HOUSE OF REPRESENTATIVES	H.B. NO.	1586
THIRTIETH LEGISLATURE, 2019		H.D. 1
STATE OF HAWAII		S.D. 1

A BILL FOR AN ACT

RELATING TO THE STRUCTURE OF GOVERNMENT.

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

SECTION 1. The legislature finds that energy composes approximately one-eighth of Hawaii's overall economy. Electric bills for public facilities and public transportation services exceed $400,000,000 annually. Management and direction of the energy sector of the state economy is becoming an increasingly complex and critically important job. According to Hawaii's utilities, successfully achieving one hundred per cent renewable electricity by 2045 is expected to save nearly $6,000,000,000. Additionally, electric vehicles are already cheaper to operate than traditional gas-powered vehicles. Transitioning to clean transportation will save residents billions of dollars. Climate change is expected to cost the State at least $19,000,000,000 in losses from sea level rise alone, making the switch to renewable energy and the ultimate reduction of atmospheric carbon a priority. The State must also handle the need for island resiliency; rapid increase and economic viability of renewable and distributed energy resources; the digitization, democratization, and inter-connectivity of infrastructure; and the electrification and automation of transportation. These complex realities reveal the need for a state agency responsible for assisting the transition to a clean energy economy to meet Hawaii's climate and cost of living goals.

The legislature further finds that efforts taken by the universities, public schools, executive departments, and other government entities have already begun to save taxpayers money by reducing the government's electricity costs. However, those efforts lack statewide coordination, preventing economies of scale to maximize savings. While some departments have made substantial progress, others have yet to commence meaningful activities. Tasking a single agency to plan for energy savings measures across all public facilities and assist government entities already working to reduce energy costs is a necessary step to maximize taxpayer savings.

The legislature further finds that although the state energy office is tasked with the responsibility of overseeing one-eighth of Hawaii's economy, which impacts every business and household, the state energy office lacks an enabling statute, a mission, formal guidance, and reporting accountability. Additionally, appointment of the head of the state energy office, the Hawaii state energy office administrator, is exempt from the senate confirmation process required for the majority of other agency heads.

The legislature's intent is to establish in statute an energy agency with a clear mission, established guidance, transparent reporting, and accountable leadership that will assist both the public and private sectors in achieving the State's energy goals. More specifically, the purpose of this Act is to:

(1) Establish the Hawaii state energy office within the department of business, economic development, and tourism; and

(2) Establish the position of deputy director of energy, and transfer the duties and responsibilities of the energy resources coordinator, which are currently assigned to the director of business, economic development, and tourism, to the deputy director of energy.

SECTION 2. Chapter 196, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part   . Hawaii state energy office

§196-A Hawaii state energy office; established. (a) There is established the Hawaii state energy office, within the department of business, economic development, and tourism, which shall be a public body politic and an instrumentality and agency of the State. The purpose of the Hawaii state energy office is to promote energy efficiency, renewable energy, and clean transportation to help achieve a resilient clean energy economy.

(b) The Hawaii state energy office shall:

(1) Provide analysis and planning to actively develop and inform policies to achieve renewable energy, energy resiliency, and clean transportation goals with the legislature, public utilities commission, and other relevant stakeholders;

(2) Lead efforts to incorporate energy efficiency and renewable energy to reduce costs and achieve clean energy goals across all public facilities;

(3) Provide renewable energy, energy efficiency, energy resiliency, and clean transportation project deployment facilitation to assist private sector project completion when aligned with state energy goals; and

(4) Engage the private sector to help lead efforts to achieve renewable energy goals through the Hawaii clean energy initiative advisory board.

(c) The Hawaii state energy office shall be the State's primary government entity for supporting the clean energy initiative.

