SB1671 SD1.DOC

SECTION 1. The legislature finds that fossil fuel use is not part of Hawaii's clean, independent, and sustainable energy future. All fossil fuel used in Hawaii is imported from thousands of miles away by ship. The burning of fossil fuel degrades the air quality and the State's image as the "Health State" and a clean destination.

The legislature further finds that carbon dioxide from fossil fuel consumption is implicated in global climate change and may have profound consequences on the State's environment and quality of life. Current scientific consensus predicts a very different future from what we are accustomed to, if heat-trapping greenhouse gas emissions continue unabated. The Pacific ocean may inundate most of Waikiki, the business district in Honolulu, and coastal resort areas on other islands. Saltwater intrusion may contaminate island aquifers and more frequent storms and hurricanes may strike the islands. Prolonged droughts and subtle shifts in island microclimates may rapidly increase the extinction of endangered plants and animals. The State can play a pivotal role in utilizing technologies that reduce humankind's contribution to global climate change by transitioning away from fossil fuel sources to generate electricity and demonstrating technologies that reduce negative effects on global climate change.

The legislature further finds that the State's dependency on foreign fossil fuel results in the annual outflow of billions of dollars from the state economy. In 2005, the State imported over 51,000,000 barrels of petroleum and 805,000 short tons of coal. In the summer of 2008, the price per barrel of oil exceeded $140. As a result, billions of dollars are directly exported from the State each year. Efforts to dramatically reduce fossil fuel consumed in the State will benefit both the economy and the environment.

The purpose of this Act is to align the State's energy policy with the State's preferred clean energy future by prohibiting new or expanded fossil fuel power plants.

SECTION 2. Chapter 342B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§342B- Fossil fuel electricity generating facilities. (a) Effective July 1, 2009, no new covered source that is owned or operated by an electricity-generating public utility, as defined in section 269-1, with a rated capacity of more than two megawatts shall be permitted to generate electricity from fossil fuel sources; provided that electric utility cooperative associations shall be exempt from the requirements of this subsection until July 1, 2015.

(b) Effective July 1, 2009, no covered source that is owned or operated by an electricity-generating public utility, as defined in section 269-1, with a rated capacity of more than two megawatts and existing on July 1, 2009, except for an electric utility cooperative association, shall be modified in any manner that allows it to use more fossil fuel as a source of electricity generation than is allowed under its permit as of July 1, 2009. No covered source that is owned or operated by an electric utility cooperative association with a rated capacity of more than two megawatts and existing on July 1, 2009 shall be modified in any manner that allows it to use more fossil fuel as a source of electricity generation than is allowed under its permit as of July 1, 2015."

SECTION 3. Section 269-92, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The public utilities commission may establish standards for each utility that prescribe what portion of the renewable portfolio standards shall be met by specific types of renewable electrical energy resources; provided that:

(1) At least fifty per cent of the renewable portfolio standards shall be met by electrical energy generated using renewable energy as the source;

(2) Where electrical energy is generated or displaced by a combination of renewable and nonrenewable means, the proportion attributable to the renewable means shall be credited as renewable energy; [~~and~~]

(3) Where fossil and renewable fuels are co-fired in the same generating unit, the unit shall be considered to generate renewable electrical energy (electricity) in direct proportion to the percentage of the total heat value represented by the heat value of the renewable fuels[.]; and

(4) Effective July 1, 2009, the public utilities commission shall not approve any application by a public utility as defined in section 269-1 to build a new generation facility with a rated capacity greater than two megawatts that uses fossil fuel as the source of electricity generation; provided that, between July 1, 2009 and July 1, 2015, the Public Utilities Commission may approve such applications when the application is submitted by an electric utility cooperative association."

SECTION 4. Section 342B-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Electric utility cooperative association" means the same as defined under section 421C-1."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2009.

THE SENATE	S.B. NO.	1671
TWENTY-FIFTH LEGISLATURE, 2009		S.D. 1
STATE OF HAWAII