Bill Text: HI SB530 | 2022 | Regular Session | Introduced
Bill Title: Relating To Renewable Energy.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2021-12-10 - Carried over to 2022 Regular Session. [SB530 Detail]
Download: Hawaii-2022-SB530-Introduced.html
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THE SENATE |
S.B. NO. |
530 |
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THIRTY-FIRST LEGISLATURE, 2021 |
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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:
PART I
SECTION 1. The legislature finds that Act 97, Session Laws of Hawaii 2015, amended section 269-92, Hawaii Revised Statutes, to establish a one hundred per cent renewable portfolio standard by December 31, 2045, with the intent to transition the State away from imported fuels and toward renewable local resources that provide a secure source of affordable energy. Currently, the calculation of the renewable portfolio standard enacted in 2001 and amended in 2006, is the percentage of electrical energy sales that is represented by renewable electrical energy. The legislature finds that the calculation of the renewable portfolio standard based on electrical energy sales (renewable electrical energy sales divided by total electrical energy sales), rather than on electrical energy generation (renewable electrical energy generation divided by total electrical energy generation), overestimates the amount of renewable energy serving Hawaii's electric utility customers. There are two fundamental issues that lead to the current discrepancy:
(1) The current renewable portfolio standard calculation inflates the reported percentage of renewable energy by excluding customer-sited, grid-connected energy generation in the denominator, which becomes material with higher levels of customer-sited, grid-connected renewable energy generation and higher renewable portfolio standard percentages; and
(2) The current electrical energy sales number does not include energy losses that occur between the points of electrical energy generation and the customer meter, where sales are measured.
Failure to address these issues creates an incorrect measure of the State's progress toward its statutory goal of one hundred per cent renewable energy.
The legislature also finds that it is important that all relevant entities are aligned in the goal of achieving one hundred per cent renewable energy. Requiring electric utilities, but not gas utilities, to increase their reliance on renewable energy creates an unfair playing field that may unintentionally harm consumers by promoting suboptimal long-lived investments in fossil fuels through gas-fired distributed electrical generation. These effects may also have near- and long-term impacts on the viability of the State's electric utilities, and near- and long-term impacts on the viability of the State's gas utilities.
The legislature further finds that the simplest, fairest, and most effective solution to this concern is to implement renewable portfolio standard targets for gas utilities that mirror those being achieved by electric utilities.
The purpose of this Act is to:
(1) Amend the definition of renewable portfolio standard to more accurately reflect the percentage of total electrical energy generated that is represented by renewable energy in the State; and
(2) Promote fairness and alignment in Hawaii's transition to one hundred per cent renewable energy and ensure that the State's market for gas is aligned with the State's transition to renewable energy.
PART II
SECTION 2. Section 269-91, Hawaii Revised Statutes, is amended as follows:
1. By repealing the definition of "cost-effective".
[""Cost-effective"
means the ability to produce or purchase electric energy or firm capacity, or
both, from renewable energy resources at or below avoided costs or as the
commission otherwise determines to be just and reasonable consistent with the
methodology set by the public utilities commission in accordance with section
269-27.2."]
2. By repealing the definition of "renewable portfolio standard".
[""Renewable portfolio
standard" means the percentage of electrical energy sales that is
represented by renewable electrical energy."]
SECTION 3. Section 269-92, Hawaii Revised Statutes, is amended to read as follows:
"§269-92 Renewable portfolio standards[.] for electric
utility companies. (a) Each electric utility company that sells
electricity for consumption in the State shall establish a renewable portfolio
standard of:
(1) Ten per cent of its net electricity sales by December 31, 2010;
(2) Fifteen per cent of its net electricity sales by December 31, 2015;
(3) Thirty per cent of its net electricity sales by December 31, 2020;
(4) Forty per cent of
its net electricity [sales] generation by December 31, 2030;
(5) Seventy per cent
of its net electricity [sales] generation by December 31, 2040;
and
(6) One hundred per
cent of its net electricity [sales] generation by December 31,
2045.
(b)
The public utilities commission may establish standards for each electric
utility company that prescribe [what] the portion of the
renewable portfolio standards that shall be met by specific types of
renewable energy resources; provided that:
(1) Prior to January 1, 2015, at least fifty per cent of the renewable portfolio standards shall be met by electrical energy generated using renewable energy as the source, and after December 31, 2014, the entire renewable portfolio standard shall be met by electrical generation from renewable energy sources;
(2) Beginning January 1, 2015, electrical energy savings shall not count toward renewable energy portfolio standards;
(3) Where electrical energy is generated or displaced by a combination of renewable and nonrenewable means, the proportion attributable to the renewable means shall be credited as renewable energy; and
(4) Where fossil and renewable fuels are co-fired in the same generating unit, the unit shall be considered to generate renewable electrical energy (electricity) in direct proportion to the percentage of the total heat input value represented by the heat input value of the renewable fuels.
