Requires qualified electric utilities to attempt the implementation of renewables portfolio standards. Requires the Public Utilities Commission to implement a renewable energy credit program.

A BILL FOR AN ACT

SECTION 1. The purpose of this Act is to encourage the implementation of renewables portfolio standards by requiring qualified electric utility companies to attempt the implementation of minimum renewables portfolio standards and by requiring the public utilities commission to establish a program to issue renewables credits to renewable energy generators.

SECTION 2. For the purposes of this Act:

"Biomass" means organic residue or crops that are grown for energy production.

"Qualified electric utility company" means a distributor of electricity to customers in the State regulated by the public utilities commission that has sales of more than five hundred million kilowatt-hours of electricity per year.

"Renewable energy" means energy from wind, solar energy systems, biomass, including waste-to-energy and landfill gas recovery, geothermal resources, hydropower, or organic wastes, including refuse-derived fuel.

"Renewable energy credit" means a tradable certification of proof that one kilowatt-hour of electricity from renewable energy was either:

"Renewable energy generator" means a facility that produces electricity from renewable energy.

"Renewables portfolio standard" means the percentage of electric power consumed in Hawaii that should be derived from renewable energy.

SECTION 3. Each qualified electric utility company which sells electricity for consumption in the State shall attempt to implement a 7.5 per cent renewables portfolio standard effective January 1, 2003, and shall attempt to increase this percentage by .25 percentage points each succeeding year to a minimum of 9.5 per cent on January 1, 2011. Beginning on January 1, 2011, each qualified electric utility company shall attempt to increase the renewables portfolio standard by .5 percentage points each succeeding year to a minimum of 19.5 per cent by January 1, 2021. Any utility company which is not included in the term "qualified electric utility company" may participate voluntarily.

SECTION 4. If a qualified electric utility company fails to reach the renewables portfolio standard for the years 2003, 2006, 2011, 2016, or 2021, the qualified electric utility company shall submit a report to the public utilities commission, the consumer advocate, and the department of business, economic development, and tourism setting forth in detail the reasons why the qualified electric utility company was not able to meet the standard established for the respective year. The department of business, economic development, and tourism shall submit a report to the public utilities commission and the consumer advocate commenting on whether the department believes the qualified electric utility company's reasons for not reaching the renewables portfolio standard are reasonable.

SECTION 5. The public utilities commission shall establish a program to issue renewable energy credits to renewable energy generators by January 1, 2002. The commission, or its duly authorized agent, shall:

SECTION 6. On or before March 30, beginning in 2003 and each year thereafter, each qualified electric utility company shall submit an application to the public utilities commission which contains evidence of ownership of sufficient renewable energy credits to satisfy the renewables portfolio standard for the previous year, unless the qualified electric utility filed a report pursuant to section 4 of this Act. An application fee shall be submitted at the time of filing the application in an amount established by rule to be sufficient to cover the cost to process, monitor, and review the application and subsequent filings. Evidence of sufficient renewable energy credits shall be equal to the product of its total electricity sales to Hawaii electricity customers in the previous calendar year, denominated in kilowatt-hours, and the renewables portfolio standard for the same year. Renewable energy credits may only be granted for renewable energy generators located within the State.

SECTION 7. Renewable energy credits may be accumulated, sold, or exchanged by the person to whom the credits are issued or by any other person who acquires the credits. A sale or exchange of credit shall not be valid unless recorded with the public utilities commission within ninety days after the conclusion of the transaction.

SECTION 8. The public utilities commission may impose an administrative penalty against a qualified electric utility company for violating section 4 of this Act.

SECTION 9. The public utilities commission shall annually provide a report to the legislature that includes the activities of the commission under sections 4 to 7 of this Act, program results, data, and any recommendations to achieve increased use and availability of renewable energy in the State.

SECTION 10. If any provision of this Act, or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the Act which can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 11. This Act shall take effect upon its approval.