SB199.DOC

SECTION 1. The legislature finds that the achievement of energy security, economic development, and a reduction in carbon emissions are in the interest of the citizens of Hawaii. Net energy metering advances each of these goals, and does so in a manner that marshals substantial federal moneys and private capital.

The legislature finds that net energy metering should persist even if the public utilities commission establishes alternative compensation systems for distributed power generators, such as feed-in tariffs, because net energy metering serves a different need in the renewable energy marketplace.

The legislature further finds that there is no technical justification for setting net energy metering project size limits at the current statutory maximum of one hundred kilowatts. Other utility procurement mechanisms for distributed renewable energy generating systems, including feed-in tariff and standard interconnection, have no such limits or are capped at dramatically higher levels.

The legislature further finds that net energy metering should be perpetuated regardless of the introduction and uptake level of alternative distributed generation procurement programs. Additionally, customer-generators with net energy metering contracts should be allowed to maintain those existing contracts.

In conclusion, the legislature finds that the net energy metering program should be expanded. This Act applies only to investor-owned utilities.

SECTION 2. Section 269-101.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§269-101.5[]] Maximum capacity of eligible customer-generator. The eligible customer-generator shall have a capacity of not more than [~~fifty kilowatts;~~] two megawatts; provided that the public utilities commission may increase the maximum allowable capacity that eligible customer-generators may have to an amount greater than [~~fifty kilowatts~~] two megawatts by rule or order."

SECTION 3. Section 269-102, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Every electric utility shall develop a standard contract or tariff providing for net energy metering and shall make this contract available to eligible customer-generators, upon request, on a first-come-first-served basis [until the time that the total rated generating capacity produced by eligible customer-generators equals .5 per cent of the electric utility's system peak demand; provided that the public utilities commission may modify, by rule or order, the total rated generating capacity produced by eligible customer-generators; provided further that the public utilities commission shall ensure that a percentage of the total rated generating capacity produced by eligible customer-generators shall be reserved for electricity produced by eligible residential or small commercial customer-generators. The public utilities commission may define, by rule or order, the maximum capacity for eligible residential or small commercial customer-generators. Notwithstanding the generating capacity requirements of this subsection, the public utilities commission may evaluate, on an island-by-island basis, the applicability of the generating capacity requirements of this subsection and, in its discretion, may exempt an island or a utility grid system from the generating capacity requirements]."

SECTION 4. Section 269-110, Hawaii Revised Statutes, is amended to read as follows:

"§269-110 Termination by eligible customer-generators. If an eligible customer-generator terminates the customer relationship with the electric utility, the electric utility shall reconcile the eligible customer‑generator's consumption and production of electricity, including any unused credits for excess electricity from the eligible customer‑generator carried over from prior months, for the period following the last twelve-month reconciliation period to the date of termination of the relationship, according to the requirements set forth in this part.

If the public utilities commission, at any time, establishes alternative mechanisms for crediting or otherwise compensating eligible customer-generators for exported power, eligible customer-generators with existing net energy metering contracts shall have the option of maintaining those existing net energy metering contracts rather than converting to new alternative credits or compensation mechanisms."

SECTION 5. Section 269-104, Hawaii Revised Statutes, is repealed.

["~~§269-104 Additional customer-generators.~~ Notwithstanding section 269-102, an electric utility is not obligated to provide net energy metering to additional customer-generators in its service area when the combined total peak generating capacity of all eligible customer-generators served by all the electric utilities in that service area furnishing net energy metering to eligible customer-generators equals .5 per cent of the system peak demand of those electric utilities; provided that the public utilities commission may increase, by rule or order, the allowable percentage of the electric utility's system peak demand produced from eligible customer-generators in the electric utility's service area, whereupon the electric utility will be obligated to provide net energy metering to additional eligible customer-generators in that service area up to the increased percentage amount."]

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.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	199
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII