STAND. COM. REP. NO.  1001

Honolulu, Hawaii

                , 2011

RE:   S.B. No. 704

      S.D. 2

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

Sir:

     Your Committee on Energy & Environmental Protection, to which was referred S.B. No. 704, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO RENEWABLE ENERGY,"

begs leave to report as follows:

     The purpose of this bill is to support the State's overall clean energy objectives by specifying that third-party owners and operators of on-site renewable energy generating systems are exempt from being regulated as a public utility.

     The Solar Alliance, SunRun Inc., SolarCity, Hawaii Renewable Energy Alliance, and Hawaii Solar Energy Association testified in support of this bill.  Kairos Energy Capital LLC testified in support of the intent of this measure.  The Chair of the Public Utilities Commission (PUC) provided comments.

     Hawaii is one of the most fossil fuel dependent states in the nation despite having some of the most diversified renewable energy options and sources in the world.  With our abundance of sunshine and at times, wind, solar and wind energy represent two forms of renewable energy that are immediately available and which offer substantial renewable energy opportunities.  Unfortunately, financial barriers often prohibit Hawaii residents and businesses from purchasing renewable energy systems.  Third-party suppliers of renewable energy may offer these individuals an alternative.  However, third-party suppliers of renewable energy should not be confused with a public utility in that they provide supplemental power to a customer who generally remains on the electric public utility grid or to the electric utility itself.  This measure clarifies this matter.

     Nevertheless, your Committee notes the concerns raised by Kairos Energy Capital LLC that passage of this measure in its present form may have the unintended consequence of removing the discretionary authority of PUC or courts to make a determination that renewable energy facilities are not public utilities in certain appropriate circumstances due to the specificity of the language contained in this bill.  Your Committee finds that this issue needs further consideration and thus respectfully requests the Committee on Consumer Protection and Commerce to review this matter more closely.

     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 S.B. No. 704, S.D. 2, and recommends that it pass Second Reading and be referred to the Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Energy & Environmental Protection,

____________________________

DENNY COFFMAN, Acting Chair