Bill Text: HI SB1196 | 2010 | Regular Session | Introduced
Bill Title: Feed-in Tariff; Renewable Electricity
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [SB1196 Detail]
Download: Hawaii-2010-SB1196-Introduced.html
Report Title:
Feed-in Tariff; Renewable Electricity
Description:
Establishes a feed-in tariff for electricity generated from renewable energy sources by a renewable electricity producer.
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THE SENATE |
S.B. NO. |
1196 |
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TWENTY-FIFTH LEGISLATURE, 2009 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO RENEWABLE ELECTRICITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii's dependence on imported petroleum for about seventy-eight per cent of its electric power needs is more than any other state in the nation. This dependence makes the State extremely vulnerable to any oil embargo, supply disruption, or other market dysfunction beyond the control of the State. Furthermore, Hawaii's continued consumption of imported petroleum and coal for electric power production negatively impacts Hawaii's environment.
The legislature also finds that Hawaii's utility-supplied electricity generated from imported petroleum and coal now costs more than electricity generated from commercial forms of renewable electricity generation, such as geothermal, wind, biomass, concentrating solar power, and photovoltaic solar power.
The legislature also finds that increased use of Hawaii's abundant renewable energy sources to generate electricity would decrease Hawaii's cost of energy, increase Hawaii's energy self-sufficiency, and achieve broad societal benefits, including increased energy security, diminished vulnerability to oil price increases, enhanced sustainability, economic development, and job creation.
Over the years, the legislature has worked steadily to encourage the development of electricity generated from renewable energy sources in Hawaii. Legislative achievements relating to renewable electricity include but are not limited to a net metering program, a renewable energy technology income tax credit, and a statewide renewable energy portfolio standard.
The legislature also finds that, notwithstanding its efforts, renewable electricity generation in Hawaii remains underdeveloped because existing incentives do not align the business interests of the electric utilities with rapid development of large-scale renewable electricity generation at low cost to the public.
The legislature also finds that a feed-in tariff has proven effective, in nations such as Germany and Spain, in achieving rapid development of large-scale renewable electricity generation at low-cost to the public and in aligning the business interests of the electric utilities with this development, while maintaining the utilities' control over the physical interconnection of generation facilities with the utilities' electric systems to assure the continued safety and reliability of the utilities' electric systems.
The purpose of this Act is to encourage the development of renewable electricity generation in Hawaii; secure, diversify, and reduce the cost of Hawaii's energy sources; encourage improved efficiency of renewable electricity generation technologies; reduce the potential for conflicts over imported fossil fuels; and protect Hawaii's environment by establishment of a feed-in tariff that obliges the utility, as distributor and seller of electric power to the public, to purchase renewable electricity from a renewable electricity producer at a statutory long-term tariff rate that provides an attractive return to the renewable electricity producer on the renewable energy producer's investment in a renewable electricity system.
SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"PART . FEED-IN TARIFF
§269-A Definitions. (a) As used in this part:
"Biogas" means a gaseous fuel produced by anaerobic decomposition of organic matter.
"Biomass" means plant material, vegetation, or agricultural waste used as a fuel or energy source.
"Building" means a roofed building or structure that can be independently used and entered by humans and is suitable for or designed for the purpose of protecting humans, animals, or objects.
"Building-mounted photovoltaic electricity system" means a photovoltaic electricity system that is attached to or integrated into the roof or walls of a building.
"Concentrating solar electricity system" means a renewable electricity system that converts solar radiation to electricity by concentrating solar radiation to heat a working fluid which drives a turbine.
"Electrical capacity" means the installed peak nameplate alternating-current electricity generating capacity of a renewable electricity system.
"Electric utility" means a public utility as defined under section 269-1, for the production, conveyance, transmission, delivery, or furnishing of power.
"Hydropower" means the energy of moving water, including wave energy and tidal energy.
"New renewable electricity system" means a renewable electricity system placed in service after the effective date of this part.
"Offshore wind electricity system" means a renewable electricity system that is located at least three nautical miles seaward from the ocean shoreline or in an ocean water depth of at least twenty meters.
"Photovoltaic electricity system" means a renewable electricity system that uses the photovoltaic effect to convert solar radiation to electricity.
"Renewable electricity" means electricity produced by a renewable electricity system from a renewable energy source.
"Renewable electricity producer" means any person that owns, controls, operates, manages, or uses a renewable electricity system to produce renewable electricity.
"Renewable electricity purchase agreement" means a contract or tariff under which the electric utility is obliged to purchase renewable electricity produced by a new renewable electricity system and delivered to the electric utility by the renewable electricity producer, and is obliged to compensate the renewable electricity producer for renewable electricity in accordance with the provisions of this part.
"Renewable electricity system" means any identifiable facility, plant, installation, project, equipment, apparatus, or the like, located in the State, that converts a renewable energy source to electricity.
"Renewable energy source" means each of the following sources of energy:
(1) Biomass;
(2) Biogas;
(3) Geothermal energy;
(4) Hydropower;
(5) Landfill gas;
(6) Sewage treatment plant gas;
(7) Solar radiation; and
(8) Wind.
"Wind electricity system" means a renewable electricity system that converts wind to electricity.
§269-B Interconnection. (a) Upon the request of a renewable electricity producer that places a new renewable electricity system in service, an electric utility shall interconnect the new renewable electricity system to the electric system of the electric utility. This requirement shall apply to the electric utility whose electric system is closest in proximity to the location of the renewable electricity system; provided that technical requirements set forth in rules of the electric utility relating to interconnection of distributed generating facilities with the electric utility's electric system, as approved by the commission, are met.
(b) Costs incurred by the electric utility to meet the technical requirements of interconnection shall be allocated so that those costs that benefit a renewable electricity system are borne by the renewable electricity producer that uses the renewable electricity system to produce renewable electricity, in conformity with orders of the commission relating to distributed generation in the State. Each of the electric utility and the renewable electricity producer shall disclose to the other, within six weeks of a request by the other, any and all utility electric system data or renewable electricity system data necessary to plan and execute the interconnection in conformity with the technical requirements.
§269-C Purchase agreement. (a) Each electric utility shall develop a standard renewable electricity purchase agreement, the form of which shall be approved by the commission, and shall offer the renewable electricity purchase agreement to any renewable electricity producer that requests interconnection of a new renewable electricity system to the utility's electric system under section 269-B.
(b) Each renewable electricity purchase agreement shall have a term of twenty years commencing on the date that the new renewable electricity system is placed in service; provided that a renewable electricity purchase agreement for the purchase of renewable electricity produced from hydropower shall have a term of thirty years.
(c) Each renewable electricity purchase agreement shall oblige the utility to take and transmit all renewable electricity produced by the new renewable electricity system and delivered to the electric utility, and shall oblige the electric utility to purchase renewable electricity at the applicable feed-in tariff rate of compensation set forth in this part.
(d) The electric utility shall compensate the renewable electricity producer for renewable electricity in an amount no less than the number of kilowatt-hours of renewable electricity multiplied by the applicable rate of compensation.
(e) The electric utility and a renewable electricity producer may agree by contract to modify the utility's obligations to take and transmit, and to purchase and pay for, renewable electricity if doing so facilitates integration of the renewable electricity system with the utility's electric system.
§269-D Cost recovery. The electric utility shall be allowed to recover, upon application by the electric utility for and approval by the commission of an interim increase in rates until the effective date of any rate change approved by final decision of the commission in the electric utility's next general rate proceeding under section 269-16, the cost of renewable electricity purchased under any renewable electricity purchase agreement.
§269-E Rates; biomass or biogas. (a) The following compensation shall be paid by the electric utility to the renewable electricity producer for renewable electricity produced exclusively from biomass or biogas:
(1) At least 17.18 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity less than or equal to one hundred fifty kilowatts;
(2) At least 13.51 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than one hundred fifty kilowatts and less than or equal to five hundred kilowatts;
(3) At least 12.18 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than five hundred kilowatts and less than or equal to five megawatts; and
(4) At least 11.45 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than five megawatts and less than or equal to twenty megawatts.
(b) The rates of compensation set forth in subsection (a) shall be increased by 5.28 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system that does not burn wood to produce renewable electricity.
