THE SENATE	S.B. NO.	2462
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to electric utilities.

 

 

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

 

     SECTION 1.  The legislature finds that electric utilities have historically had an inherent conflict of interest regarding energy efficiency programs.  In the past, the more electricity consumers used, the more revenue the utility collected.  This inherent conflict has, over time, slowed the electric utilities' ability to focus on building a modern distribution platform.

     In response to this inherent problem, the public utilities commission has adopted the policy of sales decoupling for certain electric utilities.  Decoupling is a method of setting electric rates that helps break the traditional dependence of utilities on greater electricity usage for greater revenues.  In doing so, the commission stated that it expected that the transition to a third-party energy efficiency administrator would "remove the perceived inherent conflict between a utility's desire to generate revenues and income, and energy efficiency measures that serve to decrease sales and defer the need for additional plant investment."

     However, the legislature finds that the same inherent conflict also exists between electric utilities and independent power producers.  Moreover, the commission's past actions did not address electric cooperatives, which possess the same inherent conflict as other electric utilities.  Accordingly, the purpose of this Act is to allow the commission to require electric cooperatives to disengage from owning any generation asset.

     SECTION 2.  Section 269-145.5, Hawaii Revised Statutes, is amended to read as follows:

     "§269-145.5  Advanced grid modernization technology; principles.  (a)  The commission, in carrying out its responsibilities under this chapter, shall consider the value of improving electrical generation, transmission, and distribution systems and infrastructure within the State through the use of advanced grid modernization technology in order to improve the overall reliability and operational efficiency of the Hawaii electric system.

     (b)  In advancing the public interest, the commission shall balance technical, economic, environmental, and cultural considerations associated with modernization of the electric grid, based on principles that include but are not limited to:

     (1)  Enabling a diverse portfolio of renewable energy resources;

     (2)  Expanding options for customers to manage their energy use;

     (3)  Maximizing interconnection of distributed generation to the State's electric grids on a cost-effective basis at non-discriminatory terms and at just and reasonable rates, while maintaining the reliability of the State's electric grids, and allowing such access and rates through applicable rules, orders, and tariffs as reviewed and approved by the commission;

     (4)  Determining fair compensation for electric grid services and other benefits provided to customers and for electric grid services and other benefits provided by distributed generation customers and other non-utility service providers; and

     (5)  Maintaining or enhancing grid reliability and safety through modernization of the State's electric grids.

     (c)  The public utilities commission may require an electric cooperative, as defined in section 269-31, to disengage from owning any generation asset; provided that the commission may establish a transition period to allow for existing utility generation units to be converted to third-party power purchase agreements."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Public Utilities Commission; Sales Decoupling; Electric Cooperatives

 

Description:

Allows the Public Utilities Commission to require electric cooperatives to disengage from owning any generation asset, provided that the commission may establish a transition period to allow for existing utility generation units to be converted to third-party power purchase agreements.

 

 

 

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