House Standing Committee on Energy & Environmental Protection

Alright. Good morning, everyone, and welcome to our House Committee on Energy and Environmental Protection. Our first hearing of the session, it is Tuesday, January 28th, 9am we are in room 325.

And before some housekeeping notes, I'll just let my Committee Members introduce themselves really quickly, starting with-

Representative Amy Perruso, District 46, YPO Acres, out to KA and appoint

And Vice Chair of the Committee this year. I'm Chair Nicole Lowen, District 7.

Matthias Kusch, District 1, Hilo Hamakua.

Secondary representative for Kona.

Back up, back up.

Great. I have a couple housekeeping notes and then we'll get started on the agenda. So, because morning hearings have to adjourn prior to noon floor session, if not all testifiers have the opportunity to testify, please know your written testimony will be considered by the committee.

For those on Zoom, please keep yourself muted and video off while waiting to testify. And after your I'm done testifying on Zoom, again, the Zoom chat function is allowed to allow you to chat with technical staff only. Please only use the chat for technical issues. If you're unexpectedly disconnected, you can attempt to rejoin.

And if disconnected while presenting testimony, you may be allowed to continue if time permits. Please note the House is not responsible for any bad Internet connections on the testifier's end. And in the event of a network failure, it may be necessary to reschedule the hearing or schedule a meeting for decision making.

In that case, an appropriate notice will be posted. Please avoid using any trademarked or copyrighted images, and please refrain from profanity or uncivil behavior. And for those present here, we don't usually do time limits in my committee, but we do have a long agenda.

So I ask that everyone remember we have reviewed all your written testimony and we ask you to please be concise in your oral testimony. And so with that, we'll get started. First on the agenda this morning is House Bill 470 relating to noise. This is about leaf blower noise and first up to testify we have Department of Health.

Good morning, Chair, Vice Chair, Members of the Committee, my name is Matthew Kurano. I'm the Administrator of the Environmental Health Services Division. The Department of Health supports the intent of the Bill. Any opportunity to reduce unnecessary noise pollution is something that's very important to the Department of Health.

We do have some concerns about solely limiting the sale of the type of equipment noted based on decibel limits, and we provided comment in our written testimony. We're here to answer any questions. Thank you very much.

Thank you. And on Zoom, I think we have Department of Education? Oh, in person. Sorry, please come forward.

Good morning, Chair, Committee Members. Audrey Downer for Superintendent Hayashi. We submitted comments with our written testimony. We'll be here for any questions.

Thank you and Retail Merchants of Hawaii? Not present, and then we have Ted Bolan here in person.

Thank you. Chair Lowen, Vice Chair Peruso and Members of the Committee. Ted Bolan. As many of you know, I used to be an environmental, represent the Department of Health as Deputy Attorney General. When we think of environment, we often think of water pollution and air pollution.

But there's another kind we don't think about as much as being an environmental problem, and that's noise, which can affect human health and also, of course, be rather irritating. So it's kind of a nuisance. This Bill would attempt to limit the future sale, not current usage, but future sale of certain leaf blowers that are noisy.

And it applies a national standard from the American National Standards Institute, B175.2 class for 65 decibels or higher. We propose to use decibel adjusted DBAs, which is a better way to measure the effect on the human ear. Again, the Bill does not affect usage.

It does not attempt to regulate based on fuel types, which a number of these bills do. But they are preempt. Those bills are preempted under the Clean Air Act. This is just about noise. It's not about fuel type. So I thank the Committee for the opportunity to testify.

I know there are many bills with seem like higher priority, and I would acknowledge that. But this is a good one and I hope you'll pass it. Thank you very much. Available for questions.

Thank you. And then we have three additional testimonies from individuals. Two in support and one in opposition. Is there anyone else here to testify on this measure, if not Members? Any questions? All right, seeing none, we'll move on to House Bill 742 relating to transit oriented development. And this is requesting HCDA prepare a programmatic EIS.

For Iwile Kapalama and, UH West Oahu TOD improvements. And first up to testify we have University of Hawaii.

Sherry, if I. If I may maybe take this a little bit out of order. My name is Craig Nakamoto. I'm the Executive Director of the Hawaii Community Development Authority. And I.

Well, let's. Sorry, let's go. Just. We'll go down in the order that we called people. Okay.

I just wanted to give some background first that might be helpful for the testimony that's going to follow.

Okay, we have you on the list, so. All right, okay, sorry.

I apologize about that. Aloha, Chair Lowen, Vice Chair Peruso and Members of the Committee. My name is Michael Shibata with the University of Hawaii's Office of Strategic Development and Partnership. The University supports House Bill 742 and stands on its written direct testimony. Thank you.

Thank you. And then have HHFDC with comments.

Good morning Chair, Committee Members. Dean Minakami, Executive Director of the Hawaii Housing Finance Development Corporation. We submitted comments basically stating that we prepared a master plan, infrastructure master plan for the Iwa Lake Emma area. And we're in the process right now preparing a programmatic EIS for those improvements.

And now HCDA, please come forward. Thank you.

Thank you Chair. I apologize. Chair Lohan, Vice Chair Peruso, Members of the Committee again. Craig Nakamoto, Hawaii Community Development Authority Executive Director. Let me just, allow me to just give some background on the, on the projects for which this Bill asks us to do environmental impact statements in the 20 as part of our statutory scheme.

As most of you probably know, we have development districts such as Kakako, Kalailoa, Hea Pulehunui on Maui and then additionally the Legislature created in HCDA in 2022 a transit oriented development infrastructure districts in the 2022 session, the purpose of which was to put in give HCDA the powers and the responsibility to implement infrastructure improvements that will help primarily affordable housing in TOD areas.

The funding, the Ivalay Kapalama Fund Project and the UH West Oahu project. In 2024 the Legislature gave us appropriated 25 million for infrastructure upgrades to Iwali Kapalama, one of the TOD districts.

And we've embarked on a project to upgrade the electrical system primarily to benefit the expansion that's going on at Meride Housing, the Lehigh Civic center and some private lands primarily to build affordable housing. The second project is the UH West Oahu Road Project.

That project is to kind of fulfill the vision that, UH West Oahu had in their land development plan which is to build roads and housing on lands adjacent to their UH, you know, the campus lands. So we received 35 million in the 2024 Legislature to build roads and related infrastructure for really phase one of that project.

This project was kind of a multi-agency collaborative effort between UH, HHFDC and HCDA whereby UH would provide the land so it's on site infrastructure, on site infrastructure and roads.

HHFDC would issue an RFP for the development of housing not just for students but for everybody and, and other uses and then HCDA with the 35 million is going to build roads to support that housing which we already have started to do through a design build contractor.

So I think in essence my message is that the tasks that are asked of in this Bill are already works in progress or have been done already. If you look at Mr. Shibata's testimony or,

Mr. Shibata testimony, they've already done an EIS for these for UH West Oahu in Director Minakami's testimony they're working on finishing up the EIS for the evil Kapalama area. So I just wanted to provide that context and apologize for taking myself out of order there.

Okay, thank you, appreciate it. And next up we have Hawaii Yimby in support and then Holomua Collaborative.

Morning Chair Lowe and Vice Chair Peruso Committee Members. I'll largely stand on our testimony in support.

I'll just note briefly that the reason that we support this is it does seem to be a good and effective way to simultaneously trying to make sure that we are evaluating impacts in our environment from further building but also doing it in a way that streamlines the process of doing those EISs and in a way that by having the government running point on that and funding it can ultimately provide cost savings for the people who are eventually going to be buying or renting homes in that area.

And it is great to hear the work that is already being done by HDCA, UH and HHFDC. And I would just note, I think in a couple of comments they did not that there are some things that are asked for in this Bill that are a little bit beyond what they've already done.

And I think I saw for instance in UH's testimony that they'd be happy to work with HCDA on doing that additional work if this passes. So with that I'll sit down and around for any questions you have. Thanks so much.

