Report Title:

Renewable Energy

Description:

Establishes a biofuel preference; establishes objectives and policies for state facility systems with regard to energy; appropriates funds for a statewide multi-fuel biofuel production assessment; appropriates funds to assist the agricultural community interested in developing renewable energy projects; establishes a renewable hydrogen program and hydrogen investment capital special fund, and appropriates funds for three positions and to fund the hydrogen investment capital special fund. (SD1)

THE SENATE

S.B. NO.

3161

TWENTY-THIRD LEGISLATURE, 2006

S.D. 1

STATE OF HAWAII

  

 

A BILL FOR AN ACT

 

relating to renewable energy.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§103D-   Biofuel preference. (a) Notwithstanding any other law to the contrary, contracts for the purchase of diesel fuel or boiler fuel shall be awarded to the lowest responsible and responsive bidders, with preference given to bids for biofuels or blends of biofuel and petroleum fuel.

(b) When purchasing fuel for use in diesel engines, the preference shall be cents per gallon of one hundred per cent biodiesel. For blends containing both biodiesel and petroleum-based diesel, the preference shall be applied only to the biodiesel portion of the blend.

(c) When purchasing fuel for use in boilers, the preference shall be cents per gallon of 100 per cent biofuel. For blends containing both biofuel and petroleum based boiler fuel, the preference shall be applied only to the biofuel portion of the blend.

(d) As used in this section, "biodiesel" means a vegetable oil based fuel which meets ASTM International Standard D6751, "Specification for Biodiesel Fuel Blend Stock (B100) for Distillate Fuels", as amended.

(e) As used in this section, "biofuel" means fuel from non-petroleum plant or animal based sources that can be used for the generation of heat or power."

SECTION 2. Section 226-18, Hawaii Revised Statutes, is amended to read as follows:

"§226-18 Objectives and policies for facility systems--energy. (a) Planning for the State's facility systems with regard to energy shall be directed toward the achievement of the following objectives, giving due consideration to all:

(1) Dependable, efficient, and economical statewide energy systems capable of supporting the needs of the people;

(2) Increased energy self-sufficiency where the ratio of indigenous to imported energy use is increased;

(3) Greater energy security in the face of threats to Hawaii's energy supplies and systems; and

(4) Reduction, avoidance, or sequestration of greenhouse gas emissions from energy supply and use.

(b) To achieve the energy objectives, it shall be the policy of this State to ensure the provision of adequate, reasonably priced, and dependable energy services to accommodate demand.

(c) To further achieve the energy objectives, it shall be the policy of this State to:

(1) Support research and development as well as promote the use of renewable energy sources;

(2) Ensure that the combination of energy supplies and energy-saving systems is sufficient to support the demands of growth;

(3) Base decisions of least-cost supply-side and demand-side energy resource options on a comparison of their total costs and benefits when a least-cost is determined by a reasonably comprehensive, quantitative, and qualitative accounting of their long-term, direct and indirect economic, environmental, social, cultural, and public health costs and benefits;

(4) Promote all cost-effective conservation of power and fuel supplies through measures including:

(A) Development of cost-effective demand-side management programs;

(B) Education; and

(C) Adoption of energy-efficient practices and technologies;

(5) Ensure to the extent that new supply-side resources are needed, the development or expansion of energy systems utilizes [the] a diverse assortment of least-cost energy supply [option] options and resources and maximizes efficient technologies;

(6) Support research, development, and demonstration of energy efficiency, load management, and other demand-side management programs, practices, and technologies;

(7) Promote alternate fuels and energy efficiency by encouraging diversification of transportation fuels, modes, and infrastructure;

(8) Support actions that reduce, avoid, or sequester greenhouse gases in utility, transportation, and industrial sector applications; [and]

(9) Support actions that reduce, avoid, or sequester Hawaii's greenhouse gas emissions through agriculture and forestry initiatives[.];

(10) Provide priority handling and processing, and expedite action on all state agency permits required for renewable energy projects; and

(11) Support a renewable fuels standard of ten per cent of highway fuel demand to be provided by renewable fuels by 2010, fifteen per cent by 2015, and twenty per cent by 2020. "Renewable fuels" include:

(A) Ethanol, with each gallon of ethanol produced from cellulosic materials considered the equivalent of 2.5 gallons of noncellulosic ethanol;

(B) Biodiesel; and

(C) Hydrogen or other liquid or gaseous fuels produced either from renewable feedstocks, including organic wastes, or from water, using electricity from renewable energy sources."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $200,000, or so much thereof as may be necessary for fiscal year 2006-2007, for Rocky Mountain Institute to conduct a statewide multi-fuel biofuels production assessment of potential feedstocks, technologies, and economics of the various renewable fuels pathways and the potential for ethanol, biodiesel, and renewable hydrogen production to contribute to Hawaii's near-, mid-, and long-term energy needs. The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this part.

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $150,000, or so much thereof as may be necessary, for fiscal year 2006-2007 to provide assistance to the agricultural community interested in developing energy projects, especially for the production of biodiesel from energy crops and cellulosic ethanol from agricultural waste streams, and to seek funding that may be available from the United States Departments of Agriculture and Energy, and other external sources. The sum appropriated shall be expended by the department of agriculture for the purposes of this part.

SECTION 5. Chapter 196A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§196A-   Hawaii renewable hydrogen program. (a) There is established within the department of business, economic development, and tourism, a Hawaii renewable hydrogen program, to coordinate the State's transition to a renewable hydrogen economy. The program shall plan, implement, and conduct activities including:

(1) Strategic partnerships with the private sector, the federal government, national and international organizations, such as national laboratories and universities, other states, and Hawaii stakeholders for research, development, testing, and deployment of renewable hydrogen technologies;

(2) Engineering and economic studies to define Hawaii's potential for renewable hydrogen and evaluate near-term project opportunities presented by the State's available renewable resources;

(3) Electric grid reliability and security projects that will enable integration of extensive renewable electricity on the island of Hawaii;

(4) Hydrogen demonstration projects, including infrastructure for the production, storage, and refueling of hydrogen vehicles;

(5) A statewide hydrogen economy public education and outreach plan, focusing on the island of Hawaii, to be developed in coordination with Hawaii's public education institutions;

(6) The promotion of Hawaii's renewable hydrogen assets and project opportunities to potential partners and investors;

(7) A plan, for implementation during 2007-2010, to more fully deploy hydrogen technologies and infrastructure capable of supporting the island of Hawaii's fuel needs, including:

(A) Expanded installation of hydrogen production facilities;

(B) Development of integrated energy systems including hydrogen vehicles;

(C) Construction of additional hydrogen refueling stations; and

(D) Encouragement of building design and construction that fully incorporates clean energy assets, including reliance on hydrogen-fueled distributed generation;

(8) A plan, for implementation during 2010-2020, to transition the island of Hawaii to a hydrogen-fueled economy by 2020, and to initiate that model throughout the State; and

(9) An evaluation of policy instruments and development, in coordination with program partners, of policy recommendations to encourage the adoption of hydrogen-fueled vehicles, to continually replenish the hydrogen investment capital special fund, and to support investment in hydrogen infrastructure, including production, storage, and dispensing facilities."

SECTION 6. Chapter 211F, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§211F-   Hydrogen investment capital special fund. (a) There shall be established a hydrogen investment capital special fund into which shall be deposited:

(1) Appropriations made by the legislature to the fund;

(2) All contributions from public or private partners;

(3) All interest earned on or accrued to moneys deposited in the special fund; and

(4) Any other moneys made available to the special fund from other sources.

(b) Moneys in the fund shall be used:

(1) To seed private sector and federal projects for research, development, testing, and deployment of renewable hydrogen systems in Hawaii;

(2) To pay reasonable expenses incurred by fund advisory board members in the execution of their relevant duties; and

(3) For any other purpose deemed necessary to carry out the purposes of this section.

(c) Investment of the hydrogen investment capital special fund in hydrogen projects shall be made with the advice and assistance of an advisory board of experts and knowledgeable individuals who shall be appointed by the director of the department of business, economic development, and tourism to help the State develop projects and partnerships with industry and the federal government."

SECTION 7. (a) There is appropriated out of the general revenues of the State of Hawaii the sum of $750,000, or so much thereof as may be necessary, for fiscal year 2006–2007 to carry out the purposes of this part, of which $250,000 shall be allocated to three permanent full-time equivalent (3.0 FTE) professional positions namely, a hydrogen program manager, hydrogen program specialist, and hydrogen project specialist. The sum appropriated shall be expended by the department of business, economic development, and tourism.

(b) There is appropriated out of the general revenues of the State of Hawaii the sum of $10,000,000 for fiscal year 2006-2007 to be paid into the hydrogen investment capital special fund to carry out the purposes of section 2. The sum appropriated shall be expended by department of business, economic development, and tourism.

SECTION 8. There is appropriated out of the hydrogen investment capital special fund the sum of $10,000,000, or so much thereof as may be necessary, for fiscal year 2006–2007 to be used for the purposes of the hydrogen investment capital special fund.

The sum appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect upon its approval; provided that sections 3, 4, 7 and 8 shall take effect on July 1, 2006.