RELATING TO RENEWABLE ENERGY.

HB790

HOUSE OF REPRESENTATIVES

H.B. NO.

790

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.
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The legislature finds that Hawaii has
committed to achieving a one hundred per cent renewable portfolio standard by
December 31, 2045, pursuant to section 269-92, Hawaii Revised Statutes.
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The 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.

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The legislature further finds that
customer-sited distributed energy resources, such as rooftop solar and energy
storage systems, are technologies essential to reaching the State's renewable
energy goals.
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As of September 2024,
Hawaiian Electric service territories achieved a renewable portfolio standard
of 36.7 per cent, with nearly half of that progress attributable to
customer-sited rooftop solar systems.
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Kauai Island Utility Cooperative achieved an even higher renewable
portfolio standard of 57.9 per cent, with 23.2 per cent coming from rooftop
solar installations.

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Hawaii leads the nation in the
integration of solar-plus storage systems, with ninety-six per cent of all
residential rooftop solar installation in the State now including energy
storage.
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These distributed energy
resources lower customer and grid electricity costs, provide energy resilience
during outages, and support grid reliability by balancing supply and demand.
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Notably, programs like Hawaiian Electric's
battery bonus program have demonstrated the potential of distributed energy
resources to address critical capacity needs, enrolling forty megawatts of
storage on Oahu and six megawatts on Maui to respond to energy adequacy and
reliability emergencies.

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The legislature acknowledges that
Hawaii's electric grid is confronting significant challenges, including aging
fossil-fuel-dependent infrastructure, heightened risks from climate-related
extreme weather events, and persistent utility management issues.
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These challenges have been underscored by
recent grid reliability emergencies on Oahu and Hawaii island, as well as the
devastating 2023 Lahaina wildfires.
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Recognizing the urgent need for decisive action, it is crucial for the
legislature to act promptly to secure a robust and resilient energy future.

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The legislature finds that to ensure
grid stability and system resilience, Hawaii must invest in distributed energy
resource grid service programs, microgrids, community-based or shared renewable
energy programs, and retail wheeling.
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These solutions empower customers to take decisive action to meet their
energy needs with low-cost, clean, and reliable energy while supporting broader
grid stability and community resilience.
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Microgrids and shared renewable energy systems enable localized energy
generation and resilience, ensuring continuity of power during emergencies or
outages.
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Retail wheeling allows customer
to purchase electricity from competitive suppliers expeditiously, further
promoting consumer choice, cost savings, and energy independence.

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To meet these challenges, Hawaii
should target the deployment of fifty thousand new distributed energy resources
within five years, emphasizing systems that integrate solar and energy storage
to maximize benefits for the grid and customers alike.
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Accelerated distributed energy resources
adoption will provide critical support for grid stability, reduce reliance on
imported fossil fuels, and ensure resilience in the face of emergencies and
infrastructure failures.

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Fair compensation mechanisms are
also essential to incentivize the widespread adoption of distributed energy
resources and maximize their value to customers and the grid.
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These mechanisms must include sufficiently
valued crediting for exported energy as a minimum customer protection and
capacity and performance payments for the provision of grid services by distributed
energy resources and virtual power plants.
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Such compensation ensures equitable returns on customer investments
while enhancing grid reliability and resilience.

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The purpose of this Act is to:

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(1)
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Establish an installation
goal for customer-sited distributed energy resources in the State;

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(2)
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Ensure
that
fair compensation is provided to distributed energy resources
exports as part of grid service programs; and

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(3)
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Authorize retail wheeling
of renewable energy and
require the public utilities commission to
establish policies and procedures to implement retail wheeling and microgrid
service tariffs.

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SECTION 2.
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Chapter 269, Hawaii Revised Statutes, is
amended by adding four new sections to be appropriately designated and to read
as follows:

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"
�269-
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Distributed
energy resources installation goal.
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(a)
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The
public utilities commission shall establish a goal of installing fifty thousand
new installations of customer-sited distributed energy resources in the State
by 2030.

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(b)
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The
public utilities commission shall use tariffs for grid services programs,
microgrids, community-based renewable energy, and retail wheeling with fair compensation
to achieve the goal in subsection (a).

