RELATING TO RENEWABLE ENERGY.

Energy

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: LOWEN
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

The bill's effective date is set for July 1, 3000, which seems to be a placeholder or error.

Clarifying Renewable Energy Rate Adjustments

This bill clarifies that the Public Utilities Commission can include adjustments in electricity rates from nonfossil fuel sources if these adjustments are linked to higher interest rates for financing renewable energy projects.

What This Bill Does

Clarifies that certain rate adjustments can be made by the Public Utilities Commission (PUC) when dealing with electricity generated from non-fossil fuel sources.
Allows PUC to include incremental adjustments in the rate paid to producers of nonfossil fuel electricity, such as those linked to higher interest rates for financing these projects.

Who It Names or Affects

Electricity producers who generate power from non-fossil fuels
Public Utilities Commission (PUC)

Terms To Know

Nonfossil fuel generated electricity: Electricity produced from sources other than fossil fuels, such as wind or solar power.
Public Utilities Commission (PUC): A government agency that regulates public utilities and ensures fair rates for consumers.

Limits and Unknowns

The bill does not specify how the adjustments will be calculated.
It is unclear what happens if a producer cannot prove the need for an adjustment by clear and convincing evidence.
The effective date of July 1, 3000, suggests this may be a placeholder or error in the text.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HD1

Hawaii published version HD1

Plain English: This amendment allows the Public Utilities Commission to include adjustments in electricity rates paid to producers of nonfossil fuel energy if those producers can prove that their financing costs have increased due to factors beyond their control.

Adds a provision allowing the Public Utilities Commission to consider and approve rate adjustments for renewable energy producers when they face higher financing costs because of an electric utility's financial status.

The amendment text does not specify how these adjustments will be calculated or what evidence is considered 'clear and convincing'.
It is unclear why the effective date is set for July 1, 3000, which seems to be an error or placeholder.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-02-14 H
Report adopted; referred to the committee(s) on FIN with Representative(s) Amato voting aye with reservations; none voting no (0) and Representative(s) Cochran, Matayoshi, Poepoe, Ward excused (4).
2025-02-14 H
Reported from CPC (Stand. Com. Rep. No. 781), recommending referral to FIN.
2025-02-13 H
The committee on CPC recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 9 Ayes: Representative(s) Matayoshi, Chun, Ilagan, Ichiyama, Iwamoto, Kong, Lowen, Marten, Tam; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Pierick.
2025-02-11 H
Bill scheduled to be heard by CPC on Thursday, 02-13-25 2:00PM in House conference room 329 VIA VIDEOCONFERENCE.
2025-02-04 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on CPC with Representative(s) Amato voting aye with reservations; none voting no (0) and Representative(s) Cochran, Kong, Ward excused (3).
2025-02-04 H
Reported from EEP (Stand. Com. Rep. No. 105) as amended in HD 1, recommending passage on Second Reading and referral to CPC.
2025-01-30 H
The committee on EEP recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 5 Ayes: Representative(s) Lowen, Perruso, Kahaloa, Kusch, Quinlan; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Ward.
2025-01-27 H
Bill scheduled to be heard by EEP on Thursday, 01-30-25 9:00AM in House conference room 325 VIA VIDEOCONFERENCE.
2025-01-21 H
Referred to EEP, CPC, FIN, referral sheet 1
2025-01-17 H
Introduced and Pass First Reading.
2025-01-16 H
Pending introduction.

Official Summary Text

RELATING TO RENEWABLE ENERGY.
PUC; Renewable Energy; Rate for Electricity Generated from Nonfossil Fuels; Adjustment Mechanisms
Specifies that adjustments required to compensate for certain unavoidable increases in financing costs, if proven by a producer of nonfossil fuel generated electricity by clear and convincing evidence, are mechanisms for reasonable and appropriate incremental adjustments that the Public Utilities Commission may include in the rate payable to the producer. Effective 7/1/3000. (HD1)

Current Bill Text

Read the full stored bill text

HB338

HOUSE OF REPRESENTATIVES

H.B. NO.