(c) As of January 1, 2012, the minimum rates of compensation specified in subsection (a) shall be reduced by 1.5 per cent for a new renewable electricity system placed in service during 2012, and shall be reduced by an additional 1.5 per cent of the rates of compensation as of January 1 of each successive calendar year with respect to a new renewable electricity system placed in service during such calendar year. The reduced rates of compensation shall be rounded to the second decimal place of cents per kilowatt-hour.
§269-F Rates; geothermal. (a) The following compensation shall be paid by the electric utility to the renewable electricity producer for renewable electricity produced from geothermal energy:
(1) At least 23.49 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity less than or equal to ten megawatts; and
(2) At least 15.41 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than ten megawatts.
(b) As of January 1, 2012, the minimum rates of compensation specified in subsection (a) shall be reduced by one per cent for a new renewable electricity system placed in service during 2012, and shall be reduced by an additional one per cent of the rates of compensation as of January 1 of each successive calendar year with respect to a new renewable electricity system placed in service during such calendar year. The reduced rates of compensation shall be rounded to the second decimal place of cents per kilowatt-hour.
§269-G Rates; landfill gas or sewage treatment plant gas. (a) The following compensation shall be paid by the electric utility to the renewable electricity producer for renewable electricity produced from landfill gas or sewage treatment plant gas:
(1) At least 13.21 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity less than or equal to five hundred kilowatts; and
(2) At least 9.10 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than five hundred kilowatts and less than or equal to five megawatts.
(b) As of January 1, 2012, the minimum rates of compensation specified in subsection (a) shall be reduced by 1.5 per cent for a new renewable electricity system placed in service during 2012, and shall be reduced by an additional 1.5 per cent of the rates of compensation as of January 1 of each successive calendar year with respect to a new renewable electricity system placed in service during such calendar year. The reduced rates of compensation shall be rounded to the second decimal place of cents per kilowatt-hour.
§269-H Rates; hydropower. (a) The following compensation shall be paid by the electric utility to the renewable electricity producer for renewable electricity produced from hydropower:
(1) At least 18.60 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity less than or equal to five hundred kilowatts;
(2) At least 12.70 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than five hundred kilowatts and less than or equal to two megawatts;
(3) At least 11.23 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than two megawatts and less than or equal to five megawatts;
(4) At least 8.62 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than five megawatts and less than or equal to ten megawatts;
(5) At least 7.93 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than ten megawatts and less than or equal to twenty megawatts;
(6) At least 5.86 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than twenty megawatts and less than or equal to fifty megawatts; and
(7) At least 4.70 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than fifty megawatts.
(b) As of January 1, 2012, the minimum rates of compensation specified in subsection (a) shall be reduced by one per cent for a new renewable electricity system placed in service during 2012, and shall be reduced by an additional one per cent of the rates of compensation as of January 1 of each successive calendar year with respect to a new renewable electricity system placed in service during such calendar year. The reduced rates of compensation shall be rounded to the second decimal place of cents per kilowatt-hour.
§269-I Rates; photovoltaic electricity systems. (a) The following compensation shall be paid by the electric utility to the renewable electricity producer for renewable electricity produced by a photovoltaic electricity system:
(1) At least 46.83 cents per kilowatt-hour in the case of renewable electricity produced by a photovoltaic electricity system that is not a building-mounted photovoltaic electricity system;
(2) At least 63.14 cents per kilowatt-hour in the case of renewable electricity produced by a building-mounted photovoltaic electricity system with an electrical capacity less than or equal to thirty kilowatts;
(3) At least 60.06 cents per kilowatt-hour in the case of renewable electricity produced by a building-mounted photovoltaic electricity system with an electrical capacity greater than thirty kilowatts and less than or equal to one hundred kilowatts;
(4) At least 58.10 cents per kilowatt-hour in the case of renewable electricity produced by a building-mounted photovoltaic electricity system with an electrical capacity greater than one hundred kilowatts and less than or equal to one megawatt; and
(5) At least 48.44 cents per kilowatt-hour in the case of renewable electricity produced by a building-mounted photovoltaic electricity system with an electrical capacity greater than one megawatt.
