Report Title:

Renewable Energy; electricity

 

Description:

Requires that the renewable portfolio standards of 20 per cent by 2020 be met by classic electricity generation from renewable sources and energy savings from the use of renewable displacement or off-set technologies, or energy efficiency, until such time as a separate energy efficiency portfolio standard is established.  (HB3068 HD1)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

3068

TWENTY-FOURTH LEGISLATURE, 2008

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.  The legislature notes that renewable energy resources can greatly benefit Hawaii's economy, environment, energy security, and sustainability.  The increased use of Hawaii's abundant renewable energy resources, such as wind, solar, ocean thermal, wave, and biomass resources, are keys to reducing Hawaii's dependence on imported fossil fuels, reducing Hawaii's green house gas emissions, which contribute to global warming, and creating new job opportunities and economic diversification.

     The legislature finds that Hawaii's trade deficit is also a significant impediment to Hawaii's goal of economic and energy security and sustainability.  Specifically, in 2006, Hawaii exported only $16,300,000,000 in goods and services, including visitor spending, while importing approximately $24,000,000,000.  The legislature further finds that Hawaii's oil imports totaled $3,400,000,000 for the year, accounting for approximately 15 per cent of the total imports.  Over 93 per cent of Hawaii's energy is supplied by fossil fuel.

     Act 95, Session Laws of Hawaii 2004, established a renewable portfolio standard, which requires that each electric utility company generate ten per cent of its net electricity sales from renewable resources by December 31, 2010, 15 per cent by December 31, 2015, and 20 per cent by December 31, 2020.  Hawaii's electric utilities used fossil fuel to generate 92 per cent of the electricity they sold in 2006.  This represented almost 25 per cent of the total fossil fuel imports and cost approximately $749,102,000.  Since electric utilities can most readily use renewable energy relative to Hawaii's other energy sectors, the legislature mandated the renewable portfolio standards.

     The renewable portfolio standards, however, also included electrical energy savings brought about by the use of renewable displacement or off-set technologies, as well as electrical energy savings brought about by the use of energy efficiency technologies including energy efficiency programs.  This is unique among the 29 states that have renewable portfolio standard requirements.  It also results in double counting the energy savings in calculating the renewable portfolio standard achieved by the electric utilities.

     From 2001 to the end of 2006, the Hawaiian Electric companies (HECO utilities) have increased their electricity generation from renewable resources by 37 per cent.    During the same period, the HECO utilities' electricity sales increased by 746 gigawatthours, from 9,370 gigawatthours in 2001 to 10,116 gigawatthours in 2006.  However, the amount generated from renewable resources at facilities owned by the HECO utilities or purchased from independent power producers only increased by 221.6 gigawatthours, from 606 gigawatthours in 2001 to 827.6 gigawatthours in 2006.  This supplied less than one-third of the increase in HECO utilities' electricity sales.  In 2006, the utilities' reported renewable portfolio standards achieved under the current law, which includes energy savings from the use of renewable displacement or off-set technologies, as well as from energy efficiency and conservation programs totaled 1,399 gigawatthours, 59 per cent of which is accounted by the electricity generation from renewable resources.

     To ensure that the intent and purpose of this Act are clearly and unambiguously communicated, the legislature states its unequivocal support for all cost-effective, technically feasible uses of energy efficiency and conservation resources and technology and displacement or off-set technologies.  Therefore, nothing in this Act shall be taken to mean that the legislature intends to prevent, preclude, or in any way inhibit the use of such resources and technologies as the first and best choice for diminishing Hawaii's dangerous dependency on imported fossil fuels, especially petroleum.  Moreover, the legislature finds that in addition to strengthening Hawaii's renewable portfolio standards, which is the purpose of this Act, the separate establishment of similarly robust energy efficiency standards is an extremely attractive policy option and deserves serious consideration on its own merits.

     A separate energy efficiency portfolio standard is an important element in the development and management of any energy efficiency and demand-side management programs funded under the public benefits fund established under section 269-121, Hawaii Revised Statutes.  The legislature finds electrical energy saving resulting from the use of energy-efficient technologies, or from ratepayer-funded energy efficiency or demand-side management programs, should be excluded from the definition of renewable portfolio standard, but included in a separate energy efficiency portfolio standard.  However, until a thorough review is completed by the public utilities commission and a separate energy efficiency portfolio standard is established under a public benefits fund, the legislature finds that it is necessary to accurately categorize each type of electrical energy generation to ensure an accurate reporting of the sources of renewable electrical energy and energy efficiency with the renewable portfolio standard.

     The purpose of this Act is to clarify and ensure that more renewable resources will be deployed in energy generation to meet the renewable portfolio standards with attendant reductions in greenhouse gas emissions, replacement of fossil fuel oil, and other economic and environmental benefits.

     SECTION 2.  Section 269-91, Hawaii Revised Statutes, is amended as follows:

     1.  By adding a new definition to be appropriately inserted and to read:

     ""Energy efficiency portfolio standard" means the requirement that electric utility companies meet a portion of their annual increase in electricity demand through energy efficiency measures."

     2.  By amending the definitions of "renewable electrical energy" and "renewable portfolio standard" to read:

     "Renewable electrical energy" means:

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

     (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;[or] and

  [[](3)[]][Electrical] Until a separate energy efficiency portfolio standard is established, 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.

     "Renewable portfolio standard" means the percentage of electrical energy sales that is [represented] generated by renewable [electrical] energy."

     SECTION 3.  Section 269-92, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsections (a) and (b) to read:

     "(a)  Each electric utility company that sells electricity for consumption in the [State] 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 per cent of its net electricity sales by December 31, 2020.

     (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 least [fifty] seventy-five per cent of the renewable portfolio standards shall be met by electrical energy generated using renewable energy as the source;

     (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 value represented by the heat value of the renewable fuels."

     2.  By amending subsection (d) to read:

     "(d)  Events or circumstances that are outside of an electric utility company's reasonable control may include, to the extent the event or circumstance could not be reasonably foreseen and ameliorated:

     (1)  Weather-related damage;

     (2)  Natural disasters;

     (3)  Mechanical or resource failure;

     (4)  Failure of renewable [electrical] energy producers to meet contractual obligations to the electric utility company;

     (5)  Labor strikes or lockouts;

     (6)  Actions of governmental authorities that adversely affect the generation, transmission, or distribution of renewable electrical energy under contract to an electric utility company;

     (7)  Inability to acquire sufficient renewable electrical energy due to lapsing of tax credits related to renewable energy development;

     (8)  Inability to obtain permits or land use approvals for renewable [electrical] energy projects;

     (9)  Inability to acquire sufficient cost-effective renewable [electrical] energy;

    (10)  Substantial limitations, restrictions, or prohibitions on utility renewable [electrical] energy projects; and

    (11)  Other events and circumstances of a similar nature."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

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