Thank you. And then we have MANA up title guarantee HPM Building supply. I think that is also Holomua Collaborative. Okay, sorry. The mix up on the testimony list and then Hawaii Appleseed in support not present and an additional individual in support Members.

Are there any questions on this Bill or is there anyone else here to testify on this? Seeing non Members questions. Okay, great. All right, we will move on to House Bill 340. This is relating to the environment. Requiring the Public Utilities Commission to establish relating to renewable energy.

Requiring the PUC to establish a streamlined grid ready home interconnection process. Authorizes the use of the HERA surcharge for Cost recovery of certain expenses of the Hawaii Electricity Reliability Administration Administrator associated with Grid Ready Homes interconnection process. First up, we have DCCA.

Morning Chair, Vice Chair, Members of the Committee. My name is Michael Angelo and I'm the Executive Director at the Division of Consumer Advocacy which is part of the Department of Commerce and Consumer Affairs. And we stand on our written testimony providing comments on the Bill. Thank you.

Thank you. And then we have Attorney General.

Morning Chair, Vice Chair, Members of the Committee, Ian Robertson, Deputy Attorney General.

Our Department submitted testimony submitting comments and just to summarize, that is suggesting that on page four, line 18 to 19 the language indicating within 180 days of the effective date of this act, we just suggested that it be amended to a specific date to avoid confusion after this is codified.

Thank you for questions and Public Utilities Commission.

Chair, Vice Chair, Members of the Committee, Leo Ascension, Chair of the PUC. We'll stand on a written testimony providing comments, basically wanting to study the matter further, but then adhering to the 180 days to provide a report and a framework back to the Committee or to the Legislature in fact, on the progress doing that framework.

Thank you. And Green Power Projects LLC in support. 350 Hawaii in support. Solar Array Corporation in support. Independent energy in support. And we have Hawaii Solar Energy Association.

Good morning. Chair Lowen, Vice Chair Peruso and Members of the Committee. I'm Rocky Mould, the Executive Director of the Hawaii Solar Energy Association. I'll stand on our written comments strongly supporting this Bill.

And just note that this Bill really is about moving to the next level of of really powerful grid interactive technologies that will allow us to achieve our renewable energy goals, our resilience goals at much lower cost, much more efficiently and really take us to the next level of a grid of the future for Hawaii.

I'm here to answer any questions if you have them. I'll note that I do offer an amendment that includes electric vehicle charging and vehicle to grid directly to the Bill. And that's very important. Thank you very much.

Thank you. And then we have Hawaiian Electric.

Aloha and good morning Chair, Vice Chair, Members of the Committee. I'm Kaiulani Shinsato. I'm testifying on behalf of Hawaiian Electric. I won't go over all of my testimony. I'll keep it brief. But I did want to mention two points. We do definitely support the intent of the Bill to grow DERs in Hawaii.

However, we do respectfully oppose the process that's in the Bill. The first thing I wanted to mention for the Committee's consideration is when I read through the testimonies in support of the Bill. And when I read the Bill, it looks like there's sort of an underlying theme that we are delaying the process. It's very costly.

And I just wanted to offer something to kind of challenge that narrative. And that is for the past four years, we've had an interconnection approval performance incentive mechanism, or PIM, and this was given to us by the PUC. It was designed specifically to incentivize us to speed up interconnection approval times.

And I want to submit that it has done its job because for the past four years we've been achieving high levels of performance and getting monetary rewards on the pimple. And so I mention this not to brag, but to again challenge the narrative that's in the Bill, that we're slow and our process is not perfect.

I totally recognize that we are always open to finding improvements in our process. And we've been, I think, doing a good job collaborating with the solar industry and with stakeholders over the years. We're absolutely willing to do that to find more improvements. And so our preference is to go that route through collaboration versus going through legislation.

The second point I wanted to note is that the Bill focuses on our service upgrade process. And I wanted to clarify that most customers who apply for rooftop solar and battery, normal residential customers, come straight through us. We give them an initial review, initial technical review, we approve them for installation.

