Bill Text: HI SB3194 | 2024 | Regular Session | Amended

Hawaii Senate Bill 3194

Bill Title: Relating To Energy.

Spectrum: Strong Partisan Bill (Democrat 10-1)

Status: (Engrossed) 2024-04-04 - The committee(s) on CPC recommend(s) that the measure be deferred. [SB3194 Detail]

Download: Hawaii-2024-SB3194-Amended.html

THE SENATE	S.B. NO.	3194
THIRTY-SECOND LEGISLATURE, 2024		S.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO ENERGY.

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

SECTION 1. The legislature finds that despite its goal to achieve one hundred per cent renewable energy by 2045, the State continues to depend heavily upon imported petroleum for its energy needs, using approximately the same amount of fossil fuel for electricity generation in 2023 as in 2010, falling short of the State's ambitious renewable energy goals.

The legislature also finds that renewable energy can be an economic driver of jobs, including short-term and long-term positions, and an incentive for large-scale, sustainable, and clean industries to consider relocation to, or commencement of business operations in, the State. Presently, the State has the highest cost of energy in the nation according to the May 2023 United States Energy Information Administration's average residential sector retail electricity price chart. Incentivizing diversification of the State's economy through clean energy industries would alleviate certain energy costs for Hawaii's residents.

Additionally, the tragic events that occurred in the August 2023 Maui wildfire is an example of how vulnerable communities can be to natural and manmade disasters, including the resulting lack of water, internet access, and communications due to the reliance on a centralized grid. The current and frequent rolling blackouts occurring across the State leave communities exposed to national and energy security risks. The lack of resilient, reliable electricity also exposes the State's economic drivers in key visitor, travel, and defense industries to risk.

The centralized utility has been slow to issue requests for proposals to increase the number of new renewable energy opportunities, to adopt decentralized microgrids that can help mitigate reliability issues, and bring in competition and promote jobs. Additionally, with the decarbonization and renewable portfolio standard goals of the State set forth in Act 97, Session Laws of Hawaii 2015, it is imperative that the State prioritize clean energy resources to achieve its mandate. The legislature also finds that renewable fuels and hydrogen produced with renewable energy sources for transportation, aviation, and gas utilities are increasingly necessary to transport the renewable electricity to the production facility of the renewable fuels and hydrogen on another tax map parcel.

The legislature further finds that the production of clean electricity may be encouraged if independent generators of clean electricity can engage in retail wheeling to keep one of the highest costs of business at a reasonable rate. Retail wheeling occurs when electric power is transmitted from one independent generator of renewable energy to users of renewable energy over the transmission lines of a third-party electric public utility. Through retail wheeling, users of renewable energy, including affordable housing developments, the State, and the counties, could acquire clean electricity by purchasing it from a clean electricity project developer, then transmitting the clean electricity across utility lines owned and maintained by a third-party electric public utility, while fairly compensating the third-party utility for utilizing its existing infrastructure. States across the nation have recognized this fact and have accordingly authorized it.

Accordingly, the purpose of this Act is to authorize independent generators of renewable energy to wheel the renewable electricity they produce under administrative rules established by the public utilities commission, should the public utilities commission determine that retail wheeling is in the public interest.

SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269- Retail wheeling; renewable energy; rules. (a) Independent renewable energy generators may engage in retail wheeling of renewable electricity subject to subsection (b).

(b) No later than December 31, 2025, the public utilities commission shall determine whether retail wheeling is in the public interest and, if determined to be in the public interest, shall establish, by rule or order, policies and procedures to implement retail wheeling, including any appropriate rate to charge the renewable electricity project developer, independent renewable energy generator, or user of renewable energy for retail wheeling.

(c) The public utilities commission shall submit a report of its findings, recommendations, and decision on retail wheeling to the legislature no later than twenty days prior to the convening of the regular session of 2026.

(d) The public utilities commission shall evaluate the need to adopt customer protection measures.

(e) For the purposes of this section, "retail wheeling" means the transmission of electric power from an independent renewable energy generators' point of generation over transmission lines, distribution lines, and other facilities of a third-party electric public utility to the facilities of a user of renewable energy."

SECTION 3. Section 269-1, Hawaii Revised Statutes, is amended by amending the definition of "public utility" to read as follows:

""Public utility":

(1) Includes every person who may own, control, operate, or manage as owner, lessee, trustee, receiver, or otherwise, whether under a franchise, charter, license, articles of association, or otherwise, any plant or equipment, or any part thereof, directly or indirectly for public use for the transportation of passengers or freight; for the conveyance or transmission of telecommunications messages; for the furnishing of facilities for the transmission of intelligence by electricity within the State or between points within the State by land, water, or air; for the production, conveyance, transmission, delivery, or furnishing of light, power, heat, cold, water, gas, or oil; for the storage or warehousing of goods; or for the disposal of sewage; provided that the term shall include:

(A) An owner or operator of a private sewer company or sewer facility; and

(B) A telecommunications carrier or telecommunications common carrier; and

(2) Shall not include:

(A) An owner or operator of an aerial transportation enterprise;

(B) An owner or operator of a taxicab as defined in this section;

(C) Common carriers that transport only freight on the public highways, unless operating within localities, along routes, or between points that the public utilities commission finds to be inadequately serviced without regulation under this chapter;

(D) Persons engaged in the business of warehousing or storage unless the commission finds that regulation is necessary in the public interest;

