STAND. COM. REP. NO. 1073

Honolulu, Hawaii

RE: S.B. No. 1154

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection and Ways and Means, to which was referred S.B. No. 1154, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

beg leave to report as follows:

The purpose and intent of this measure is to authorize government agencies to wheel electricity over the existing transmission lines of a third-party electric public utility, excluding member-owned cooperatives, that is produced by their own facilities from renewable energy sources to another government agency's facilities, subject to certain restrictions.

Your Committees received testimony in support of this measure from the Ulupono Initiative. Your Committees received testimony in opposition to this measure from Hawaiian Electric and International Brotherhood of Electrical Workers Local Union 1260. Your Committees received comments on this measure from the Department of Commerce and Consumer Affairs, Public Utilities Commission, Life of the Land, and Sustainable Energy Hawai‘i.

Your Committees find that due to rising energy costs, many state departments and agencies, particularly educational facilities, face severe cost shortfalls prompting a need for emergency appropriations. However, other state facilities generate a surplus of electricity from renewable resources that goes unused, despite being connected to the same electricity grid as other state facilities that need the electricity. Wheeling occurs when electric power is transmitted from a seller's power generation facility to a customer's power-consuming facilities over the existing transmission lines of a third-party electric public utility. By allowing intragovernmental wheeling, it may encourage government agencies that have excess land or rooftop space at one facility to generate renewable energy on site, even if it cannot all be used at the same location, to reduce the cost of energy overall for state facilities and benefit tax-payers. This measure allows wheeling by government agencies, which promotes energy efficiency.

Your Committees acknowledge the concerns raised in testimony that this measure could impair economic development and cause job displacement. Therefore, amendments to this measure are necessary to address these concerns.

Accordingly, your Committees have amended this measure by:

(1) Inserting language clarifying that the Public Utilities Commission's docket to determine terms to ensure wheeling is done in the public interest may include:

(A) The timely execution of a workforce and community agreement with all stakeholders who may be economically impacted or displaced prior to authorization; and

(B) Maintaining compliance with conditions for certain federal funding; and

(2) Inserting an effective date of July 1, 2050, to encourage further discussion.

As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Ways and Means that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1154, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 1154, S.D. 2.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Ways and Means,

________________________________ DONOVAN M. DELA CRUZ, Chair

________________________________ JARRETT KEOHOKALOLE, Chair