In March, the House Energy and Environmental Protection Committee heard a controversial bill with enormous implications for renewable energy in Hawaii.

The overarching idea, pushed by Hawaii Senate Ways and Means Chairman Donovan Dela Cruz, was for the Legislature to prescribe by law that each island generate at least 55% of its renewable energy from “firm renewables,” primarily generators burning things like wood, renewable natural gas and biodiesel.

In the face of concerns from a range of parties including Hawaiian Electric, the State Energy Office and the University of Hawaii’s Natural Energy Institute, the Energy and Environmental Protection Committee’s chair, Rep. Nicole Lowen, led a unanimous committee vote to delete the prescriptive language.

But that, as it turns out, wasn’t the end.

A Senate bill headed to Gov. David Ige’s desk would help projects like the Big Isand’s controversial Hu Honua Bioenergy. The bill’s sponsor says its goal is to create a green energy economy. Cory Lum/Civil Beat/2022

Fast forward to April 29, and Lowen and her committee vice chair, Rep. Lisa Marten, did an about-face.

During a closed-door process held out of public view during the waning days of the session, with no public testimony or public debate, Lowen and Marten voted to put the requirements back, although watered down. Each island would have to use firm renewables for a third of its renewable portfolio. Any other source, like solar, would be capped at 45% of the island’s total energy portfolio.

The bill moved out of conference committee and was quickly adopted by the Legislature.

Now, with the measure headed to Gov. David Ige for his signature, the outcry against it has grown. Solar energy advocates say the measure will kill their industry. Utilities say the bill makes their job a lot harder.

“We really do support and appreciate the need for firm renewables as part of the portfolio,” said Jim Kelly, vice president for government and community relations and corporate communications for Hawaiian Electric Co., which operates utilities on Oahu, Maui and the Big Island.

But Kelly said mandating percentages of energy to be used will make it much harder for Hawaiian Electric to manage the thorny task of shifting to renewables.

“We think that is going to impede our ability to reach 100% renewable energy,” he said.

Beth Tokioka, a spokeswoman for Kauai Island Utility Cooperative, the Garden Isle’s utility, echoed the theme that mandated quotas were a hindrance.

“The more flexibility we have moving forward the better it is for us,” she said.

Large solar farms like this one on Kauai have made the Kauai Island Utility Cooperative a leader in Hawaii’s transition to renewables. Whether a new bill could hinder KIUC’s future developments could depend on how the law is implemented, a spokeswoman said. Nathan Eagle/Civil Beat/2019

To Dela Cruz, the bill’s original sponsor, the overarching priorities are keeping the lights on, protecting and creating jobs and diversifying the state’s portfolio of renewable energy resources. As chairman of the Senate Ways and Means Committee, Dela Cruz has enormous power, with the ability to effectively kill any bill that involves money. He’s now using that clout to push forward the energy measure over objections from numerous energy industry stakeholders.

“We want to make sure we create an energy economy,” he said in an interview, explaining why he’s fighting so hard.

Although energy experts argue that technologies combining things like photovoltaic solar farms and massive battery storage are creating reliable systems that generate power at much lower cost than power plants burning things like trees to run generators, Dela Cruz has a different view.

He says solar and wind projects do little to create permanent energy jobs. He envisions industries not just growing and harvesting trees to fuel power generators, but also local refineries producing biofuels and geothermal power plants that will employ far more people than solar farms.

Union workers who might be put out of work by Hawaii’s transition to renewables, he says, will be able to retrain to work at firm renewables facilities producing electricity that, according to his bill, is “always available and capable of being continuously produced twenty-four hours per day, 365 days per year.”

Senate Ways and Means Chair Donovan Dela Cruz speaks to the Civil Beat Editorial Board, Wednesday, Feb. 2, 2022.
Sen. Donovan Dela Cruz, chairman of the Senate Ways and Means Committee, said his controversial bill is in part about protecting and creating jobs. Nathan Eagle/Civil Beat/2022

Kauai’s utility offers a case study in why prescribing certain percentages by law can complicate the thorny task utilities already face.

KIUC has been a leader in Hawaii’s push to renewables, thanks in part to the utility’s early adoption of massive batteries to store energy from big solar farms. Tokioka dispelled rumors that the utility already exceeds the bill’s 45% limit on solar.