(d) No later than twenty days prior to the convening of each regular session, the Hawaii state energy office shall submit a report to the legislature that includes:

(1) A description of the activities of the Hawaii state energy office in response to the directives established pursuant to subsection (b) and section 196-B(d), along with progress in meeting any of the Hawaii state energy office goals established in or pursuant to this part;

(2) Progress by the State in meeting its energy efficiency, renewable energy, and clean transportation goals; and

(3) Proposed legislation, if any.

§196-B Deputy director of energy; duties. (a) The Hawaii state energy office shall be led by the deputy director of energy appointed by the governor, subject to the advice and consent of the senate; provided that the term of the deputy director of energy shall be coterminous with the term of the governor.

(b) The deputy director of energy shall have:

(1) Experience, knowledge, and expertise in policy, programs, or services related to renewable energy and clean transportation related activities and development; and

(2) Experience in a supervisory or administrative capacity.

(c) The deputy director of energy shall hire staff necessary to carry out the purposes of this part.  The deputy director of energy and employees of the Hawaii state energy office shall be exempt from chapter 76, and shall not be considered civil service employees but shall be entitled to any employee benefit plan normally inuring to civil service employees.

(d) Subject to the approval of the governor, the deputy director of energy shall:

(1) Formulate, analyze, and recommend specific policies and plans, in coordination with public and private sector stakeholders, for cost-effectively and equitably achieving the State's energy goals;

(2) Identify, track and report key performance measures and milestones related to the State's energy and decarbonization goals;

(3) Provide technical assistance to state and county agencies to assess and implement projects and programs related to energy conservation and efficiency, renewable energy, clean transportation, energy resiliency, and related measures;

(4) Coordinate the State's energy programs with those of the federal government, other state governments, the political subdivisions of the State, and governments of nations with interest in common energy resources;

(5) Identify market gaps and innovation opportunities, collaborate with stakeholders, and facilitate public-private partnerships to develop programs and tools to encourage private and public exploration, research, and development of energy resources and distributed energy resources that will support the State's energy and decarbonization goals;

(6) Review proposed state actions that may have a significant effect on the State's energy and decarbonization objectives and report to the governor their effect on the energy program, and perform other services as may be required;

(7) Evaluate, recommend, and participate in the development of incentives and programs that encourage the development of renewable energy, distributed energy resources, and clean transportation resources;

(8) Assess and evaluate the effectiveness and continued necessity of existing energy related incentives, tax credits and programs, and provide recommendations and proposed changes;

(9) Develop and maintain a comprehensive and systematic quantitative and qualitative capacity to analyze the status of energy resources, systems, and markets, both in-state and those to which Hawaii is directly tied, particularly in relation to the State's economy, and to recommend, develop proposals for, and assess the effectiveness of policy and regulatory decisions, and conduct energy emergency planning;

(10) Develop and recommend programs for, and assist public agencies in the implementation of, energy assurance and energy resilience;

(11) Support the development, evaluation, revision, and adoption of energy-related codes and standards that advance the State's energy goals;

(12) Act as the State's energy data clearinghouse by identifying, collecting, compiling, analyzing, and publishing energy and clean transportation data and analyses;

(13) Advocate for the State's energy and decarbonization goals at the public utilities commission and legislature, ensuring that state energy policy and regulatory plans and proposals are data-driven;

(14) Support economic development and innovation initiatives related to and resulting from the State's renewable energy and distributed energy resources experience, capabilities, and data analyses; and

(15) Prepare and submit an annual report and other reports as may be requested to the governor and to the legislature on the implementation of this part;

(16) Contract for services when required for the implementation of this part; and

(17) Adopt rules, pursuant to chapter 91, for the administration of this part."

SECTION 3. Sections 125C-22, 125C-23, 125C-31, 141-9, 196-5, 196-6.5, 196-11, 196-30(a), 196-63, 206M-23, 286-172, 304A-1892, and 304A-1894.1, Hawaii Revised Statutes, are amended by substituting the term "deputy director of energy" wherever the term "state energy resources coordinator", "energy resources coordinator", "coordinator", or "energy program administrator of the department" appears, as the context requires.

SECTION 4. Section 196-2, Hawaii Revised Statutes, is amended as follows:

1. By adding two new definitions to be appropriately inserted and to read:

""Deputy director" means the deputy director of energy.

"Distributed energy resources" means a resource sited close to customers that:

(1) Can provide all or some of the customers' immediate electric and power needs;

(2) Can be used by the system to reduce demand or provide supply to satisfy the energy, capacity, or ancillary service needs of the distribution grid; and

(3) Is connected to the distribution system and close to load, if the resource provides electricity or thermal energy.

"Distributed energy resources" includes but is not limited to solar photovoltaic and thermal, wind, combined heat and power, electrical and thermal energy storage, demand response, electric vehicles, electric vehicle service equipment, microgrids, energy efficiency, and advanced inverters."

2. By amending the definition of "energy resources" to read:

""Energy resources" means fuel, and also includes all electrical or thermal energy produced by combustion of any fuel, or generated [or], produced, or stored using wind, the sun, geothermal heat, ocean water, falling water, currents, waves, or any other source."

SECTION 5. Section 201-12.8, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Subject to legislative appropriation, moneys from the fund may be expended by the department of business, economic development, and tourism for the following purposes and used for no other purposes, except for those set forth in this section:

(1) To support the Hawaii clean energy initiative program, including its energy division, including funding staff positions within the division, and projects that ensure dependable, efficient, and economical energy, promote energy self-sufficiency, and provide greater energy security for the State;

[(2) To fund the renewable energy facilitator pursuant to section 201-12.5 and any other positions necessary for the purposes of paragraph (1) as determined by the legislature; and

(3)] (2) To fund, to the extent possible, the greenhouse gas emissions reduction task force, climate change task force, [grants-in-aid to the economic development boards of each county, and grants-in-aid to economic development agencies of each county to meet the stated objectives of the Hawaii clean energy initiative program.] and programs to increase the resiliency of public facilities through renewable energy systems;

(3) To support achieving the zero emissions clean energy target set forth in section 225P-5;

(4) To fund the building energy efficiency revolving loan fund established in section 201-20;

(5) To fund incentives to promote the adoption of electric vehicles, to develop electric vehicle charging infrastructure, and to upgrade to electrical infrastructure to support the development of electric vehicle charging infrastructure; and

(6) To fund, to the extent possible, the duties of the state building code council in section 107-24, as they relate to the development of energy conservation codes."

SECTION 6. Section 304A-1891, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The director of the institute shall coordinate the institute's work with the energy resources coordinator in carrying out duties pursuant to section [196-4] 196-B in the area of research and development of renewable energy sources."

SECTION 7. Section 196-3, Hawaii Revised Statutes, is repealed.

["§196-3 Energy resources coordinator. The director of business, economic development, and tourism shall serve as energy resources coordinator."]

SECTION 8. Section 196-4, Hawaii Revised Statutes, is repealed.

["§196-4 Powers and duties. Subject to the approval of the governor, the coordinator shall:

(1) Formulate plans, including objectives, criteria to measure accomplishment of objectives, programs through which the objectives are to be attained, and financial requirements for the optimum development of Hawaii's energy resources;

(2) Conduct systematic analysis of existing and proposed energy resource programs, evaluate the analysis conducted by government agencies and other organizations and recommend programs that represent the most effective allocation of resources for the development of energy resources;

(3) Formulate and recommend specific proposals, as necessary, for conserving energy resources, including the allocation and distribution thereof;

(4) Assist public and private agencies in implementing energy conservation and efficiency programs, the development of indigenous energy resources, and related measures;

(5) Coordinate the State's energy programs with those of the federal government, other state governments, governments of nations with interest in common energy resources, and the political subdivisions of the State;

(6) Develop programs to encourage private and public exploration, research, and development of indigenous energy resources that will benefit the State;