And on Oahu last year, we did that on an average of 10.5 business days, which is fast. It's tier one, it's the highest level of performance for our PIM. So that's the normal customer wanting to do this.

We do have a subset of customers who decide to upgrade their service and they're the ones that go through the service upgrade process. And generally, if It's a simple 100 to 200 AMP upgrade, we actually don't charge them for those costs. It's only when the upgrade gets complicated, there's trenching, stuff like that.

The customer's electrician is going to have to charge them more for the job. So again, we've been working with the solar industry. We understand their concerns. We want to find improvements where we can to to our process. But our preference is again to do it through collaboration versus legislation. Thank you very much for hearing my points.

I'm happy to answer your questions.

Thank you. And then we have additional testimony and support from PhotonWorks Engineering, in support from Tesla and in support from one individual. Is there anyone else here to testify on this measure, if not Members, Questions? I have a couple questions, I guess starting with Hawaiian Electric.

So I think there have been improvements in timeliness of interconnection processes when you're looking at older technology. But I think maybe the concern that you're seeing in testimony is that with the newer technologies that are available, there's a lesser amount of feeling comfortable with it and that process has been slower.

So while you might be seeing achieving the incentives in the PIM, it doesn't mean there hasn't been delays on being able to adopt and approve the newer technologies. So I mean, would you agree with that?

I appreciate the question. I would ask for more specific information, I guess on the newer technologies. From my perspective, all of the newer technologies we adopt, as long as they're, you know, up to our standards, we adopt them. For example, we have an equipment list.

And so if the technology is new and it applies by our standards, we will add that technology to our equipment list. And so everything coming on, we'll check that equipment list and make sure it's on there.

So we do try to integrate new technologies and then make sure again that we are processing things as fast as we possibly can.

So where are you with the like UL1741 in terms of evaluating that?

I think it's already a part of our process. I'm looking to my colleague here. Yes, it is a part of our process.

Okay. All right. I have questions for some others, but did you have a question? Okay, so thank you. Thank you I guess for Hawaii Solar Energy Association. And just same question from, from your guys perspective.

Yeah, so we are as Member companies of HSEA have been trying to interconnect through like new UL1741 features. There has been more pushback on that. There's this export import limiting feature in particular that utilizes inverter technology to do a lot of the export control and grid interaction that we're looking for to help the grid.

And there's been some, some pushback on that a little bit. We are potentially working through these in the collaborative process.

But really we think with UL1741 equipment coming, this really opens up the door and there really is less of a need for interconnection studies and looking at system level hosting capacity because these grid interactive features in UL1741 really handle that stuff. They really actually support the grid and actually balance, help balance the grid.

And so some of these checks and balances we don't think are necessary anymore in the process.

All right, thank you. And then last question for Consumer advocate just on the cost, on the impact to ratepayers. I guess those concerns.

Would it alleviate your concerns if we just adjust that cost share amount or blanket out for now for further discussion like whether more of that should fall on a higher amount should fall on the customer who's.

If we blanked it out and I think the some consideration around the use of the reliability surcharge to pay for it. We have concerns around that as well.

Right. And remove that section altogether. Yeah, that's. That would alleviate your concerns.

That would alleviate our concerns.

Okay. All right, thank you. Any other questions, Members? All right, if not, we are moving on to House Bill 243. So this is kind of similar trying to address similar concerns in a little bit different way relating to energy. So this is requiring PV and EV ready new residential construction. And first up we have Hawaii State Energy Office.

Good morning Chair, Vice Chair, Members of the Committee. I'm Maria Tome with the Hawaii State Energy Office. We will stand on our testimony in support. Thank you.

Thank you. We have Green Party of Hawaii in support. Citizens Climate Lobby in support. Climate Protectors Hawaii in support.

Thank you, Chair Lowen. I'll be brief. This is a kind of in my mind a no brainer. It's cheaper to install PV and EV ready equipment before you build as opposed to coming back and having to retrofit with construction. It's five times as expensive I believe. So please pass this Bill and save people some money. Thank you.