(b) As of January 1, 2012, the minimum rates of compensation specified in subsection (a) shall be reduced by nine per cent for a new renewable electricity system placed in service during 2012, and shall be reduced by an additional nine per cent of the rates of compensation as of January 1 of each successive calendar year with respect to a new renewable electricity system placed in service during such calendar year. The reduced rates of compensation shall be rounded to the second decimal place of cents per kilowatt-hour.
§269-J Rates; solar electricity systems. (a) The following compensation shall be paid by the electric utility to the renewable electricity producer for renewable electricity produced by a concentrating solar electricity system:
(1) At least 39.64 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity less than or equal to five megawatts; and
(2) At least 36.70 cents per kilowatt-hour in the case of renewable electricity produced by a renewable electricity system with an electrical capacity greater than five megawatts.
(b) As of January 1, 2012, the minimum rates of compensation specified in subsection (a) shall be reduced by one per cent for a new renewable electricity system placed in service during 2012, and shall be reduced by an additional one per cent of the rates of compensation as of January 1 of each successive calendar year with respect to a new renewable electricity system placed in service during such calendar year. The reduced rates of compensation shall be rounded to the second decimal place of cents per kilowatt-hour.
§269-K Rates; wind electricity systems. (a) The following compensation shall be paid by the electric utility to the renewable electricity producer for renewable electricity produced by a wind electricity system that is not an offshore wind electricity system:
(1) At least 13.51 cents per kilowatt-hour in the case of renewable electricity delivered during the five-year period commencing on the date on which the wind electricity system is placed in service; and
(2) At least 7.37 cents per kilowatt-hour in the case of renewable electricity delivered during the fifteen-year period commencing on the fifth anniversary of the date on which the wind electricity system is placed in service.
(b) As of January 1, 2012, the minimum rates of compensation specified in subsection (a) shall be reduced by one per cent for a new renewable electricity system placed in service during 2012, and shall be reduced by an additional one per cent of the rates of compensation as of January 1 of each successive calendar year with respect to a new renewable electricity system placed in service during such calendar year. The reduced rates of compensation shall be rounded to the second decimal place of cents per kilowatt-hour.
§269-L Rates; offshore wind electricity system. (a) The following compensation shall be paid by the electric utility to the renewable electricity producer for renewable electricity produced by an offshore wind electricity system:
(1) At least 22.02 cents per kilowatt-hour in the case of renewable electricity delivered during the twelve-year period commencing on the date on which the offshore wind electricity system is placed in service; and
(2) At least 5.14 cents per kilowatt-hour in the case of renewable electricity delivered during the eight-year period commencing on the twelfth anniversary of the date on which the offshore wind electricity system is placed in service.
(b) As of January 1, 2016, the minimum rates of compensation specified in subsection (a) shall be reduced by five per cent for a new renewable electricity system placed in service during 2016, and shall be reduced by an additional five per cent of such rates of compensation as of January 1 of each successive calendar year with respect to a new renewable electricity system placed in service during such calendar year. The reduced rates of compensation shall be rounded to the second decimal place of cents per kilowatt-hour.
§269-M Unregulated producers. An unregulated subsidiary or affiliate of an electric utility may be a renewable electricity producer. The subsidiary or affiliate shall have the right to obtain a renewable electricity purchase agreement from the electric utility on the same terms as any other renewable energy producer and to be paid the same feed-in tariff rate of compensation as any other renewable energy producer for the production of renewable electricity and the delivery of renewable electricity to the electric utility.
§269-N Reporting. By December 31 of the second calendar year following the calendar year in which this part takes effect, and by December 31 of every second calendar year thereafter, the energy resources coordinator shall submit a progress report to the legislature on the development of renewable electricity production in the State. The progress report shall include an assessment of:
(1) The number, size, and types of renewable electricity systems placed in service during the two-year period and cumulatively, and the amounts of renewable electricity produced by renewable electricity systems;
(2) The levelized costs of renewable electricity produced by renewable electricity systems;
(3) The dollar amounts paid for the purchase of renewable electricity, and the additional cost, if any, to ratepayers, net of all savings to the utility and ratepayers from reduced fossil fuel consumption and all economic benefits of distributed generation, including economic benefits of enhanced reliability;
(4) The economic, social, and environmental effects of renewable electricity production, such as the amount of investment in such renewable electricity systems, the number of jobs created in the renewable electricity sector, and the amount of greenhouse gas emissions avoided;
(5) The progress made toward achievement of renewable portfolio standards and greenhouse gas emissions goals; and
(6) Any proposed adjustments to the rates of compensation in this part to reflect technological or market developments, including the effects of new federal legislation or regulation, with respect to the cost of renewable electricity produced by new renewable electricity systems.
§269-O Rulemaking. The commission shall adopt rules, pursuant to chapter 91, that establish a procedure for queuing requests for interconnection of a new renewable electricity system to the utility's electric system pursuant to section 269‑B. The queuing procedure established by the commission shall include a security fee, payable to the electric utility, which shall be refundable if the request's place in the queue is surrendered because certain milestones for the development of the new renewable electricity system are not met, and which may be increased in exchange for extensions of time allowed to achieve such milestones.
§269-P Temporary interconnection. Upon the request of a renewable electricity producer, the commission may order, at its own discretion and in consideration of the merits of the individual case, an electric utility to temporarily interconnect the renewable electricity system to the utility's electric system and to purchase and pay for the renewable electricity produced by the renewable electricity system at the applicable rate of compensation set forth in this part.
§269-Q Verification. A renewable electricity producer may request any agency, authority, person, or organization entitled to verify the generation of a particular quantity of energy from a renewable energy source to issue any certificate, credit, allowance, green tag, or other transferable indicia, howsoever titled, indicating the generation of a specific quantity of renewable electricity by the renewable electricity producer's renewable electricity system, or indicating the renewable electricity producer's ownership of any environmental attributes associated with generation, including any right to report any such ownership to any such agency, authority, person, or organization. Any certificate, credit, allowance, green tag, other transferable indicia, or environmental attribute shall be the property of the renewable electricity producer and shall be freely assignable by the renewable electricity producer.
§269-R Limitations. (a) The obligations of an electric utility to interconnect a new renewable electricity system to the utility's electric system and to offer a renewable electricity purchase agreement to a renewable electricity producer shall not apply with respect to renewable electricity produced by a new renewable electricity system that is a wind electricity system, and that is placed in service after December 31 of the year following the year in which the aggregate electrical capacity of new renewable electricity systems that are wind electricity systems as to which technical requirements for interconnection have been met equals twenty-five per cent of the electric utility's system peak demand; provided that the commission may increase, by rule or order, the aggregate electrical capacity limit above twenty-five per cent of the electric utility's system peak demand.
(b) The obligation of an electric utility to interconnect a new renewable electricity system to the utility's electric system and to offer a renewable electricity purchase agreement to a renewable electricity producer shall not apply with respect to renewable electricity produced by a new renewable electricity system that is a photovoltaic electricity system or a concentrating solar electricity system, and that is placed in service after December 31 of the year following the year in which the aggregate electrical capacity of new renewable electricity systems that are photovoltaic electricity systems or concentrating solar electricity systems as to which technical requirements for interconnection have been met equals fifty per cent of the electric utility's system peak demand; provided that the commission may increase, by rule or order, the aggregate electrical capacity limit above fifty per cent of the electric utility's system peak demand.
§269-S Exceptions. (a) The requirements of section 269‑27.2 shall not apply to any renewable electricity purchase agreement or to any purchase of any renewable electricity under any renewable electricity purchase agreement.
(b) A renewable electricity producer that enters into a renewable electricity purchase agreement with the electric utility shall not be an eligible customer-generator for purposes of part VI of this chapter.
(c) A renewable electricity producer shall not be eligible to receive feed-in tariff compensation under this part for any renewable electricity produced by a renewable electricity system as to which an income tax credit was claimed by any taxpayer pursuant to section 235-12.5.
(d) A renewable electricity producer shall not be eligible to receive feed-in tariff compensation under this section for any renewable electricity produced by a photovoltaic electricity system as to which any person received a photovoltaic rebate under Act 151, Session Laws of Hawaii 2008."
SECTION 3. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 4. This Act shall take effect upon its approval.
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