338

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to renewable energy
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
�
The
legislature finds that that reliable and affordable energy is in the public interest.
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The procurement and successful deployment of
renewable clean energy is necessary to ensure that energy in the State is
provided at a low cost and will be available when existing electricity
generating units are retired or converted due to obsolescence and permitting
challenges.

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The legislature also finds that the
renewable energy from independent power producers and community-based renewable
producers will also help to achieve the State's goals of one hundred per cent
renewable energy portfolio standards, energy resilience through resource
diversification, decarbonization, and energy equity.

����
The procurement, contracting, and
delivery of an operational renewable energy facility has faced challenges with a
certain investor-owned electric utility's stage 2 and stage 3 requests for proposals
and in its next Integrated Grid Planning Request for Proposals.
�
The community-based renewable energy (CBRE)
projects procured by this investor-owned electric utility also face the same
challenges.

����
The legislature further finds that
the procurement and successful delivery of these renewable energy facilities are
now jeopardized by the sudden sub-investment-grade status of this investor-owned
electric utility and its subsidiaries.
�
The
power producers would need to finance their renewable utility or CBRE projects.

�
These set price bids include the cost of
financing based on the investor-owned electric utility's former investment-grade
financial strength.
�
The ability of power
producers to obtain a loan to finance these projects is now in question, which
impacts the reliability and affordability of electricity for consumers.
�
If a loan is even possible, a premium or
higher-than-average interest rate will be required to finance these projects.
�
The high-yield credit, or higher‑than‑average
interest rate, threatens to cancel projects due to the inability of a power
producer to increase their bid price to reflect the increased interest rate.

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The ability of a power producer to
obtain a loan may be mitigated through a proposed state step-in agreement.
�
However, the inability for power producers to
increase the prices of the renewable energy generated by these projects to
reflect the increased costs from a premium interest rate for high-yield credit
remains.

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Accordingly, the purpose of this Act is
to
c
l
arify
that incremental adjustments that are linked to premium interest rates for high
yield credit are just and reasonable and to authorize the public utilities
commission to include these incremental adjustments to the rate for electricity
generated from nonfossil fuels.

����
SECTION
2
.
�
Section 269-27.2, Hawaii Revised Statutes, is
amended by amending subsection (c) to read as follows:

����
"
(c)
�
The rate payable by the public utility to the
producer for the nonfossil fuel generated electricity supplied to the public
utility shall be as agreed between the public utility and the supplier and as
approved by the public utilities commission; provided that in the event the
public utility and the supplier fail to reach an agreement for a rate, the rate
shall be as prescribed by the public utilities commission according to the
powers and procedures provided in this chapter.

����
The
commission's determination of the just and reasonable rate shall be
accomplished by establishing a methodology that removes or significantly
reduces any linkage between the price of fossil fuels and the rate for the
nonfossil fuel generated electricity to potentially enable utility customers to
share in the benefits of fuel cost savings resulting from the use of nonfossil
fuel generated electricity.
�
As the
commission deems appropriate, the just and reasonable rate for nonfossil fuel
generated electricity supplied to the public utility by the producer may
include mechanisms for reasonable and appropriate incremental adjustments, such
as adjustments linked to consumer price indices for inflation
, adjustments
linked to premium interest rates for high yield credit,
or other acceptable
adjustment mechanisms.
"

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SECTION 3.
�

New statutory material is underscored.

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SECTION 4.
�

This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

PUC;
Renewable Energy; Rate for Electricity Generated from Nonfossil Fuels;
Adjustment Mechanisms

Description:

Clarifies
that adjustments linked to premium interest rates for high yield credit are
just and reasonable.
�
Authorizes the Public
Utilities Commission to include these incremental adjustments to the rate for
electricity generated from nonfossil fuels.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.