Bill Text: HI HB588 | 2024 | Regular Session | Amended
Bill Title: Relating To Renewable Energy.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2023-12-11 - Carried over to 2024 Regular Session. [HB588 Detail]
Download: Hawaii-2024-HB588-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
588 |
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THIRTY-SECOND LEGISLATURE, 2023 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO RENEWABLE ENERGY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
(1) Act 97, Session Laws of Hawaii 2015, which established a renewable energy portfolio standards' target of one hundred per cent renewable electric energy by December 31, 2045;
(2) Act 15, Session Laws of Hawaii 2018, which established a statewide zero emissions clean economy target to sequester throughout the State more atmospheric carbon and greenhouse gases than emitted, as quickly as practicable but no later than 2045; and
(3) Act 238, Session Laws of Hawaii 2022, which established a statewide target that includes a greenhouse gas emissions limit of at least fifty per cent below 2005 greenhouse gas emission levels no later than 2030.
The legislature further finds that the timely completion of grid-connected renewable energy projects is also a high priority, as it will help the State achieve the targets and limits established through prior legislation. On November 13, 2020, the public utilities commission issued a letter to the parties in docket numbers 2015-0389 (Community Based Renewable Energy), 2017-0352 (Hawaiian Electric Renewable Requests for Proposals), and 2018-0165 (Integrated Grid Planning), stating that it "is markedly concerned that Hawaiian Electric [Company]'s interconnection processes and policies are increasing development costs and extending renewable project timelines".
On December 23, 2020, under docket number 2018-0088 (Performance-Based Regulation), the public utilities commission issued order number 37507, indicating, in part, that it was concerned about interconnection delays and will implement a performance incentive mechanism to encourage Hawaiian Electric Company to accelerate the interconnection process. Order number 37507 also stated that "the scheduled retirement of the AES Power Plant in 2022, as well as [Hawaiian Electric Company, Inc.; Hawaii Electric Light Company, Inc.; and Maui Electric Company, Limited's] proposal to delay interconnecting several renewable energy and storage projects recently approved by the commission, underscores the need for expeditiously securing alternative sources of grid services to ensure that system needs are met".
The legislature notes that during phase 1 and phase 2 of the electric utility's procurement under docket no. 2017-0352, projects have been delayed or terminated, due in part to costs and delays of interconnection. On February 11, 2021, the public utilities commission opened docket number 2021-0024 to review Hawaiian Electric Company's interconnection process and transition plans for retirement of fossil fuel plants.
In
2022, the public utilities commission testified that it had set up a tracker
account to quantify and monitor the cost of project delays. As of the monthly update submitted by the
Hawaiian Electric Company on January 21, 2022, the tracked cost totaled over
$10,000,000 across several projects. The
public utilities commission also testified that it issued a request for
information to solicit input from qualified entities to serve under contract as
a Hawaii electric reliability administrator.
On September 9, 2022, instead of procuring a Hawaii electric reliability
administrator, the public utilities commission awarded a procurement contract
that hired an independent engineer to assist the commission in overseeing the
technical aspects of the upcoming phase 3 procurement processes, reviewing
interconnection requirements that had already been established by the Hawaiian
Electric Company and associated costs, resolving technical disputes related to
interconnection of resources, assisting in the implementation of
interconnection-related performance incentive mechanisms, and serving in a
general advisory role to the commission on issues related to Hawaiian Electric
Company's interconnection process. These
duties only cover a subset of the duties of a Hawaii electric reliability
administrator, pursuant to part IX of chapter 269, Hawaii Revised Statutes, and
therefore will not result in commission-established reliability standards for interconnection
and the grid, an interconnection dispute resolution process, nor long-term grid
planning for the State.
In
the latter half of 2022, the public utilities commission approved Hawaiian
Electric Company's recommendation to complete the interconnection
requirements study and total estimated interconnection cost for each phase
3 procurement project selected prior to the signing and filing of the power
purchase agreement with the public utilities commission for approval.
However,
phase 3 procurement projects are required to assume interconnection costs prior
to the completion of the interconnection requirements study and total estimated
interconnection cost. If these costs are
higher than what the project assumed before or after bid submission to the
public utilities commission, the project is not allowed to adjust its bid price
to reflect the higher-than-anticipated cost. Moreover, under the commission-approved model
power purchase agreement, Hawaiian Electric Company, who performs the
interconnection construction, is further permitted to increase the project's interconnection
costs. Thus, the revised process
approved by the public utilities commission does not result in meaningful
reform to the interconnection issues impacting timely and cost-effective
renewable energy development, which affects ratepayers.
Also
in the latter half of 2022, Hawaiian Electric Company issued four separate
requests to Hawaii island customers to limit their use of electricity to
prevent the possibility of rolling blackouts due to factors including the
unexpected loss of several large generators, lower wind resources, and
lower-than-expected geothermal output.
This further substantiates the urgency to create and implement
reliability standards through a Hawaii electric reliability administrator.
The
legislature also finds that the State does not regulate interconnection costs,
which results in the ratepayer bearing the full financial burden of
interconnection costs and utility network upgrades in the electricity rates. The Federal Energy Regulatory Commission, an
independent federal agency that regulates the interstate transmission of
natural gas, oil, and electricity and natural gas and hydropower projects, has
developed a simple test for distinguishing interconnection facilities from
network upgrades. In its Order No. 2003,
the Federal Energy Regulatory Commission stated that "interconnection
facilities are found between the interconnection customer's generating facility
and the transmission provider's transmission system ... [N]etwork upgrades
include only facilities at or beyond the point where the interconnection
customer's generating facility interconnects to the transmission provider's transmission
system." This distinction clarifies
and determines which party has ultimate cost responsibility. Order No. 2003 also generally found that
"it is just and reasonable for the interconnection customer to pay for
interconnection facilities but not for network upgrades."
Establishing grid reliability standards, regulating the timely and transparent interconnection of utility-scale renewable energy projects, and distinguishing the cost responsibilities between interconnection facilities and utility network upgrades will help to bring utility-scale renewable energy projects online sooner; decrease electricity rates for consumers; provide project developers with added certainty regarding project timelines and transparent costs; encourage lower bid prices; achieve the State's renewable portfolio standard goals; establish long-term institutional knowledge within the public utilities commission; reduce greenhouse gas emissions; and mitigate the effects of climate change.
Accordingly, the purpose of this Act is to:
(1) Require the public utilities commission to establish reliability standards and interconnection requirements for all electric utilities and all users, owners, or operators of the Hawaii electric system; provided that any costs for changes in reliability standards or interconnection requirements shall not be the responsibility of the interconnection customer after the interconnection customer's power purchase agreement has been approved by the public utilities commission;
(2) Require the public utilities commission to:
(A) Distinguish between interconnection facilities and utility network upgrades;
(B) Ensure that the cost of interconnection facilities is the responsibility of the interconnection customer; and
(C) Ensure that the cost of utility network upgrades at and beyond the point of interconnection to the utility's transmission system is the sole responsibility of the utility transmission provider; and
(3) Establish a timeline and requirements for interconnection procedures to be established by the public utilities commission for certain utility-scale renewable energy projects.
SECTION 2. Section 269-142, Hawaii Revised Statutes, is amended to read as follows:
"[[]§269-142[]] Reliability standards; interconnection
requirements; adoption and development; force and effect. (a)
The commission [may] shall adopt, by rule or order,
reliability standards and interconnection requirements. Reliability standards and interconnection
requirements adopted by the commission shall apply to any electric utility and
any user, owner, or operator of the Hawaii electric system. The commission shall not contract for the
performance of the functions under this subsection to any other entity as
provided under section 269-147.
(b) The commission [may] shall
develop reliability standards and interconnection requirements as it determines
necessary or upon recommendation from any entity, including an entity
contracted by the commission to serve as the Hawaii electricity reliability
administrator provided for under this part, for the continuing reliable design
and operation of the Hawaii electric system[.]; provided that any
costs for changes in reliability standards or interconnection requirements
shall not be the responsibility of the interconnection customer after the
interconnection customer's power purchase agreement has been approved by the
commission. Any reliability standard
or interconnection requirement developed by the commission shall be adopted by
the commission in accordance with subsection (a) in order to be effective. The commission shall not contract for the performance
of the functions under this subsection to any other entity as provided under
section 269-147.
(c)
The commission shall:
(1) Distinguish
between interconnection facilities and utility network upgrades;
(2) Ensure
that the cost of interconnection facilities is the responsibility of the
interconnection customer; and
(3) Ensure
that the cost of utility network upgrades at and beyond the point of
interconnection to the utility's transmission system is the sole responsibility
of the utility transmission provider.