(c)
If the public utilities commission determines that an electric utility
company failed to meet the renewable portfolio standard, after a hearing in
accordance with chapter 91, the utility shall be subject to penalties to be
established by the public utilities commission; provided that if the commission
determines that the electric utility company is unable to meet the renewable
portfolio standards [due to] because of reasons beyond the
reasonable control of [an] the electric utility[,] company,
as set forth in subsection (d), the commission, in its discretion, may waive in
whole or in part any otherwise applicable penalties.
(d)
Events or circumstances that are [outside of] beyond an
electric utility company's reasonable control may include, to the extent the
event or circumstance could not be reasonably foreseen and ameliorated:
(1) Weather-related damage;
(2) Natural disasters;
(3) Mechanical or resource failure;
(4) Failure of renewable electrical energy producers to meet contractual obligations to the electric utility company;
(5) Labor strikes or lockouts;
(6) Actions of governmental authorities that adversely affect the generation, transmission, or distribution of renewable electrical energy under contract to an electric utility company;
(7) Inability to acquire sufficient renewable electrical energy due to lapsing of tax credits related to renewable energy development;
(8) Inability to obtain permits or land use approvals for renewable electrical energy projects;
(9) Inability to acquire sufficient cost-effective renewable electrical energy;
(10) Inability to acquire sufficient renewable electrical energy to meet the renewable portfolio standard goals beyond 2030 in a manner that is beneficial to Hawaii's economy in relation to comparable fossil fuel resources;
(11) Substantial limitations, restrictions, or prohibitions on utility renewable electrical energy projects; and
(12) Other events and
circumstances of a similar nature[.] that could not be reasonably
foreseen and ameliorated.
(e)
For the purposes of this section:
"Cost-effective" means
the ability to produce or purchase electric energy or firm capacity, or both,
from renewable energy resources at or below avoided costs or as the public
utilities commission otherwise determines to be just and reasonable consistent
with the methodology set by the commission in accordance with section 269-27.2.
"Renewable portfolio
standard" means the percentage of electrical energy generation that is
represented by renewable electrical energy."
SECTION 4. Section 269-93, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:
"§269-93 Achieving electric
utility company portfolio standard. (a) An
electric utility company and its electric utility affiliates may aggregate
their renewable portfolios to achieve the renewable portfolio standard[.],
as established and defined in section 269-92."
SECTION 5. Section 269-94, Hawaii Revised Statutes, is amended to read as follows:
"[[]§269-94 Waivers, extensions, and
incentives[.]]for electric utility companies. Any electric utility company not meeting the
renewable portfolio standard, as established and defined in section 269-92,
shall report to the public utilities commission within ninety days following the
goal dates established in section [[]269-92[]], and provide an
explanation for not meeting the renewable portfolio standard. The public utilities commission, after
allowing an appropriate period of public comment, shall have the option to
either grant a waiver from the renewable portfolio standard or an extension for
meeting the prescribed standard.
The public utilities commission may provide incentives to encourage electric utility companies to exceed their renewable portfolio standards or to meet their renewable portfolio standards ahead of time, or both."
PART III
SECTION 6. Section 269-91, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:
""Gas utility company" means a public utility, as defined under section 269-1, for the production, conveyance, transmission, delivery, or furnishing of gas."
SECTION 7. Chapter 269, part V, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:
"§269-A Renewable
portfolio standards for gas utility companies. (a) Each gas utility company that sells gas for
consumption in the State shall establish a renewable portfolio standard of:
(1) Twenty-five per
cent of its total sales by December 31, 2025;
(2) Forty per cent
of its total sales by December 31, 2030;
(3) Seventy per
cent of its total sales by December 31, 2040; and
(4) One hundred per cent of its total sales by December 31, 2045.
For the purpose of this section,
"total sales" shall mean the sales of all gas in the State by a gas
utility company, by its corporate parent, and by its corporate parent's
subsidiary entities, partners, joint venturers, and affiliate entities.
