STAND. COM. REP. NO. 461-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 1883
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Energy and Environmental Protection, to
which was referred H.B. No. 1883 entitled:

     "A BILL FOR AN ACT RELATING TO RENEWABLE ENERGY RESOURCES,"

begs leave to report as follows:

     The purpose of this bill is to implement "renewables
portfolio standards" to ensure that renewable energy is included
in the portfolio of electricity resources serving Hawaii.

     In particular, this Act seeks to achieve market penetration
for renewable energy in the State by requiring qualified electric
utility companies to possess a minimum percentage of renewable
energy resources within their overall resource portfolios.  In
addition, this bill requires the Public Utilities Commission to
establish a program to issue renewable credits to renewable
energy generators.

     Your Committee received testimony in favor of this measure
from the Department of Business, Economic Development, and
Tourism; Department of Commerce and Consumer Affairs, Division of
Consumer Advocacy (Consumer Advocate); County of Kauai Office of
Economic Development; two Maui County Councilmembers; the Union
of Concerned Scientists; Hawaii Nature Center; Hawaii Island
Geothermal Alliance; Kauai Renewable Energy Hui; Sierra Club
(Hawaii and Kauai chapters); Puna Geothermal Venture; Gay &
Robinson (proposing amendments); Zond Pacific, Inc. (a subsidiary
of Enron Wind Development Corp.); Hawaii Renewable Energy

 
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Alliance; University of Hawaii Environmental Center; Green
Islands Corporation; PowerLight Corporation; and five
individuals.

     Although each of the following supported the concept of
renewable energy, testimony in opposition to the measure was
received from the Public Utilities Commission; Kauai Electric;
Hawaiian Electric Co., Inc.; and one licensed professional
engineer.  Informational testimony was received from Goodsill
Anderson Quinn & Stifel on behalf of Ogden Energy Group, Inc.,
operator of the H-POWER facility at Campbell Industrial Park
(proposing amendments to the definition of "renewable energy").

     Your Committee finds that this bill furthers the intent of
the Hawaii State Planning Act, which specifically calls for
"[i]ncreased energy self sufficiency where the ratio of
indigenous to imported energy use is increased" and declares as
state policy to "promote the use of renewable energy resources".
(Section 226-18(a)(1) and (c)(1), Hawaii Revised Statutes.)

     Your Committee finds that the production of energy from
locally-available resources has long been an objective of the
State Energy Plan.  Your Committee finds that this bill supports
this policy objective, and that instituting renewables portfolio
standards has been identified as the single most effective means
of accomplishing that energy objective.

     Upon further consideration, your Committee has amended this
bill as follows:

     (1)  Amending the definition of "biomass" to mean organic
          residues or crops that are grown for energy production;

     (2)  Amending the definition of "qualified electric utility
          company" to refer to those companies having sales of
          more than 350,000, rather than one billion, kilowatt-
          hours of electricity per year;

     (3)  Amending the definition of "renewable energy" to mean
          energy from wind, solar energy systems, biomass,
          landfill gas, geothermal resources, ocean thermal
          energy conversion, hydropower, and organic wastes,
          including refuse-derived fuel;

     (4)  Amending the definition of "renewable energy credit" by
          specifying that purchased credits must be from
          renewable energy generators in Hawaii;


 
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     (5)  Inserting percentages in the blank spaces in section 3
          of the bill regarding the implementation of the
          renewables portfolio standard.  Specifically, qualified
          electric utility companies must implement a 7.5 per
          cent standard by January 1, 2002, which is to increase
          by 0.35 percentage points each year up to a minimum of
          ten per cent on January 1, 2010, and subsequently up to
          a minimum of twenty per cent by January 1, 2020; 

     (6)  Adding a new part II to the bill to provide for "solar
          renewables portfolio standards" as a component of the
          Hawaii renewables portfolio standards.  Your Committee
          finds that the unquantified benefits of solar electric
          energy production can include enhancing facility
          reliability, security of important telecommunications,
          financial data and public health and safety functions,
          and job creation and economic development from
          potential in-state manufacturing or assembly
          facilities.  Your Committee further finds that
          development in this area offers great export technology
          potential should these incentives attract a
          manufacturing or assembly plant.  Specifically, part II
          of this bill requires the following percentages of
          gross Hawaii utility peak power production derived from
          on-grid solar photovoltaic electric energy production:
          one-quarter of one per cent by 2010; one-half of one
          per cent by 2015; and one per cent by 2020.  These
          percentages can be counted toward the overall
          renewables portfolio standard;

     (7)  Designating sections 1 and 2 of the bill as part I
          (Hawaii renewables portfolio standards), and
          designating the remainder of the bill as part III
          (implementation and enforcement) and part IV
          (miscellaneous), as appropriate; and

     (8)  Making technical, nonsubstantive amendments for the
          purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your
Committee on Energy and Environmental Protection that is attached
to this report, your Committee is in accord with the intent and
purpose of H.B. No. 1883, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as H.B. No.
1883, H.D. 1, and be referred to the Committee on Consumer
Protection and Commerce.


 
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Energy and
                                   Environmental Protection,



                                   ______________________________
                                   HERMINA M. MORITA, Chair

 
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