THE SENATE

S.B. NO.

1456

TWENTY-SIXTH LEGISLATURE, 2011

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO ENERGY.

 

 

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

 


SECTION 1.  Grid reliability has emerged as a central issue in Hawaii’s transition to clean energy.  The potential impact of increasing amounts of renewable energy on the electric grid has been linked to technical concerns regarding interconnection that could lead to the curtailment of the use of renewable energy for the electric grid.  The technical and contentious nature of this issue demands careful review and formal adoption of reliability standards and operating practices tailored specifically for Hawaii.  Formal reliability standards such as the North American Electric Reliability Corporation (NERC) standards may be particularly valuable to Hawaii because it can serve as a model to assess any grid reliability impacts and ensure reliable grid operation, thereby establishing an objective, verifiable basis for determining the amount of renewable energy that can be added to Hawaii’s electric systems.

To achieve Hawaii's clean energy objectives, interconnection and curtailment of renewable energy in Hawaii should be governed by formally adopted electric system reliability that are based upon existing NERC bulk electric system reliability standards, modified as may be necessary and appropriate for Hawaii's isolated island grids.  Although provisions in the Federal Power Act concerning electric reliability standards do not apply in Hawaii, regulated utilities’ electric system planning and operations, including decisions concerning the interconnection and curtailment of renewable energy providers, should be governed by formal reliability standards.

Reliability standards are planning and operating rules that utilities follow to ensure system reliability, including the ability of the electric system to supply the aggregate electric power and energy requirements of the electricity consumers at all times, taking into account scheduled and reasonably expected unscheduled outages of system components, and the ability of the electric system to withstand sudden disturbances such as electrical short circuits or unanticipated loss of system components.

Reliability standards should define circumstances in which renewable energy projects can or cannot be incorporated on each island.  The standards should be flexible and responsive to experience and changes in system conditions.  They should be modified as needed to reflect changes to transmission, distribution, generation, demand, generation mix, ancillary services availability, the results of ongoing studies, and any other relevant factors, such as technology and advancement.

Once approved by the United States (U.S.) Federal Energy Regulatory Commission, NERC reliability standards become legally binding on all owners, operators and users of the bulk power system.  NERC has the legal authority to enforce compliance with NERC reliability standards, which it achieves in part through the imposition of financial penalties.

All electric utilities in the U.S. (except for Hawaii and Alaska) are legally bound to comply with reliability standards enforced by NERC.  NERC reliability standards are used by electric utilities throughout the U.S., Canada, and portions of Mexico.  The reasons compelling widespread use of the NERC reliability standards throughout North America apply with equal force in Hawaii.  Although operational challenges in Hawaii may require modification of NERC reliability standards, the basic physical and operational characteristics of electric grids in Hawaii and North America are essentially identical.  All utilities must maintain adequate voltage, balance supply and demand in real time, and maintain system stability.

The experience of New Zealand demonstrates that formal reliability standards are appropriate and used not only in North America, but on isolated island electric grids similar to those in Hawaii.  The electric system in New Zealand consists of two separate island grids with limited interconnection via a high voltage direct current undersea cable.  The bulk power electric system is subject to formal reliability standards established by the New Zealand Electricity Commission.

Formal reliability and grid interconnection standards based on the NERC reliability standards are appropriate to guide Hawaii’s transition to electric grids supplied by increasing amounts of renewable energy.  The purpose of the reliability and interconnection standards is to maintain system reliability and grid stability and to ensure open access to transmission and distribution systems.

The purpose of this Act is to establish the Hawaii electricity reliability council to develop and implement grid reliability and interconnection standards for renewable energy.

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

     "§269-   Definitions.  Whenever used in this part, unless a different meaning clearly appears from the context:

     "Commission" means the public utilities commission.

     "Council" means the Hawaii electricity reliability council.

     "Electric system" means facilities and equipment used for generation, transmission, and distribution of electricity.

