Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 1003, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to remove the cap on the allowable customer-generator generating capacity provided under the net energy metering law.

This measure also:

Testimony in support of this measure was submitted by the Department of Business, Economic Development, and Tourism, the Hawaii Chapter of the Sierra Club, PowerLight Solar Electric Systems, the Hawaii Renewable Energy Alliance, the Hawaii Solar Energy Association, Inter-Island Solar Supply, and a Council Member from the County of Maui. Testimony in opposition to this measure was submitted by the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs, the Hawaiian Electric Company, and its subsidiary utilities, Maui Electric Company and Hawaii Electric Light Company. Comments on this measure were also submitted by the Public Utilities Commission.

Your Committee finds that pursuant to Act 99, Session Laws of Hawaii 2004 (SLH 2004), the Legislature sought to promote the use of renewable energy in Hawaii by increasing the maximum allowable generating capacity of eligible customer-generators from 10KW to 50KW, as well as by allowing government entities to participate in net energy metering. The enactment of Act 99, SLH 2004, affirmed the Legislature's commitment to promoting renewable energy development and reducing government operating costs. This measure seeks to remove the eligible customer-generator capacity limits under the current law and institute increases in the percentage of total utility energy generating capacity allowed on a utility's system.

Your Committee further finds that there are many benefits associated with the expansion of net energy metering for systems larger than 50KW, including encouraging more rapid growth of customer-generators, thereby helping to meet the growing power needs within the State. Additionally, increasing the percentage of the total energy generating capacity produced by eligible customer-generators will help to reduce future power consumption, necessary in reducing the risk of power outages. Finally, adjusting the billing period from monthly to annually will also allow customer-generators to size their net-metered systems to take advantage of monthly fluctuations in output that are typical of some renewable resource systems.

However, your Committee notes that this measure has raised many concerns, including the fact that Act 99, SLH 2004, has been in effect for only a short period of time. Therefore, the full effect of the increase in the cap has not yet been ascertained, thus the propriety of the removal of the cap is unclear, as it may be premature.

Accordingly, your Committee has amended this measure by changing the effective date of the Act to July 1, 2050 in order to facilitate further discussion on the matter.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1003, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1003, S.D. 2.