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(c)
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Any
tariffs or tariff amendments filed pursuant to this section shall:

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(1)
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Include a rider
for new and existing energy storage devices;

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(2)
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Include
provisions that allow aggregators to:

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(A)
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Participate
in grid service programs;

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(B)
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Automatically
enroll and manage their customers' participation;

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(C)
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Receive
dispatch signals and other communications from the electric utility;

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(D)
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Deliver
performance measurement and verification data to the electric utility; and

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(E)
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Receive
grid service program payments directly from the electric utility; and

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(3)
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Provide for
measurement and verification of energy storage device performance directly at
the device without the requirement for the installation of an additional meter,
and such other measurement standards for non-energy-storage and electric
vehicle technologies for approval by the commission.

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269-
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Fair compensation for solar and energy
storage exports.
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(a)
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Notwithstanding any law to the contrary, energy exported to the electric
grid past a participating customer-generator's point of common coupling from
photovoltaic solar systems paired with energy storage as part of a grid service
program shall be credited at the full retail rate of electricity for the
relevant time period.

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(b)
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The
public utilities commission shall establish grid service compensation values
that fairly compensate system owners for resiliency, capacity, and ancillary
service value provided by their system.

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269-
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Microgrids; public utility; exception.
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Notwithstanding
any other law to the contrary, a person that constructs, maintains, or operates
a new microgrid does not, solely as a result of furnishing service through that
new microgrid to participating consumers, be considered a public utility under section
269-1.

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269-
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Retail wheeling; renewable energy; rules
.
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(a)
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Owners of renewable energy generation and
storage systems may engage in retail wheeling of renewable electricity.

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(b)
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No
later than , 2025, the
public utilities commission shall establish, by rule or order, policies and
procedures to implement retail wheeling and microgrid service tariffs that
include appropriate charges for retail wheeling participants and any consumer
protection measures it deems necessary.

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(c)
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For
the purposes of this section, "retail wheeling" means the
transmission of electric power from a storage or energy generation system
through the utility meter for consumption by a separate utility account holder.
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SECTION
3
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Section 269-1,
Hawaii Revised Statutes, is amended by amending the definition of "public
utility" to read as follows:

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""Public utility":

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(1)
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Includes every
person who may own, control, operate, or manage as owner, lessee, trustee,
receiver, or otherwise, whether under a franchise, charter, license, articles
of association, or otherwise, any plant or equipment, or any part thereof,
directly or indirectly for public use for the transportation of passengers or
freight; for the conveyance or transmission of telecommunications messages; for
the furnishing of facilities for the transmission of intelligence by
electricity within the State or between points within the State by land, water,
or air; for the production, conveyance, transmission, delivery, or furnishing
of light, power, heat, cold, water, gas, or oil; for the storage or warehousing
of goods; or for the disposal of sewage; provided that the term shall include:

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(A)
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An owner or
operator of a private sewer company or sewer facility; and

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(B)
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A
telecommunications carrier or telecommunications common carrier; and

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(2)
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Shall not include:

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(A)
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An owner or
operator of an aerial transportation enterprise;

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(B)
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An owner or
operator of a taxicab as defined in this section;

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(C)
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Common carriers
that transport only freight on the public highways, unless operating within
localities, along routes, or between points that the public utilities
commission finds to be inadequately serviced without regulation under this
chapter;

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(D)
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Persons engaged in
the business of warehousing or storage unless the commission finds that
regulation is necessary in the public interest;

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(E)
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A carrier by water
to the extent that the carrier enters into private contracts for towage,
salvage, hauling, or carriage between points within the State; provided that
the towing, salvage, hauling, or carriage is not pursuant to either an
established schedule or an undertaking to perform carriage services on behalf
of the public generally;

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(F)
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A carrier by
water, substantially engaged in interstate or foreign commerce, that transports
passengers on luxury cruises between points within the State or on luxury
round-trip cruises returning to the point of departure;

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(G)
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Any user, owner,
or operator of the Hawaii electric system as defined under section 269-141;

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(H)
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A
telecommunications provider only to the extent determined by the public
utilities commission pursuant to section 269-16.9;

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(I)
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Any person who
controls, operates, or manages plants or facilities developed pursuant to
chapter 167 for conveying, distributing, and transmitting water for irrigation
and other purposes for public use and purpose;

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(J)
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Any person who
owns, controls, operates, or manages plants or facilities for the reclamation
of wastewater; provided that:

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(i)
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The services of
the facility are provided pursuant to a service contract between the person and
a state or county agency and at least ten per cent of the wastewater processed
is used directly by the state or county agency that entered into the service contract;

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(ii)
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The primary
function of the facility is the processing of secondary treated wastewater that
has been produced by a municipal wastewater treatment facility owned by a state
or county agency;

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(iii)
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The facility does
not make sales of water to residential customers;

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(iv)
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The facility may
distribute and sell recycled or reclaimed water to entities not covered by a
state or county service contract; provided that, in the absence of regulatory
oversight and direct competition, the distribution and sale of recycled or
reclaimed water shall be voluntary and its pricing fair and reasonable.
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For purposes of this subparagraph,
"recycled water" and "reclaimed water" means treated
wastewater that by design is intended or used for a beneficial purpose; and

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(v)
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The facility is
not engaged, either directly or indirectly, in the processing of food wastes;

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(K)
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Any person who
owns, controls, operates, or manages any seawater air conditioning district
cooling project; provided that at least fifty per cent of the energy required
for the seawater air conditioning district cooling system is provided by a
renewable energy resource, such as cold, deep seawater;

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(L)
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Any person who
owns, controls, operates, or manages plants or facilities primarily used to
charge or discharge a vehicle battery that provides power for vehicle
propulsion;

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(M)
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Any person who:

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(i)
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Owns, controls,
operates, or manages a renewable energy system that is located on a customer's
property; and

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(ii)
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Provides, sells,
or transmits the power generated from that renewable energy system to an
electric utility or to the customer on whose property the renewable energy
system is located; provided that, for purposes of this subparagraph, a
customer's property shall include all contiguous property owned or leased by
the customer without regard to interruptions in contiguity caused by easements,
public thoroughfares, transportation rights-of-way, and utility rights-of-way;
and

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(N)
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Any person who
owns, controls, operates, or manages a renewable energy system that is located
on such person's property and provides, sells, or transmits the power generated
from that renewable energy system to an electric utility or to lessees or
tenants on the person's property where the renewable energy system is located;
provided that:

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(i)
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An
interconnection, as defined in section 269-141, is maintained with an electric
public utility to preserve the lessees' or tenants' ability to be served by an
electric utility;

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(ii)
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Such person does
not use an electric public utility's transmission or distribution lines to
provide, sell, or transmit electricity to lessees or tenants;

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(iii)
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At the time that
the lease agreement is signed, the rate charged to the lessee or tenant for the
power generated by the renewable energy system shall be no greater than the
effective rate charged per kilowatt hour from the applicable electric utility
schedule filed with the public utilities commission;

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(iv)
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The rate schedule
or formula shall be established for the duration of the lease, and the lease
agreement entered into by the lessee or tenant shall reflect such rate schedule
or formula;

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(v)
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The lease
agreement shall not abrogate any terms or conditions of applicable tariffs for termination
of services for nonpayment of electric utility services or rules regarding
health, safety, and welfare;
and

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(vi)
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The lease
agreement shall disclose:
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(1) the rate
schedule or formula for the duration of the lease agreement; (2) that, at the
time that the lease agreement is signed, the rate charged to the lessee or
tenant for the power generated by the renewable energy system shall be no
greater than the effective rate charged per kilowatt hour from the applicable
electric utility schedule filed with the public utilities commission; (3) that
the lease agreement shall not abrogate any terms or conditions of applicable tariffs
for termination of services for nonpayment of electric utility services or
rules regarding health, safety, and welfare; and (4) whether the lease is
contingent upon the purchase of electricity from the renewable energy system;
provided further that any disputes concerning the requirements of this
provision shall be resolved pursuant to the provisions of the lease agreement
or chapter 521, if applicable[
; and

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(vii)
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Nothing
in this section shall be construed to permit wheeling
].

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If the application of this chapter
is ordered by the commission in any case provided in paragraph (2)(C), (D),
(H), and (I), the business of any public utility that presents evidence of bona
fide operation on the date of the commencement of the proceedings resulting in
the order shall be presumed to be necessary to the public convenience and
necessity, but any certificate issued under this proviso shall nevertheless be
subject to terms and conditions as the public utilities commission may
prescribe, as provided in sections 269-16.9 and 269-20."

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SECTION
4.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.

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SECTION 5.
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This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

PUC;
Renewable Energy; Customer-sited Distributed Energy Resources; Installation
Goal; Retail Wheeling

Description:

Establishes
an installation goal for customer-sited distributed energy resources in the
State.
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Ensures that fair compensation is
provided to distributed energy resources exports as part of grid service
programs.
�
Authorizes retail wheeling of
renewable energy and
requires the PUC to establish policies and
procedures to implement retail wheeling and microgrid service tariffs.

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