     "§269-    Hawaii electricity reliability council; establishment. (a)  There is established within the public utilities commission for administrative purposes only, the Hawaii electricity reliability council that shall consist of seven members.  Members of the council shall be appointed by the governor as provided in section 26-34.  The term of each member shall be four years; provided that, of the members initially appointed, four members shall serve for four years and three members shall serve for three years.  Vacancies shall be filled for the remainder of any unexpired term in the same manner as original appointments.  The council chairperson shall be elected by the council from among the appointed members of the council. The chairperson of the commission shall serve as an ex officio, non-voting member.

Members shall have knowledge, experience, and expertise in the area of renewable energy, electric public utility operation and management, engineering, government regulation and energy policy, economics, or climate and environmental protection; provided that no more than two members shall represent, be employed by, or be under contract with any electric public utility or electric public utility affiliate.  The members shall include at least one representative each from the city and county of Honolulu and the counties of Hawaii, Kauai, and Maui.  Four members shall constitute a quorum and a minimum of four affirmative votes shall be necessary for all actions by the council.  The members of the council shall serve without compensation but shall be reimbursed for expenses, including travel expenses, incurred in the discharge of their duties.

(b)  The council shall meet regularly and the meetings of the council shall be open to the public as provided in section 92-3; provided that when it is necessary for the council to receive information that is proprietary or confidential to a particular enterprise or the disclosure of which might be harmful to the business interests of the enterprise, the council may enter into an executive meeting that is closed to the public in accordance with the procedures provided for holding an executive meeting under part I of chapter 92.

(c)  Notwithstanding any law to the contrary, the council shall be exempt from section 26-35 with the exception of section 26-35(a)(2), (3), (7), (8) and subsection (b).

(d)  The council shall employ an executive officer and other personnel as necessary to carry out the duties of the council, who shall be exempt from chapter 76.  The executive officer shall have sufficient electricity grid or renewable energy expertise to carry out the duties of the council.

§ 269-   Reliability standards.  (a)  The council shall develop standards to ensure the reliability of electric systems in Hawaii.  The reliability standards shall be modeled upon North American Electric Reliability Corporation bulk electric system reliability standards, modified by the council as may be necessary and appropriate for electric systems in Hawaii.  All electric system owners, operators, and users shall comply with any applicable reliability standards developed by the council.

(b)  Reliability standards shall define the reliability requirements for planning and operating Hawaii electric systems, and shall define functions to be performed to ensure Hawaii electric systems operate reliably and in a manner that is fair, non-discriminatory, and consistent with state clean energy objectives.  The reliability standards shall address resource and demand balancing, supply resource adequacy, transmission and distribution planning and operations, and voltage and reactive control, and may address other related areas.  An electric public utility may not curtail renewable energy production unless such curtailment is necessary to prevent violation of a reliability standard.

(c)  Reliability standards shall be developed pursuant to a process modeled upon the North American Electric Reliability Corporation standards development process, modified by the council as may be necessary and appropriate to Hawaii electric systems; provided that the process shall provide reasonable notice and opportunity for public comment, due process, openness, a balance of interests, transparency, consensus-building, and timeliness.

(d)  The council shall submit for review to the commission initial reliability standards for Hawaii electric systems not less than eighteen months after the enactment of this Act.  Upon review, the commission may approve, deny, or approve with modifications the initial reliability standards.  The council may, upon implementation of any initial reliability standards approved by the commission, seek commission review and approval of proposed amendments or modifications to the initial reliability standards.

(e)  Significant disturbances and abnormal system events shall promptly be reported to the council and the council shall investigate such events, identify their causes, and publish findings in an effort to prevent and mitigate future such events.

(f)  As directed by the commission, periodic reports concerning compliance with reliability standards shall be submitted to the commission, and the council shall have access to real-time data and other information it deems necessary to monitor Hawaii electric systems for purposes of providing notification concerning significant disturbances and abnormal system events that may have the potential to affect electric system reliability.

