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. 1707 entitled:

begs leave to report as follows:

The purpose of this measure is to exempt seawater air conditioning district cooling systems from Public Utilities Commission regulation.

The exemption is contingent on at least fifty per cent of the energy required for the seawater air conditioning district cooling system to come from a renewable energy resource, such as cold, deep seawater.

Your Committee finds that the State's over dependence on imported oil dictates the development of renewable energy systems. The development of seawater air conditioning district cooling systems is a step in this direction. The use of cold seawater to air condition buildings in designated districts not only reduces energy consumption in the State, but also reduces the need for additional fossil fuel generating plants to satisfy the demand for electricity during peak-use hours.

This bill supports the development of renewable energy systems by streamlining the regulatory process to enhance the development of seawater air conditioning district cooling systems. Your Committee finds that exempting seawater cooling systems from public utilities commission regulation is justified because, unlike a public utility, the seawater cooling system will not be provided by a sole operator. Rather, operators are likely to be a limited number of sophisticated building owners and operators with long-term contracts that protect the rights of all parties. Your Committee notes that the Public Utilities Commission had no objection to exempting seawater cooling systems from its oversight.

Your Committee received testimony on this measure from the Department of Commerce and Consumer Affairs, the Public Utilities Commission, the City and County of Honolulu Board of Water Supply, and a developer of seawater cooling systems.

Your Committee has amended the bill by making technical amendments for purposes of style and clarity.

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. 1707, as amended herein, and recommends that it be referred to the Committee on Consumer Protection & Commerce in the form attached hereto as H.B. No. 1707, H.D. 1.