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


 1       WHEREAS, in the Public Utilities Commission Docket 94-0226,
 2   Renewable Energy Resource Investigation, one of the barriers to
 3   the use of renewable energy is unresolved avoided cost issues;
 4   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 facility;
 9   and
10   
11       WHEREAS, these unresolved issues increase the cost of doing
12   business and 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 in the State of Hawaii, Hawaii Administrative
21   Rules Title 6, Chapter 74, the PUC's Avoided Cost Rules, which
22   implement PURPA and Section 269-27.2, HRS; and
23   
24       WHEREAS, as defined in the PUC's Avoided Cost Rules,
25   avoided costs means the incremental or additional costs to an
26   electric utility of electric energy or firm capacity or both
27   which costs the utility would avoid by purchase from the
28   qualifying facility, Section 6-74-1, Hawaii Administrative
29   Rules (HAR); and
30   
31       WHEREAS, avoided costs are comprised of two components -
32   avoided capacity costs and avoided energy costs, and avoided
33   capacity costs include avoided capital costs and avoided fixed
34   operation and maintenance costs; and
35   
36       WHEREAS, examples of costs that may be included in the
37   avoided capacity cost component are firm generating capacity

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

 
 1   costs, transmission and distribution capital costs, fixed
 2   operation and maintenance costs, and transmission and
 3   distribution demand losses; now, therefore,
 4   
 5       BE IT RESOLVED by the Senate of the Twentieth Legislature
 6   of the State of Hawaii, Regular Session of 2000, the House of
 7   Representatives concurring, that the Public Utilities
 8   Commission complete Docket No. 7310, short-run avoided energy
 9   costs for as-available resources and issue a decision and
10   order; and
11   
12       BE IT FURTHER RESOLVED that the Public Utilities Commission
13   implement a plan to calculate avoided cost within 120 days from
14   the filing of a petition pursuant to Section 6-74-15(c), HAR,
15   by a qualifying facility with respect to an offer meeting the
16   requirements of Section 6-74-15(d), HAR; and
17   
18       BE IT FURTHER RESOLVED that the Chairperson of the Public
19   Utilities Commission shall report the decision and order and
20   the implementation plan to the State Legislature no later than
21   twenty calendar days prior to the convening of the 2001 Regular
22   Session.
23   
24       BE IT FURTHER RESOLVED that a duly certified copy of this
25   Concurrent Resolution be transmitted to the Chairperson of the
26   Public Utilities Commission.