STAND. COM. REP. NO. 1072

Honolulu, Hawaii

RE: S.B. No. 839

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. 839, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO RENEWABLE ENERGY,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish the Hawaii Electricity Reliability Surcharge Special Fund;

(2) Require the Public Utilities Commission to establish reliability standards and interconnection requirements for all users, owners, or operators of the Hawaii electric system and determine the responsibility of costs associated with any reliability standards or inter-connection requirements;

(3) Require the Public Utilities Commission to establish:

(A) The distinction between interconnection facilities and utility network upgrades;

(B) That the cost of interconnection facilities shall be the responsibility of the interconnection customer; and

(C) That the cost of utility network upgrades shall be the sole responsibility of the transmission provider;

(4) Establish a timeline and requirements for interconnection procedures to be established by the Public Utilities Commission for certain utility-scale renewable energy projects;

(5) Require implementation of the Hawaii Electricity Reliability Administrator Law upon establishment of the Hawaii Electricity Reliability Administrator Surcharge;

(6) Beginning January 1, 2024, require the surcharge to be imposed on certain customers to cover the costs of the Administrator to be deposited into the Hawaii Electricity Reliability Surcharge Special Fund Subaccount;

(7) Require the Public Utilities Commission to submit a report and assessment of the Hawaii Electric Reliability Administrator to the Legislature; and

(8) Appropriate funds to be deposited into the Hawaii Electricity Reliability Surcharge Special Fund.

Your Committees received testimony in support of this measure from the Hawaii Clean Power Alliance. Your Committees received testimony in opposition to this measure from the Hawaiian Electric Company, Inc. Your Committees received comments on this measure from the Department of Commerce and Consumer Affairs, Public Utilities Commission, and Ulupono Initiative.

Your Committees find that accelerating the development of renewable energy to reduce greenhouse gases is a high priority and that the Legislature has enacted numerous Acts to achieve this objective. The timely completion of grid-connected renewable energy projects will help the State achieve the targets and limits established through prior legislation. However, your Committees find that electric public utility companies are experiencing interconnection delays that increase development costs and extend renewable project timelines. Additionally, the State does not regulate interconnection costs, which results in the ratepayer bearing the full financial burden of both interconnection costs and utility network upgrades in the electricity rates. Your Committees believe that this measure will establish grid reliability standards, regulate the timely and transparent interconnection of utility-scale renewable energy projects, and help distinguish the cost responsibilities between interconnection facilities and utility network upgrades to assist the State in achieving its ambitious energy goals.

Your Committees have amended this measure by:

(1) Clarifying the Hawaii Electricity Reliability Administrator surcharge shall be imposed on the bills of customers of investor-owned electric utility companies, rather than Hawaiian Electric customers;

(2) Inserting a blank appropriation amount;

(3) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

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. 839, S.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 839, 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