Policy

Hawaii Clean Energy Initiative (HCEI): Some major policy initiatives were signed into law in 2009, including a 40% Renewable Portfolio Standard required by 2030, and a 30% (4,300 GWh) Energy Efficiency Portfolio Standard, also with the target date of 2030.  In December 2009, HCEI published policy recommendations for the 2010 legislative session, developed by the initiative’s working groups in conjunction with the Department of Energy; the report is available on the HCEI website.  The comprehensive analysis of the cost and energy impacts of these policy recommendations was released in April 2010.  Under HCEI, the U.S. Department of Energy commissioned permitting guidebooks to lay out federal, state, and county permit requirements for bioenergy, solar, marine, wind, waste to energy, hydroelectric, and geothermal projects.

Another resource is the Hawaii Legislature Website, which contains up-to-date hearing and bill information during legislative session.  The Hawaii State Policy Website has additional information and reports. The HCEI partnership also helped lay the groundwork for an Energy Agreement signed by the State of Hawaii, the HECO companies (Hawaiian Electric Company, Maui Electric Company, and Hawaii Electric and Light Company), and the Division of Consumer Advocacy signaling a new path forward in October 2008.

What does this mean for Hawaii businesses?

• Hawaii’s clean energy laws are still evolving, but all signs show a state commitment to more aggressive clean energy policies (e.g., solar water heating mandate for all new construction beginning in 2010, Renewable Portfolio Standard, renewable energy zones, Lead by Example standards, electric vehicle infrastructure, and greenhouse gas emissions reductions).
• However, funding has been a challenge in the current economic climate, and businesses will have to monitor tax incentives and other such programs.  While PV, solar water heating, and wind tax credits appear set to continue – and were actually extended to become available to more individuals last year through the “refundable” provisions – the Act 221 innovation investment tax credit is unlikely to be renewed once it lapses.
• The Energy Agreement is having a significant impact on the direction of the electricity sector in the state; the Stanford Group Company produced a short analysis addressing what the agreement means for cleantech in the state.

Hawaii Public Utilities Commission: The Commission has over 30 dockets open that relate to electricity regulation.  The PUC launched a document management system and full calendar in 2010 to better provide information to the public.  A few that will have significant impact on clean energy deployment in Hawaii are discussed here.

On August 31, 2010, the Commission issued a Decoupling Decision and Order, which will change the utility revenue model – basically disassociating utility profits from its sales of electricity so that the utility is not penalized for Hawaii’s conservation and efficiency measures. Decoupling also further opens the door for renewable energy from independent power producers by changing the financial incentive system for the utility.

The Commission issued a Feed-in Tariff (FiT) Decision and Order on September 25, 2009.  The Decision indicated that FiTs would be enacted to cover photovoltaics, on-shore wind, in-line hydropower, and concentrated solar thermal power.  While the Decision did not establish cost information, additional information may be released in early 2010.

In addition, the Commission is considering a revision to the utility planning process, in which Clean Energy Scenario Planning would replace the current Integrated Resource Plan process.

In 2009 at the direction of the Hawaii Legislature, the Commission moved the energy efficiency programs on Oahu, Maui, and Hawaii Island from the utility companies to an independent administrator.  As of July 1, 2009, the Public Benefits Fee Administrator is the Hawaii Energy Efficiency and Conservation Programs, run by SAIC (Science Applications International Corporation).

On  December 30, 2009, the Commission issued a Decision and Order approving, with conditions, the Renewable Energy Infrastructure Program surcharge for HECO, HELCO, and MECO.  This surcharge will help the utilities fund clean energy investments.

What does this mean for Hawaii businesses?

• The Commission’s FiT decision is likely to determine the future of solar, wind, and hydropower in the state in the near term – at least for small projects.  If the FiT also simplifies interconnection requirements and increases access to the grid, it will be an important enabler for companies with distributed generation technologies.
• The Clean Energy Scenario Planning may have more of a direct impact on the utility and on the public involvement process than on clean energy companies – though there are likely to be some changes in the infrastructure planning process than could impact queuing and pricing for energy developers.
• Rebates and incentive programs are likely to evolve in 2010, as the Public Benefits Fee Administrator assesses which energy efficiency strategies are most cost effective and appropriate for Hawaii’s buildings and equipment.

County energy plans: The counties have been moving forward with energy plans and projects specifically tailored to their communities’ needs and visions.  The Maui County Energy Alliance plan, the Hawaii Island Energy Sustainability Plan, and the Kauai Energy Sustainability Plan all set aggressive goals and timeframes for a fundamental transition to a clean energy economy.

Non-governmental organizations: The Hawaii Energy Policy Forum, funded by the State of Hawaii and organized by UH, hosts briefings and conducts studies on emerging policy questions.  Blue Planet Foundation directs a number of outreach and educational programs, and also mobilizes support for important clean energy policy issues.

The Database of State Incentives for Renewables and Efficiency has comprehensive and up-to-date summaries of Hawaii state policies as well as other federal and state policy developments.