STAND. COM. REP. NO 43

Honolulu, Hawaii

RE:    S.B. No. 698

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Madam:

     Your Committee on Energy and Environment, to which was referred S.B. No. 698 entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

begs leave to report as follows:

     The purpose and intent of this measure is to prohibit the Public Utilities Commission from approving power purchase agreements that prohibit the sale of energy to third parties or require utility consent to sell energy to third parties.

     Your Committee received testimony in support of this measure from the Hawaii Solar Energy Association and Blue Planet Foundation.  Your Committee received testimony in opposition to this measure from Hawaiian Electric Company.  Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs Division of Consumer Advocacy.

     Your Committee finds that power purchase agreements, entered into by electric utilities and approved by the Public Utilities Commission, frequently prohibit power producers from selling energy to third parties, even if that energy is being curtailed or not used on the grid by the utility.  These power purchase agreements promote the waste of energy to the detriment of the people of Hawaii.  This measure enables energy producers to make use of energy that would otherwise be wasted.

     Your Committee has amended this measure by:

     (1)  Adding language to clarify that the Public Utilities Commission is prohibited from approving purchase agreements that prohibit the sale of renewable energy to third parties or require utility consent to sell renewable energy to third parties to the extent that the renewable energy will be converted from electrical energy to another form of energy or will be stored for later distribution to an electric utility; and

     (2)  Amending section 1 to reflect the amended purpose of this measure.

     As affirmed by the record of votes of the members of your Committee on Energy and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 698, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 698, S.D. 1, and be referred to the Committee on Commerce and Consumer Protection.

Respectfully submitted on behalf of the members of the Committee on Energy and Environment,

____________________________

MIKE GABBARD, Chair