SB1087, which estabishes a green financing loan program that can help fund on-bill financing, passed out of conference committee and is headed to the floor for a final vote. Learn more about the program here or read the Star-Advertiser article here. Our program director, Richard Wallsgrove, was there at the legislature fighting for it all the way. Go Richard!

"It's a game-changer, that's the best way to put it," said Richard Wallsgrove, program director at the Blue Planet Foundation.

"It's innovation because we're taking all of these pieces that people have figured out — rich guys in suits in New York who have figured out how bonds work to finance big projects — and rather than financing coal plants and nuclear power plants, now we're going to finance rooftop solar, energy efficiency in homes — so, things that are directly going to drive down people's bills. And anybody can sign up for it. There's no limit to the impact it could have on our energy infrastructure."

The 2012 legislative session ended May 3, with mixed results for clean energy. The main three key actions taken by the legislature with Blue Planet’s support were passage of the Hawaii Electricity Reliability Administrator and the interisland cable regulatory bill, and confirmation of Mike Champley and Lorraine Akiba to the Public Utilities Commission.

Hawaii Electricity Reliability Administrator (HERA)
The priority clean energy policy this session was SB 2787, which establishes the Hawai‘i Electricity Reliability Administrator, or HERA. As more independent power producers and distributed energy systems plug into the grid, they face numerous technical, operational, and regulatory issues presented by Hawai‘i's century-old electrical system. These obstacles hinder interconnection and compromise reliability, stifling the potential of renewable energy production. The HERA policy establishes formal, objective, and verifiable reliability and interconnection standards for Hawai‘i’s electricity grids. Having an independent entity—not the electric utility—
set the “rules of the road” for reliability and interconnection would enable increased integration
of renewables and greater system predictability and resiliency. Senate Bill 2787 passed 74-1-1.

Interisland Cable Regulatory Structure
Senate Bill 2785 establishes a regulatory structure for the installation and implementation of an interisland high-voltage electric transmission cable system, bringing it under the governance of the PUC. Having a regulatory framework for the implementation of an interisland cable system will ensure more certainty and oversight in the development process. Hawaii’s islands have varying amounts of technologically acquirable renewable energy resources and an uneven distribution of electricity demand based on population and economic activity. Maui, for example, has surplus wind energy at night, while Oahu has an expanding fleet of electric vehicles that could put that energy to work. Legislation to establish a regulatory framework for the implementation of an interisland cable system can provide more certainty, stability, and oversight in the development process. By providing structure for a statewide electrical grid we can get the most out of our state's abundant solar, wind, and geothermal energy resources. Senate Bill 2785 passed 67-9 (although 15 “with reservations”).  
 
Public Utilities Commission (PUC) Appointments
The Senate confirmed the nominations of both Michael Champley and Lorraine Akiba to the PUC. We believe both will be strong advocates for aggressive clean energy regulatory policy. Mike Champley served as Blue Planet’s expert consultant for two years. During his work with Blue Planet, Champley was instrumental in identifying and suggesting modifications to practices that impede the integration of renewable energy. Champley understands the complex economic, institutional, and operational changes that must happen to enable Hawai‘i’s clean energy transition. Lorraine Akiba will bring broad experience (in public and private law sectors) and energy to the PUC while balancing the skills and expertise of the existing commissioners.  
 
Other Legislative Issues
Unfortunately, we were unable to advance some other key issues this session. Policies that fell by the wayside included reallocation of the barrel tax (and expansion to include coal), renewable energy tax credit reform, and additional PUC policy guidance (related to curtailment provisions and variable rate of return for renewable integration).  

In particular, Blue Planet spent a good deal of effort in a measure to reform the renewable tax credit, largely in response to proposed bills that would have severely reduced the credit. The challenge has been the “success” of the existing 35% credit and the explosive growth of residential and commercial PV (as well as the utility-scale
wind). It’s estimated that the credit could cost the state budget upwards of $60 million this year and
much more in 2013.

Blue Planet took a couple of approaches to this threat. First, we asked former UH economist Thomas Loudat to analyze what the credit yields to the state in terms of job creation, income tax, GET, oil savings, and other ancillary benefits. An op-ed, co-authored by Jeff Mikulina and Thomas Loudat, was published in the Honolulu Star-Advertiser. We then worked on formulating a new incentive structure for the tax credit—one that converts most of the more substantial incentives from investment credits to production credits (rewarding the actual renewable kWh instead of the equipment cost). This also had the effect of spreading the credit over 10 years, reducing the one-year budget hit. We made some other changes as well, ratcheting back the residential and commercial PV from 35% to 20% over 3 years, eliminating the confusing “system” caps, and sunsetting the credit in 2018 (providing a predictable glide path for the industry). Although the tax credit reforms didn’t pass this session, we had good agreement among legislative leadership and most of the key players in the renewable energy industry, setting us up for next session.