Thank you. 350 Hawaii in support. Hawaii Electric Vehicle Association in support. We have Hawaii Solar Energy Association offering comments. Not testifying, not signed up to speak in person. Alliance for Automotive Innovation on zoom not present. Kauai Climate Action Coalition in support. Chamber of Sustainable Commerce in support. We have NYAP Hawaii Chapter in opposition. Not present.

And then we have 21 additional testimonies, all in support report. Is there anyone else here to testify on this measure if not Members? Questions? I had a question for Naya but they're not here so we'll move on. Next bill on the agenda is House Bill 350 relating to energy.

So this expands the types of water heater systems to satisfy the requirement for a building permit. So basically adding heat pump water heaters alongside solar hot water heating to the types of heaters not requiring a variance. And first up to testify we have Public Utilities Commission. Wait, sorry, hang on, wrong page. Hawaii State Energy Office.

Aloha Chair, Vice Chair, Members of the Committee. Hawaii State Energy office stands on its testimony in support. Thank you.

Thank you. Will Giese Solar Array Corporation on Zoom.

Good morning. I'm if you'll allow me the indulgence, I'm joined by my colleague Calvin. He's been on the job for five months, but he's very opinionated. My name is Will Giese. I am the Senior Director of Government affairs for Solaray Solar Ray has been around for 50 years in Hawaii as a renewable energy corporation.

We're locally owned and operated right there in Oahu, but we have facilities on every major island. And we are also the largest domestic manufacturer of solar thermal collectors. Through two of our companies, one based in California and one based in Florida, we submitted comments on this.

So, you know, we as a company, we sell all kinds of water heaters. We do solar hot water, but we also sell heat pumps, electric water heaters and instant gas demand water heaters. We've been deeply involved with the solar water heater mandate.

We actually had a very productive working group meeting yesterday, the Hawaii State Energy Office on this exact topic. We don't outright oppose this bill, but I would just ask two things. One is that we're really encouraged to see the removal of the 15 year lifespan.

So part of that is driven by the Department of Energy, which considers properly maintained solar thermal system as lasting a minimum of 20 years, which is what we have seen in the market for the last 50. So it's very encouraging to see that provision removed.

The other thing is we've, we've offered some amendments just on basically aligning solar thermal energy efficiency performance with heat pump performance. So if heat pumps are to be considered an equal technology to be installed under a mandate like solar thermal has been, they should have to perform from an energy energy efficiency perspective in the same way.

And so in Hawaii for new homes, and part of the standard is through Hawaii Energy's technical reference Manual, you have to meet at least a minimum of a 90% solar fraction to install a solar water heater on new homes.

Which means that 90% of the energy that is used to heat water in any given year is from solar and the remaining 10% is from backup.

Now, heat pumps are efficient, but as far as I know they are about maybe two to three times as efficient as a typical gas or electric water heater, but they are not 90% efficient as a solar thermal system would be. We would love to see heat pumps that are that efficient.

But I would say that if we are mandating efficient technology that is to be used outside of what would be requested for a variance under the current law, that it be aligned and on the same playing field as the efficiency required for a solar thermal system.

That is why solar thermal systems are so successful in the state is because they're allowed to be the most efficient way to heat water which can save you up to 40% on the average electric bill of of a residence in Hawaii.

Partly because water heating is usually one of the largest if not the largest single electrical heating loads that that a home will experience.

So you know we appreciate the Committee hearing this, we appreciate the bill and we just offered that that one amendment to be considered but we're excited to have that conversation and happy to answer any questions if there are any and thanks for allowing my associate to join.

Thank you. And let's see. Next we have Hawaii Solar Energy Association with comments and Hawaii Energy and Support. Is there anyone else here to testify on this measure? Members, any questions? Do you have a question for I guess energy office? You might be my best bet. The suggested amendment that Will was talking about.

If I can pull this up. Sorry, hang on, let me just find this.

Was to say that a heat pump water heater that has a coefficient of performance equivalent to the minimum 90% solar factor required for solar hot water heaters.

