H.B. NO.



H.D. 2
















     SECTION 1.  The legislature finds that Hawaii's energy sector is undergoing a transition to one hundred per cent renewable energy that is strengthening the State's economy, environment, and security.  To complete this transition successfully, and to ensure maximum benefits for Hawaii's residents and businesses, it is important that all relevant entities are aligned in the goal of rapid decarbonization to avoid the worst impacts of climate change.  The legislature is concerned that requiring electric utility companies, but not gas utility companies, to increase their reliance on renewable energy creates an unfair playing field that may unintentionally harm consumers by promoting suboptimal long-lived investments in fossil fuels through gas-fired distributed electrical generation.  These effects may also have near- and long-term impacts on the viability of the State's electric utility companies, and near- and long-term impacts on the viability of the State's gas utility companies.

     The legislature further finds that, globally, natural gas, also known as "fossil gas", is the fastest-growing source of climate change emissions, according to a 2019 study published in Environmental Research Letters, a peer-reviewed open-access scientific journal.  Although gas only represents approximately two per cent of energy expenditures in Hawaii, the legislature believes it is important to continue to strive toward achieving the State's renewable energy and climate mitigation goals by gathering additional information regarding costs, reliable quantities, and impacts—including economic and environmental costs associated with continuing to rely on fossil gas—to assist the legislature in setting renewable energy standards for gas utility companies.

     The purpose of this Act is to:

     (1)  Require the public utilities commission to conduct a study regarding the availability, feasibility, and costs of the use of renewable gas in Hawaii by gas utility companies; and

     (2)  Appropriate funds for the study.

     SECTION 2.  (a)  The public utilities commission shall contract with the Hawaii natural energy institute of the University of Hawaii to conduct an independent renewable gas study to be reviewed by a panel of experts in the field of gas and energy, including representatives from the American Gas Association and Gas Technology Institute.  The Hawaii natural energy institute of the University of Hawaii shall work with gas utility companies to confirm and verify all data, assumptions, projections and other information and analysis used in conducting the study required by this section.

     (b)  The study shall include but not be limited to:

     (1)  The potential quantity and cost of renewable gas that could be produced in the State and delivered for use, and, if necessary, could be produced out of the State and delivered to the State for use:

          (A)  By residential, commercial, and industrial consumers; and

          (B)  As a transportation fuel;

     (2)  The identification and inventory of feedstock and acreage for renewable gas production currently available in the State;

     (3)  The identification of commercial conversion technologies for renewable gas production and economic scalability of capacity;

     (4)  The identification of incentives that are currently available to develop renewable gas resources and the identification of incentives available to develop renewable gas resources in other jurisdictions;

     (5)  The potential for the use of renewable gas in the State to measurably reduce greenhouse gas emissions;

     (6)  The potential for renewable gas in the State to measurably improve air quality;

     (7)  The technical, market, policy, and regulatory barriers to developing and utilizing renewable gas in the State, produced in the State and delivered for use, and produced out of the State and delivered to the State for use, and possible solutions to overcoming such barriers;

     (8)  The identification of available renewable alternatives, such as the procurement and importation of renewable gas;

     (9)  Whether renewable gas projects should have access to the same incentives other renewable energy projects are provided, such as gas utility company incentives, investment and production tax credits, land and water policy incentives to facilitate and encourage the use of public and private lands and other resources for renewable gas production by farmers and landowners, and other incentives;

    (10)  The ability to use renewable gas at reasonable costs, including an assessment of factors such as:

          (A)  The impact on consumer rates;

          (B)  Gas utility company system reliability and stability;

          (C)  Availability and reliability of renewable gas supply;

          (D)  Costs and availability of appropriate renewable gas resources and technologies, including the impact of renewable gas requirements on the gas prices offered by renewable energy suppliers or developers;

          (E)  Permitting requirements and necessary approvals for renewable gas projects;

          (F)  Effects on the economy;

          (G)  Balance of trade, culture, community, environment, land, and water;

          (H)  Climate change policies;

          (I)  Demographics;

          (J)  Gas price volatility;

          (K)  Effects on existing gas production, supply chain, and gas utility company suppliers;

          (L)  Required gas utility company infrastructure improvements and additions;

          (M)  Gas quality and safety;

          (N)  Risks associated with the use of renewable gas;

          (O)  The availability of land, water, labor, and other resources needed for the development of renewable gas resources;

          (P)  Lifecycle greenhouse gas emissions for existing and renewable gas supply; and

          (Q)  Other factors deemed appropriate by the public utilities commission; and

    (11)  A renewable gas policy framework and regulatory mechanism to ensure timely recovery of renewable gas costs for gas utility companies and encourage investment in renewable gas infrastructure by gas utility companies.

     (c)  The public utilities commission shall submit a report of its findings and recommendations resulting from the study, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2022.

     (d)  For the purposes of this section:

     "Biogas" means gas that is generated from organic waste or other organic materials through anaerobic digestion, gasification, pyrolysis, or other technology that converts organic waste to gas.

     "Gas utility company" means a public utility as defined under section 269-1, Hawaii Revised Statutes, for the production, conveyance, transmission, delivery, or furnishing of gas or of light, power, heat, or cold produced from gas.

     "Renewable gas" means any of the following products processed or upgraded to be interchangeable with conventional natural gas for the purpose of meeting pipeline quality standards, end use requirements, or transportation fuel grade requirements:

     (1)  Biogas;

     (2)  Hydrogen gas derived from renewable energy sources; or

     (3)  Carbon dioxide from waste.

     SECTION 3.  There is appropriated out of the public utilities commission special fund the sum of $           or so much thereof as may be necessary for fiscal year 2020-2021 to conduct the study required by section 2 of this Act.

     The sum 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, 2050.



Report Title:

Renewable Energy; Gas; Public Utilities Commission; Hawaii Natural Energy Institute; Study; Appropriation



Requires the public utilities commission (PUC) to contract with the Hawaii natural energy institute to conduct an independent renewable gas study.  Appropriates funds to PUC to contract with the University of Hawaii to perform the study.  Effective 7/1/2050.  (HD2)




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