Bill Text: HI HB2566 | 2016 | Regular Session | Amended
Bill Title: Nonfossil Fuel Generated Electricity; Rates
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Engrossed - Dead) 2016-03-22 - The committee on CPH deferred the measure. [HB2566 Detail]
Download: Hawaii-2016-HB2566-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2566 |
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TWENTY-EIGHTH LEGISLATURE, 2016 |
H.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO ELECTRICITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii's critical decisions on energy and fuel supplies must place the interests of the public first. Policy makers must be able to incorporate all useful and justifiable variables into their analysis. While the current price of fuel is a leading indicator, it is imperative that the true full cost of fossil fuel and renewable energy over time must be evaluated. Fossil fuel prices are particularly volatile, can raise future consumer costs, depend upon non-local sources for supply, harbor negative environmental externalities, and require additional transmission infrastructure.
The legislature further finds that since 2008, the price of a barrel of crude oil has ranged from mid-$20s to mid-$140s. A Florida power and light hedging contract that locked in the price of natural gas recently led to an extra $4,200,000,000 in costs paid by Florida ratepayers when market prices later declined. Florida public counsel explained that:
. . . the hedging losses have been, and continue to be, paid by customers, and it is unfair to them and contrary to good public policy to obscure the true magnitude of what customers have paid for these losses. (Florida Public Service Commission Docket 50001 Document Number 04240-15.)
The purpose of this Act is to protect the public interest by providing the public utilities commission with additional guidelines to consider when making critical fossil fuel and renewable energy decisions. Through consideration of additional relevant economic factors, the State's long-term energy objectives can be more easily attained while reducing the risk to Hawaii's consumers.
SECTION 2. Section 269-27.2, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) The rate payable by the public utility to the producer for the nonfossil fuel generated electricity supplied to the public utility shall be as agreed between the public utility and the supplier and as approved by the public utilities commission; provided that in the event the public utility and the supplier fail to reach an agreement for a rate, the rate shall be as prescribed by the public utilities commission according to the powers and procedures provided in this chapter.
The commission's determination of the just and reasonable rate shall be accomplished by establishing a methodology that removes or significantly reduces any linkage between the price of fossil fuels and the rate for the nonfossil fuel generated electricity to potentially enable utility customers to share in the benefits of fuel cost savings resulting from the use of nonfossil fuel generated electricity. The methodology shall, among other potential criteria, take into account the objective of reducing the risks of the State's exposure to fossil fuels, including but not limited to:
(1) The impact of fuel price volatility in electricity rates, fuel supply reliability risks, and greenhouse gas emissions;
(2) The costs and benefits that distributed generation has on the electrical distribution and transmission grid systems;
(3) The need to achieve the State's renewable portfolio standards provided in this chapter; and
(4) The promoting of Hawaii's long-term objective of energy self-sufficiency.
As the commission deems appropriate, the just and reasonable rate for nonfossil fuel generated electricity supplied to the public utility by the producer may include mechanisms for reasonable and appropriate incremental adjustments, such as adjustments linked to consumer price indices for inflation or other acceptable adjustment mechanisms."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2050.
Report Title:
Nonfossil Fuel Generated Electricity; Rates
Description:
Establishes criteria for the Public Utility Commission's methodology in determining the rate that a public utility should pay a producer for nonfossil fuel-generated electricity that the producer supplies to the public utility. (HB2566 HD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