(7) Conduct public education programs to inform the public of the energy resources situation, as it may exist, from time to time and of the government actions taken;

(8) Serve as consultant to the governor, public agencies, and private industry on energy-related matters;

(9) Contract for services when required for the implementation of this chapter;

(10) Review proposed state actions that the coordinator finds to have significant effect on the State's energy objectives and report to the governor their effect on the energy program, and perform other services as may be required by the governor and the legislature;

(11) Prepare and submit an annual report and other reports as may be requested to the governor and to the legislature on the implementation of this chapter and all matters related to energy resources;

(12) Formulate a systematic process, including the development of requirements, to identify geographic areas that are rich with renewable energy resource potential that can be developed in a cost-effective and environmentally benign manner and designate these areas as renewable energy zones;

(13) Develop and recommend incentives, plans, and programs to encourage the development of renewable energy resource projects within the renewable energy zones;

(14) Assist public and private agencies in identifying utility transmission projects or infrastructure required to accommodate and facilitate the development of renewable energy resources;

(15) Assist public and private agencies, in coordination with the department of budget and finance, in accessing the use of special purpose revenue bonds to finance the engineering, design, and construction of transmission projects and infrastructure that are deemed critical to the development of renewable energy resources;

(16) Develop the criteria or requirements for identifying and qualifying specific transmission projects and infrastructure that are critical to the development of renewable energy resources, including providing assistance in accessing the use of special purpose revenue bonds to finance the projects or infrastructure;

(17) Develop and maintain a comprehensive and systematic quantitative and qualitative capacity to analyze the status of energy resources, systems, and markets, both in-state and those to which Hawaii is directly tied, particularly in relation to the State's economy, and to recommend, develop proposals for, and assess the effectiveness of policy and regulatory decisions, and conduct energy emergency planning; and

(18) Adopt rules for the administration of this chapter pursuant to chapter 91."]

SECTION 9. Section 201-12.5, Hawaii Revised Statutes, is repealed.

["§201-12.5 Renewable energy facilitator; establishment; duties. (a) There is established within the department of business, economic development, and tourism the position of renewable energy facilitator, which shall be a full-time, temporary position exempt from chapters 76 and 89. The renewable energy facilitator shall possess a requisite level of knowledge and expertise in the areas of renewable energy, state and county permitting processes, and management necessary to carry out the duties of the position.

(b) The renewable energy facilitator shall have the following duties:

(1) Facilitate the efficient permitting of renewable energy projects, including:

(A) The land parcel on which the facility is situated;

(B) Any renewable energy production structure or equipment;

(C) Any energy transmission line from the facility to a public utility's electricity system; and

(D) Any on-site infrastructure necessary for the production of electricity or biofuel from the renewable energy site;

(2) Initiate the implementation of key renewable energy projects by permitting various efficiency improvement strategies identified by the department;

(3) Administer the day-to-day coordination for renewable energy projects on behalf of the department; and

(4) Submit periodic reports to the legislature on renewable energy facilitation activities.

(c) The renewable energy facilitator position shall be funded by the energy security special fund."]

SECTION 10. There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2019-2020 and the same sum or so much thereof as may be necessary for fiscal year 2020-2021 for the Hawaii state energy office.

The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 11. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 13. This Act shall take effect on July 1, 2050.

Report Title:

Structure of Government; Hawaii State Energy Office; Department of Business, Economic Development, and Tourism; Barrel Tax; Fossil Fuel Tax; Deputy Director of Energy; Appropriation

Description:

Establishes the Hawaii state energy office. Establishes the deputy director of energy and powers and duties of the deputy director of energy. Repeals the establishment of the energy resources coordinator position, the coordinator's powers and duties, and the establishment of the renewable energy facilitator position, and transfers some of the powers and duties of the energy resources coordinator to the deputy director of energy. Amends the allowable uses of the energy security special fund. Appropriates funds for the Hawaii state energy office. Takes effect 7/1/2050. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.