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THE SENATE                           S.C.R. NO.            S.D. 1
TWENTIETH LEGISLATURE, 2000                                H.D. 1
STATE OF HAWAII                                            
                                                                
___________________________________________________________________
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                     SENATE CONCURRENT
                        RESOLUTION
REQUIRING THE PUBLIC UTILITIES COMMISSION TO RESOLVE AVOIDED COST
   ISSUES.



 1       WHEREAS, in the Public Utilities Commission (PUC) Docket
 2   94-0226, Renewable Energy Resource Investigation, one of the
 3   barriers to the use of renewable energy is unresolved avoided
 4   cost issues; and
 5   
 6       WHEREAS, unresolved avoided cost issues are also a factor
 7   in protracted contract negotiations for power purchase
 8   agreements between electric utilities and qualifying
 9   facilities; and
10   
11       WHEREAS, these unresolved issues increase the cost of doing
12   business and the cost of living in Hawaii and contribute to
13   Hawaii's negative image as a place to do business; and
14   
15       WHEREAS, utilities are required to purchase power from
16   qualifying facilities at or below their avoided costs unless a
17   different price is negotiated pursuant to the Public Utility
18   Regulatory Policies Act of 1978 (PURPA), as amended, and the
19   Commission's Standards for Small Power Production and
20   Cogeneration found in the Hawaii Administrative Rules (HAR)
21   title 6, chapter 74, or the PUC's Avoided Cost Rules, which
22   implement PURPA and section 269-27.2, Hawaii Revised Statutes;
23   and
24   
25       WHEREAS, as defined in the PUC's Avoided Cost Rules,
26   avoided costs mean the incremental or additional costs to an
27   electric utility of electric energy, firm capacity, or both,
28   which costs the utility would avoid by purchase from the
29   qualifying facility, section 6-74-1, HAR; and
30   
31       WHEREAS, avoided costs comprise two components:  avoided
32   capacity costs and avoided energy costs; and
33   
34       WHEREAS, avoided capacity costs include avoided capital
35   costs and avoided fixed operation and maintenance costs; and

 
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                                  S.C.R. NO.            S.D. 1
                                                        H.D. 1
                                                        

 
 1       WHEREAS, examples of costs that may be included in the
 2   avoided capacity cost component are firm generating capacity
 3   costs, transmission and distribution capital costs, fixed
 4   operation and maintenance costs, and transmission and
 5   distribution demand losses; now, therefore,
 6   
 7       BE IT RESOLVED by the Senate of the Twentieth Legislature
 8   of the State of Hawaii, Regular Session of 2000, the House of
 9   Representatives concurring, that the PUC complete Docket No.
10   7310, short-run avoided energy costs for as-available
11   resources; and
12   
13       BE IT FURTHER RESOLVED that PUC implement a plan to
14   calculate avoided cost within 120 days from the filing of a
15   petition by a qualifying facility; and
16   
17       BE IT FURTHER RESOLVED that the Chairperson of the PUC
18   report on the decision, order, and implementation plan to the
19   Legislature no later than 20 calendar days prior to the
20   convening of the Regular Session of 2001; and
21   
22       BE IT FURTHER RESOLVED that a certified copy of this
23   Concurrent Resolution be transmitted to the Chairperson of the
24   PUC.