SB72 SD2

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 to mitigate climate change.

State departments need to implement more efficient ways to streamline government processing and the review of proposed renewable energy projects. 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 and establish application procedures and requirements;

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

(3) Require a public utility requesting an amendment to a power purchase agreement to submit an informational filing to the public utilities commission.

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) Relating to applications filed on or after 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) In making its determinations for applications under subsection (a), the commission shall:

(1) Require the filing of an application that includes, at a minimum, standard required information to support a determination of the reasonableness of the proposed project, the necessity of the project at the proposed costs, a demonstration of community support, and other commission guidelines to allow expeditious review of a requested project. The Commission shall determine what information is necessary to include in the applications for each type of project or proposal;

(2) Require that the project, to the fullest extent possible, has received the necessary approvals from the relevant government agencies prior to filing its application;

(3) Allow for parties to submit a mutually agreeable request for an extension to the procedural schedule to allow for reasonable time to review; and

(4) Not be required to file a report to the legislature and the governor if any of the prior conditions are not met.

(c) For any power purchase agreement previously approved by the public utilities commission, and subsequent amendments filed on or after July 1, 2023, shall not require approval of the public utilities commission; provided that:

(1) The power purchase agreement is for renewable power generation;

(2) The amended power purchase agreement reduces the unit price of the combined energy payments, capacity payments, and any other payments, or the effective cost of the project;

(3) The effective cost of the project is lower than the average retail price per kWh of electricity produced by renewable generation on the utility system for the utility submitting the application for the entire term of the amended contract;

(4) The power purchase agreement does not include limitations on how it can be operated, such as minimum dispatch requirements, provisions for curtailment priority, or others; and

(5) The power purchase agreement is extended for not more than five years.

(d) The public utility requesting an amendment to a power purchase agreement shall submit an informational filing to the public utilities commission and all parties to the original power purchase agreement proceeding. The contents of the informational filing shall be determined by commission order or by rules adopted by the commission. The informational filing shall be available for public review for a period of two months, at which time it shall not require further commission action, unless the informational filing does not satisfy the filing requirements or there are concerns from the public or a party that require review through a subsequent commission proceeding.

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

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

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	72
THIRTY-SECOND LEGISLATURE, 2023		S.D. 2
STATE OF HAWAII