SB2579 SD1

SECTION 1. The legislature finds that rural areas of Maui county, such as Molokai and Lanai, have some of the highest electricity rates in the State, with water pumping constituting twenty to forty per cent of water utility operating budgets. Power outages can impede access to water for agricultural, household, and emergency use, threatening food security and community safety. While rural and agricultural communities may host many renewable energy developments, these communities often receive little economic benefit or infrastructure investment in return.

The legislature further finds that billions of gallons of water flow through the Molokai irrigation system each year, which is managed by the department of agriculture and biosecurity agricultural resource management division. This system requires year-round pumping, regardless of operational status to fill up and maintain a serviceable reservoir, creating unnecessary budget pressure. Because the irrigation system is a critical agricultural resource, it is imperative that it is accessible and affordable for farmers.

The legislature also finds that because water pumps have flexible operating schedules, they are ideal candidates for solar battery systems. On-site renewable energy can eliminate or dramatically reduce electricity costs for water pumping. Additionally, microgrids can maintain water access during grid outages, improving disaster resilience.

Accordingly, the purpose of this Act is to establish a temporary water-energy resilience competitive grant program in the county of Maui to convert water pumping and irrigation facilities to renewable microgrids to reduce electricity costs and improve disaster resilience.

Section 2. (a) The Hawaii state energy office shall develop and implement a three-year water-energy resilience competitive grant program in the county of Maui to convert water pumping and irrigation facilities to renewable microgrids to reduce electricity costs and improve disaster resilience.

(b) The grant program shall be phased. The first phase shall consist of a desktop analysis to compile and assess existing information on groundwater pumping, irrigation energy use, facility conditions, land availability, and associated solar feasibility, security requirements, and grid vulnerability. The second phase shall be an implementation phase to provide grants to qualified applicants to convert two to three high impact water pumping or irrigation facilities in Maui county to renewable microgrids; provided that these facilities shall serve agricultural irrigation or community water needs. The renewable microgrids shall include solar panels, battery storage, and smart pump controls.

(c) The Hawaii state energy office shall collaborate with the department of agriculture and biosecurity, department of land and natural resources, and the county of Maui to carry out the grant program, which shall include the following success metrics:

(1) A target of forty to sixty per cent reduction in electricity costs for participating facilities;

(2) Ability to maintain water pumping during grid outages;

(3) The training of six to ten local technicians; and

(4) A demonstrated ability to scale the model for other counties in the State;

provided that the Hawaii state energy office shall provide technical assistance for design and installation of any approved grant project and shall provide training for local technicians to operate and maintain the systems.

(d) The water-energy resilience competitive grant program shall emphasize:

(1) Community benefit over corporate profit;

(2) Local hiring and training requirements;

(3) Farmer and rancher input on site selection; and

(4) Transparent reporting on cost savings and benefits.

(e) Requests for grants shall be submitted to the Hawaii state energy office in accordance with administrative rules adopted to administer the grant program.

(f) Applications for grants shall be made to the Hawaii state energy office and contain the information as shall be required by rules adopted to administer the grant program. At a minimum, the applicant shall:

(1) Be licensed or accredited, in accordance with federal, state, or county statutes, rules, or ordinances, to conduct the activities or provide the services for which a grant is awarded;

(2) Provide a detailed plan outlining the scope, objectives, and projected impact of the project or projects, including a clear breakdown of how grant funds will be expensed;

(3) Agree to use state funds exclusively for the purposes of these programs;

(4) Indicate the capability to carry out the proposed project and properly administer grant funds; provided that the Hawaii state energy office shall prescribe the applicant qualifications for each grant;

(5) Comply with all applicable federal and state laws prohibiting discrimination against any person on the basis of race, color, national origin, religion, creed, sex, age, sexual orientation, disability, or any other characteristic protected under applicable federal or state law;

(6) Agree not to use state funds for purposes of entertainment or perquisites;

(7) Comply with any additional requirements prescribed by the Hawaii state energy office;

(8) Comply with all applicable federal, state, and county statutes, rules, and ordinances;

(9) Agree to indemnify and hold harmless the State and its officers, agents, and employees from and against any and all claims arising out of or resulting from activities carried out or projects undertaken with grant funds provided hereunder and procure sufficient insurance to provide this indemnification if requested to do so by the Hawaii state energy office; and

(10) Agree to make available to the Hawaii state energy office all records the applicant may have relating to the grant, to allow state agencies to monitor the applicant's compliance with this section.

(g) The Hawaii state energy office may adopt rules pursuant to chapter 91, Hawaii Revised Statutes, to use a phased approach to implement the water-energy resilience competitive grant program.

(h) The Hawaii state energy office shall submit a report of its findings and recommendations to the legislature no later than twenty days prior to the convening of the regular sessions of 2027 and 2028, which shall include:

(1) Cost savings for the county of Maui;

(2) Outage resilience, including hours of water pump operation during microgrid failures;

(3) The number of jobs created and individuals trained in the water-energy resilience competitive grant program; and

(4) Technical performance data.

(i) The Hawaii state energy office shall submit a final report of its findings and recommendations, including any proposed legislation for expansion of the three-year water-energy competitive grant program, to the legislature no later than twenty days prior to the convening of the regular session of 2029.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2026-2027 for the three-year water-energy resilience competitive grant program.

The sum appropriated shall be expended by the Hawaii state energy office for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2050, and shall be repealed on June 30, 2027.

THE SENATE	S.B. NO.	2579
THIRTY-THIRD LEGISLATURE, 2026		S.D. 1
STATE OF HAWAII