Amends the definition of "renewable energy;" requires state agencies to: (1) use seawater air-conditioning district cooling in state facilities where feasible and available; (2) provide for purchase of seawater air-conditioning in requests for bids; and (3) use efficient technology and load shifting to reduce electricity costs. (HD1)

A BILL FOR AN ACT

SECTION 1. The legislature adopted Senate Concurrent Resolution No. 169 in 2004, requesting that the department of accounting and general services assist Honolulu Seawater Air Conditioning LLC, in conducting a study to determine the feasibility of using the seawater air-conditioning district cooling system in state facilities.

An economic assessment was conducted to compare conventional air-conditioning systems currently used in state buildings and the proposed seawater air-conditioning district cooling system, using the electric power research institute technical assessment guide method of life-cycle cost analysis. The legislature finds that life cycle costs of conventional and seawater air-conditioning are affected to various extents by electricity cost or use, annual full load hours, real cost of debt (interest rate or discount rate), and capital cost. A sensitivity analysis was also conducted to determine the effects of changes in these parameters.

The legislature finds that, based on the results of these analyses, a seawater air-conditioning district cooling system can be significantly more cost effective than conventional air-conditioning currently used in state buildings. The legislature further finds that, where this technology is available, a seawater air-conditioning district cooling system can provide numerous other benefits that make it a desirable alternative to conventional air-conditioning. The legislature also finds that there are other more desirable alternatives, besides seawater air-conditioning, to conventional air-conditioning, such as ice thermal storage systems, that can achieve energy savings. These alternatives should be used, when seawater air-conditioning district cooling systems technology is neither feasible nor available, to achieve energy efficiency and generate cost savings.

The purpose of this Act is to:

SECTION 2. Section 196-11, Hawaii Revised Statutes, is amended by amending the definition of "renewable energy" to read as follows:

""Renewable energy" means electrical energy produced by wind, solar[,] energy [conserved by passive solar design/daylighting, ocean thermal, wind, wave, geothermal, waste-to-energy, or biomass power.], hydropower, landfill gas, waste to energy, geothermal resources, ocean thermal energy conversion, wave energy, biomass, including municipal solid waste, biofuels, or fuels derived from organic sources, hydrogen fuels derived from renewable energy, or fuel cells where the fuel is derived from renewable sources. Where biofuels, hydrogen, or fuel cell fuels are produced by a combination of renewable and nonrenewable means, the proportion attributable to the renewable means shall be credited as renewable energy. Where fossil and renewable fuels are co-fired in the same generating unit, the unit shall be considered to produce renewable electricity in direct proportion to the percentage of the total heat value represented by the heat value of the renewable fuels. "Renewable energy" also means electrical energy savings brought about by the use of solar water heating, seawater air-conditioning district cooling systems, solar air-conditioning, and all renewable electricity generated by eligible customer-generators."

SECTION 3. Section 196-23, Hawaii Revised Statutes, is amended to read as follows:

"[[]§196-23[]] Energy efficient products. (a) Agencies shall select, where life-cycle cost-effective, ENERGY STAR and other energy efficient products when acquiring energy-using products. For product groups where ENERGY STAR labels are not yet available, agencies may select products that are in the upper twenty-five per cent of energy efficiency as designated by the United States Department of Energy, Office of Energy Efficiency and Renewable Energy, Federal Energy Management Program.

Agencies shall incorporate energy efficient criteria consistent with designated energy efficiency levels into all guide specifications and project specifications developed for new construction and renovation, as well as into product specification language developed for all purchasing procedures.

The State shall also consider the creation of financing agreements with private sector suppliers to provide private funding to offset higher up-front costs of efficient products.

(b) Agencies shall strive to meet the ENERGY STAR building criteria for energy performance and indoor environmental quality in their eligible facilities to the maximum extent practicable by December 31, 2005. Agencies may use energy-savings performance contracts, utility energy-efficiency service contracts, or other means to conduct evaluations and make improvements to facilities. Facilities that rank in the top twenty-five per cent in energy efficiency relative to comparable commercial and state buildings shall receive the ENERGY STAR building label or its equivalent as determined by the coordinator. Agencies shall integrate this rating tool into their general facility audits.

(c) The State shall employ sustainable design principles and agencies shall apply the principles to the siting, design, and construction of new facilities. Agencies shall optimize life-cycle costs, pollution, and other environmental and energy costs associated with the construction, life-cycle operation, and decommissioning of the facility. Agencies shall consider using energy-savings performance contracts or utility energy-efficiency service contracts to aid them in constructing sustainably designed buildings.

(d) Agencies entering into leases, including the renegotiation or extension of existing leases, shall incorporate lease provisions that encourage energy and water efficiency wherever life-cycle cost-effective. Build-to-suit lease solicitations shall contain criteria encouraging sustainable design and development, energy efficiency, and verification of facility performance. Agencies shall include a preference for facilities having an ENERGY STAR building label in their selection criteria for acquiring leased facilities. In addition, all agencies shall encourage lessors to apply for an ENERGY STAR building label and to explore and implement projects that will reduce costs to the State, including projects carried out through the lessors' energy-savings performance contracts or utility energy-efficiency service contracts.

(e) Agencies shall implement energy reduction systems, and other highly efficient systems, in new construction or retrofit projects when life-cycle cost-effective. Agencies shall consider combined cooling, heat, and power systems when determined to be the most cost-effective when measured against other alternatives on a life-cycle cost basis. Agencies shall survey local natural resources to optimize use of available solar, ocean thermal, seawater air-conditioning district cooling, biomass, bioenergy, geothermal, or other naturally occurring energy sources.

(f) Agencies shall use off-grid generation systems, including solar hot water, solar electric, solar outdoor lighting, small wind turbines, fuel cells, and other off-grid alternatives, where such systems are life-cycle cost-effective and offer benefits including energy efficiency, pollution prevention, source energy reductions, avoided infrastructure costs, or expedited service.

(g) Agencies shall use seawater air-conditioning district cooling in state facilities located in areas where this technology is feasible and available. Where this technology is not feasible and available, agencies shall make reasonable efforts to achieve energy savings for air-conditioning using efficient technologies and load shifting techniques to reduce electricity costs."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.