SB 202: RELATING TO RENEWABLE ENERGY.

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 the State should attempt to meet its goals of energy independence through renewable energy by ensuring that every stakeholder, including consumers and producers, play an active role in the process of producing electricity.  Solar panels are an acceptable mode of producing electricity, and user-producers of solar electricity are generally homeowners who have installed solar panels on their rooftops.  However, current state policies do not adequately incentivize homeowners to conserve or produce more energy at their residences.  Requiring electric utilities to compensate homeowners for the kilowatt hours that they produced but have not used at the end of any twelve-month period would encourage homeowners to install additional rooftop solar panels and conserve energy.  The legislature also believes that producing energy from rooftop solar panels is a more acceptable energy source than windfarms.

     The purpose of this Act is to require electric utilities to compensate customer-generators for excess electricity credits remaining at the end of each twelve-month reconciliation period.

     SECTION 2.  Section 269-106, Hawaii Revised Statutes, is amended to read as follows:

     "§269-106  Billing periods; twelve-month reconciliation.  (a)  Billing of net energy metering customers shall be on a monthly basis; provided that the last monthly bill for each twelve-month period shall reconcile for that twelve-month period the net electricity provided by the electric utility with[:

     (1)  The] the electricity generated by the eligible customer-generator and fed back to the electric grid over the monthly billing [period; and

     (2)  Any unused credits for excess electricity from the eligible customer-generator carried over from prior months since the last twelve-month reconciliation] period.

     (b)  Credits for excess electricity from the eligible customer-generator that remain unused after [each twelve-month reconciliation period may not be carried over to the next twelve-month period.] the twelve-month period shall be purchased by the utility or its designee at the rate of compensation set forth in section 269-108.

     (c)  This section shall not apply to a member-owned cooperative electric utility."

     SECTION 3.  Section 269-108, Hawaii Revised Statutes, is amended to read as follows:

     "§269-108  Net electricity producers; excess electricity credits and credit carry over.  (a)  At the end of each monthly billing period, where the electricity generated by the eligible customer-generator during the month exceeds the electricity supplied by the electric utility during that same period, the eligible customer-generator is a net electricity producer and the electric utility shall retain any excess kilowatt-hours generated during the prior monthly billing period; provided that the excess electricity generated by the customer-generator, if any, in each monthly billing period shall be carried over to the next month as a monetary value to the credit of the eligible customer-generator, which credit may accumulate and be used to offset the compensation owed the electric utility for the eligible customer-generator's net kilowatt-hour consumption for succeeding months within each twelve-month period; provided further that the electric utility shall reconcile the eligible customer-generator's electricity production and consumption for each twelve-month period as set forth in section 269-106.

     (b)  The eligible customer-generator shall [not be owed any compensation] be compensated for any excess kilowatt-hours [unless the electric utility enters into a purchase agreement with the eligible customer-generator for those excess kilowatt‑hours.] remaining at the end of any twelve-month period.  The compensation owed to the eligible customer‑generator shall be calculated at a rate of electricity to be established by the public utilities commission for the relevant time period.

     (c)  This section shall not apply to a member-owned cooperative electric utility."

     SECTION 4.  The utility company shall pay 33.3 per cent of the compensation owed under section 3 of this Act in the first year of implementation following the effective date of this Act, 66.6 per cent of the compensation owed under section 3 of this Act in the second year of implementation following the effective date of this Act, and one hundred per cent of the compensation owed under section 3 of this Act from the third year of implementation following the effective date of this Act and in subsequent years.

     SECTION 5.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect upon its approval.

Report Title:

Net Energy Metering; Electric Utilities; Net Energy Producers; Compensation

Description:

Requires electric utilities to compensate customer-generators for excess electricity credits.  (SD1)

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

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 the State should attempt to meet its goals of energy independence through renewable energy by ensuring that every stakeholder, including consumers and producers, play an active role in the process of producing electricity.  Solar panels are an acceptable mode of producing electricity, and user-producers of solar electricity are generally homeowners who have installed solar panels on their rooftops.  However, current state policies do not adequately incentivize homeowners to conserve or produce more energy at their residences.  Requiring electric utilities to compensate homeowners for the kilowatt hours that they produced but have not used at the end of the year would encourage homeowners to install additional rooftop solar panels and conserve energy.  The legislature also believes that producing energy from rooftop solar panels is a more acceptable energy source than windfarms.

     The purpose of this Act is to require electric utilities to compensate electricity producers for excess electricity credits remaining at the end of each twelve-month reconciliation period.