Blue Planet is extremely active at the PUC on a number of critical policy dockets. Here's an update on works in progress:
 
Feed-in Tariff (Docket No. 2008-0273)
The Feed-in Tariff (FIT) program is now oversubscribed (180 MW requested for the 80 MW program), marking successful implementation of this keystone energy policy. The FIT program Independent Observer and HECO Companies continue efforts to monitor the queue to prevent unqualified projects from taking capacity from qualified projects. On May 4, 2012, the HECO Companies filed a motion for clarification seeking the further abilities to manage the queue by removing projects. Blue Planet supports addressing these issues by expanding the FIT program to allow more projects and improving the grid to address reliability concerns. The Commission has ordered a review of Tiers 1 and 2 in October 2012 which will allow Blue Planet to advocate for further expansion and improvements to the FIT program.
 
Rule 14H (Docket No. 2010-0015)
The new version of Tariff Rule 14H, which substantially improves grid access by reducing the need for costly and time-consuming interconnection requirements studies, remains in effect. Motions for reconsideration threatened by the HECO Companies and Consumer Advocate did not materialize. Blue Planet is now shifting its focus to further improvements to Rule 14, based in part on improvements to California’s Rule 21.
 
Energy Efficiency Portfolio Standards (Docket No. 2010-0037)
On January 3, 2012, the Commission issued its final decision and order adopting the Energy Efficiency Portfolio Standards (EEPS) framework. The Commission subsequently closed the docket and established a Technical Working Group (TWG) to implement the EEPS. The TWG members include the utilities, Hawaii Energy, and government agencies. Blue Planet successfully petitioned the Commission to join the TWG and is playing an active role in
implementing the EEPS Framework as a member of the TWG.
 
On-Bill Financing (Docket No. 2011-0168)
In December 2011, the Commission retained consultant Harcourt Brown & Carey to design Hawaii’s on-bill financing (OBF) program. On December 30, 2011, however, the HECO Companies filed a proposal for a solar water heating “Simply Solar” OBF program. The Commission subsequently consolidated the Simply Solar proposal with the OBF docket. On April 16, 2012, the consultant filed its assessment of the Simply Solar proposal. Blue Planet filed
its brief on the Simply Solar proposal on May 7, 2012. The timing of a Commission decision on Simply Solar is unclear. On April 16, 2012 the Commission also issued an order amending the procedural schedule under which the docket is to conclude in approximately April 2013. Blue Planet agreed to pay up to $200,000 for the costs of the on-bill financing study for the docket, $100,000 of which was paid in 2011. Fortunately, the total cost was $167,275, the balance of which ($67, 275) was paid in the first quarter of 2012.
 
Reliability Standards (Docket No. 2011-0206)
Blue Planet continues to be an active participant, leader, and driving force in the Reliability Standards Working Group (RSWG), which was established to identify reliability standards and resolve issues pertaining to the expansion of renewable energy in the HECO Companies' service territories. The purpose of the RSWG effort is to recommend reliability standards, metrics, rules, criteria and processes to determine how the maximum amount of renewable
generation can be interconnected to the grid while preserving grid reliability. Bash Nola, acting as Blue Planet’s consultant, is chair of the Reliability Standards Drafting subgroup. Bash is also active member of the Reliability Data and Metrics subgroup which is addressing metrics and defining ancillary services and requirements, the Minimum Load and Curtailment subgroup which is addressing minimum load/curtailment issues and mitigation measures, the Gap Analysis subgroup which is addressing current studies underway to increase the penetration of renewable energy resources, including distributed PV generation, and defining system mitigation measures to achieve this increased penetration, and the PV subgroup which is specifically addressing PV integration and interconnection issues. The efforts of the RSWG are targeted to be completed by year end with a set of recommendations to be forwarded to the PUC. These efforts will foster understanding of what is required to achieve maximum renewable energy resource penetration, the modernization of the existing HECO utilities’ generating assets, the costs (including production costs), and the impacts to consumers/ratepayers.  
 
Integrated Resources Planning (Docket No. 2012-0036)
On March 1, 2012, the Commission issued an order initiating the Integrated Resource Planning process for HECO, HELCO and MECO. The order, which has been anticipated since last fall, tracks the requirements of the March 14, 2011 IRP Framework adopted in the Docket No. 2010-0108. The IRP process presents a significant opportunity for Blue Planet to advance planning for Hawaii’s clean energy future, in conjunction with the Blueprint. Under the Framework, HECO must file an IRP Report and an Action Plan which covers all three utilities. The Commission has selected Carl Freedman to serve as the Independent Entity overseeing the process. Blue Planet and other parties wishing to serve on the IRP Advisory Group must apply by June 8, 2012.

