Measures We Support

Measures We Support

The following 2013 legislative proposals represent some of the critical policy measures that will facilitate Hawaii's transition to clean energy:

Renewable Energy Tax Credit amendments (SB 11, HB 497, among others)

Solar energy is currently a bright spot in Hawaii’s progress toward energy independence, and the renewable energy tax credit has been extremely effective at making Hawai‘i a leader in solar installations—creating local jobs and providing steady revenue from its business creation. Blue Planet has found that the renewable energy credit yields a clear, significant net fiscal benefit to the state, with each commercial PV tax credit dollar invested generates $2.67 in new tax revenue, among other benefits to the overall economy. Blue Planet supports amendments to the state credit that would 1) slowly ratchet back the credit in a fair, predictable manner; 2) remove the existing per-system cap to remove ambiguities from the existing law and make the credit easier to administer; and 3) establish a production tax credit for certain projects to reduce the first year fiscal impact of the credit and to encourage efficiency in system investment.

Barrel tax reallocation (SB 1088, HB 1363)

Hawaii’s barrel tax law is keystone clean energy policy that provides a dedicated investment in clean energy, funding the critical planning, development, and implementation of clean energy programs that will foster energy security for Hawaii. Unfortunately, only $0.40 of the $1.05 tax is dedicated to clean energy and food security. This measure reallocates the $1.05 to fulfill the intended sustainability purposes of the policy, with half of the funding being directed to energy security. This measure also repeals the sunset date for the tax. We believe that this measure properly amends Hawaii’s “fossil fuel fee” to reflect the original intent of the policy.

Community-Based Renewable Energy (SB 1330, HB 1363)

While solar has been an incredible success story in Hawaii, the majority of residents simply cannot directly participate in renewable energy because of their lack of access to a suitable rooftop for solar, such as many of the 40% of residents who live in multi-unit housing such as condos, or those whose roofs are shaded or otherwise incapable of supporting solar. Community-based renewable energy allows residents to invest in and benefit from solar and wind energy systems—even if those systems weren't directly on their property. The program would allow residents to join together to find energy solutions. For example, several condominium owners in different buildings may collectively install solar panels in another location with spare rooftop capacity. Even larger communities can join together to install renewable energy in ways that are most effective and efficient for their particular community. It’s a matter of fairness and equity for the 60% to 70% who are currently disempowered by lack of access to clean energy solutions. Everyone should be able to participate in Hawaii's clean energy future, not just those fortunate enough to have a big roof over their heads.

Utility clean energy performance mechanism (SB 120)

Existing laws give the utility little economic incentive to pursue clean energy projects. Long-term utility profits are tied mostly to capital investments that the utility makes, encouraging them to purchase expensive new plants or undertake major upgrades to existing ones. Since third-party renewable energy projects displace the need for utility investments, and energy efficiency reduces electricity use, the utility does not profit directly from such clean energy initiatives. Further, when the utility purchases power from independent power producers, like large solar farms, the utility is exposed to additional financial risk. These institutional barriers—decreasing sales on top of increasing costs to enable a system that doesn’t help their bottom line—makes change incredibly difficult for the utility. This measure provides legislative direction to the PUC by asking them to consider a number of policy tools to realign regulation and incentive with clean energy goals. The measure gives the PUC the ability to allow for the recovery of the utility’s “stranded assets,” preventing these facilities from becoming anchors that restrain clean energy progress. The measure also directs the PUC to consider a “performance incentive mechanism” to reward the utility for achieving clean energy goals through a variable allowed rate of return. This will align the financial decision making within the organization with achievement of Hawaii’s aggressive clean energy goals.

Barrel tax expansion to all fossil fuels (SB 17, HB 451)

Hawaii’s barrel tax currently only applies to petroleum products. Blue Planet supports expanding this “fossil fuel fee” to all fossil imports, including coal (nearly one million tons imported annually) and industrial methane (if it is ever imported to Hawaii). The approach taken in this measure—basing the fossil tax on energy content—is the optimal approach. By taxing all fossil fuels based on their energy content, the various fuels are rewarded for efficient end-use. Blue Planet has found—through extensive market research—that the policy of taxing our fossil fuel imports to fund clean energy solutions has broad support among Hawaii residents. This measure would likely raise about $5 million annually for the purposes of energy and food security.

Green financing program (SB 1087, HB 856)

On-bill financing—currently being developed at the Public Utilities Commission—overcomes the biggest hurdle to energy efficiency and clean energy: the up-front cost. By eliminating the initial cost and enabling ratepayers to pay off the investment directly from energy savings over time, adoption of efficiency and clean energy will accelerate. This measure establishes a regulatory financing structure to enable low-cost capital to fund the on-bill financing program. It does so by using a small portion of the existing ratepayer-funded “public benefits fee” to securitize bonds that can be used to fund on-bill financing. This would enable residents and small businesses statewide to access the benefits of solar and efficiency investments.

Clean energy curtailment restrictions (SB 612, HB 1142)

Curtailment of renewable energy resources is a significant barrier to Hawaii’s clean energy future. Hawaii’s largest electric utility company is essentially allowed to curtail renewable energy facilities without limit and without compensation. This not only directly limits the amount of renewable energy on the grid, it has a chilling effect on the ability to finance clean energy projects in Hawaii. With the threat of uncertain amounts of curtailment, developers are unable to properly evaluate financial risk. This measure establishes reasonably certain parameters (such as maximum hours of curtailment limits and payment amounts) in power purchase agreements to limit the amount of curtailment of clean energy.

Energy efficiency disclosure for renters (SB 988, HB 1407)

This measure requires that landlords and lessors disclose the energy consumption information to prospective tenants. Renters feel the squeeze of high energy prices more acutely, as they often have limited options in investing to reduce the energy use of the property they are leasing. In many situations, the landlord has little incentive to install such equipment, because the increasing energy costs are paid by the tenant. This measure is about protecting tenants’ rights, reducing landlords’ costs, and making Hawaii more energy independent. It can help to achieve this simply by requiring transparency in the leasing process. By spurring an “energy conversation” in that process, there will be no more hidden energy costs for landlords and tenants.

Grid modernization consideration at PUC (SB 1040, HB 810)

To take advantage of distributed and diversified sources like solar, wind, and wave, the grid has to become smarter and have the capacity to store electricity. It will resemble today’s Internet—where distributed servers both send and receive packets of information—and less like yesterday’s commercial television. Such a self-aware, robust “smart grid” will instantaneously adjust to shifts in wind strength or cloud cover over solar, balancing energy loads on the other side of the wire and drawing on stored energy when needed. This measure requires that the PUC consider the value of the smart grid and the benefits of modernizing Hawaii’s electricity grid to accommodate more clean energy sources. This measure will provide important policy guidance to the PUC to help them weigh the often competing objectives in their deliberations.

Energy independence (HB 757)

This measure sets long-term renewable energy requirements for Hawaii with an ultimate objective of 100% clean energy by 2050. The current energy requirements target 1030, but 2030 is not the end of our energy road—we must ensure that today’s energy decisions are being made with appropriate long-term policy guidance. We must also ensure that today’s decisions do not lock us into an energy paradigm that will persist long after 2030 passes. Indeed, that is exactly the situation Hawai‘i faces today, heavily reliant on an aging fossil-based energy system because of decisions made long ago. Luckily, technology is accelerating ever faster, providing ever increasing clean energy options. Already, renewable energy technologies such as solar and wind power can generate electricity for less money than we currently pay for fuel alone. The future is bright…if we avoid repeating history.

Clearing the Path for Clean Energy