H.B. NO.



H.D. 2
















SECTION 1. Energy efficiency is historically the lowest-cost new energy resource in Hawaii. In its most recent program year, the State's energy efficiency program, administered by the public utilities commission, invested $36,000,000 to enable $435,000,000 in lifetime energy savings. Energy efficiency thus costs a mere fraction of the cost of energy purchased from the electric grid. The legislature therefore finds that it is in the strong interest of the State's economy and environment to advance energy efficiency in the State.

Net zero energy capable design in new single family residential construction means that the home has effectively maximized its energy efficiency, such that it becomes more cost-effective to generate on-site renewable energy rather than to further increase the efficiency of the home.

There currently exists a split incentive that creates a barrier to energy efficiency in new homes, to the detriment of consumers. Residential developers often seek to minimize their expenditures in the development of new homes. However, by missing energy efficiency opportunities in those new homes, developers shift the increased costs to consumers, in the form of unnecessarily high energy costs during the lifetime of the home.

In one example of addressing this split incentive issue, California has targeted zero net energy standards for all new residential buildings by 2020 and all new commercial structures (and fifty per cent of existing commercial structures) by 2030. California has also confirmed that implementing zero net energy home building codes and standards is cost-effective. A 2012 analysis completed for Pacific Gas & Electric found that adding energy efficiency upgrades to create a net zero energy code-compliant new home will cost approximately $2 to $8 per square foot. This is approximately 0.4 per cent to 1.7 per cent of the present median cost per square foot of homes on the market in Hawaii. As explained above, the cost-effectiveness of energy efficiency in Hawaii means that this small initial cost can be recouped many times over by the consumers in the form of lower energy costs. In the context of a thirty-year mortgage, energy efficiency can mean immediate savings for consumers, as slightly higher mortgage payments are immediately offset by lower energy costs.

Hawaii's energy codes and standards can be used to protect consumers from this split incentive problem and to maximize cost-effective energy efficiency in new homes.

The purpose of this Act is to require:

(1) The typical monthly operating costs of all new home sales to be disclosed to potential buyers; and

(2) The department of business, economic development, and tourism to convene a working group comprising the public utilities commission, concerned citizens, affected businesses, and energy-related industries to develop strategies and methods to maximize the energy efficiency of residential dwellings in Hawaii.

SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"196-   Energy; operating costs; new homes; disclosure. The typical monthly operating costs in all new home sales shall be disclosed to potential buyers using the standards established by the department of business, economic development, and tourism, pursuant to Act    , Session Laws of Hawaii 2017."

SECTION 3. (a) The department of business, economic development, and tourism shall convene a working group to develop strategies and methods to maximize the energy efficiency of residential dwellings in Hawaii. The working group shall comprise:

(1) The director of business, economic development, and tourism or the director's designee;

(2) The chairperson of the public utilities commission or the chairperson's designee; and

(3) Concerned citizens and representative of affected businesses and energy-related industries.

(b) The working group shall make recommendations on:

(1) The production of reports to consumers and home buyers of the typical monthly cost of energy consumption of new homes for sale; and

(2) Building and energy codes and standards intended to ensure that new single-family residential construction shall maximize cost-effective energy efficiency opportunities.

For the purposes of this subsection, "maximizing energy efficiency" means reaching efficiency levels such that it would generally become more cost-effective to theoretically add generation to the home, rather than further increasing the efficiency of the home.

(c) The working group shall present recommendations pursuant to this subsection (b) to the state building code council no later than January 31, 2018. Starting February 1, 2018, the working group shall assist the state building code council in its review of recommendations and any amendments.

(d) The working group shall submit a report on its progress, including findings and recommendations, to the legislature no later than twenty days before the convening of the regular session of 2018.

(e) The working group shall be exempt from the requirements of chapter 92, Hawaii Revised Statutes.

(f) The working group shall terminate on June 30, 2018.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon a date to be determined.


Report Title:

Energy Efficiency; Working Group



Requires the Department of Business, Economic Development, and Tourism to convene a working group to develop standards for reporting energy consumption to facilitate comparisons of energy consumption and costs by consumers and home buyers. (HB1249 HD2)




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