     SECTION 2.  Section 269-106, Hawaii Revised Statutes, is amended to read as follows:

     "§269-106  Billing periods; twelve-month reconciliation.  (a)  Billing of net energy metering customers shall be on a monthly basis; provided that the last monthly bill for each twelve-month period shall reconcile for that twelve-month period the net electricity provided by the electric utility with[:

     (1)  The] the electricity generated by the eligible customer-generator and fed back to the electric grid over the monthly billing [period; and

     (2)  Any unused credits for excess electricity from the eligible customer-generator carried over from prior months since the last twelve-month reconciliation] period.

     (b)  Credits for excess electricity from the eligible customer-generator that remain unused after [each twelve-month reconciliation period may not be carried over to the next twelve-month period.] the succeeding twelve-month period shall be purchased by the utility or its designee at the rate of compensation set forth in section 269-108."

     SECTION 3.  Section 269-108, Hawaii Revised Statutes, is amended to read as follows:

     "§269-108  Net electricity producers; excess electricity credits and credit carry over.  (a)  At the end of each monthly billing period, where the electricity generated by the eligible customer-generator during the month exceeds the electricity supplied by the electric utility during that same period, the eligible customer-generator is a net electricity producer and the electric utility shall retain any excess kilowatt-hours generated during the prior monthly billing period; provided that the excess electricity generated by the customer-generator, if any, in each monthly billing period shall be carried over to the next month as a monetary value to the credit of the eligible customer-generator, which credit may accumulate and be used to offset the compensation owed the electric utility for the eligible customer-generator's net kilowatt-hour consumption for succeeding months within each twelve-month period; provided further that the electric utility shall reconcile the eligible customer-generator's electricity production and consumption for each twelve-month period as set forth in section 269-106.

     (b)  The eligible customer-generator shall [not be owed any compensation] be compensated for any excess kilowatt-hours [unless the electric utility enters into a purchase agreement with the eligible customer-generator for those excess kilowatt‑hours.] remaining at the end of any twelve-month period.  The compensation owed to the eligible customer‑generator shall be calculated at the retail rate of the rate class to which the customer is normally assigned."

     SECTION 4.  The utility company shall pay 33.3 per cent of the compensation owed under section 3 of this Act in the first year of implementation following the effective date of this Act, 66.6 per cent of the compensation owed under section 3 of this Act in the second year of implementation following the effective date of this Act, and one hundred per cent of the compensation owed under section 3 of this Act from the third year of implementation following the effective date of this Act and in subsequent years.

     SECTION 5.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 6.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect upon its approval.

Report Title:

Net Energy Metering; Electric Utilities; Net Energy Producers; Compensation

Description:

Requires electric utilities to compensate electricity producers for excess electricity credits.

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

STAND. COM. REP. NO. 213

Honolulu, Hawaii

RE:    S.B. No. 202

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Energy and Intergovernmental Affairs, to which was referred S.B. No. 202 entitled:

"A BILL FOR AN ACT RELATING TO RENEWABLE ENERGY,"

begs leave to report as follows:

     The purpose and intent of this measure is to require electric utilities to compensate consumer-generators for excess electricity credits.

     Your Committee received testimony in support of this measure from the Green Party of Hawaiʻi, Recycle Hawaii, Clean the Pacific, Kauai Climate Action Coalition, Environmental Caucus of the Democratic Party of Hawaiʻi, Life of the Land, 350Hawaii.org, GreenPeace Hawaii, and thirty-one individuals.

     Your Committee received testimony in opposition to this measure from Hawaiian Electric and Kauaʻi Island Utility Cooperative.

     Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs, Public Utilities Commission, and one individual.

     Your Committee finds that incentivizing renewable energy generation can contribute greatly to the State's energy goals.  This measure not only encourages consumers to install distributed renewable energy resources, such as rooftop solar systems, but also to conserve the renewable energy produced.  Your Committee has heard concerns that compensating eligible customer-generators at the retail rate class to which the customer is normally assigned could result in higher utility costs for customers without a distributed renewable energy system.  Your Committee notes that as customer-generators continue to be compensated, the remainder of the grid costs are be paid by customers who do not generate renewable energy, many of whom are renters, live on fixed income, or cannot afford the upfront investment of installing a rooftop solar system.  Amendments are therefore necessary to address this potential inequity.

     Accordingly, your Committee has amended this measure by:

     (1)  Requiring the compensation owed to an eligible customer‑generator to be calculated at a rate to be established by the Public Utilities Commission, rather than at the retail rate class to which the customer is normally assigned;

     (2)  Inserting language to exempt member-owned cooperative electric utilities from the provisions of this measure; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Energy and Intergovernmental Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 202, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 202, S.D. 1, and be referred to your Committee on Commerce and Consumer Protection.

Respectfully submitted on behalf of the members of the Committee on Energy and Intergovernmental Affairs,