HB1248 HD1.DOC

SECTION 1. The legislature finds that the development of renewable microgrids can aid Hawaii's transition to a clean energy economy. In this context, a microgrid is a small energy network, interconnected with an electric utility grid, or utilizing an electric utility grid, which is powered by renewable energy, and which may be islanded from the electric utility grid if needed.

The legislature further finds that microgrids have the potential to be a testing ground for greater integration of renewable energy, distributed generation, storage, and demand response technology. Microgrid demonstration projects will enable the State to learn how to reduce costs, increase grid reliability and resiliency, reduce pollution and greenhouse gas emissions, reduce the cost of infrastructure, and increase the efficiency of transmission and distribution.

The purpose of this Act is to enable microgrid demonstration projects that can assist in understanding, developing, and refining microgrid technologies and policies in the State.

SECTION 2. Chapter 227D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§227D-A Microgrid demonstration project; advisory committee. (a) The authority shall establish a microgrid advisory committee for the purpose of providing guidelines and advice on matters relating to the microgrid demonstration project established pursuant to section 269-B, including issues regarding pricing and liability.

(b) The microgrid advisory committee shall consist of seven members as follows:

(1) Two members representing the board, to be appointed by the chairperson of the board;

(2) One member representing the division of consumer advocacy of the department of commerce and consumer affairs, to be appointed by the director of commerce and consumer affairs;

(3) One member representing the state energy office of the department of business, economic development, and tourism, to be appointed by the director of business, economic development, and tourism;

(4) One member from a non-governmental organization who is an active participant in energy issues, to be appointed by the director of business, economic development, and tourism;

(5) One member representing the county of Hawaii, to be appointed by the mayor of the county of Hawaii; and

(6) One member representing Hawaii Electric Light Company.

SECTION 3. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§269-B Enabling microgrid demonstration projects. (a) Notwithstanding any other provisions in this chapter, microgrid demonstration projects shall be exempt from the requirements of this chapter, except as may be needed to facilitate safe interconnection of the microgrid demonstration project to an electric public utility grid. Any person who owns, controls, operates, manages, or otherwise participates in a microgrid demonstration project shall not be considered a public utility for the purpose of participating in the microgrid demonstration project.

(b) The public utilities commission may take any steps the commission deems necessary to enable and compel electric public utilities to allow the development of microgrid demonstration projects by non-utilities. These steps may include issuing related orders, amending or adopting related rules, working with permitting agencies or other authorities to grant exemptions, or other steps necessary to enable microgrid demonstration projects.

(c) A microgrid demonstration project shall be exempt from any wheeling restrictions when the wheeling is conducted within the designated boundaries of the project.

(d) The property controlled by the natural energy laboratory of Hawaii authority, established pursuant to chapter 227D, is designated as a microgrid demonstration project. After January 1, , the public utilities commission may designate other microgrid demonstration projects without legislative approval.

(e) Any power that is sold by a microgrid demonstration project shall be at a price equal to or less than the utility rates established by the public utilities commission.

(f) No later than twenty days prior to the convening of each regular session, each microgrid demonstration project established or authorized pursuant to this section shall submit an annual report to the legislature of its findings and recommendations on the demonstration project.

(g) For the purposes of this section, "microgrid demonstration project" means a renewable energy generation, storage, or distribution network that:

(1) Is designated by the legislature and is associated with a governmental or a quasi-governmental entity;

(2) Is authorized by the public utilities commission;

(3) May or may not cross property boundaries, easements, public thoroughfares, transportation rights-of-way, and utility rights-of-way;

(4) May or may not provide, sell, or transmit renewable energy to a person other than the person who owns, controls, operates, or manages the microgrid demonstration project;

(5) May or may not use portions of an electric public utility's transmission or distribution lines to provide, sell, or transmit electricity to participants in the microgrid demonstration project;

(6) Uses electricity generation, located on the microgrid demonstration project, with a total generating capacity of five megawatts or less;

(7) Uses only renewable energy, as defined in section 269-91, to generate electricity, except in cases of emergency; and

(8) Can be islanded from the electric public utility grid from time to time."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on January 28, 2081.

HOUSE OF REPRESENTATIVES	H.B. NO.	1248
TWENTY-NINTH LEGISLATURE, 2017		H.D. 1
STATE OF HAWAII