(b) The public utilities commission may establish standards for each gas utility company that prescribe the portion of the renewable portfolio standards that shall be met by specific types of renewable energy resources; provided that where gas is composed of co-mingled fossil and renewable fuels, the renewable energy component of such gas shall be considered to be in direct proportion to the percentage of the total heat output value represented by the heat output value of the fuels derived from renewable energy.
(c) If the public utilities commission determines
that a gas utility company failed to meet the renewable portfolio standard,
after a hearing in accordance with chapter 91, the utility shall be subject to
penalties to be established by the public utilities commission; provided that
if the commission determines that the gas utility company is unable to meet the
renewable portfolio standards because of reasons beyond the reasonable control
of the gas utility company, as set forth in subsection (d), the commission, in
its discretion, may waive in whole or in part any otherwise applicable
penalties.
(d) Events or circumstances that are beyond a gas utility company's reasonable control may include, to the extent the event or circumstance could not be reasonably foreseen and ameliorated:
(1) Weather-related
damage;
(2) Natural
disasters;
(3) Mechanical or
resource failure;
(4) Failure of
renewable gas producers or suppliers to meet contractual obligations to the gas
utility company;
(5) Labor strikes
or lockouts;
(6) Actions of
governmental authorities that adversely affect the procurement of renewable gas
energy under contract to a gas utility company;
(7) Inability to
obtain permits or land use approvals for renewable gas projects;
(8) Inability to
acquire sufficient renewable gas to meet the renewable portfolio standard goals
for 2040 and for years beyond in a manner that is cost-effective or beneficial
to Hawaii's economy in relation to comparable fossil fuel resources;
(9) Substantial
limitations, restrictions, or prohibitions on utility renewable gas projects;
and
(10) Other events
and circumstances of a similar nature that could not be reasonably foreseen and
ameliorated.
(e) For the purposes of this section:
"Cost effective" means
the ability to produce or purchase gas from renewable gas resources at or below
avoided costs or as the public utilities commission otherwise determines to be
just and reasonable.
"Renewable portfolio standard" means the percentage of gas sales that is represented by fuels derived from renewable energy."
§269-B Achieving gas utility company portfolio
standard. (a) A gas utility company and its gas utility
affiliates may aggregate their renewable portfolios to achieve the renewable
portfolio standard, as established and defined in section 269-A.
(b) If a gas utility company and its gas utility
affiliates aggregate their renewable portfolios to achieve the renewable
portfolio standard, the public utilities commission may distribute, apportion,
or allocate the costs and expenses of all or any portion of the respective
renewable portfolios among the gas utility company, its gas utility affiliates,
and their respective ratepayers, as is reasonable under the circumstances.
(c) A gas utility company may recover, through an
automatic rate adjustment clause, the gas utility company's revenue requirement
resulting from the distribution, apportionment, or allocation of the costs and
expenses of the renewable portfolios of the gas utility company and its gas
utility affiliates.
(d) To provide for timely recovery of the revenue
requirement under subsection (c), the public utilities commission may establish
a separate automatic rate adjustment clause, or approve the use of a previously
approved automatic rate adjustment clause, without a rate case filing. The use of the automatic rate adjustment
clause to recover the revenue requirement shall be allowed to continue until
the revenue requirement is incorporated in rates in the respective gas utility
company's rate case.
§269-C Waivers, extensions, and incentives for gas
utility companies. Any gas
utility company not meeting the renewable portfolio standard, as established
and defined in section 269-A, shall report to the public utilities commission
within ninety days following the goal dates established in section 269-A, and
provide an explanation for not meeting the renewable portfolio standard. The public utilities commission, after
allowing an appropriate period of public comment, shall have the option to either
grant a waiver from the renewable portfolio standard or an extension for
meeting the prescribed standard.
The public utilities commission may provide incentives to encourage gas utility companies to exceed their renewable portfolio standards or to meet their renewable portfolio standards ahead of time, or both."
PART IV
SECTION 8. In codifying the new sections added by section 7 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 9. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 11. This Act shall take effect on July 1, 2021.
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INTRODUCED BY: |
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Report Title:
Renewable Energy; Renewable Portfolio Standard; Electricity; Gas; Public Utilities Commission
Description:
Amends the definition of renewable portfolio standard for electric utility companies to be a percentage of electrical energy generation, rather than sales. Defines a renewable portfolio standard for gas utility companies. Requires gas utility companies to establish renewable energy portfolio standards and provides a means for gas utility companies to achieve the renewable energy portfolio standards.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
