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 S.B. No. 702 entitled:

begs leave to report as follows:

The purpose of this measure is to encourage implementation of renewables portfolio standards by requiring qualified electric utilities to attempt to meet the standards and to require the Public Utilities Commission to establish a program to issue renewable energy credits by January 1, 2002.

Your Committee received testimony in support of this measure from Hawaii Renewable Energy Alliance, Hawaiian Electric Company, Inc., Apollo Energy Corporation, The Hydrogen Renewable Energy Enterprise, LLC, Vertical Wind Turbine Technologies, LLC, Life of the Land, and seven individuals. The Department of Business, Economic Development, and Tourism, University of Hawaii at Manoa Environmental Center, Public Utilities Commission, the Consumer Advocate, and Kauai Electric submitted comments.

Your Committee finds that Hawaii continues to be highly dependent on fossil fuels for many uses, including generation of electricity. On Oahu, fuel and purchased power expenses represent over seventy-five per cent of the power company's total operating and maintenance expenses, and on the island of Hawaii, the same expenses represent sixty-five per cent of total.

Your Committee further finds that alternative energy sources must be developed if this imbalance is to be corrected, and that this measure is one means of diversification. Your Committee has amended this measure to delete the requirement that the renewables portfolio standard increase by .5 percentage points each year after 2011, to a minimum of 19.5 per cent by 2021; the program to issue renewable energy credits by January 1, 2002; and the reporting requirements; and to make technical amendments to reflect the preferred drafting style.

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 S.B. No. 702, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 702, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection and Housing.