SB3163

SECTION 1. The legislature finds that Hawaii is ranked as one of the highest in the United States for solar power generation per capita. In addition to importing electricity generated by customers to the grid, Hawaii can create a more comprehensive and long-term solution that solves the problem of excess electricity generation during daylight hours. Solar power will be key to achieving the State's goal of generating one hundred per cent of the State's electricity from renewable energy sources by 2045. Excess renewable energy is already a significant problem that often leads to curtailment or other policies that limit the development and utilization of solar and wind power, both of which are variable sources of power.

The legislature also finds that energy storage is one solution to the problem of excess electricity generation during daylight hours. However, energy storage is often expensive and limited in capacity. An alternative option is to sell excess electricity to consumers such as computer companies or agricultural growers during daylight hours at the net cost to the electric utility. The sale of excess electricity from the grid to consumers at net cost is known as "smart imports".

The legislature further finds that smart imports can reduce electricity rates and effectively use the abundance of solar power during daylight hours. This can help more Hawaii residents and businesses transition to using electric vehicles through low or no-cost charging during daylight. Smart imports can significantly boost the renewable energy, battery storage, and electric vehicle industries.

The legislature further finds that enabling flexible electricity consumption during periods of excess renewable energy generation enhances grid stability, reduces curtailment, and provides economic benefits to consumers who can shift energy use to align with renewable energy generation patterns. Priority applications for smart imports include electric vehicle charging, thermal energy storage systems, water heating, agricultural irrigation and processing, and other loads that can flexibly adjust consumption timing.

Accordingly, the purpose of this Act is to:

(1) Establish a smart imports program to require electric utilities to offer excess electricity during daylight hours to consumers at cost to help create a more sustainable Hawaii; and

(2) Require the public utilities commission to initiate a proceeding to propose implementation of the program by January 1, 2028.

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

"§269- Smart imports program; renewable energy; excess electricity. (a) Beginning January 1, 2028, there is established the smart imports program, which shall require electric utilities to offer excess electricity at cost to consumers during daylight hours to be used for any legal purpose.

(b) The public utilities commission shall establish by rule:

(1) Time periods during which excess electricity is available, based on analysis of renewable energy generation patterns and grid load;

(2) The methodology for calculating and verifying "at cost" pricing, including:

(A) A transparent cost calculation formula;

(B) Independent verification procedures; and

(3) Eligible customer classes and use cases, including but not limited to:

(A) Electric vehicle charging stations and networks;

(B) Water heating systems, including thermal energy storage;

(D) Commercial refrigeration and cold storage;

(E) Data processing and computing facilities; and

(F) Other flexible loads capable of shifting consumption to periods of excess renewable energy generation;

(4) Real-time price signal requirements enabling consumers to respond to excess electricity availability;

(5) Utility reporting and compliance requirements, including:

(A) Quarterly reports on excess electricity periods and pricing;

(B) Program participation rates and customer enrollment;

(D) The impact on grid operations and renewable energy curtailment; and

(6) Consumer protection measures ensuring fair treatment and preventing gaming of cost calculations.

(1) Fail to offer excess electricity at cost as required by this section;

(2) Manipulate or misrepresent cost calculations;

(3) Fail to provide real-time pricing signals;

(4) Fail to submit required reports; or

(5) Otherwise fail to comply with rules adopted under subsection (b); provided that any penalty imposed under this subsection shall be sufficient to ensure compliance and may include fines, remedial actions, or other appropriate measures.

(d) Electric utilities shall prioritize smart imports program enrollment for:

(1) Public electric vehicle charging infrastructure;

(2) Agricultural operations supporting local food production;

(3) Affordable housing developments;

(4) Small businesses and local manufacturers; and

(5) Facilities providing essential community services.

(e) The public utilities commission shall ensure the smart imports program complements and integrates with other demand response programs, time-of-use rates, and grid services programs offered by electric utilities.

(f) For the purposes of this section:

"At cost" means the net cost to the electric utility of electricity, which may be zero or less than zero.

"Excess electricity" means electricity generated from renewable energy sources that exceeds current grid load and would otherwise be curtailed or exported at negative value.

"Flexible load" means electricity consumption that can be shifted in time or adjusted in response to grid conditions and pricing signals without significantly impacting the consumer's operations or comfort.

"Smart imports" means the sale of excess electricity from electric utilities to consumers."

SECTION 3. (a) The public utilities commission shall initiate a proceeding to study other states' smart imports programs, renewable energy, energy storage, and related solutions to excess electricity generation and propose a "smart imports program" in Hawaii to be implemented no later than January 1, 2028. The proceeding shall include:

(1) Analysis of smart imports or time-of-use programs in Arizona, California, Texas, and other jurisdictions with high renewable energy penetration;

(2) Evaluation of technologies and systems enabling real-time price responses;

(3) Assessment of potential impacts on electric vehicle adoption and charging infrastructure development;

(4) Analysis of opportunities for agricultural sector participation;

(5) Examination of consumer protection frameworks ensuring fair and transparent pricing;

(6) Evaluation of methods to integrate smart imports with battery storage deployment and grid modernization initiatives;

(7) Stakeholder engagement with consumer advocates, environmental organizations, businesses, agricultural groups, and technology providers; and

(8) Development of implementation timeline and milestones for the January 1, 2028, program launch.

(b) The public utilities commission shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2027. The report shall include:

(1) Detailed program design recommendations;

(2) Proposed cost calculation methodologies;

(3) Recommended eligible customer classes and use cases;

(4) Analysis of expected program participation and benefits;

(5) Projected impacts on renewable energy curtailment and grid operations;

(6) Consumer education and outreach strategy; and

(7) Draft rules for program implementation.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3163
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII