SB2991 SD1

SECTION 1. The legislature finds that one of the primary functions of government includes the need to coordinate, from an informed technical and analytical perspective, the development of the State's energy resources to preserve energy security, which means improving energy efficiency, increasing the sustainable use of indigenous renewable energy, and reducing the State's overdependence on oil. The legislature also finds that energy data and statistical and energy economic analysis are integral to the State's roles in strategic energy policy planning and energy emergency preparedness and response, as both are aimed at preserving energy and economic stability and security. In recent years, energy markets, resources, systems and technologies, the variety and types of fuels, environmental standards and specifications of fuels, industry and industry sectors, consumers and consumption sectors, and policies related to energy and fuels have undergone dramatic changes, and current and future transitional trends and issues are expected to continue to influence and change Hawaii's and the world's energy situation. Such events have revealed to the legislature a critical need to revitalize the State's technical analytic capabilities and understanding of Hawaii's energy resources, markets, and systems for effective planning of longer term measures to preserve the State's energy security, a prerequisite for economic stability and resilience.

These functions are among the statutory roles and responsibilities of the director of the department of business, economic development, and tourism, who serves as the state energy resources coordinator pursuant to section 196-3, Hawaii Revised Statutes.

The legislature finds that chapter 196, Hawaii Revised Statutes, assigns responsibilities to systematically analyze, develop, and coordinate achievement of the State's energy policies, programs, and plans to the energy resources coordinator. The legislature also finds that under chapter 125C, and chapter 128, Hawaii Revised Statutes, the energy resources coordinator is the governor's designated representative responsible for energy emergency preparedness, including support of state civil defense, analogous to the United States Department of Energy's emergency support role of the Federal Emergency Management Agency.

The legislature finds that these energy data and analytic functions of the director of the department of business, economic development, and tourism, as the state energy resources coordinator pursuant to chapter 196, Hawaii Revised Statutes, are statutorily distinctive and different from those of other agencies, and are not redundant of other agencies' functions; e.g., the functions of the public utilities commission, which focus primarily on monitoring petroleum prices and industry profits, a necessary and appropriate state "watchdog" role.

The legislature, in Act 182, Session Laws of Hawaii 2007, explicitly acknowledged the difference between the department of business, economic development, and tourism's energy analysis role and the public utilities commission's role to conduct analysis with a fundamental focus on petroleum prices and petroleum industry profits. Moreover, the legislature finds that section 486J-5.3, Hawaii Revised Statutes, provides policy direction to the department of business, economic development, and tourism to conduct energy analytic functions that are distinctively different than those done by the public utilities commission, and specifically recognizes that the use and analysis of energy and fuels data functions remain critical to virtually all of the department of business, economic development, and tourism's interrelated statutory energy program functional requirements, while directing the department of business, economic development, and tourism to use this data "to effectuate the purposes of chapters 125C, 196, and other relevant laws."

The legislature finds that just as the department of business, economic development, and tourism and the public utilities commission have distinctive energy-related missions and functions, the types of energy data collected and statistical analysis they are required to conduct are distinctive as well, and both agencies require appropriate and definitive policy guidance for these functions.

Therefore, the legislature finds that just as the data analytic functions of the public utilities commission are explicated in chapter 486J, Hawaii Revised Statutes, such functional detail is needed within chapter 196, Hawaii Revised Statutes, which assigns responsibilities to systematically analyze, develop, and coordinate achievement of the State's energy policies, programs, and plans. Such statutory language is needed to set forth these functions and provide the policy guidance by which to establish and afford appropriate direction for the department of business, economic development, and tourism's systematic quantitative and qualitative technical analyses of integrated energy systems and markets, assess effectiveness of, and produce unbiased analytic proposals developed for policy and regulatory decisions, assessments of renewable energy, energy efficiency, and fossil fuels in all energy sectors, and ensure energy security by diversification away from the use of imported fossil fuels.

Therefore, the legislature finds that to strengthen and comprehensively address deficiencies in the energy resources coordination statutes, it is necessary to amend chapter 196, Hawaii Revised Statutes to: (1) update all key definitions to account for transition issues related to biofuels and other alternate fuels, and the proliferation of new categories and specifications of petroleum fuels; (2) address increasing unique economic and energy systems risks corresponding to transition issues and trends as a result of the increase in the variety of fuels and fuel production feedstocks being directly imported into the State and the new, fuel- and feedstock-specific infrastructure requirements associated with such transitional issues and trends; (3) establish definitive policy guidance needed on the nature and relationship of energy data analyses to the State 's energy program, and to clearly delineate distinctive analytic roles and responsibilities of state agencies conducting energy data functions; and (4) provide the basis for a robust, systematic state energy analytic capacity and capability, which is essential to support the energy resources coordinator's role.

The purpose of this Act is to remedy the deficiencies in existing statutes governing energy policy planning, and provide definitive guidance relating to the necessary quantitative and qualitative energy analytic functions support for the role of the energy resources coordinator in this State.

SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§196‑ Information and analysis required for state comprehensive energy planning for energy security. The department of business, economic development, and tourism, with its own staff and agents who the director designates as authorized representatives, shall use the information, including confidential information, received from all sources, including the information received from the public utilities commission pursuant to chapter 486J and information received pursuant to chapter 125C, solely to effectuate the purposes of this chapter and chapter 125C, and shall conduct systematic statistical and quantitative analyses of the State's energy resources, systems, and markets that the director determines are necessary to:

(1) Produce analyses designed to determine the status of energy resources, systems, and markets, both in-state and those to which Hawaii is directly tied, particularly in relation to the State's economy, and to recommend, develop proposals for, and assess the effectiveness of policy and regulatory decisions and assessments of renewable energy, energy efficiency, and all fuels in all sectors, and ensure energy security;

(2) Produce analyses of private and public sector energy planning efforts and market-based policies to develop Hawaii's energy resources, systems, and markets in all sectors, and programs to preserve and protect the State's energy security, effectuate the conservation of energy resources, and formulate plans for the development and use of alternative energy sources, determine and recommend well-informed government policies and programs that may be necessary and appropriate, and implement and evaluate the effectiveness of such policies and programs;

(3) Conduct systematic statistical, energy economic, and other relevant analyses for comprehensive energy planning toward determining, measuring, evaluating, formulating, and recommending specific proposals for achieving optimum development of Hawaii's energy resources;

(4) Establish and maintain a quantitative and qualitative technical understanding of Hawaii's statewide energy resources, systems, and markets and their relationships to the economy;

(5) Produce trend analyses and forecasts of energy supply and demand, and trend analyses of major aspects of Hawaii's energy resources, systems, and markets;

(6) Produce assessments of the cost-competitiveness of developing renewable energy and energy efficiency resources and subcategories of those energy resources in relation to each other, and relative to petroleum-based fuels, other fossil fuels, and other energy resources; and

(7) Produce other relevant energy analyses that the director deems necessary to administer the comprehensive energy planning for energy security policies pursuant to this chapter, and implement and evaluate other related activities in support of the director's role and responsibilities pursuant to this chapter, chapter 125C, and other relevant laws.

§196‑ Confidential information. In effectuating the purposes of this chapter, chapter 125C, and other relevant laws, or in order for the director to perform the duties pursuant to this chapter, chapter 125C, and other relevant laws:

(1) All information received by the director that is exempt from public disclosure under section 92F-13, shall be afforded all the protections available pursuant to chapter 486J and shall be held in confidence by the director and the director's staff and agents, or aggregated to the extent necessary in the director's discretion to ensure confidentiality as required by chapter 92F;

(2) The director and the director's staff and agents shall preserve the confidentiality and protection of all information received by the director to the extent it is exempt from public disclosure under section 92F-13, and, by application and extension of any other agency's respective safeguards, protect and prevent the unauthorized further release of the information. Each agency shall afford any shared information the protections from disclosure provided for under chapter 92F;

(3) Each major energy producer, distributor, major energy marketer, major fuel storer, major energy transporter, and major energy user that provides confidential information to the director, shall provide written or electronic notification to the director as to the specific information that it considers confidential, provided that the information specified shall only be kept confidential as provided for in this section if it is exempt from public disclosure under section 92F‑13; and

(4) Unless otherwise provided by law with respect to information that is exempt from public disclosure under section 92F-13 that the director obtains, purchases, receives, or otherwise acquires, neither the governor nor the director, nor the staff and agents thereof, may do any of the following:

(A) Use the confidential information for any purposes other than the purposes for which it is acquired;

(B) Make any publication whereby the confidential information furnished by any person can be identified; or

(C) Permit any person other than the governor, the director, the director's staff and agents thereof, to examine any confidential information, individual reports, or statements acquired."

