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A legislative look at renewable energy bills

by Rob Parsons

March 27, 2008

A little more than two months ago, the 2008 Hawai`i legislative session began with great fanfare about the importance of local renewable energy sources. House Speaker Calvin Say and others brought attention to our state's over-dependence on imported fuels, and the opportunities to bolster our economy by keeping our energy dollars in the state with renewable energy incentives. Now it's crunch time at the legislature, and particularly for some important energy initiatives.

Among the most noteworthy of this year's crop of energy bills is Senate Bill 644 SD3, mandating installation of solar hot water systems on all new construction beginning Jan. 1, 2010. For years, advocates have described this measure as the "low-hanging fruit"-that is, the easiest, most cost-effective way of reducing household electrical use. But a similar bill failed in last year's legislative session, a victim of opposition by both Hawaiian Electric Company (HECO) and, curiously, the solar industry itself.

But this year, the bill appears to have a better chance of passing. Testimony to date has tallied 93 in support, and only eight opposed. Those in opposition include the Hawai`i Chamber of Commerce, realtors and the Hawai`i Solar Energy Association (HSEA). HECO submitted earlier testimony that listed five reasons the bill was flawed, but was otherwise neutral. They have since done an about-face, and are backing the bill, noting that they saw an avalanche of support.

Renewable energy advocates Jeff Mikulina of the Sierra Club Hawai`i and Henry Curtis of Life of the Land have met with HSEA representatives to discuss their opposition, and to propose possible amendments. "They don't want amendments," Curtis said. "They want the bill killed."

When asked why the solar energy association would oppose a bill that would directly benefit their industry, Curtis replied, "They're afraid of a big company like Sun-Edison coming in. They're afraid of home kits for contractors to do their own installations. They're afraid of everything."

Life of the Land also supports an amendment calling for a 35 percent tax credit to those installing solar systems in new or existing residences, rather than reducing the renewable energy credit to 20 percent for systems installed before 2010, and 15 percent thereafter. This is a common sense incentive, given that fuel costs from petroleum-based electrical generation are increasing about five percent yearly.

House Bill 3211 HD2 is the Right to Dry Clothes Bill. No kidding. This legislation addresses the fact that many homeowners associations restrict clothesline use for aesthetic reasons. Using sunshine and trade winds instead of a gas or electric clothes dryer can save a household from $250 to $450 yearly, according to the Sierra Club. A typical family using an electric clothes dryer may be responsible for more than a ton of annual greenhouse gas emissions.

Then there's House Bill 2250 HD2, which would expand opportunities for homegrown power through net metering. Begun in 2001, net metering allows customers who produce their own energy to reduce their bills by paying only for their net consumption-the amount of electricity consumed minus the amount generated. HB 2250 picks up where the prior legislation left off, increasing the allowable size of a home energy system, and raising the total amount of net metered energy on the grid.

Just last week, the Hawai`i Public Utility Commission (PUC) doubled the amount of net metering on Oahu, Maui and the Big Island, from 50 to 100 kilowatts. Maui actually leads the state in net metering energy producers, with 148 such installations, compared with just 98 on Oahu. The benefits of increased home energy production include reducing dependency on imported oil, reducing emissions, diversifying Hawai`i's economy and increasing our energy security. HD 2250 would help the increasing number of residents choosing to invest in solar photovoltaic systems to counter the soaring fuel surcharges attached to our electric bills.

Two renewable fuel bills introduced by Senator Shan Tsutsui (D, Wailuku, Waihe`e, Kahului, Paia) have crossed over from the Senate to the House. Senate Bill 3215, "Relating to Biodiesel," provides market incentives for local biodiesel development, including making state lands available for fuel crops. The bill establishes a state biodiesel feedstock crop and fuel purchasing program, and also creates tax exemptions for biomass crushing facilities and lands used for biodiesel feedstock crops.

While support has been apparent for the intent of the bill, the state Department of Agriculture has voiced objections with some of the oversight provisions. The other agency tagged with administering the workings of the proposed legislation, the Department of Business, Economic Development, and Tourism (DBEDT), has expressed similar reservations.

BlueEarth Biodiesel and Imperium Renewables, the big bio-diesel refinery proposers, dutifully sent in supporting testimony, though it's clear that if their plans go through, no local feedstock would be available for many years to come. Oddly, the PUC has taken no action in the past five months on a docket for biodiesel procurement-something the commission originally said they would put on a fast track. Perhaps the reality has set in that biofuels are not quite the Holy Grail some thought they might be, and that proceeding cautiously is more prudent.

Sen. Tsutsui's second bill is SB 2764, "Relating to Ethanol Facility Credit." This measure would repeal the qualifying capacity limits of ethanol production facilities, provides a vehicle to change the total tax credits allowed per year and repeals the sunset provision with respect to annual capacity for qualifying ethanol production facilities.

These tweaks to previous legislation surely demonstrate that our elected leaders are aware that there is still no local ethanol production, two years after a mandate that requires 10 percent ethanol in our gasoline. Predictions that the ethanol mandate would stimulate local business opportunities haven't yet proven correct.

House Bill 2862, "Relating to Wind Energy" and House Bill 2863, "Relating to Renewable Energy" spell double trouble. Billionaire David Murdoch is proposing an enormous wind energy project on Lanai, with 300-400 megawatts to be shipped to Oahu by undersea cable. The problem is in the two bills providing exemptions from normal environmental reviews.

One testifier back in January dubbed HB 2862 as "Act 3"-referring to Act 2, the special legislation afforded to Hawai`i Superferry, Inc. DBEDT and the Department of Health testified two months ago that they were uncomfortable with the bill, but it remains alive.

According to Life of the Land's outreach, HB 2863 would empower DBEDT to, "(a) review the Draft Environmental Impact Statement; (b) hold no hearings; (c) grant no contested case hearings; (d) adopt no rules; (e) have no criteria; and (f) decide all state and county permits (except for a county grading permit and, if necessary, a PUC Power Purchase Agreement). The inter-island transmission line shall be exempt from a public hearing or contested case hearing."

The Sierra Club has raised similar concerns about exempting large facilities from environmental review and public input. "Expediting permitting of new renewable energy facilities-particularly those that are located in wild areas-may cause important resource protection measures to be overlooked," states their website. "Some of the `renewable energy facilities' contemplated in HB 2863 HD1 may be truly fossil fuel facilities in disguise. A recent proposal to produce biofuel by Kauai Ethanol LLC sought a covered source air permit to burn imported coal at the facility to convert molasses to ethanol. In lieu of this measure, the Sierra Club would fully support bills to provide a renewable energy facilities coordinator at DBEDT (an ombudsman of sorts) to help shepherd projects, priority processing of renewable energy permits, and any other measures to cut bureaucracy-as long as the existing public input and environmental protection processes remain intact."

It's encouraging that Hawai`i's leading environmental organizations are watchdogs for renewable energy. Many caring citizens who may not find time to track specific legislation or write meaningful testimony can still write a check to these worthy organizations to support their advocacy for our sustainable energy future.

For further information, visit www.hi.sierraclub.org or www.lifeofthelandhawaii.org.