Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committees on Consumer Protection and Commerce and Judiciary, to which was referred H.B. No. 1032, H.D. 1, entitled:

beg leave to report as follows:

The purpose of this measure is to require the Public Utilities Commission (PUC) to develop and adopt a standard power purchase contract for the purchase of electricity by public utilities from nonfossil fuel producers.

Your Committees received testimony in support of this bill from the Sierra Club, Life of the Land, Hawaii Renewable Energy Alliance, Apollo Energy Corporation, and an interested citizen.

The Department of Business, Economic Development, and Tourism and Hawaiian Electric Company (HECO) submitted testimony supporting the intent of this bill. PUC opposed the bill. The Department of Consumer Advocacy and Covanta Energy Group offered comments.

Your Committees find that one of the State's important energy objectives is to increase the use of cost-effective renewable energy. Requiring the adoption of a standard power purchase contract, as this bill proposes to do, will remove a major obstacle that nonfossil fuel producers currently face in their attempts to sell electricity to the public utilities. Your Committees were notified that in some instances, it has taken up to five years for nonfossil fuel producers to negotiate a power purchase contract with public utilities in Hawaii.

Your Committees note that HECO has already filed two standard power purchase contracts with PUC, which is an encouraging sign as the State attempts to move toward energy self-sufficiency. Although your Committees recognize the concerns set forth by the opponents of this bill, your Committees feel this matter deserves further attention as the Legislature considers various ways to expand the use of renewable energy.

As affirmed by the records of votes of the members of your Committees on Consumer Protection and Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1032, H.D. 1, and recommend that it be referred to the Committee on Finance.