Bill Text: HI SB2656 | 2014 | Regular Session | Introduced
Bill Title: Grid Modernization; Hawaii Electric System; Public Utilities Commission; Division of Consumer Advocacy; Appropriation ($)
Spectrum: Partisan Bill (Democrat 9-0)
Status: (Engrossed - Dead) 2014-03-13 - The committee(s) on EEP recommend(s) that the measure be deferred. [SB2656 Detail]
Download: Hawaii-2014-SB2656-Introduced.html
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THE SENATE |
S.B. NO. |
2656 |
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TWENTY-SEVENTH LEGISLATURE, 2014 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the modernization of the hawaii electric system.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the increasing deployment of customer generation in Hawaii is in the public interest, lessening Hawaii's dependence on imported oil, creating thousands of jobs, fostering billions of dollars of economic activity, and giving tens of thousands of households and businesses access to reasonably priced electricity. The legislature also finds that energy storage and other components of a "smart grid", such as demand response management, can support the continued deployment of customer generation, improve the resiliency, flexibility, and efficiency of the Hawaii electric system, and are thus also in the public interest. The legislature expects customer generation will play a major role in supplying the State's future electricity needs and clean energy goals, recognizing that appropriate investments in energy storage and smart grid improvements are vital to achieve Hawaii's robust clean energy goals.
Accordingly, it is the legislature's intent that all Hawaii residents have the right to install and interconnect customer generation regardless of the location of their homes and businesses on the Hawaii electric system. It is also the legislature's intent that all Hawaii residents be allowed to interconnect customer generation to the Hawaii electric system in a timely manner and for a reasonable cost.
The legislature finds that technical and economic barriers are preventing Hawaii customer-generators from interconnecting to the Hawaii electric system in a timely manner. The State's interconnection procedures limit the amount of customer generation that can be installed on each circuit of the Hawaii electric system to ensure the safe and reliable operation of that system. While the interconnection procedures allow for upgrades to the electric system to increase the system's capacity to host customer generation, such upgrades can delay projects and are only constructed after the interconnection procedures are applied to individual projects. The large number of customer-generators requesting interconnection to the electric system has required upgrades preventing the interconnection of large numbers of Hawaii residents in a timely manner.
The legislature finds that the failure to adequately and sufficiently plan for and implement the modifications necessary to accommodate customers' choices to install customer generation negatively impacts all Hawaii residents. The legislature further finds that if technical and economic barriers are not addressed, a number of undesirable scenarios may result, including irreparable loss of jobs in the nascent solar industry and an ever increasing number of Hawaii residents disconnecting from the Hawaii electric system.
The legislature further finds that utility planning and construction of upgrades to the electrical system, including the use of advanced grid modernization technology such as energy storage, to accommodate anticipated growth in customer generation could resolve technical barriers in advance of the interconnection procedures being applied. Such proactive planning could ensure that all Hawaii residents are able to interconnect to the system in a timely manner.
The legislature also finds that the use of strict cost causation principles within the State's interconnection rules for customer generation prevent all Hawaii residents from accessing the Hawaii electric system for a reasonable cost. These rules allocate the costs for upgrades to the State's electric system to the marginal customer-generator that caused the need for the upgrade. Laying the cost obligation for upgrades on one customer is frequently burdensome and unreasonable for small residential and commercial customer-generators who have little choice about where on the electrical system to locate their generation. Strict cost causation principles pose a barrier to Hawaii residents' ability to install customer generation.
The legislature finds that the upgrades necessary to accommodate small residential and commercial customer-generators can be installed in a manner that benefits load and customer generation such that a number of customers will benefit. Accordingly, a superior way to allocate the costs of electrical system upgrades caused by small customer-generators may be for each public utility to appropriately allocate these costs among all electric customers and customer-generators that benefit from the upgrades.
It is the legislature's intent that the Hawaii public utilities commission open a proceeding by July 1, 2014, to address these technical and economic barriers and to ensure all Hawaii customers have the ability to install generation in a timely manner and at a reasonable cost without sacrificing the safe and reliable operation of the Hawaii electric system. It is also the legislature's intent that the same commission proceeding consider whether the establishment of differentiated authorized rates of return on common equity are warranted to encourage increased utility investments in transmission, distribution infrastructure, and advanced grid modernization technology, pursuant to section 269-6, Hawaii Revised Statutes, and identify which types of transmission and distribution infrastructure and advanced grid modernization technology would be eligible for such differentiated authorized rates of return on common equity.
The legislature requests that the commission complete the proceeding and submit a report on the results of the proceeding to the legislature no later than twenty days prior to the convening of the regular session of 2016. Recognizing the expedited nature of the proceeding, it is the legislature's intent to make available to the commission $750,000 in general funds to conduct the proceeding. It is also the legislature's intent to exempt the commission from section 103D-304, Hawaii Revised Statutes, in the commission's procurement of any professional services needed to provide technical expertise during the proceeding.
SECTION 2. 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 procedures established by the commission by rule or order pursuant to subsection (a) shall be revised as necessary to ensure any person, business, or entity can make a safe and reliable interconnection on the Hawaii electric system in a timely manner and for a reasonable cost; provided that the person, business, or entity is located on the Hawaii electric system.
[(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 3. 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) The commission shall ensure that any person, business, or entity can operate customer generation regardless of where that person, business, or entity is located on the Hawaii electric system."
SECTION 4. (a) The public utilities commission shall commence a proceeding by July 1, 2014, to consider how the use of advanced grid modernization technology and the planning and construction of upgrades to the Hawaii electric system by each public utility can accommodate anticipated growth in customer generation. The same commission proceeding shall consider whether the establishment of differentiated authorized rates of return on common equity is warranted to encourage increased utility investments in transmission and distribution infrastructure and advanced grid modernization technology, as authorized by section 269-6, Hawaii Revised Statutes, and identify which types of transmission, distribution infrastructure, and advanced grid modernization technology would be eligible for such differentiated authorized rates of return on common equity.
(b) The commission shall submit a report of its findings and recommendations to the legislature no later than twenty days prior to the convening of the regular session of 2016.
(c) The commission shall be exempt from section 103D-304, Hawaii Revised Statutes, in its procurement of any professional services needed to conduct the proceeding.
SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $750,000 or so much thereof as may be necessary for fiscal year 2014-2015 for the public utilities commission to conduct a proceeding to address technical and economic barriers to ensure that all Hawaii customers have the ability to install generation in a timely manner and at reasonable cost without sacrificing the safe and reliable operation of the Hawaii electric system.
The sum appropriated shall be expended by the public utilities commission for the purposes of this Act.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect upon its approval; provided that section 5 shall take effect on July 1, 2014.
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INTRODUCED BY: |
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Report Title:
Grid Modernization; Hawaii Electric System; Public Utilities Commission; Appropriation
Description:
Requires the public utilities commission to adopt rules for improved accessibility to connect to the Hawaii electric system for any person, business, or entity on the Hawaii electric system. Requires the commission to initiate a proceeding no later than July 1, 2014, to discuss upgrades to the Hawaii electric system for anticipated growth of customer generation.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
