HB1568 HD1

SECTION 1. The legislature finds that the State must ensure that any consideration of importing natural gas into the State is conducted in a manner that protects ratepayers, advances the State's clean energy goals, and safeguards Hawaii's long-term economic and environmental interests.

The legislature further finds that proponents of natural gas have asserted that its use would reduce electricity costs and greenhouse gas emissions relative to imported petroleum fuels; however, sufficient, transparent, and verifiable evidence has not been provided to substantiate these claims. The legislature additionally finds that long-term investments in natural gas infrastructure may expose ratepayers to significant financial risks, including stranded asset costs, fuel price volatility, and long-term contractual obligations that could inflate electricity costs over time and crowd out current and future opportunities for real cost savings.

The legislature also finds that Hawaii has established a statutory mandate to achieve one hundred per cent renewable portfolio standards by 2045 and that substantial new investment in fossil fuel infrastructure may undermine progress toward this goal by diverting capital, policy focus, and market signals away from the development of indigenous, renewable energy resources that are cleaner, more affordable, and not subject to import price fluctuations.

Accordingly, the purpose of this Act is to:

(1) Prohibit the public utilities commission from approving costs of infrastructure, operations and maintenance, fuel, or other costs relating to supplying and using liquefied natural gas unless certain conditions are met; and

(2) Require the public utilities commission to consider the effect of fossil fuels on renewable energy, stranded investment risks and costs, and costs and risks of reliance on a single fuel supply or monopoly supplier when making determinations of the reasonableness of the costs pertaining to electric or gas utility system capital improvements and operations.

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

"§269- Liquefied natural gas; cost approval. (a) In considering the approval of any costs of liquefied natural gas infrastructure, operations and maintenance, fuel, or other costs relating to supplying and using liquefied natural gas, the public utilities commission shall require the following conditions:

(1) All liquefied natural gas infrastructure costs shall be fully amortized no later than 2045, and utility customers shall not be obligated to pay the costs of any stranded investments;

(2) Any power purchase or fuel supply agreement shall not include any volumetric commitments or take-or-pay requirements for fuel supplies and shall include provisions for supplies declining to zero no later than 2045;

(3) Any power purchase or fuel supply agreement shall not result in increased costs for customers in the counties of Hawaii, Kauai, or Maui, including costs arising from downstream effects of changing fuel supplies or suppliers for those counties; and

(4) Any approval shall include protections for customers from fuel price volatility, including but not limited to provisions for the utility to share in fuel price changes, which shall begin at no less than ten per cent and shall increase over time in line with declining fuel supply volumes;

provided that the public utilities commission shall not approve any costs related to liquefied natural gas if more cost-effective, non-fossil-fuel alternatives are available to a utility or if approving the power purchase or fuel supply agreement would commit a utility to purchasing a greater amount of liquefied natural gas than necessary to accommodate the maximum amount of renewable energy on the grid.

(b) For the purposes of this section:

"Liquefied natural gas" means a natural gas, consisting primarily of methane, that has been cooled to a liquid state for shipping and storage.

"Liquefied natural gas infrastructure" means any import terminal, regasification facility, pipeline, or storage unit used to transport, receive, regasify, liquefy, or distribute liquefied natural gas."

SECTION 3. Section 269-6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The public utilities commission shall consider the need to reduce the State's reliance on fossil fuels through energy efficiency and increased renewable energy generation in exercising its authority and duties under this chapter. In making determinations of the reasonableness of the costs pertaining to electric or gas utility system capital improvements and operations, the public utilities commission shall explicitly consider, quantitatively or qualitatively, the effect of the State's reliance on fossil fuels on:

(1) Price volatility;

(2) Export of funds for fuel imports;

(3) Delay or displacement of renewable energy use or development;

(4) Diversion of attention and resources away from maximizing present and future cost savings from renewable energy sources;

(5) Stranded investment risks and costs;

(6) Costs and risks of reliance on a single fuel supply or monopoly supplier under a long-term obligation;

[~~(3)~~] (7) Fuel supply reliability risk; and

[~~(4)~~] (8) Lifecycle greenhouse gas emissions; provided that the public utilities commission may waive the requirement for a lifecycle greenhouse gas emissions assessment for energy projects that do not involve combustion.

The public utilities commission may determine that short-term costs or direct costs of renewable energy generation that are higher than alternatives relying more heavily on fossil fuels are reasonable, considering the impacts resulting from the use of fossil fuels. The public utilities commission shall determine whether such analysis is necessary for proceedings involving water, wastewater, or telecommunications providers on an individual basis."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 3000.

HOUSE OF REPRESENTATIVES	H.B. NO.	1568
THIRTY-THIRD LEGISLATURE, 2026		H.D. 1
STATE OF HAWAII