HB1521

SECTION 1. The legislature finds that while the transition to renewable energy holds promise for lower energy costs in comparison to fossil fuel use, the legislature is concerned that many households in Hawaii have difficulty paying basic energy bills and suffer "energy insecurity", in which they are faced with difficult choices, such as whether to sacrifice food or medicine to be able to pay for energy. This concern is clearly identified in the July 2021 report by the department of business, economic development, and tourism, "Electricity Burdens on Hawaii Households", which identifies that "household electricity burden – the percentage of household income spent on electricity bills – is one of the key elements contributing to a household's energy insecurity, especially for low-income households." Accordingly, households with lower incomes are faced with higher levels of energy insecurity.

Furthermore, with temperature and humidity increases due to climate change, the legislature is increasingly concerned about access to affordable and clean energy because the need for air conditioning, and thus more electricity, has increased during the warmest months of the year, further exacerbating the situation of "energy insecurity" for residents.

The legislature further finds that according to the 2020 report commissioned by the Aloha United Way, "ALICE in Hawaii: A Financial Hardship Study", forty-two per cent of households in the State live below the ALICE (asset limited, income constrained, employed) threshold, meaning that almost half of all families in Hawaii are struggling to make ends meets even though they are employed. Nine per cent of these ALICE families are living in poverty. This trend has progressively worsened in recent years and was exacerbated by the coronavirus disease 2019 pandemic, meaning that these numbers have likely increased since the 2020 report was published, as the 2020 report reflected 2018 metrics. However, upon research of ALICE household, it appears that their energy burden is much lower than the national average due to lower usage.

The legislature also finds that Hawaii's electric rates are the highest in the nation, at close to three times the national average. These high rates add to the challenges faced by families already struggling with Hawaii's high cost of living. The average residential electric bill in Hawaii was forty per cent higher than on the continental United States.

The legislature further finds that the State's electric utilities only offer income-based bill assistance through the federal Low Income Home Energy Assistance Program (LIHEAP) and do not offer utility-specific low to moderate income discount rates or bill assistance. According to the federal Administration for Children and Families' Office of Community Services, being qualified for LIHEAP does not guarantee that a person in need will receive help. This is because LIHEAP assistance disbursements depend on how much LIHEAP funds are available for the year, and once funds run out for the year, no more benefits can be given out until more funds are made available by Congress. This results in an average of only twenty per cent of qualifying households actually receiving the LIHEAP benefit. Thus, a substantial number of residents are not able to receive the federal assistance for which they qualify, and as LIHEAP is the only income-based bill assistance program offered by utilities, an obvious unmet need for bill assistance or rate relief to those in privation is left unmet. According to Spotlight on Poverty, less than nine thousand homes in the State participated in LIHEAP in 2020, or about 0.02 per cent of households in Hawaii. Meanwhile, nine per cent of Hawaii households live below the poverty level.

In recognition of these and other disparities contributing to high electricity burdens, some states' utilities are authorized to offer lower rates to low- and limited-income customers to reduce residential electricity burden and ensure continued access to electrical power. These states include Arizona, California, Georgia, Maine, Massachusetts, Minnesota, New Hampshire, New York, Pennsylvania, Rhode Island, and Vermont.

Relatedly, as acknowledged by the Hawaii climate change mitigation and adaptation commission, the legislature also finds that there has been an increase in concerns about energy and climate justice, and ensuring that low-income and frontline communities are not bearing an undue proportion of the impacts of energy infrastructure and climate change. Traditionally, major energy projects provide the same benefit, secure provision of service, to all ratepayers on an electric grid. The communities serving as geographic hosts for major energy projects receive this same benefit, yet must live with the burdens associated with hosting those projects, and are not offered compensation for doing so, nor are these communities generally meaningfully engaged in the planning process for these projects. The burdens these host communities have shouldered include high concentrations of particulate air emissions, loss of open space, loss of other land uses, environmental concerns, and projects that are maligned with the host community's localized needs and priorities for provision of electrical service.

The legislature additionally finds that when the electricity burden maps provided in the department of business, economic development, and tourism electricity burden report are reviewed alongside the statewide energy project directory provided by the Hawaii state energy office, a substantial amount of the current and planned energy project locations are in or near areas that have higher electricity burdens. Thus, the legislature is further concerned that without more informed planning, the progression towards the State's clean energy goals may come at the expense of already burdened communities.

The legislature also finds that in certain situations, energy project developers are encouraged to negotiate community benefits agreements with the communities that neighbor their projects as part of the project development process. In some cases, utilities could be authorized to offer reduced electricity rates to communities impacted by or in close proximity to major energy projects, that is, those communities that are geographic hosts.

The legislature concludes that, given its two distinct but interrelated concerns regarding high electricity burdens for the State's low-to-moderate income families, and the concentration of energy projects in communities with high electricity burdens that lack geographic hosting compensation or other considerations to address the disproportionate burden these communities deal with, it is fair and in the public interest to further investigate ways to address both concerns.

Accordingly, the purpose of this Act is to require the public utilities commission to open one or more proceedings to consider:

(1) Low- and moderate-income rates, bill credits, or direct payments and whether these would be appropriate for the State;

(2) The advantages and disadvantages of rate design, program offerings, and the requirements of community benefits agreements to address energy burden, energy insecurity, and environmental and energy justice concerns related to the siting of energy projects; and

(3) Other customer-centric solutions to lessen the energy burden on low- and moderate-income customers and determine appropriate benefits above and beyond those accrued to the overall electric grid for communities that serve as geographic hosts to utility scale energy projects.

SECTION 2. 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- Energy rates; low- and moderate-income consumers; proceeding. The public utilities commission shall open one or more proceedings to consider the following:

(1) Low- and moderate-income rates, bill credits, or direct payments and whether these would be appropriate for the State;

SECTION 3. New statutory material is underscored.

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

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1521
THIRTY-FIRST LEGISLATURE, 2022
STATE OF HAWAII