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.

THE SENATE

S.B. NO.

1614

TWENTY-SECOND LEGISLATURE, 2003

 

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 269-27.72, 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 requirements 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 would eliminate the long delays in negotiating a contract between nonfossil fuel producers and the public utilities. This will encourage private investors to fund the construction and operation of renewable energy facilities generating electricity to be sold to the public utilities. The public will benefit through lower electricity rates and reduced environmental pollution. Moreover, this will further the goals of the legislature in promoting energy self-sufficiency and encouraging the maintenance and 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 purchase power contract and interconnection agreement. (a) The public utilities commission, after receiving testimony from the public, shall develop and adopt a standard form of power purchase contract for the sale of electricity to the public utilities from nonfossil fuel producers using renewable energy resources within six months of the effective date of this Act. The 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 commission and in the best interest of the public.

(b) If the public utilities commission fails to develop and adopt a standard form of power purchase contract as required in subsection (a), an aggrieved nonfossil fuel producer may seek redress from any court of competent jurisdiction."

SECTION 3. New statutory material is underscored.

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

INTRODUCED BY:

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