8
REPORT TITLE:
PUC; Distributed Generation


DESCRIPTION:
Requires the public utilities commission to:  (1) develop and
implement a grant program to offset costs of eligible distributed
generation systems; and (2) establish appropriate interconnection
and safety standards and requirements and operating agreements
for distributed generation systems.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2330
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT
RELATING TO ENERGY.



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

 1      SECTION 1.  The legislature finds that distributed
 
 2 generation is the small scale production of electricity at or
 
 3 near the point of use, as opposed to central generation, where
 
 4 electricity is produced in large quantities at a remote site and
 
 5 transmitted to multiple users.  Distributed generation systems
 
 6 range from photovoltaics and fuel cells to gas turbines and
 
 7 diesel engines in residential, commercial, and industrial
 
 8 applications.  They can operate in conjunction with, or
 
 9 independent of, the electricity grid.
 
10      The purpose of this Act is to:
 
11      (1)  Require the public utilities commission, to the extent
 
12           that funds are appropriated for that purpose in the
 
13           annual appropriations act, to develop and implement a
 
14           five-year grant program to offset a portion of the
 
15           costs of eligible distributed generation systems, as
 
16           defined in the Act, and to authorize the commission to
 
17           use up to three per cent of the funds appropriated for
 
18           the program to fund the commission's costs in
 
19           administering the program; and
 
20      (2)  Require the commission to establish appropriate
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           interconnection and safety requirements and operating
 
 2           agreements for distributed generation, as defined, in
 
 3           accordance with specified requirements.
 
 4      Under this Act, distributed generation systems are required
 
 5 to be interconnected with the electricity grid to be eligible for
 
 6 grants.  Distributed generation systems are further required to
 
 7 be used only to meet onsite electric load, and not sell power.
 
 8 The intent of this Act is to increase consumer investment in low-
 
 9 pollution distributed generation systems in Hawaii by providing
 
10 grants of up to $2,000 that make these systems more cost-
 
11 competitive.  With that increased investment, the legislature
 
12 finds that these systems will not need state support to be cost-
 
13 competitive in the future.
 
14      SECTION 2.  Chapter 269, Hawaii Revised Statutes, is amended
 
15 by adding two new sections to be appropriately designated and to
 
16 read as follows:
 
17      "§269-    Eligible distributed generation systems; grant
 
18 program.  (a)  The commission shall develop and implement a grant
 
19 program to offset a portion of the costs of eligible distributed
 
20 generation systems.
 
21      (b)  A grant for an eligible distributed generation system
 
22 shall be based on either the performance or type of distributed
 
23 generation system, as determined by the commission.  The amount
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 of the grant shall not exceed the lesser of ten per cent of the
 
 2 costs of the eligible distributed generation system, or $2,000.
 
 3      (c)  An applicant who receives a grant for an eligible
 
 4 distributed generation system from another program administered
 
 5 by the commission, may also receive a grant for that system
 
 6 pursuant to this section if the system possesses adequate black-
 
 7 start capability, as determined by the commission.
 
 8      (d)  Only the owner of the eligible distributed generation
 
 9 system may apply for a grant under this section.  If the owner-
 
10 developer or owner-builder of the property on which a system is
 
11 installed irrevocably elects to not apply for a grant under this
 
12 section, the purchaser of the property may apply if the original
 
13 owner-developer or owner-builder conveys entitlement to the grant
 
14 in a written document.
 
15      (e)  The commission shall adopt rules pursuant to chapter 91
 
16 to provide appropriate consumer protection under the grant
 
17 program and to govern other aspects of the grant program, which
 
18 shall be made available to the public.
 
19      (f)  The person who provides the eligible distributed
 
20 generation system shall be properly licensed to do so by the
 
21 contractors license board.
 
22      (g)  The award of a grant pursuant to this section is
 
23 subject to appeal to the commission upon a showing that factors
 

 
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 1 other than those adopted by the commission were applied in making
 
 2 the award.
 
