Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Water, Land, Energy and Environment, to which was referred H.B. No. 173, H.D. 2, entitled:

begs leave to report as follows:

The purpose of this measure is to require qualified electric utilities to possess unspecified minimum percentages of renewable energy resources within their overall resource portfolios and to provide for the issuance of renewable energy credits to renewable energy generators.

Your Committee received testimony in support of this measure from the Department of Business, Economic Development, and Tourism, the Consumer Advocate, University of Hawaii at Manoa Environmental Center, a member of the Kauai County Council, Apollo Energy Corporation, PowerLight Corporation, Pacific Biodiesel, Center for a Sustainable Future, Life of the Land, Sierra Club Hawaii Chapter, and twenty-three individuals. The Public Utilities Commission submitted testimony in opposition. Hawaiian Electric Company, Inc., Kauai Electric, and Hawaii Renewable Energy Alliance submitted comments.

Your Committee finds that the production of energy from locally available sources has long been a State objective, and instituting a renewable portfolio standard has been identified as the single most effective means of accomplishing that and Hawaii's other energy objectives.

Your Committee further finds that recently completed analyses have confirmed that a standard of 10.5% by the end of 2010 would be reasonable and cost effective. Analysis also shows that such a standard is not likely to result in increased costs, and could very well reduce costs to taxpayers through decreased reliance on imported oil.

Your Committee has also heard the concerns of the utility companies, with regard to meeting specific standards, and believes this is an issue that merits further discussion.

Your Committee supports a diverse resource portfolio as a prudent response to rising consumer costs, and has amended this measure to:

As affirmed by the record of votes of the members of your Committee on Water, Land, Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 173, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 173, H.D. 2, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection and Housing.