RELATING TO RENEWABLE ENERGY.

HB340

HOUSE OF REPRESENTATIVES

H.B. NO.

340

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:

����
SECTION 1.
�
The legislature finds that pursuant to Act
97, Session Laws of Hawaii 2015, Hawaii has committed to achieving a one
hundred percent renewable portfolio standard by December 31, 2045.
�
This transition away from imported fossil
fuels toward locally available renewable energy sources is critical for
ensuring the State's energy independence, economic sustainability, and
environmental resilience.

����
The legislature further finds that
the transition to a clean energy economy requires customer-friendly processes
to enable widespread adoption of distributed energy resources and
electrification technologies.
�
Current
interconnection and utility service upgrade processes have led to delays,
unexpected costs, and increased customer dissatisfaction, hindering progress
toward achieving the State's clean energy goals.
�
These challenges also result in localized
power quality issues and power outages when customers increase loads without
informing the utility.

����
The legislature finds that
establishing streamlined and transparent interconnection processes will
encourage consumer adoption, enable proactive utility planning, and ensure
reliability and cost-effectiveness in the power system.
�
The integration of smart inverters and other
customer-sited technologies is critical to minimizing grid investments and
achieving a clean, sustainable energy future.

����
Accordingly, the purpose of this Act
is to establish a grid-ready home interconnection process that supports the
rapid adoption of clean energy technologies, facilitates smart utility
investments, and ensures power system reliability.

����
SECTION 2.
�
Section 269-141, Hawaii Revised Statutes, is
amended by adding a new definition to be appropriately inserted and to read as
follows:

����
"
"Grid-ready home"
means a residential property equipped or modified to anticipate and streamline
the integration of clean electrification technologies such as electric vehicle
chargers and heat pumps, distributed energy resources such as photovoltaic
systems, batteries leveraging current national standards for functionality such
as UL 1741, and advanced grid modernization technology.
"

����
SECTION
3
.
�
Section
269-142, Hawaii Revised Statutes, is amended to read as follows:

����
"
[
[
]
�269-142[
]
]
�
Reliability standards; interconnection
requirements; adoption and development; force and effect.
�
(a)
�
The
commission may adopt, by rule or order, reliability standards and
interconnection requirements.
�
Reliability
standards and interconnection requirements adopted by the commission shall apply
to any electric utility and any user, owner, or operator of the Hawaii electric
system.
�
The commission shall not contract
for the performance of the functions under this subsection to any other entity
as provided under section 269-147.

����
(b)
�

The commission may develop reliability standards and interconnection
requirements as it determines necessary or upon recommendation from any entity,
including an entity contracted by the commission to serve as the Hawaii
electricity reliability administrator provided for under this part, for the
continuing reliable design and operation of the Hawaii electric system.
�
Any reliability standard or interconnection
requirement developed by the commission shall be adopted by the commission in
accordance with subsection (a) in order to be effective.
�
The commission shall not contract for the
performance of the functions under this subsection to any other entity as
provided under section 269-147.

����
(c)
�

The commission shall have jurisdiction over matters concerning interconnection
requirements and interconnections located in the State between electric utilities,
any user, owner, or operator of the Hawaii electric system, or any other
person, business, or entity connecting to the Hawaii electric system or otherwise
applying to connect generation or equipment providing ancillary services to, or
operate generation and equipment providing ancillary services in parallel with
the Hawaii electric system under processes established in accordance with section
269-145.
�
Nothing in this subsection is
intended to give the commission general supervision authority over any user,
owner, or operator of the Hawaii electric system or any other person, business,
or entity that is not a public utility as defined in section 269-1.

����
(d)
�
Within one hundred eighty days of the
effective date of this Act, the commission shall establish a streamlined
grid-ready home interconnection process for grid-tied renewable energy
generation and storage systems.
�
The
process shall include:

����
(1)
�
A streamlined
notification and approval process for customers seeking to install distributed
energy resources systems using UL 1741 or equivalent certified functionality;

����
(2)
�
A cost-sharing
fee of $350 to address service upgrades where necessary, to be paid by the
asset owner;

����
(3)
�
Requirements
obligating regulated electric utilities to process notifications and grant
interconnection to grid-ready homes within two weeks for systems with
electrical permits for the grid-ready improvements that have been approved by
the appropriate authority;

����
(4)
�
Provisions to
allow distributed energy resources operation with managed power export/import
where service upgrades are required; provided that the upgrades shall be
completed within three months of
; and

����
(5)
�
Protocols for
virtual commissioning and interconnection agreement issuance within one week of
the submission of a commissioning packet.
"

����
SECTION
4
.
�
Section
269-145, Hawaii Revised Statutes, is amended to read as follows:

����
"
[
[
]
�269-145[
]
]
�
Grid access; procedures for interconnection;
dispute resolution.

�
(a)
�
Each user, owner, or operator of the Hawaii
electric system, or any other person, business, or entity seeking to make an
interconnection on the Hawaii electric system shall do so in accordance with
procedures to be established by the commission by rule or order.

����
(b)
�
The commission shall have the authority to
make final determinations regarding any dispute between any user, owner, or
operator of the Hawaii electric system, or any other person, business, or
entity connecting to the Hawaii electric system, concerning either an existing
interconnection on the Hawaii electric system or an interconnection to the
Hawaii electric system created under the processes established by the
commission under this section.

����
(c)
�
In establishing a rule or order for the
utility interconnection process for renewable energy and storage systems for
grid-ready homes, the commission shall ensure the process:

����
(1)
�
Allows licensed
electricians to isolate electrical service at utility meters for meter panel
replacement, meter socket adapter installation, or main panel upgrades;
provided that access shall be subject to:

���������
(A)
�
Notification
by the utility provider to the owner of the grid-ready home of the planned
service disconnection on the morning of the planned service disconnection;

���������
(B)
�
Confirmation
of passed inspections by the appropriate authority; and

���������
(C)
�
Confirmation
of reconnection procedures; and

����
(2)
�
Establishes a
virtual commissioning process whereby system installers may submit
documentation confirming compliance with filed settings and operational
requirements of the installed distributed energy resources.
"

����
SECTION
5
.
�
Section
269-145.5, Hawaii Revised Statutes, is amended to read as follows:

����
"
�269-145.5
�
Advanced grid
modernization technology; principles.
�

(a)
�
The commission, in carrying
out its responsibilities under this chapter, shall consider the value of
improving electrical generation, transmission, and distribution systems and
infrastructure within the State through the use of advanced grid modernization
technology in order to improve the overall reliability and operational
efficiency of the Hawaii electric system.

����
(b)
�

In advancing the public interest, the commission shall balance
technical, economic, environmental, and cultural considerations associated with
modernization of the electric grid, based on principles that include but are
not limited to:

����
(1)
�
Enabling a diverse
portfolio of renewable energy resources;

����
(2)
�
Expanding options
for customers to manage their energy use;

����
(3)
�
Maximizing
interconnection of distributed generation to the State's electric grids on a
cost-effective basis at non-discriminatory terms and at just and reasonable
rates, while maintaining the reliability of the State's electric grids, and
allowing such access and rates through applicable rules, orders, and tariffs as
reviewed and approved by the commission;

����
(4)
�
Determining fair
compensation for electric grid services and other benefits provided to
customers and for electric grid services and other benefits provided by
distributed generation customers and other non-utility service providers; and

����
(5)
�
Maintaining or
enhancing grid reliability and safety through modernization of the State's
electric grids.

����
(c)
�
The commission, in carrying out its
responsibilities under this chapter, shall ensure the grid-ready home
interconnection process aligns with principles of advanced grid modernization
technology by:

����
(1)
�
Streamlining
customer access to renewable energy and storage resources;

����
(2)
�
Enhancing
customer participation in reliance-enhancing energy programs through rapid
integration; and

����
(3)
�
Optimizing grid
operations to accommodate increased electrification while minimizing
infrastructure costs.
"

����
SECTION
6
.
�
Section
269-146, Hawaii Revised Statutes, is amended to read as follows:

����
"
[
[
]
�269-146[
[
]
�
Hawaii electricity reliability surcharge;
authorization; cost recovery.
�
(a)
�
The commission may require, by rule or order,
that all utilities, persons, businesses, or entities connecting to the Hawaii
electric system, or any other user, owner, or operator of any electric element
that is a part of an interconnection on the Hawaii electric system shall pay a
surcharge that shall be collected by Hawaii
'
s electric utilities.
�

The commission shall not contract or otherwise delegate the ability to
create the Hawaii electricity reliability surcharge under this section to any
other entity.
�
This surcharge amount
shall be known as the Hawaii electricity reliability surcharge.

����
(b)
�

Amounts collected through the Hawaii electricity reliability surcharge
shall be transferred in whole or in part to any entity contracted by the
commission to act as the Hawaii electricity reliability administrator provided
for under this part.

����
(c)
�

The Hawaii electricity reliability surcharge shall be used for the
purposes of ensuring the reliable operation of the Hawaii electric system and
overseeing grid access on the Hawaii electric system through the activities of
the Hawaii electricity reliability administrator contracted under section
269-147; provided that amounts collected under the Hawaii electricity
reliability surcharge shall not be available to meet any current or past
general obligations of the State.

����
(d)
�

The commission may allow an electric utility to recover appropriate and
reasonable costs under the Hawaii electricity reliability surcharge for any
interconnection to the Hawaii electric system, including interconnection
studies and other analysis associated with studying the impact or necessary
infrastructure and operational requirements needed to reliably interconnect a
generator, as well as from electric utility customers through a surcharge or
assessment subject to review and approval by the commission under section
269-16.

����
(e)
�
The commission may allow the Hawaii
electricity reliability administrator contracted under section 269-147, if
contracted to perform the commission's functions under section 269-142(d), to
recover appropriate and reasonable costs under the Hawaii electricity
reliability surcharge for the implementation and operation of the grid-ready
home interconnection process, including staffing, training, and infrastructure
upgrades required to meet the grid-ready home interconnection process's
timelines and standards.

����
[
(e)
]
(f)

�
Nothing in this section shall create or be
construed to cause amounts collected through the Hawaii electricity reliability
surcharge to be considered state or public moneys subject to appropriation by
the legislature or be required to be deposited into the state treasury."

����
SECTION
7
.
�
Section
269-149, Hawaii Revised Statutes, is amended by amending subsection (b) to read
as follows:

����
"(b)
�
The Hawaii electricity reliability administrator
shall report to the commission each year on the date of agreement under section
269-147 following the original contracting between the Hawaii electricity
reliability administrator and the commission on [
the
]
:

����
(1)
�
The
status
of its operations, financial position, and a projected operational budget for
the fiscal year following the date of the report[
.
]
; and

����
(2)
�
The status,
effectiveness, and outcomes of the grid-ready home interconnection process,
including:

���������
(A)
�
The
number of customers served under the process;

���������
(B)
�
Average
timelines for interconnection approvals and upgrades;

���������
(C)
�
Total
fees collected by the electric utility under the process;

���������
(D)
�
Total
costs recovered by the electric utility in service of the process; and

���������
(E)
�
Value
of infrastructure upgrades deferred or avoided as a result of the process.
"

����
SECTION
8.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 9.
�
This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Grid-ready
Homes Interconnection Process; Renewable Energy; Public Utilities Commission;
Electricity Reliability Administrator; Electricity Reliability Surcharge

Description:

Requires
the Public Utilities Commission to establish a streamlined grid-ready homes
interconnection process.
�
Authorizes the
use of the Hawaii electricity reliability surcharge for cost recovery of
certain expenses of the Hawaii electricity reliability administrator associated
with the grid-ready homes interconnection process.
�
Requires report to the Legislature on the
grid-ready homes interconnection process.

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