So like a COP of 10?

Well, I'm asking you, I'm not familiar with how these are technically measured, but I just wanted to check if we included that kind of provision, would it rule out a lot of people being able to opt for a heat pump in Hawaii?

I think one of the other pieces of this is how heat pumps can work with photovoltaics. So if you have photovoltaics, you still need a variance under this law. But heat pump water heaters could be using the energy from the photovoltaic. So it's possible that some combination of that would be equivalent.

And so that might be worth looking at because it could be specified in such a way that if you have photovoltaics and heat pump that would meet the same type of conditions. Can you speak into the mic? Sorry, I can't hear you very well.

It could be that a combination of photovoltaics and heat pump would meet that as well.

So that is definitely an interesting approach that would recognize both the ability of the solar energy through photovoltaics to support the system on a roof, also as we get more renewable energy on the system, on the electricity system, then the heat pump's ability to use any of the excess during the day, when that's available, especially as we have higher quantities of it and we're trying to manage the grid, these heat pump water heaters can be very helpful there as well.

So we're looking forward to that as well.

Can you not have the same kind of grid interaction with a solar hot water system?

Yeah. No, no. If you look on the Energy Star site and you look at whether they are grid interactive, none of the solar water heaters on the Energy Star site indicate that they are grid interactive. Sorry, that's incorrect.

Okay, okay, hang on, hang on, Will.

Anyway, so. But there may be other information.

Okay, well, maybe. And if Hawaii Energy was here, I would ask them as well, but I guess I'm just curious about the impact of this particular amendment. So thank you. Yeah, thanks.

So, yeah we see it as a positive.

Especially going forward, but this particular amendment suggested by Hawaii Solar Energy Association. Yeah, I would need to see the actual language. Okay. All right, thanks. Okay, thanks. Sure. We'll follow up. Yeah, go ahead.

If I may, for the Hawaii State Energy Office. I'm sorry, I didn't get to the microphone fast enough. Thank you for your response to that question, my question is that we're not talking about the size of the home. I think everybody has a picture here of a three bedroom, two bath home.

And how would this relate to a smaller home when you incorporate the costs of a solar. Like today we have passed a lot of legislation for ADUs. How would this relate to a smaller like ADU or two bedroom, one bath home where the cost of solar compared to a heat pump would interact? And this proposed legislation.

Yeah, our office handles variance requests. So when a home builder is proposing an alternative water heating system, they're not putting a solar heater on there. You know, they say we don't have enough sun or it's not feasible or they actually have to do the analysis comparing the alternative water heating system to the solar water heating system.

So that addresses those differences in the number of people going to be in the home and the amount of water used and so forth. That's why I guess the variance process was put in place.

Okay, so that would stay intact even if this 90% coefficient amendment was adopted?

Well, it's the 90%. The Solar Water heater mandate requires that the solar thermal system actually have 90% of the energy going into the water coming from the sun. I mean, that's already in there.

Okay, thank you. Thanks. I appreciate the clarification.

Thank you. All right, last question, I guess. Did we lose solaray? Did we lose Will?

Nope, I'm still here.

Okay, sorry, our zoom is for some reason not highlighting. I'm gonna wait for them to fix that real quick. Okay, there you are. So sorry for your amendment. If you could just explain what would the specific impact of your amendment be like?

If we passed the Bill as it is currently, versus if we included the amendment, how would that impact how many people could opt for a heat pump over a solar hot water system?

Well, I think that would be kind of an HSEO question because they're the ones who do the variance. But I would say that. I'll just say that the Hawaii State Energy office has a very comprehensive process in evaluating the efficiencies of these systems.

So I would imagine that they would adopt a new life cycle cost analysis tool that is currently used to be able to determine whether a system that was installed with a heat pump was able to meet that solar fraction. So as Maria.

Well, you must have some familiarity of how many systems would that. Can you share that?

So as Maria pointed out, I think you would be able to meet potentially that fraction if you installed a heat pump system in concurrence with a A solar PV system. Right.

