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THE SENATE |
S.B. NO. |
2752 |
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TWENTY-NINTH LEGISLATURE, 2018 |
S.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO ENERGY EFFICIENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that green infrastructure financing was established in the public interest to make cost-effective green infrastructure equipment options accessible and affordable to customers in order to achieve Hawaii's clean energy goals while benefitting from measurable cost savings.
The legislature further finds that $46,400,000 was appropriated out of the Hawaii green infrastructure special fund for fiscal year 2017-2018 for the purpose of financing the installation costs for energy-efficient lighting and other energy-efficiency measures related to heat abatement at public schools. Similarly, the department of education, with the approval of the governor, was authorized to borrow the sum of $46,400,000 for fiscal year 2017-2018 from the green infrastructure loan program upon terms and conditions as are agreed to between the department of education and the Hawaii green infrastructure authority; provided that the loan shall be issued free of interest charges. Repayment of the loan will be from general revenue savings from reduced utility costs as a result of the implementation of energy-efficient lighting and other energy-efficiency measures.
Further, while the department of education's energy-efficiency plan utilizing Hawaii green infrastructure financing initially included only light emitting diode lighting retrofits, the legislature finds that this financing mechanism, coupled with innovative implementation strategies, will enable the department of education to implement deeper retrofits to include other energy-efficiency measures.
EnerNoc Utility Solutions Consulting Inc. prepared and presented the State of Hawaii Energy Efficiency Potential Study, Project #1448 (study) to the Hawaii public utilities commission on January 15, 2014. The study categorized Hawaii's 2012 energy consumption into five sectors: residential (thirty-two per cent), military (eleven per cent), water and wastewater (four per cent), street lighting (0.5 per cent), and commercial (fifty-two per cent). The study found that the commercial sector, which includes the government, consumes over half of statewide electricity use, and concluded that the majority of the statewide energy-efficiency savings potential is found in the commercial sector. Of the twenty-five state agencies participating in the department of business, economic development, and tourism report to the legislature titled Lead by Example State of Hawaii Agencies' Energy Initiatives FY 2013-2014, the department of education was the second largest consumer of electricity, consuming over 130,000,000 kWh per year from fiscal year 2004-2005 through fiscal year 2013-2014 at an average cost of $38,000,000 per year. There are a number of other state agencies and departments that would benefit from a similar financing arrangement. Reducing energy consumption in state buildings would significantly and positively contribute to the achievement of Hawaii's energy-efficiency portfolio standard, while reducing and controlling costs for Hawaii's taxpayers.
Though government agencies were not named as underserved by the Hawaii public utilities commission in the green energy market securitization program, the Hawaii public utilities commission acknowledged that the green energy market securitization program was not intended to be exclusively dedicated to underserved customers. The legislature notes that while state agencies constitute a significant component of energy consumption in Hawaii, investment in energy-efficiency improvements by government agencies has been limited. Further, government agencies can be classified with those ratepayers who are hard-to-reach with traditional market-competitive financing agreements due to procurement limitations and the obligation to include contractual provisions that make the continuation of contracts contingent upon the allocation of funds. For these reasons, the use of the green energy market securitization program funds to provide low-cost financing to enable energy-efficiency retrofits for state government agencies fills a gap not served by the capital market.
The purpose of this Act is to provide all state agencies and departments the opportunity to obtain low-cost financing from the green energy market securitization program, at an interest rate of 3.5 per cent a year, to reduce energy costs and consumption by installing energy-efficiency measures. This Act creates a sub-fund under the umbrella of the Hawaii green infrastructure special fund and converts $ into a revolving line of credit for any state agency or department to finance energy-efficiency measures, subject to sub-fund availability, on an on-going basis.
SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows:
(b) The department or
agency shall meet with the public benefits fee administrator of the public
utilities commission prior to the launch of the project planning phase. The department's or agency's proposed
energy-efficiency measures shall meet or exceed the public benefits fee
administrator's enhanced efficiency levels and requirements in order to be
eligible for the Hawaii green infrastructure loan program. The department or agency shall work with the
public benefits fee administrator throughout the entire project cycle
to ensure energy efficiency is maximized.
All supporting documentation required by the public benefits fee
administrator shall be provided by the department or agency to ensure proper
tracking towards the State's energy-efficiency portfolio standard as specified
in section 269-96.
(c) The department or agency shall submit an
expenditure plan to the Hawaii green infrastructure authority executive
director, who shall serve as the fiscal administrator for the loans issued
pursuant to subsection (a) and shall make payment on behalf of the department
or agency, as appropriate, upon submission of requests for payment from the
department or agency.
(d) Beginning with fiscal year 2018-2019, and annually thereafter, the department or agency shall begin to repay the loan pursuant to subsection (a) using general revenue savings resulting from reduced utility costs as a result of the implementation of energy-efficient lighting and other energy-efficiency measures."
SECTION 3. Section 196-61, Hawaii Revised Statutes, is amended by adding new definitions to be appropriately inserted and to read as follows:
""Energy-efficiency
measures"
means any type of project conducted, or technology implemented, to reduce the
consumption of energy in a building. The
types of projects implemented can be in a variety of forms but are usually
designed to reduce electric utility costs.
"Revolving
line of credit" means a type of credit
where loan advances are made for eligible purposes and where repaid principal
deposited back into the sub-fund can be re-borrowed.
"Sub-fund"
means a separate fund within the Hawaii green infrastructure special fund
reserved for a specific purpose."
SECTION 4. Section 196-62, Hawaii Revised Statutes, is amended to read as follows:
"[[]§196-62[]] Hawaii
green infrastructure loan program. There
is established a Hawaii green infrastructure loan program, which shall be a
loan program as defined under section 39-51.
The program shall be administered by the authority on behalf of the
department in a manner consistent with chapter 39, part III. This loan program may include loans made to government
entities and private entities, whether corporations, partnerships, limited
liability companies, or other persons, which entities may lease or provide
green infrastructure equipment to electric utility customers, as well as direct
loans to electric utility customers, on terms approved by the authority."
SECTION 5. Section 196-65, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Moneys in the Hawaii green infrastructure special fund may be used, subject to the approval of the public utilities commission, for the purposes of:
(1) Making green
infrastructure loans, including for installation costs for energy-efficient
lighting and other energy-efficiency measures [related to heat abatement at
public schools];
(2) Creating a $ sub-fund, as a revolving line of credit under the umbrella of the Hawaii green infrastructure special fund, for any state agency or department to obtain low-cost financing to install cost-effective energy-efficiency measures;
[(2)] (3) Paying administrative costs of the Hawaii
green infrastructure loan program;
[(3)] (4)
Paying any other costs related to the Hawaii green infrastructure
loan program; or
[(4)] (5)
Paying financing costs, as defined in section 269-161, to the
extent permitted by the public utilities commission in a financing order issued
pursuant to section 269-163."
SECTION 6. There is appropriated out of the Hawaii green infrastructure special fund the sum of $ or so much thereof as may be necessary for fiscal year 2018-2019, for the purpose of financing the installation costs for energy-efficient lighting and other energy-efficiency measures for any state agency or department.
The sum appropriated shall be expended by the Hawaii green infrastructure authority for the purposes of this Act.
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act shall take effect on July 1, 2050.
Report Title:
Green Energy Market Securitization; Energy Efficiency; Appropriation
Description:
Creates a revolving line of credit sub-fund of an unspecified amount under the umbrella of the Hawaii green infrastructure special fund for any state agency or department to finance cost-effective energy-efficiency measures. Effective 7/1/2050. (SD2)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.