SECTION 3. Section 196-1, Hawaii Revised Statutes, is amended to read as follows:

"§196-1 Findings and declaration of necessity. The legislature finds that:

(1) The global demand for petroleum and its derivatives has resulted in a significant and fundamental market escalation in oil prices, has caused severe economic hardships throughout the State, and threatens to impair the public health, safety, and welfare.

The State of Hawaii, with its near total dependence on imported fossil fuel, is particularly vulnerable to dislocations in the global energy market. This [~~is an anomalous~~] situation[,] can be changed, as there are few places in the world so generously endowed with natural energy: geothermal, solar radiation, ocean temperature differential, wind, biomass, waves, and currents--all potential non-polluting power sources;

(2) There is a real need for comprehensive strategic [~~comprehensive~~] planning in the effort towards achieving full utilization of Hawaii's energy [~~resource programs~~] resources and the most effective allocation of energy resources throughout the State. Planning is necessary and desirable in order that the State may recognize and declare the major problems and opportunities in the field of energy resources. Both short-range and long-range planning will permit the articulation of:

(A) Broad policies, goals, and objectives;

(B) Criteria for measuring and evaluating accomplishments of objectives;

(D) A determination of requirements necessary for the optimum development of Hawaii's energy resources.

Such planning efforts will identify present conditions and major problems relating to energy resources, their exploration, development, production, and distribution. It will show the projected nature of the situation and rate of change [~~and~~], present conditions for the foreseeable future based on a projection of current trends in the development of energy resources in Hawaii[;], and include initiatives designed to fundamentally change how Hawaii consumes energy, by accelerating the production of renewable and alternative energy, increasing energy efficiency, developing and adopting new technologies, and ensuring the State's energy security;

(3) The State requires an in-depth understanding of the causes and effects of any transitional issues and trends related to changes in the State's energy resources, systems, and markets;

[~~(3)~~] (4) There are many agencies of the federal, state, and county governments in Hawaii, as well as many private agencies[,] and a broad set of non-governmental entities, engaged in, or expressing an interest in, various aspects of the exploration, research, distribution, transportation, storage, conservation, and production of all forms of energy resources in Hawaii. Some of these agencies include the University of Hawaii, the department of land and natural resources, the department of business, economic development, and tourism, the division of consumer advocacy, the public utilities commission, the state civil defense, the federal energy office, and various county agencies, as well as [~~the oil companies, gas stations, and other private enterprises;~~] Hawaii's energy and energy-related companies; and

[~~(4)~~] (5) There is [~~immediate~~] an ongoing need in this State to coordinate the efforts of [~~all these agencies,~~] statewide industry and government energy sectors, maintain the technical capability and adequate capacity to quantitatively and qualitatively evaluate, analyze, develop, and coordinate implementation of private and public sector energy planning efforts, and recommend market-based policies to develop Hawaii's energy resources, systems, and markets, establish and coordinate programs to preserve and protect the State's energy security, maintain a robust energy emergency preparedness program, and effectuate the conservation of [~~fuel,~~] energy resources, to provide for the equitable distribution thereof, and to formulate plans for the development and use of alternative energy sources. There is a need for such coordination, capability, and capacity so that there will be maximum conservation and utilization of energy resources in the State."

SECTION 4. Section 196-2, Hawaii Revised Statutes, is amended to read as follows:

"§196-2 Definitions. As used in this chapter, unless the context requires otherwise:

"Commission" means the public utilities commission.

"Coordinator" means the energy resources coordinator[.], who, pursuant to section 196-3, is the director of business, economic development, and tourism.

"Department" means the department of business, economic development, and tourism.

"Director" means the director of business, economic development, and tourism, who is also the state energy resources coordinator pursuant to section 196-3.

"Distributor" means:

(1) Every person who refines, manufactures, produces, or compounds fuel in the State and sells it at wholesale or retail, or who utilizes it directly in the manufacture of products or for the generation of power;

(2) Every person who imports or causes to be imported into the State, or exports or causes to be exported from the State, any fuel;

(3) Every person who acquires fuel through exchanges with another distributor; or

(4) Every person who purchases fuel for resale at wholesale or retail from any person described in paragraph (1), (2), or (3).

