Report Title: Solar Energy; Electricity; Feed-in Tariff
Description: Establishes feed-in tariff compensation to solar electricity producers for solar electricity sold to the electric utility.
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII
A BILL FOR AN ACT
relating to solar energy.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Hawaii depends on petroleum for about eighty per cent of its electric power needs. This is a higher dependency rate than any other state in the nation. This dependence makes the State extremely vulnerable to any oil embargo, supply disruption, or other market dysfunction beyond the control of the State. Furthermore, Hawaii’s continued consumption of petroleum and coal for electric power production negatively impacts Hawaii’s environment.
The legislature also finds that increased use of Hawaii’s abundant solar energy resource to generate solar electricity would increase Hawaii’s energy self-sufficiency and achieve broad societal benefits, including increased energy security, diminished vulnerability to oil price increases, enhanced sustainability, economic development, and job creation.
Over the years, the legislature has worked steadily to encourage the development of solar electricity in Hawaii. Legislative achievements relating to solar electricity include a net metering program, utility interconnection standards, renewable energy technology tax credits, and a statewide renewable energy portfolio standard.
The legislature also finds that, notwithstanding its efforts, solar electricity generation in Hawaii remains underdeveloped because existing incentives do not make solar electricity cost-competitive with grid power, do not compensate customer-generators that produce more electricity than they generate, and do not reward power users, such as tax-exempt state and municipal institutions, that are not able to use tax-based incentives.
The legislature also finds that a premium feed-in tariff has proven effective in nations such as Germany and Spain, by dramatically increasing the rate and scale of solar electricity development in those nations.
The purpose of this Act is to encourage the development of solar electricity generation in Hawaii, promote energy self-sufficiency for Hawaii, and protect Hawaii’s environment by establishment of a feed-in tariff that offers solar electricity producers an attractive price for solar electricity sold to the electric utility.
SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
Ҥ269- Feed-in tariff. (a) As used in this section:
“New solar electricity system” means a solar electricity system placed in service after the effective date of this section.
“Solar electricity” means electricity produced by a solar electricity system from solar radiation energy.
“Solar electricity producer” means any person that owns, controls, operates, manages, or uses a solar electricity system to produce solar electricity.
“Solar electricity purchase agreement” means a contract or tariff under which the electric utility is obliged to purchase solar electricity produced by a new solar electricity system and made available to the electric utility by the solar electricity producer and to compensate the solar electricity producer for the solar electricity provided in accordance with this section.
“Solar electricity system” means any identifiable facility, equipment, apparatus, or the like that converts solar radiation energy to electricity, including photovoltaic systems and concentrating solar electric power systems.
(b) At the request of a solar electricity producer that places a new solar electricity system in service, an electric utility shall interconnect the solar electricity system to the electric system of the electric utility. The requirement under this subsection shall apply to the electric utility whose electric system is closest in proximity to the location of the solar electricity system; provided that technical requirements set forth in rules of the electric utility relating to interconnection of distributed generating facilities with the electric utility’s electric system, as approved by the public utilities commission, are met. Costs incurred by the electric utility to meet technical requirements of interconnection shall be allocated so that those costs that benefit a solar electricity system are borne by the solar electricity producer that uses the solar electricity system to produce solar electricity, in conformity with orders of the public utilities commission relating to distributed generation in the State. Electric system data and data of the solar electricity system shall be disclosed by the electric utility and the supplier when necessary to plan and execute any interconnection in conformity with any technical requirements.
(c) Every electric utility shall develop a standard solar electricity purchase agreement and shall make the solar electricity purchase agreement available to a solar electricity producer at the request of the solar electricity producer. Each solar electricity purchase agreement shall have a term of twenty years commencing with the date on which the new solar electricity system is placed in service.
(d) The difference between the number of kilowatt-hours of solar electricity supplied by the solar electricity producer to the electric utility and the number of kilowatt-hours of electricity supplied by the electric utility to the solar electricity producer shall be measured, for each monthly billing period during the term of the solar electricity purchase agreement, using “net energy metering”, as defined in section 269-101, substituting “solar electricity producer” for “eligible customer-generator” in the definition. A solar electricity producer that elects to be paid compensation under a solar electricity purchase agreement shall not be an eligible customer-generator for purposes of part VI of this chapter.
(e) At the end of each monthly billing period, if the number of kilowatt-hours of electricity supplied by the electric utility to the solar electricity producer exceeds the number of kilowatt-hours of solar electricity supplied by the solar electricity producer to the electric utility, the solar electricity producer shall owe compensation to the electric utility for the number of kilowatt-hours of electricity supplied by the electric utility in excess of the number of kilowatt-hours of solar electricity supplied to the electric utility. The compensation shall be calculated at the retail rate for the rate class to which the solar electricity producer would be assigned if the solar electricity producer was not a solar electricity producer.
(f) At the end of each monthly billing period, if the number of kilowatt-hours of solar electricity supplied by the solar electricity producer to the electric utility exceeds the number of kilowatt-hours of electricity supplied by the electric utility to the solar electricity producer, the electric utility shall pay compensation to the solar electricity producer for the number of kilowatt-hours of solar electricity supplied by the solar electricity producer in excess of the number of kilowatt-hours of electricity supplied to the solar electricity provider. The compensation shall be an amount no less than the number of kilowatt-hours of solar electricity supplied by the electric utility in excess of the number of kilowatt-hours of electricity supplied to the solar electricity producer, multiplied by a rate of compensation that is no less than the greater of:
(1) The rate per kilowatt-hour for electricity purchased from the electric utility by the solar electricity producer; or
(2) 70.0 cents per kilowatt-hour.
(g) A solar electricity producer shall not be subject to any fee, charge, or rate by the electric utility for any unbundled costs associated with providing any standby services, including any unbundled costs associated with providing any backup services, and shall not be subject to any fee, charge, or rate by the electric utility for any capital costs incurred by the electric utility in expectation that usage by the solar electricity producer, or by all the solar electricity producers as a group, of electricity supplied by the electric utility would not decline. Any new or additional demand charge, standby charge, customer charge, minimum monthly charge, interconnection charge, or other charge that would increase a solar electricity provider’s costs beyond those of other customers in the rate class to which the solar electricity producer otherwise would be assigned are contrary to the intent of this section and shall not form part of any solar electricity purchase agreement.
(h) By December 31 of the second calendar year following the calendar year during which this section takes effect, and by December 31 of every second calendar year thereafter, the energy resources coordinator shall submit, if necessary, a report to the public utilities commission proposing adjustments to the rates of compensation in subsection (f)(2) to reflect technological progress and market developments with respect to the cost of new solar electricity systems.
(i) This section shall not apply to a solar electricity system with an installed peak nameplate generating capacity in excess of twenty megawatts.
(j) The requirement that an electric utility make available a solar electricity purchase agreement to a solar electricity producer shall not apply to new solar electricity systems that are placed in service after December 31 of the year following the year in which the aggregate peak nameplate generating capacity of solar electricity systems eligible for solar electricity purchase agreements equals five per cent of the electric utility’s system peak demand; provided that the public utilities commission may increase, by rule or order, the amount of the aggregate peak nameplate generating capacity above five per cent of the electric utility’s system peak demand.
(k) A solar electricity producer shall not be eligible for feed-in tariff compensation under this section for any solar electricity produced by a solar electricity system as to which an income tax credit was claimed by any taxpayer pursuant to section 235-12.5.”
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
INTRODUCED BY: Senator Ron Menor