(E) A carrier by water to the extent that the carrier enters into private contracts for towage, salvage, hauling, or carriage between points within the State; provided that the towing, salvage, hauling, or carriage is not pursuant to either an established schedule or an undertaking to perform carriage services on behalf of the public generally;

(F) A carrier by water, substantially engaged in interstate or foreign commerce, that transports passengers on luxury cruises between points within the State or on luxury round-trip cruises returning to the point of departure;

(G) Any user, owner, or operator of the Hawaii electric system as defined under section 269-141;

(H) A telecommunications provider only to the extent determined by the public utilities commission pursuant to section 269-16.9;

(I) Any person who controls, operates, or manages plants or facilities developed pursuant to chapter 167 for conveying, distributing, and transmitting water for irrigation and other purposes for public use and purpose;

(J) Any person who owns, controls, operates, or manages plants or facilities for the reclamation of wastewater; provided that:

(i) The services of the facility are provided pursuant to a service contract between the person and a state or county agency and at least ten per cent of the wastewater processed is used directly by the state or county agency that entered into the service contract;

(ii) The primary function of the facility is the processing of secondary treated wastewater that has been produced by a municipal wastewater treatment facility owned by a state or county agency;

(iii) The facility does not make sales of water to residential customers;

(iv) The facility may distribute and sell recycled or reclaimed water to entities not covered by a state or county service contract; provided that, in the absence of regulatory oversight and direct competition, the distribution and sale of recycled or reclaimed water shall be voluntary and its pricing fair and reasonable. For purposes of this subparagraph, "recycled water" and "reclaimed water" means treated wastewater that by design is intended or used for a beneficial purpose; and

(v) The facility is not engaged, either directly or indirectly, in the processing of food wastes;

(K) Any person who owns, controls, operates, or manages any seawater air conditioning district cooling project; provided that at least fifty per cent of the energy required for the seawater air conditioning district cooling system is provided by a renewable energy resource, such as cold, deep seawater;

(L) Any person who owns, controls, operates, or manages plants or facilities primarily used to charge or discharge a vehicle battery that provides power for vehicle propulsion;

(M) Any person who:

(i) Owns, controls, operates, or manages a renewable energy system that is located on a customer's property; and

(ii) Provides, sells, or transmits the power generated from that renewable energy system to an electric utility or to the customer on whose property the renewable energy system is located; provided that, for purposes of this subparagraph, a customer's property shall include all contiguous property owned or leased by the customer without regard to interruptions in contiguity caused by easements, public thoroughfares, transportation rights-of-way, and utility rights-of-way; and

(N) Any person who owns, controls, operates, or manages a renewable energy system that is located on [~~such~~] the person's property and provides, sells, or transmits the power generated from that renewable energy system to an electric utility or to lessees or tenants on the person's property where the renewable energy system is located; provided that:

(i) An interconnection, as defined in section 269-141, is maintained with an electric public utility to preserve the lessees' or tenants' ability to be served by an electric utility;

(ii) [~~Such~~] The person does not use an electric public utility's transmission or distribution lines to provide, sell, or transmit electricity to lessees or tenants;

(iii) At the time that the lease agreement is signed, the rate charged to the lessee or tenant for the power generated by the renewable energy system shall be no greater than the effective rate charged per kilowatt hour from the applicable electric utility schedule filed with the public utilities commission;

(iv) The rate schedule or formula shall be established for the duration of the lease, and the lease agreement entered into by the lessee or tenant shall reflect [~~such~~] the rate schedule or formula;

(v) The lease agreement shall not abrogate any terms or conditions of applicable tariffs for termination of services for nonpayment of electric utility services or rules regarding health, safety, and welfare; and

(vi) The lease agreement shall disclose: (1) the rate schedule or formula for the duration of the lease agreement; (2) that, at the time that the lease agreement is signed, the rate charged to the lessee or tenant for the power generated by the renewable energy system shall be no greater than the effective rate charged per kilowatt hour from the applicable electric utility schedule filed with the public utilities commission; (3) that the lease agreement shall not abrogate any terms or conditions of applicable tariffs for termination of services for nonpayment of electric utility services or rules regarding health, safety, and welfare; and (4) whether the lease is contingent upon the purchase of electricity from the renewable energy system; provided further that any disputes concerning the requirements of this provision shall be resolved pursuant to the provisions of the lease agreement or chapter 521, if applicable[~~; and~~

~~(vii)~~ ~~Nothing in this section shall be construed to permit wheeling~~].

If the application of this chapter is ordered by the commission in any case provided in paragraph (2)(C), (D), (H), and (I), the business of any public utility that presents evidence of bona fide operation on the date of the commencement of the proceedings resulting in the order shall be presumed to be necessary to the public convenience and necessity, but any certificate issued under this proviso shall nevertheless be subject to terms and conditions as the public utilities commission may prescribe, as provided in sections 269-16.9 and 269-20."

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

SECTION 5. This Act shall take effect on January 1, 2060.

Report Title:

PUC; Retail Wheeling; Renewable Energy; Clean Electricity; Report

Description:

Authorizes independent generators of renewable energy to wheel the renewable electricity they produce to users of renewable energy under administrative rules established by the Public Utilities Commission, should the Public Utilities Commission determine that retail wheeling is in the public interest. Requires the Public Utilities Commission to report to the Legislature. Takes effect 1/1/2060. (SD2)

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