- Special Projects
Updated 9:15 a.m., 2/4/2016
Should Hawaii set a goal of burning no fossil fuels for electricity by 2045?
If you’re thinking the state already did that last year, the fact is, it left itself some wiggle room.
Lawmakers plan to revisit the state’s 100 percent renewable goal Thursday morning, when the Energy and Environmental Protection Committee hears House Bill 2575.
It’s one of more than two dozen energy measures this session that would affect the Public Utilities Commission. The efforts include setting parameters on when electric rates can be increased, controlling the chair’s power to manage staff, and making sure there’s a “substantial net benefit” in the proposed $4.3 billion sale of Hawaiian Electric Industries to Florida-based NextEra Energy.
Among its long list of duties, the PUC regulates Kauai Island Utility Cooperative; Hawaiian Electric Industries’ utilities on Oahu, Maui and the Big Island; gas and coal companies; and independent power producers, including wind and solar farms.
Under House Bill 2575, the commission would be authorized to set reasonable interim percentages to get to zero percent fossil fuels, allow for variances and determine penalties for the utilities if they fail to comply.
The law currently says each electric utility company must establish a renewable portfolio standard of 100 percent of its net electricity sales by Dec. 31, 2045. The standard is defined as “the percentage of electrical energy sales that is represented by renewable electrical energy.”
Under this formula, that percentage is based on sales not generation, so it’s possible to meet the goal while still burning coal, natural gas or oil for power.
Despite assurances from officials that the state wasn’t trying to create loopholes, lawmakers are considering a cleaner way of kicking the state’s oil addiction.
“We want to remain on track for our clean energy future,” said Rep. Chris Lee, who introduced the bill and chairs the Energy and Environmental Protection Committee.
Both House Bill 2291, which has a hearing later Thursday morning, and its Senate counterpart strike at the same issue — trying to clean up the technical language to ensure that 100 percent renewable means 100 percent.
The legislation, which was part of Gov. David Ige’s package of bills, would base the renewable portfolio standard calculation on electricity generation instead of sales.
Many of the PUC-related measures have yet to gain traction this session, which started Jan. 20, and plenty of them are carryover bills that stalled last session.
Ideas like requiring periodic financial audits of the agency, for instance, or giving people cheaper electric rates if they live within a mile of a wind farm, were introduced and that’s as far as they’ve come.
But House and Senate committees have started to schedule times this week and next to consider a handful of new proposals.
House Bill 2616, set to be heard at 8 a.m. Thursday by the House Energy and Environmental Protection Committee, would help renters and others who now can’t take advantage of onsite clean energy options like rooftop solar to do so by creating community-based renewable energy tariffs.
The state passed a law last year to do this, but the plan Hawaiian Electric submitted in response “fell far short of the legislature’s vision, in scope, scale, and accessibility,” according to the legislation.
Blue Planet Executive Director Jeff Mikulina said it’s been “incredibly frustrating” to the clean-energy nonprofit to get a law passed to do community solar projects after working on it for four years but then have Hawaiian Electric thwart the effort by piling on restrictions that make it unfeasible.
“People have just waited far too long,” he said.
Lee said the program should be “open and fair” to anyone who’s interested.
“This bill much more explicitly lays out the program in the statute so the utility or anyone else can’t mess with the technical details to try to keep control over the different projects that might arise,” he said.
Another bill set to be heard Thursday morning would change the rules for how the PUC approves electric rate increases. House Bill 2649 says the rate would only be considered “just and reasonable” if it’s derived from an earnings-impact mechanism that directly ties the utility’s revenues to meeting certain performance-based metrics and conditions.
Regardless of which company owns the utilities in Hawaii, Lee said it’s critical to protect ratepayers from having infrastructure costs passed down to them — especially in light of the billions of dollars that are expected to be spent on a new 21st Century grid.
“Right now utilities are able to recover costs for infrastructure, so they have a financial incentive to inflate costs and build the biggest power plants,” Lee said. “This bill is about rightsizing those projects for the public instead of oversizing them to boost profits at our expense.”
Senate Bill 3124, set to be heard Feb. 12, would require the PUC chair to have one of the two other commissioner’s approval to fire or fire an executive officer. It also allows each commissioner to hire five professional staff members plus assistants and their own personal attorney.
There has been friction between PUC Chair Randy Iwase and his fellow commissioners, Lorraine Akiba and Mike Champley.
Some of the concerns are over his “I’m not here to make everyone happy” management style. But he’s received support for getting dockets moving that were idling due to poor strategic planning, staff problems and an inability to come to a consensus on policy direction, as a state audit put it.
After taking over as chair in January 2015, Iwase implemented his so-called “American Flag” process for commissioners to follow when drafting and reviewing key opinions that the PUC issues. It sets a three-day deadline for the commissioners to respond to draft decisions once they’ve been circulated, and an up-or-down vote on any amendments and the overall opinion.
Iwase has also issued a directive saying he will be the one to prioritize work for the commission and staff members.
Legislation introduced in the House and Senate would require the PUC to include at least one person from a neighbor island, and allow them to work remotely by attending hearings via teleconference or video conference.
Last year, the Legislature allocated additional resources for the PUC to beef up its staff, which it did in large part to handle the massive docket to determine if NextEra Energy should be allowed to buy HEI.
The PUC’s quasi-judicial hearing process for that case resumed this week, and a decision is expected this summer.
Bills carried over from the 2015 session would set criteria for the PUC to apply when approving a merger. The legislation cleared the House last year but the Senate hasn’t set a hearing yet this session.
However, House Bill 2567 — introduced this session by Lee and Reps. Cullen, Matt LoPresti and Cynthia Thielen — is expected to be heard as soon as next week.
The legislation establishes “substantial net benefit” as the standard that the PUC must apply when considering whether to approve the transfer or assignment of a franchise.
Rather than giving an OK under a “no net harm” standard, Lee said, this bill says the deal should be better than the status quo.
“It’s not to say the PUC won’t go this direction, but it’s just to be sure because we have an obligation to look out for our residents before anything else,” he said.
Update Iwase said the best way to go on many of these issues is through the PUC’s docket process. He said he’s concerned that the Legislature may be jumping the gun.
“We just opened a docket on community renewables. Now we have more bills on that,” he said. “My goodness, let us try to get the groundwork laid with the players. And if changes are needed, we’ll let you know.
“If you are interacting with the players in the field and hear from them that change is needed, then go ahead and do it,” Iwase added. “But give us time to set the foundation through the process of the dockets.”
– Eric Pape contributed reporting to this story.