Hawaii's New Energy Bills to Boost Efficiency, Renewable Energy

June 28, 2006

Hawaii Governor Linda Lingle capped off her approval of a package of energy bills on June 26th by signing Senate Bill 2957, which encourages renewable energy and renewable fuels. The new bill raises the limits on the state's tax credits for solar photovoltaic, solar thermal, and wind energy systems and makes the tax credits permanent. To encourage homeowners to install cost-effective renewable energy systems such as solar hot water systems, the bill establishes a pilot project for utility financing of the systems, allowing homeowners to pay the cost through their electric bills over a period of time. To boost the use of biodiesel in Hawaii, the bill establishes a preference for biodiesel when the state government buys fuel. The bill also establishes programs to provide funds to conduct a statewide biofuels assessment; to assist the agricultural community with the development of energy projects; and for the research, development, and testing of hydrogen power technologies. See the governor's press release and the full text of SB 2957.

The governor's "Energy for Tomorrow" package also included three other energy bills—House Bills 2175 and 2848 and Senate Bill 3185—that she signed on May 12th and June 2nd. HB 2175 requires the state to lead by example, setting green building standards for state buildings; instructing state agencies to maximize their use of energy-saving contracts; appropriating $5 million for solar power systems on public schools; and requiring 20 percent of the state's new vehicles to be hybrids, alternative fuel vehicles, or the most efficient vehicles in their class, with the percentage increasing to 35 percent in 2007 and to 75 percent in 2015. The bill also encourages new green buildings by giving them priority when they apply for construction permits. See the governor's press release and the full text of HB 2175.

SB 3185 strengthens the state's renewable energy requirements by removing language regarding utility profits and authorizing the state's Public Utility Commission (PUC) to set penalties for failing to meet the standards. It removes links between fossil fuel costs and the price paid to renewable power producers, and allows the PUC to determine if utilities should absorb some of the impact of rising oil prices. It also establishes a public benefits fund for energy efficiency programs, and allows the PUC to decide if an independent agency should run the programs instead of the utilities. Finally, HB 2848 appropriates $200,000 to reconvene the Hawaii Energy Policy Forum to develop an action plan, timeline, recommendations, and benchmarks to meet the state's energy self-sufficiency goals. See the governor's press release and the full text of SB 3185 and HB 2848.