load growth shall only occur through the use of:

(1) Combined heat and power systems;

(2) Grid-connected baseload hybrid renewable energy systems;

(3) Baseload hybrid renewable-non-renewable energy systems;

(4) Local grids; and

(5) Modular smart electric systems with less than one MW capacity.

A portfolio of renewable alternatives shall be encouraged. Systems which test new ideas, including fuel cells, ocean thermal energy conversion, and hydrogen shall be encouraged.

(c) All new buildings shall have solar water heaters installed. For existing buildings, solar water heaters shall be installed on fifty per cent of all single resident houses, and twenty-five per cent of all other buildings by 2010.

(d) Electric utilities on Hawaii island may test new and innovative ways of generating and transmitting energy, including but not limited to:

(1) Time-of-day rates;

(2) Islanding or sectionalizing the grid;

(3) Wholesale and retail wheeling;

(4) Cogeneration;

(5) Performance-based ratemaking;

(6) Solar water heating revolving funds;

(7) The use of bonds for financing projects and for revolving funds;

(8) The use of nonprofits to funnel grants from agencies, foundations, and industry;

(9) Local grids; and

(10) Spinning off the generation units of the island utility into an unregulated company.

(e) The electric utility shall provide a real time web site that shows:

(1) The current load;

(2) The current demand; and

(3) The generators currently feeding the grid, and those generators efficiency and average pollution emissions per kilowatt/hour.

(f) By 2020, all electricity shall be made from renewable energy sources and/or combined heat and power systems. Combined heat and power systems shall be limited to no more than twenty per cent of the island’s electrical production and must have energy efficiencies greater than ninety per cent.

§269-    County energy commission establishment. A county energy commission may be established by the county of Hawaii. The public utilities commission shall work with any county energy commission that is established and shall share data gathered under this part."

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

INTRODUCED BY:

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