STAND

STAND. COM. REP. NO. 157-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 1692

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Energy and Environmental Protection, to which was referred H.B. No. 1692 entitled:

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

begs leave to report as follows:

The purpose of this bill is to establish a new chapter providing for the organization of renewable energy cooperatives to generate, transmit, and sell electricity to their membership, and authorizing the issuance of revenue bonds to finance costs related to constructing, upgrading, and acquiring transmission facilities.

A member of the Maui County Council and PowerLight testified in support of this measure. The Department of Business, Economic Development, and Tourism (DBEDT), Public Utilities Commission (PUC), Hawaii Renewable Energy Alliance and a concerned citizen supported the bill's intent and offered comments. The Department of Budget and Finance opposed the bill.

Upon further consideration, your Committee finds that the bill as introduced does not allow for a cooperative to function as a true cooperative association. Your Committee further finds that a cooperative that functions solely for the benefit of its members should be exempt from PUC regulation, provided that the PUC shall have oversight of interconnection agreements between the cooperative and regulated public utilities.

Your Committee has amended this bill by:

(1) Amending the definitions of "cooperative" and "renewable resources or technologies";

(2) Requiring that no more than 25 percent of the electricity produced by the cooperative may be derived from fossil fuels;

(3) Clarifying that a cooperative may sell electricity only to its members;

(4) Removing certain prohibitions on the sale, transfer, or distribution of electricity by a cooperative;

(5) Removing certain restrictions on cooperative membership;

(6) Removing the provision prohibiting a husband and wife from both being directors of the cooperative;

(7) Clarifying that interconnection agreements between a renewable energy cooperative and a public utility shall be regulated by the PUC and not the Director of Commerce and Consumer Affairs;

(8) Amending the definition of "electric transmission line" in the revenue bond provisions of the new chapter;

(9) Changing the revenue bond issuing agency from DBEDT to the Director of Budget and Finance; and

(10) Making technical, nonsubstantive amendments for purposes of clarity, consistency, and style.

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. 1692, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1692, H.D. 1, and be referred to the Committee on Consumer Protection and Commerce.

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

		____________________________ HERMINA M. MORITA, Chair