Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Energy and Environment, to which was referred S.B. No. 1614 entitled:

begs leave to report as follows:

The purpose of this measure is to require that the Public Utilities Commission adopt a standard power purchase contract for the purchase of electricity by public utilities from nonfossil fuel producers and to allow an aggrieved nonfossil fuel producer to seek judicial redress if the Commission fails to develop and adopt a standard form of power purchase contract.

The Sierra Club, Life of the Land, Maui Group Sierra Club, and two individuals submitted testimony in support of this measure. Testimony in opposition to this measure was submitted by the Public Utilities Commission, Hawaiian Electric Company and its subsidiaries, and Covanta Energy Group. The Department of Business, Economic Development, and Tourism supports the intent of this measure and the Department of Commerce and Consumer Affairs provided comments on this measure.

Your Committee finds that the lack of a standard power purchase agreement has been often cited as an impediment by renewable energy producers who are trying to do business in the State and reduce Hawaii's dependence on imported fossil fuels. Without an idea of what a potential power purchase agreement with the Public Utilities Commission would require or may negotiate, it is a challenge for small renewable producers to do business in the State.

Your Committee has amended this measure in the following manner:

Your Committee requests that the Public Utilities Commission place the adopted standard form of power purchase contracts online for public accessibility.

As affirmed by the record of votes of the members of your Committee on Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1614, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1614, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection and Housing.