HOUSE OF REPRESENTATIVES	H.B. NO.	1518
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII

A BILL FOR AN ACT

relating to energy.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Hawaii has the most expensive electricity rates in the nation.  These high electricity rates are often attributed to Hawaii's reliance on imported oil and an obsolete electrical utilities business model that has not changed in over a century.  Hawaii electrical utilities still require a central system operator to manage the power supply with fluctuating customer demand, while striving to maintain the reliability of the power system.  Electrical utility problems are further exacerbated by the fact that the aging analog controls used to manage the electrical supply have become increasingly unreliable and insecure.

     To reduce both electricity prices and the State's dependence on imported oil, Hawaii must modernize the electrical grid to allow for competition in the production of electricity.  An intelligent, deregulated, digital electrical grid control system will increase the reliability and security of the electrical grid, manage the power supply to meet electricity demands, help to increase electrical production competition, and help move Hawaii toward the widespread use of renewable energy.  To increase use of renewable energy, Hawaii must remove barriers preventing competition in the electricity production marketplace, while ensuring the stability of the electrical grid.

     The purpose of this Act is to require the public utilities commission to establish rules in support of the implementation of privately owned microgrids so that electrical customers have a choice of utilities from which to purchase electricity.

     SECTION 2.  Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§269-  Privately owned microgrids. (a)  Notwithstanding any provision of this chapter or any franchise, charter, law, decision, order, or rule to the contrary, the public utilities commission shall adopt rules authorizing and licensing privately owned microgrids.  The public utilities commission and the consumer advocate shall at all times consider the ownership structure and interests of a microgrid in determining the need for, and scope of, microgrid regulatory oversight.

(b)  For the purposes of this section, "microgrid" means a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid and can connect to the grid to operate in grid-connected mode and can disconnect from the grid to operate in island mode."

     SECTION 3.  New statutory material is underscored.

    SECTION 4.  This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Energy; Electricity; Microgrid; Privately Owned

Description:

Requires the public utilities commission to enact rules authorizing the establishment of privately owned microgrids.

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