But she said much might depend on how officials define various types of renewables – including, for instance, whether huge Tesla batteries charged with solar energy are considered solar, or something else.

The provision requiring each island utility to draw at least 33% of its renewable energy from firm renewables also complicates things. For example, while Tokioka said KIUC now produces 33% of its renewable electricity from firm renewables, that could soon change. The utility’s next project is a hydroelectric system that will use solar energy during the day to pump water uphill to a reservoir. At night the utility will be able to release the water to turn turbines to create electricity.

While reliable, such a project does not appear to meet the definition of a “firm renewable” project generating electricity 24 hours a day, seven days a week, 365 days a year, rain or shine. That means the new project could tip KIUC’s quota of firm renewables out of compliance with the bill’s prescribed percentage: when the project comes online, KIUC’s overall renewables pie will grow, but the “firm renewables” slice will not.

If that did happen, KIUC could bring things back into compliance by burning biofuels to increase “firm renewables” generation from existing generators, Tokioka said.

But, she said, that “would be more expensive than oil at this point.”

Still, Tokioka said, it’s not clear that the hydroelectric storage project would tip KIUC out of compliance and what the consequence of noncompliance would be if that did happen.

“It’s going to come down to the implementation and how different sources of renewable energy are categorized,” she said.

Hawaiian Electric’s Kelly was more direct. He said the company’s projections indicate solar will make up more than 45% of the energy portfolios for Oahu, Maui and Lanai in coming years. In fact, he said, a solar with battery storage project planned for Lanai could push Hawaiian Electric past the 45% limit for that island.

“That’s the kind of thing we’re going to have to work through,” he said.

As for the 33% firm renewables requirement, Kelly said, “We looked at the numbers, and we can live with it.”

‘Star Chamber Process’

Perhaps the biggest loser in this is the solar industry.

“The provisions of the bill will basically put a moratorium on solar development for some islands,” said Rocky Mould, executive director of the Hawaii Solar Energy Association, a trade organization.

Colin Yost, chief operating officer for RevoluSun, echoed Kelly, saying the bill actually will slow down Hawaii’s move to renewables.

“We’ve just got to keep doing what we’re doing but do it faster,” he said. “This bill will slow down everything.”

Rep Nicole Lowen during info forum on cesspools.
It’s not clear why Rep. Nicole Lowen, chair of the House Energy and Environmental Protection Committee, largely undid the committee’s amendments during conference committee. Cory Lum/Civil Beat/2018

The biggest visible winner for now appears to be Hu Honua, a controversial Big Island project that wants to burn trees for power. The project, which is under review by the Hawaii Public Utilities Commission, has come under criticism from environmentalists who say it’s a bad idea to burn wood for energy.

Others, such as Dean Nishina, executive director of the Hawaii Division of Consumer Advocacy, point out that Hu Honua’s electricity will be more expensive than alternatives like solar and that consumers would be locked into paying the higher rate for 30 years.

Isaac Moriwake, an attorney with Earthjustice who practices before the Public Utilities Commission, said Hu Honua is a “tail that’s wagging the dog with these senators.”

“It is a true tail-wagging-the-dog situation that I have not seen in 10 years of practicing before this agency,” he said.

Hu Honua officials did not respond to an emailed request for comment. John Williamson, a public relations executive who has worked for Hu Honua, declined to comment.

Dela Cruz denied the bill was meant to benefit Hu Honua.

“I don’t know why people keep talking about Hu Honua,” he said. “This is about the big picture. It’s supposed to be technology agnostic.”

Finally, there’s the process of how the bill was amended: in what Yost described as a secretive “star chamber process” with no input from the industry executives, energy experts and government agencies that normally establish policies through robust and sophisticated public debate before the PUC.

Moriwake also noted that a handful of lawmakers creating energy policy in private isn’t the norm.

“It just violates every principle about how regulation of our utility works,” he said. “This is a meritocracy, and the best ideas win. It’s not about politics.”

There’s also the question of why Lowen flipped. Known as a progressive on environmental issues, Lowen “has been a really good ally for renewable energy,” the solar energy association’s Mould said.

Lowen did not return an email and call for comment. Her committee vice chair, Marten, also did not return an email and call.

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