STAND. COM. REP. NO. 941

Honolulu, Hawaii

RE:    H.B. No. 591

       H.D. 1

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committees on Water, Land, Agriculture, and Hawaiian Affairs and Energy and Environment, to which was referred H.B. No. 591, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC UTILITIES,"

beg leave to report as follows:

     The purpose of this measure is to authorize and encourage the establishment of preferential rates for renewable energy produced in conjunction with agricultural activities.

     Testimony in support of this measure was submitted by four organizations.  Comments were submitted by one state commission.  Written testimony presented to your Committees may be reviewed on the Legislature's website.

     Your Committees find that this is a critical juncture for agriculture in Hawaii, and that prolonged drought and the rapidly deteriorating economy are having a significant negative impact upon the agricultural industry.  This measure will help support the continuation and growth of the agricultural industry. 

     The Hawaiian Commercial and Sugar Company (HC & S) produces electricity for its sugar milling, irrigation pumping, and other internal operations and provides electricity to the Maui Electric Company (MECO).  The biomass electricity is primarily produced by burning bagasse, the residual fiber of the sugar cane plant, as a fuel to generate steam for the production of power.  In addition to providing approximately seven per cent of MECO's electricity, HC & S also serves as a firm power source for MECO, and has played a significant role in the restoration of MECO's electrical service during power outages.  The preferential renewable energy rates will enhance the prospects of attracting new agricultural related renewable energy producers as well as retain those presently in production.  The result will be a reduction in Hawaii's dependence on fossil fuel imports, a step towards Hawaii's future energy security, and a method to sustain the agricultural industry.

     Your Committees have amended this measure by changing the effective date to upon approval.

     As affirmed by the records of votes of the members of your Committees on Water, Land, Agriculture, and Hawaiian Affairs and Energy and Environment that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 591, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 591, H.D. 1, S.D. 1, and be referred to the Committee on Commerce and Consumer Protection.

Respectfully submitted on behalf of the members of the Committees on Water, Land, Agriculture, and Hawaiian Affairs and Energy and Environment,

____________________________ MIKE GABBARD, Chair

____________________________ CLAYTON HEE, Chair