"Electricity" means all electrical energy produced by combustion of any fuel as defined in this section, or generated or produced using wind, the sun, geothermal, ocean water, falling water, currents, and waves, or any other source.

"Energy" means work or heat that is, or may be, produced from any fuel or source whatsoever.

"Energy resources" means [~~and includes fossil fuel, nuclear, geothermal, solar, hydropower, wind, and other means of generating energy.~~] fuels, whether liquid, solid, or gaseous, commercially usable for energy needs, power generation, and fuels manufacture, that may be manufactured, grown, produced, or imported into the State or that may be exported therefrom, including petroleum and petroleum products and gases, including all fossil fuel-based gases, coal tar, vegetable ferments, biomass, municipal solid waste, biofuels, hydrogen, agricultural products used as fuels and as feedstock to produce fuels, and all fuel alcohols. "Energy resources" also includes all electrical energy produced by combustion of any fuel, or generated or produced using wind, the sun, geothermal, ocean water, falling water, currents, and waves, or any other source.

"Fuel" means fuels, whether liquid, solid, or gaseous, commercially usable for energy needs, power generation, and fuels manufacture, that may be manufactured, grown, produced, or imported into the State or that may be exported therefrom, including petroleum and petroleum products and gases to include all fossil fuel-based gases, coal tar, vegetable ferments, biomass, municipal solid waste, biofuels, hydrogen, agricultural products used as fuels and as feedstock to produce fuels, and all fuel alcohols.

"Major energy marketer" means any person who sells energy resources in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

"Major energy producer" means any person who produces energy resources in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

"Major energy transporter" means any person who transports energy resources in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

"Major energy user" means any person who uses energy resources in the manufacture of products or for the generation of electricity in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

"Major fuel storer" means any person who stores fuels in amounts determined by the director as having a major effect on the supplies of, or demand for, energy resources.

"Townhouse" means a series of individual houses, having architectural unity and a common wall between each unit."

SECTION 5. Section 196-4, Hawaii Revised Statutes, is amended to read as follows:

"§196-4 Powers and duties. Subject to the approval of the governor, the coordinator shall:

(1) Formulate plans, including objectives, criteria to measure accomplishment of objectives, programs through which the objectives are to be attained, and financial requirements for the optimum development of Hawaii's energy resources;

(2) Conduct systematic analysis of existing and proposed energy resource programs, evaluate the analysis conducted by government agencies and other organizations and recommend to the governor and to the legislature programs [~~which~~] that represent the most effective allocation of resources for the development of energy [~~sources;~~] resources;

(3) Formulate and recommend specific proposals, as necessary, for conserving [~~energy and fuel,~~] energy resources, including the allocation and distribution thereof, to the governor and to the legislature;

(4) Assist public and private agencies in implementing energy conservation and related measures;

(5) Coordinate the State's energy conservation and allocation programs with that of the federal government, other state governments, governments of nations with interest in common energy resources, and the political subdivisions of the State;

(6) Develop programs to encourage private and public exploration and research of alternative energy resources [~~which~~] that will benefit the State;

(7) Conduct public education programs to inform the public of the energy resources situation as may exist from time to time and of the government actions taken [~~thereto~~];

(8) Serve as consultant to the governor, public agencies, and private industry on matters related to the acquisition, utilization, and conservation of energy resources;

(9) Contract for services when required for implementation of this chapter;

(10) Review proposed state actions [~~which~~] that the coordinator finds to have significant effect on energy [~~consumption~~] resources and report to the governor their effect on the energy conservation program, and perform such other services as may be required by the governor and the legislature;

(11) Prepare and submit an annual report and such other reports as may be requested to the governor and to the legislature on the implementation of this chapter and all matters related to energy resources; [~~and~~]

(12) Adopt rules for the administration of this chapter pursuant to chapter 91, provided that the rules shall be submitted to the legislature for review[.]; and

(13) Develop and maintain a comprehensive and systematic quantitative and qualitative capacity to analyze the status of energy resources, systems, and markets, both in-state and those to which Hawaii is directly tied, particularly in relation to the State's economy, and to recommend, develop proposals for, and assess the effectiveness of policy and regulatory decisions, and conduct energy emergency planning."

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval.

THE SENATE	S.B. NO.	2991
TWENTY-FOURTH LEGISLATURE, 2008		S.D. 1
STATE OF HAWAII