Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Energy, Environment, and International Affairs, to which was referred H.B. No. 1018, H.D. 2, entitled:

begs leave to report as follows:

The purpose of this measure is to increase the maximum capacity of an eligible customer-generator from 50 kilowatts to 300 kilowatts, extend the billing period from monthly to an annual basis, and allow customer-generators to pay monthly for the net energy consumed.

Testimony in support of the measure was received from the Department of Business, Economic Development, and Tourism; PowerLight Corporation; Hawaii Renewable Energy Alliance; Hawaii Solar Energy Association; and Hawaii PV Coalition. Testimony in opposition to the measure was received from the Department of Commerce and Consumer Affairs, Hawaiian Electric Company, Inc., and the Kauai Island Utility Cooperative. The Public Utilities Commission offered comments.

Your Committee finds that the net energy metering program, which provides incentives to those who produce renewable energy fed into the power grid, needs to be further encouraged by making it easier for a customer-generator to participate in the program. Your Committee finds that in order to maximize participation in the program the cap on the maximum capacity of an eligible customer-generator should be eliminated. In order to accommodate increased participation in the program, your Committee believes that incremental increases in the percentage of an electric utility's generating capacity produced by customer-generators will provide a fair standard to follow while providing predictability to electric utilities for planning and implementation purposes.

Your Committee has amended this measure by substituting the provisions in S.B. No. 1003, S.D. 1, in order to address your Committee's concerns. The amendment removes the cap on the allowable customer-generator generating capacity provided under the net energy metering law. The amendment also provides for incremental increases in the percentage of an electric utility's generating capacity produced by customer-generators, from one percent in 2006 to five percent in 2022. The amendment eliminates a proposed change giving an eligible consumer-generator the option to pay net energy usage on a monthly basis. When additional customer-generators must be added by an electric utility will be governed by the percentage of generating capacity provided for in section 269-102(a).

As affirmed by the record of votes of the members of your Committee on Energy, Environment, and International Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1018, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1018, H.D. 2, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection, and Housing.