Today we released the results of study that analyzes the economic impact of the state's renewable energy tax credit. This issue has been the subject of much debate this legislative session. We wanted to better understand the exact economic costs and benefits of the credit to the state as a whole, so we asked former University of Hawai‘i economist Dr. Thomas Loudat (who did a similar analysis in 2002 that was reported to the state legislature) to analyze the economic impact.

What we found was remarkable. The existing tax credit yields a clear, significant net fiscal benefit to the state. For every PV tax credit dollar the state invests, the payoff includes:

-- $13.37 stays in Hawai‘i (what we would have sent out of state to import oil)
-- $44.70 in additional sales (from the oil savings circulated into the local economy)
-- $3.17 in new tax revenues (generated from those added sales)

Loudat's findings show that each PV installation also produces new jobs and additional local labor income. A typical 118 kW commercial PV installation, for example, yields 2.8 local jobs each year over the 30-year lifetime of the system.

Blue Planet believes that the tax credit stimulates private investment in renewable power, and these investments provide a community benefit. We also recognize that renewable projects draw federal dollars into Hawai‘i's economy that otherwise wouldn't be here. Dr. Loudat's study allows us to assess what these benefits are worth.

While Blue Planet supports the existing tax credit, we are backing a measure to reduce the tax credit from 35% to 20% over the next three years. This and other changes to the law are currently contemplated in the Senate Draft of House Bill 2417. Acknowledging that the price of PV systems has dropped dramatically, Blue Planet's position is that the state's share in incentivizing the systems can and should decrease. But it is also essential that we maintain the right tax credit "nudge" to help more and more families and businesses put solar to work for them—with long-term benefits for everyone.
 
Unlike other tax credits, the investment in renewable energy is not a one-shot deal. The state continues to reap economic benefits over the 30-year lifetime of the system--consider the oil costs offset, year after year. It makes sense in the big picture, too, when you look at all the other reasons we need to move beyond oil. The dividends pay off in more than just dollars--there's value in energy security and reducing CO2 emissions, too, and these are benefits that other tax credits don't provide.

As Van Jones wrote in Rebuilding the Dream, "As we think about a new economy, perhaps we can begin to apply some new math — and begin to count what really counts. The earth counts; our kids count; the future counts. Where economic and energy policy meet, we should calculate not only what we spend, but also what we save. And we should consider the payoffs from the investments we make in human and natural capital."

Read more:

"Often-overlooked benefit of solar is how it benefits the economy" Editorial by Jeff Mikulina and Dr. Tom Loudat, Honolulu Star-Advertiser
"Study: Hawai‘i solar tax credits pay off" by Duane Shimogawa, Pacific Business News
"Blue Planet: Renewable energy tax credit boosts local economy" by Sophie Cocke, Honolulu Civil Beat
"Sun, Shine" by Derrick DePledge, Honolulu Star Advertiser  (Clever headline!)

Click the bill links to read our testimony. Check progress of these measures on our bill status page. Read more about our legislative priorities for 2012.

Apr. 3 | 6p | House Committee on Finance, Room 308
SB 2787 SD2 HD1 Authorizes PUC to perform necessary electric system reliability and grid access oversight functions and allows the commission to contract for the services of a Hawaii Electricity Reliability Administrator (HERA)

Apr. 3 | 3p | House Committee on Finance, Room 308
SB 2981 SD2 HD2 Allows the PUC to require that electric utilities examine, within their integrated resource planning process, the phasing out of fossil fuel power plants and replacement of them with clean energy alternatives

Apr. 3 | 3p | House Committee on Finance, Room 308
SB 2752 SD1 Facilitates greater renewable energy adoption by reducing the level of imputed debt assumed by electric utilities when entering into power purchase agreements

Apr. 3 | 3p | Senate Committee on Energy and Environment, Senate Committee on Commerce and Consumer Protection, Room 225
HB 2121 SD1 Increases the allowable system size for net-metered systems to two megawatts for State facilities and one megawatt for other systems

Apr. 2 | 9:30a | Senate Committee on Ways and Means, Room 211
HB 2012 HD1 Opposition to subsection that strips funding from energy systems development fund

Click the bill links to read our testimony. Check progress of these measures on our bill status page. Read more about our legislative priorities for 2012.

