Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Energy & Environmental Protection, to which was referred H.B. No. 1216 entitled:

begs leave to report as follows:

The purpose of this measure is to provide a tax credit for the cost of energy storage systems installed for the storage of electricity or other energy products created by electricity to shift electricity loads to off-peak periods.

As proposed under the measure, the tax credit would be equal to thirty-five per cent of the total cost of the energy storage system, or $500,000, whichever is less. The tax credit would only apply to the actual cost of the energy storage system, its accessories, and installation.

Your Committee finds that Hawaii's geographic isolation, the State's dependence on imported fossil fuels, and the impact it has on our economy, dictates the efficient utilization of fossil fuels to meet the State's energy needs. Your Committee further finds that energy storage systems are a proven load-shifting technology that can maximize the use of Hawaii's existing electric utility infrastructure. Energy storage systems can reduce costs for Hawaii's businesses and residents who seek lower off-peak electricity rates which also improves renewable energy utilization. Since energy storage systems operate independently from the electric utility infrastructure during peak hours, this energy source is available to meet Hawaii's growing electricity demands.

Your Committee has amended the bill by:

(1) Clarifying the definition of "energy storage system";

As affirmed by the record of votes of the members of your Committee on Energy & Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1216, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1216, H.D. 1, and be referred to the Committee on Finance.