THE SENATE	S.B. NO.	72
THIRTY-SECOND LEGISLATURE, 2023		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO RENEWABLE ENERGY.

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

SECTION 1. The legislature finds that Act 97, Session Laws of Hawaii 2015, established a renewable portfolio standards target of one hundred per cent renewable electric energy by 2045. Act 15, Session Laws of Hawaii 2018, also established a statewide zero emissions clean economy target to sequester more atmospheric carbon and greenhouse gases than emitted within the State as quickly as practicable, but no later than 2045.

To move the State closer to its carbon negative target as soon as possible, which is needed to mitigate the damaging effects of projected sea level rise due to greenhouse gas emissions, the legislature finds that continual progress and the timely approval, commencement of construction, and completion of renewable energy projects is of paramount importance.

Renewable energy project developers currently must obtain public utilities commission approval of the project and the power purchase agreement before obtaining financing or expending significant moneys to begin construction of their respective projects. Accordingly, delays in receiving approvals from the public utilities commission typically results in delays to obtaining financing and the commencement of construction of the renewable energy project. The legislature further finds that renewable energy projects take multiple years to develop. A procedural framework is therefore necessary to ensure timely progression of these important projects.

The Hawaii natural energy institute informed the public utilities commission in December 2020, that the timely completion of renewable energy projects is critical to mitigate grid reliability issues. The legislature consequently finds that defining the timing of the public utilities commission's review process for renewable projects, power purchase agreements, and cost recovery applications, will not only help bring utility-scale renewable energy projects online sooner, it will also:

(1) Decrease electricity rates for consumers by providing project developers with added certainty regarding timing, which helps to lower bid pricing;

(2) Help achieve the State's renewable portfolio standards goals in a timely manner; and

(3) Help reduce greenhouse gas emissions earlier in order to mitigate climate change.

State departments need to implement more efficient ways to streamline government processing and the review of proposed renewable energy projects. Previously, the legislature has established time limits for state and county agencies by which they must issue decisions in certain types of matters. Specifically, section 269-16(d), Hawaii Revised Statutes, requires the public utilities commission to make every effort to complete its deliberations concerning ratemaking proceedings and issue its decision as expeditiously as possible within nine months from the date a public utility filed a certain application. However, due to the need to more timely facilitate the approval of renewable energy matters, the legislature finds that a six-month deadline is more appropriate. Therefore, the purpose of this Act is to:

(1) Require the public utilities commission to render decisions on certain renewable projects, power purchase agreements, and cost recovery applications within one hundred eighty days of the filing of the application;

(2) Exempt certain power purchase agreement amendments from the public utilities commission's review and approval process; and

(3) For ratemaking proceedings, require the public utilities commission to complete its deliberations and issue its decision before six months from the date a public utility has filed its application for approval.

SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269-   Public utilities commission decision-making for renewable energy matters. (a) Beginning July 1, 2023, the public utilities commission shall approve, approve with modifications, or deny matters for proposed:

(1) Renewable projects developed by a public utility;

(2) Renewable energy power purchase agreement applications;

(3) Projects to connect renewable facilities to the electric grid; and

(4) Cost recovery applications for required substation and infrastructure upgrades,

filed with the commission within one hundred eighty days of the filing. In carrying out this mandate, the public utilities commission shall set and enforce a procedural schedule that allows the commission to meet the one hundred eighty-day period. If the application is not approved, approved with modification, or denied by the commission within one hundred eighty days, the commission shall report the reasons therefor to the legislature and the governor in writing within thirty days after the expiration of the one hundred eighty-day period.

(b) For any power purchase agreement previously approved by the public utilities commission, any subsequent amendments thereto shall not require approval of the public utilities commission; provided that the amended power purchase agreement reduces the unit price of the energy or energy potential from the previously approved power purchase agreement.

(c) This section shall only apply to utility-scale renewable energy projects that are five megawatts in total output capacity or larger.

(d) This section shall not apply to a member-owned cooperative electric utility."

SECTION 3. Section 269-16, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

"(d) The commission shall make every effort to complete its deliberations and issue its decision as expeditiously as possible and before [nine] six months from the date the public utility filed its completed application; provided that in carrying out this mandate, the commission shall require all parties to a proceeding to comply strictly with procedural time schedules that it establishes. If a decision is rendered after the [nine-month] six-month period, the commission shall report in writing, on paper or electronically, the reasons therefor to the legislature within thirty days after rendering the decision.

Notwithstanding subsection (c), if the commission has not issued its final decision on a public utility's rate application within the [nine-month] six-month period stated in this section, the commission, within one month after the expiration of the [nine-month] six-month period, shall render an interim decision allowing the increase in rates, fares and charges, if any, to which the commission, based on the evidentiary record before it, believes the public utility is probably entitled. The commission may postpone its interim rate decision for thirty days if the commission considers the evidentiary hearings incomplete. In the event interim rates are made effective, the commission shall require by order the public utility to return, in the form of an adjustment to rates, fares, or charges to be billed in the future, any amounts with interest, at a rate equal to the rate of return on the public utility's rate base found to be reasonable by the commission, received under the interim rates that are in excess of the rates, fares, or charges finally determined to be just and reasonable by the commission. Interest on any excess shall commence as of the date that any rate, fare, or charge goes into effect that results in the excess and shall continue to accrue on the balance of the excess until returned.

The [nine-month] six-month period in this subsection shall begin only after a completed application has been filed with the commission and a paper or an electronic copy served on the consumer advocate. The commission shall establish standards concerning the data required to be set forth in the application in order for it to be deemed a completed application. The consumer advocate may, within twenty-one days after receipt, object to the sufficiency of any application, and the commission shall hear and determine any objection within twenty-one days after it is filed. If the commission finds that the objections are without merit, the application shall be deemed to have been completed upon original filing. If the commission finds the application to be incomplete, it shall require the applicant to submit an amended application consistent with its findings, and the [nine-month] six-month period shall not commence until the amended application is filed."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on June 30, 2023.

Report Title:

Renewable Energy; Public Utilities Commission; Electric Public Utilities

Description:

Beginning July 1, 2023, requires the Public Utilities Commission to render decisions on certain renewable projects, power purchase agreements, and cost recovery applications within one hundred eighty days of the filing of the application. Exempts certain power purchase agreement amendments from the Public Utilities Commission review and approval process in certain circumstances. For ratemaking proceedings, requires the Public Utilities Commission to complete its deliberations and issue its decision before six months from the date a public utility has filed its application for approval. Takes effect 6/30/2023. (SD1)

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