Mar. 30 | 5p | House Committee on Finance, Room 308
SB 2785 SD2 HD1  Establishes regulatory structure for installation and implementation of an interisland, high-voltage, electric transmission cable system

Mar. 30 | 9:30a | Senate Committee on Consumer Protection and Commerce, Room 229
HB 425 HD3 SD1 Requires PUC to consider costs and benefits of a diverse energy portfolio and of maximizing the efficiency of all electric utility assets to lower and stabilize cost of electricity

Mar. 29 | 5:30p | House Committee on Finance, Room 308
SB 2288 SD1 HD1  Limits renewable energy tax credit per property

Mar. 29 | 2:35p | House Committee on Consumer Protection and Commerce, Room 325
SB 2438 SD1 HD1 DBEDT technology analysis for deployment of renewable projects

Mar. 29 | 9a | Senate Committee on Ways and Means, Room 211
HB 2417 HD2 SD1 Modifies renewable energy tax credit

Mar. 29 | 9a | Senate Committee on Ways and Means, Room 211
HB 2760 HD2 SD1 Strengthens Hawaii's "complete streets" policy and prohibits mopeds on bicycle paths

Mar. 29 | 9a | Senate Committee on Ways and Means, Room 211
HB 2262 HD2 SD1  Expands the ethanol facility tax credit to include other liquid biofuels

Mar. 29 | 9a | Senate Committee on Ways and Means, Room 211
HB 2544 HD2 SD1  Requires the PUC to implement best practices in the areas of regulatory frameworks, rules and procedures, and information technology and public access, and appropriates funds for such purposes

Mar. 29 | 9a | Senate Committee on Ways and Means, Room 211
HB 2626 HD2 SD1 Establishes safe routes to schools program

Mar. 29 | 9a | Senate Committee on Ways and Means, Room 211
HB 1726 HD1 SD1  Aligning the repeal date for the energy systems development special fund with that of the environmental response, energy, and food security tax

Legislative hearing schedule for Wednesday, Feb. 29 and Thursday, Mar. 1
Sometimes you have to take a leap of faith... easy to justify today.

Feb. 29 | 9:30a | Senate Committee on Ways and Means, Room 211
SB 2512 SD1  Reallocates barrel tax and renames Hawaii Economic Development Task Force

Mar. 1 | 9:30a | Senate Committee on Commerce and Consumer Protection, Room 229
GM 648  Confirmation hearing for PUC Commissioner nominee Michael Champley

Click the bill links to read our testimony. Check progress of these measures on our Read More

Legislative hearing schedule for Tuesday, Feb. 28
HB 2417 is the big one today...

Feb. 28 | 11a | House Committee on Finance, Room 308
HB 2262  HD1 Expands the ethanol facility tax credit to include other liquid biofuels

Feb. 28 | 2p | House Committee on Finance, Room 308
HB 2417  HD1 Limits claimable tax credit on renewable energy systems

Feb. 28 | 2p | House Committee on Finance, Room 308
HB 2259  Establishes hydrogen safety codes and standards

Feb. 28 | 9a | Senate Committee on Ways and Means, Room 211
SB 2512 SD1  Reallocates barrel tax and renames Hawaii Economic Development Task Force

Feb. 28 | 10a | Senate Committee on Commerce and Consumer Protection, Room 229
SB 2966 SD1  Increases the allowable system size for net-metered systems to two megawatts for state facilities and one megawatt for other systems

Click the bill links to read our testimony. Check progress of these measures on our bill status page. Read more about our legislative priorities for 2012.

Jeff wrote an insightful editorial for the Honolulu Star-Advertiser that calls for the state to share its blueprint for achieving Hawaii's clean energy goals. You can read it here.

Hearing schedule for Wednesday, Feb. 8

Feb. 8 | 8:15a | House Committee on Energy and Environmental Protection, House Committee on Agriculture, Room 312
HB 2262 Expands ethanol facility tax credit to include other liquid biofuels
HB 2834 Extends the sunset date for the Hawaii Economic Development Task Force

Feb. 8 | 1:15p | Senate Committee on Transportation and International Affairs, Room 224
SB 3040 Exempts car sharing organizations from the rental vehicle surcharge for hourly rentals

Feb. 8 | 2p | House Committee on Consumer Protection and Commerce, Room 325
HB 2490 HD1 Seeks to greater renewable energy adoption by reducing the level of imputed debt assumed by electric utilities when entering into power purchase agreements
HB 2525 HD1 Authorizes PUC to perform necessary electric system reliability and grid access oversight functions and allows the Commission to contract for the services of a Hawaii Electricity Reliability Administrator (HERA)

Feb. 8 | 3:10p | Senate Committee on Health, Senate Committee on Energy and the Environment, Room 229
SB 2292  Restricts the permitting of new coal-fired power plants in Hawaii

Read more about our legislative priorities for 2012. Click the links to see our testimony.