[(c)]
(d) The commission shall have
jurisdiction over matters concerning interconnection requirements and interconnections
located in the State between electric utilities, any user, owner, or operator
of the Hawaii electric system, or any other person, business, or entity
connecting to the Hawaii electric system or otherwise applying to connect
generation or equipment providing ancillary services to, or operate generation
and equipment providing ancillary services in parallel with the Hawaii electric
system under processes established in accordance with section 269-145. Nothing in this subsection is intended to give
the commission general supervision authority over any user, owner, or operator
of the Hawaii electric system or any other person, business, or entity that is
not a public utility as defined in section 269-1.
(e) For purposes of this section:
"Generating
facility" means the specific device for which the interconnection customer
has requested interconnection.
"Interconnection
customer" means the owner of the generating facility that is
interconnecting at the utility point of interconnection at the transmission
provider's transmission system.
"Interconnection
facilities" means facilities that are found between the interconnection
customer's generating facility and the utility transmission provider's transmission
system.
"Transmission
provider" means the entity or entities with which the generating facility
is interconnecting.
"Utility network upgrades" means facilities at or beyond the point where the interconnection customer's generating facility interconnects to the utility transmission provider's transmission system."
SECTION 3. Section 269-145, Hawaii Revised Statutes, is amended to read as follows:
"[[]§269-145[]] Grid access; procedures for interconnection;
dispute resolution. (a) Each user, owner, or operator of the Hawaii
electric system, or any other person, business, or entity seeking to make an
interconnection on the Hawaii electric system shall do so in accordance with
procedures to be established by the commission by rule or order.
(b)
The commission shall establish interconnection procedures as follows:
(1) The commission shall include in any
interconnection procedures established pursuant to this section requirements
that the electric public utilities:
(A) Complete the interconnection design;
(B) Reach agreement with the renewable
energy project developer;
(C) File a request with the commission
for interconnection or line extension approval, if required;
(D) Meet the requirements under
subparagraphs (A) through (C) as soon as practicable;
(E) Meet timelines and deadlines as
determined by the commission; and
(F) Submit interim reports to the
commission on the status of the electric public utility's efforts to comply
with the requirements of this subsection ninety days and one hundred eighty
days after the renewable energy project power purchase agreement is filed with
the commission for review and approval;
(2) If the electric public utility is
unable to comply with the requirements of this subsection, the electric public
utility shall report, in writing, the reasons for noncompliance to the
commission within ten calendar days after the failure to meet timelines and
deadlines established by the commission;
(3) If the electric public utility fails
to meet the requirements established by the commission pursuant to this
subsection, the electric public utility shall forfeit and return all moneys or
other financial incentives that the electric public utility has received as
part of any performance incentive mechanism program or similar incentive-based
award recognized by the commission in connection with the renewable energy
project; and
(4) The commission shall submit a report
to the governor and legislature regarding any failure to meet the timing under
this subsection by any electric public utility within thirty days of the
commission receiving notice of this failure;
provided that this subsection shall
only apply to utility-scale renewable energy projects that are five megawatts
in total output capacity or larger and to any community-based renewable
energy projects that the commission has determined to be responsible for
interconnection costs.
[(b)]
(c) The commission shall have the
authority to make final determinations regarding any dispute between any user,
owner, or operator of the Hawaii electric system, or any other person,
business, or entity connecting to the Hawaii electric system, concerning either
an existing interconnection on the Hawaii electric system or an interconnection
to the Hawaii electric system created under the processes established by the
commission under this section."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 3000.
Report Title:
Public Utility Commission; Renewable Energy; Reliability Standards; Interconnection Requirements; Interconnection Facilities; Utility Network Upgrades
Description:
Requires the Public Utilities Commission to establish reliability standards and interconnection requirements for certain renewable energy projects; provided that any costs for changes in reliability standards or interconnection requirements shall not be the responsibility of the interconnection customer after the interconnection customer's power purchase agreement has been approved by the Public Utilities Commission. Requires the Public Utilities Commission to distinguish between interconnection facilities and utility network upgrades; ensure that the cost of interconnection facilities is the responsibility of the interconnection customer; and ensure that the cost of utility network upgrades is the sole responsibility of the transmission provider. Establishes a timeline and requirements for interconnection procedures to be established by the Public Utilities Commission for certain utility-scale renewable energy projects. Effective 7/1/3000. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