(g)  The council shall maintain a list of registered entities subject to compliance with the reliability standards.

(h)  The council shall comply with all federal laws and rules related to national security, including but not limited to critical energy infrastructure information.

§ 269‑   Reliability standards; compliance and enforcement.  The council may identify potential violations of reliability standards through self-reporting by owners, operators, and users of specific incidents and events; information provided in annual compliance reports, audit reports, or other reports; information received by the council from other industry participants; audits and other monitoring programs; and investigations by the council.  The council shall report potential violations to the commission.  If the commission determines that any person has violated or is violating this section, the commission shall undertake enforcement pursuant to this chapter.

§ 269‑   Interconnection standards and procedures.  (a)  The council shall prepare initial interconnection standards and procedures not less than eighteen months after the enactment of this Act.  The council shall, upon implementation of any initial interconnection standards and procedures, seek commission review and approval of proposed amendments or modifications to the standards and procedures.

(b)  The interconnection standards and procedures shall establish the technical requirements that govern interconnection to the transmission, sub-transmission, and distribution levels of an electric system by generators of electricity, and by providers of electricity storage and services to aid the proper and efficient functioning of the electric system.

(c)  The standards and procedures shall replace interconnection standards and procedures, and tariffs, in effect at the time they are prepared, and shall be based as may be reasonable and appropriate on model standards and procedures.  Notwithstanding the foregoing, the council shall govern interconnection upon the enactment of this Act and shall use interconnection standards and procedures, and tariffs, in effect until such time that initial interconnection standards and procedures are prepared.

(d)  The council shall undertake technical studies necessary to evaluate compliance of the requested interconnection with the interconnection standards.  The council shall consult with the utility concerning any request to interconnect to an electric system; provided, however, that the council shall retain final authority to approve or deny, at its sole discretion, any request to interconnect to the electric system.

(e)  The council shall grant any request to interconnect to an electric system, and shall direct the utility to complete the requested interconnection, upon a showing by the requesting party that interconnection will comply with all applicable interconnection standards and procedures and is consistent with any applicable reliability standards.

§ 269‑   Technical guidance.  Upon the commission’s request, the council shall provide technical guidance to the commission concerning the development and implementation of clean energy policy and programs, including smart grid systems, system reliability standards, electric grid stability, energy storage, advanced metering, electric grid communications systems, transmission and distribution issues, fuel and non-fuel generation, and other system-level issues associated with renewable energy production and use.

§ 269‑   Hawaii electricity reliability council functions.  (a)  The council may arrange for the conduct of research through contractual services with the University of Hawaii or any agency or other qualified persons concerning technical, engineering, economic, social, and environmental aspects of renewable energy development in the State.

(b)  The council shall do any and all things necessary to carry out its purposes, to exercise the powers and responsibilities given in this part, and to perform other functions required or authorized by law, including contracting for services when required for the implementation of this part.

(c)  The council shall develop and maintain a comprehensive summary of all interconnection requests, including progress toward clean energy goals, including interconnection and the aggregate amount of renewable energy available, to facilitate public knowledge and participation.

(d)  The council may assess the effectiveness of policy and develop proposals to increase the integration of renewable energy in Hawaii."

     SECTION 3.  There is appropriated out of the public utilities special fund established under section 269-33 the sum of $        or so much thereof as may be necessary for fiscal year 2011-2012 and the same sum or so much thereof as may be necessary for fiscal year 2012-2013 for the establishment and filling of a permanent executive officer position and one clerical position for the hawaii electricity reliability council.

     The sums appropriated shall be expended by the public utilities commission for the purposes of this Act.
     SECTION 4.  This Act shall take effect on July 1, 2011.

 

INTRODUCED BY:

_____________________________

 

 



 

Report Title:

Renewable Energy; Hawaii Electricity Reliability Council; Reliability and Interconnection Standards

 

Description:

Establishes the Hawaii Electricity Reliability Council to develop and implement grid reliability and interconnection standards.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.