 3      (h)  The commission shall only implement this section to the
 
 4 extent that moneys are appropriated for those purposes of this
 
 5 section in the annual appropriations act.  The commission may
 
 6 expend up to three per cent of the funds available for this
 
 7 program to fund the commission's cost of administering this
 
 8 program.
 
 9      (i)  Eligible distributed generation systems shall have a
 
10 warranty of not less than three years.
 
11      (j)  Potentially certifiable technologies include all of the
 
12 following:
 
13      (1)  Micro-cogeneration;
 
14      (2)  Gas turbines;
 
15      (3)  Fuel cells;
 
16      (4)  Wind turbines;
 
17      (5)  Electricity storage technologies;
 
18      (6)  Solar dish Stirling engines;
 
19      (7)  Reciprocating internal combustion engines;
 
20      (8)  Biomass-fueled systems; and
 
21      (9)  Hydropower systems.
 
22      (k)  For the purposes of this section, the following terms
 
23 have the following meanings:
 

 
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 1      "Black-start capability" means the capability to provide
 
 2 electricity to the customer in the event of an outage.
 
 3      "Cost" includes equipment, installation charges, and all
 
 4 components necessary to carry out the intended use of the system.
 
 5 In the case of a system that is leased, "cost" means the
 
 6 principal recovery portion of all lease payments scheduled to be
 
 7 made during the full term of the lease, which is the costs
 
 8 incurred by the customer in acquiring the distributed generation
 
 9 system, excluding interest charges and maintenance expenses.
 
10      "Eligible distributed generation system" means any new,
 
11 previously unused distributed generation system, interconnected
 
12 and operating in parallel with the electricity grid, certified by
 
13 the commission to provide environmental and system reliability
 
14 benefits equal to or greater than the following specifications:
 
15      (1)  Forty per cent total fuel-to-energy conversion
 
16           efficiency for any nonrenewable fuel system; and
 
17      (2)  Emission of oxides of nitrogen and any other applicable
 
18           criteria pollutants that equal or exceed best
 
19           achievable control technology for combustion
 
20           turbine/combined cycle central station power plants.
 
21           The commission, in consultation with the director of
 
22           health, shall prepare and update specifications for
 
23           those emissions and other criteria pollutants.
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1      "Installed" means placed in a functionally operative state.
 
 2      (l)  This section shall be repealed on July 1, 2005.
 
 3      §269-    Distributed generation; commission to establish
 
 4 interconnection and safety standards.  (a)  The commission shall
 
 5 establish appropriate interconnection and safety standards and
 
 6 requirements and operating agreements for distributed generation
 
 7 by developing all of the following:
 
 8      (1)  Simplified, uniform interconnection requirements that
 
 9           do both of the following:
 
10           (A)  Take into account generator size and interconnect
 
11                technology, including but not limited to,
 
12                synchronous, inductive, or solid-state technology;
 
13                and
 
14           (B)  Do not provide for power sales;
 
15      (2)  Simplified, nonburdensome, uniform operating agreements
 
16           and reasonable insurance requirements;
 
17      (3)  Interconnection standards for solid-state power
 
18           conditioning systems;
 
19      (4)  A process to pre-certify specific hardware and software
 
20           configurations for interconnection with the electric
 
21           grid;
 
22      (5)  An expedited process whereby performance of any
 
23           necessary studies, safety inspections of the installed
 

 
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 1           system, and the signing of the operating agreement by
 
 2           the utility distribution company are completed within a
 
 3           prescribed period from the date of notification, which
 
 4           shall not unduly or unnecessarily delay the
 
 5           commencement of operation.
 
 6      (b)  The commission shall establish fair and reasonable
 
 7 standby rates that do not discriminate against distributed
 
 8 generation.
 
 9      (c)  For purposes of this section, "distributed generation"
 
10 means any onsite generation, interconnected and operating in
 
11 parallel with the electricity grid, that is used solely to meet
 
12 onsite electric load, or any cogeneration facility."
 
13      SECTION 3.  New statutory material is underscored.
 
14      SECTION 4.  This Act shall take effect on July 1, 2000.
 
15 
 
16                              INTRODUCED BY:______________________