STAND. COM. REP. NO. 2916

Honolulu, Hawaii

RE: S.B. No. 3194

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 3194, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

begs leave to report as follows:

The purpose and intent of this measure is to authorize independent generators of renewable energy to wheel the renewable electricity they produce to users of renewable energy under administrative rules established by the Public Utilities Commission.

Your Committee received testimony in support of this measure from Tawhiri Power LLC, Hawaii Solar Energy Association, and Blue Planet Foundation.

Your Committee received comments on this measure from the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs, Hawaii State Energy Office, Public Utilities Commission, Ulupono Initiative, Kauaʻi Island Utility Cooperative, and Hawaiian Electric.

Your Committee finds that retail wheeling, also known as third party access, is when a generator of power, whether an independent power producer, utility, or broker, sells power directly to an end user in another electric utility's territory. Through retail wheeling, a power generator bypasses the end-user's local electric utility, but uses the electric utility's transmission lines to sell to the electric utility's customer. In return, the power generator pays reasonable compensation to the electric utility for the use of its infrastructure. Your Committee finds that by authorizing retail wheeling for independent renewable energy generators, this measure, in its proposed form, would incentivize the development of more renewable energy projects, such as large solar and windmill farms, create new markets for clean and cost-efficient renewable energy throughout the State, and help Hawaii meet its ambitious renewable energy goals.

Your Committee has amended this measure by:

(1) Inserting language that requires the Public Utilities Commission to first determine whether retail wheeling is in the public interest and if so determined, adopt administrative rules or establish orders, policies, and procedures to implement retail wheeling;

(2) Inserting language to require the Public Utilities Commission to submit a report of its decision on retail wheeling, along with its findings and recommendations, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2026;

(3) Amending section 1 to reflect its amended purpose; and

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

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3194, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3194, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

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JARRETT KEOHOKALOLE, Chair