And so then you would, you would have a situation in which the water heating is, is 90% or greater provided by renewable energy as opposed to electric resistance as it would be in the case of a heat pump or through a refrigeration cycle which still takes electrical energy.

So I would say that like that that's really more of a kind of a administrative question for the HSEO.

But I, from what I've seen through my, I would say now almost decade of experience with the LCC tool that HSEO has developed, I think it be well within their ability to kind of add that on there for this.

My whole point is offering an amendment that brings the efficiency of a heat pump on the level playing field of an efficiency with an average solar water heater that's installed.

That is the whole point of this, this piece of legislation that was passed many years ago is that at least in Hawaii, solar thermal systems are the most efficient way to heat water as long as you have access to adequate solar resources.

And over the life of the system that makes sense for most residents because they did not have to pay an electric Bill for that portion of the load. I'd be happy to address the demand response portion too quickly if you'd allow me, but I'll pause there.

I would like to hear your response to that, so go ahead.

So Maria is, is partially correct on the Energy Star side. Demand response quote unquote doesn't exist for solar water heating. But that's because it does exist for the backup water heater that has to be installed as part of a solar thermal system.

So all solar thermal systems and all heat pumps for that matter have a backup heating element. Typically that's an electric resistance or it could be gas for a solar thermal system, you can attach it to a heat pump if you wanted to. Each one of those water heaters has the capability to be a demand response water heater.

Our company as well, you know, we, I can't speak for all solar thermal manufacturers, but for many years we have designed and developed a smart controller demand response device that I think Hawaii energy is, I think they utilize for their systems.

So it's, it is incorrect to say that solar thermal systems cannot also function as demand response devices.

I think the broader point is that a well working solar thermal system typically doesn't need to function as a demand response device because it is removing a majority of that demand that would otherwise be present for the water heating system anyway.

But if it needed to function that way, let's say you had Like a week of cloudy weather and you were running your electric resistance back up very well. That electric resistance could function through any smart controller that you could that is commercially available. So it doesn't matter if it's a solar thermal system.

The solar thermal system is going to be attached to a water heater that can function as a demand response device like any normal water heater would. Because that's what it is.

Yeah. Okay. All right, thank you. Any further questions, Members? Okay, we will move on to the next Bill on the agenda. House Bill 346 relating to electric vehicle charging infrastructure. This provides rebates for the installation of electric vehicle ready parking stalls for new construction of affordable housing. And first up to testify we have Public Utilities Commission.

Good morning, Chair Lowen, Vice Chair Peruso and Members of the Committee. I'm Ashley Norman on behalf of Chair Asuncion at the Public Utilities Commission. We stand on a written testimony and support comments and I'm available for any questions. Mahalo.

Thank you. Hawaii State Energy office in support.

Aloha, chair, Vice Chair, Members of the Committee, Maria Tome, Hawaii State Energy office will stand on our written testimony in support. Thank you.

Thank you. Then we have the Office of Planning and Sustainable Development in support.

Aloha, chair, Vice Chair, Members of the Committee, my name is Danielle Bass, State Sustainability Coordinator from the Office of Planning and Sustainable Development. We offer testimony and support. We think that this is a good Bill that incentivizes affordable housing developers to install electric vehicle charging and parking infrastructure for new developments. Thank you.

Thank you. We have Green Party of Hawaii in support. Climate protectors Hawaii in support.

Thank you. Chair Lowen, Vice Chair Peruso and Members of the Committee, Ted Bolan on behalf of the Climate protectors Hawaii, we support this Bill. It seems to me it's mostly about equity. The move to electric vehicles is coming and if we don't include lower income people, people in affordable housing, they're going to be left behind.

That is unfair. And this Bill would help to make available to those people the same access that people with more money are already buying. I would add that ground transportation is the leading area, the leading sector where we could make progress on reducing greenhouse gases, greenhouse gas emissions in Hawaii.

And this is one opportunity to have more electric vehicles in a place where there are barriers and otherwise might not happen. So thank you for the opportunity to testify. I'm available for any questions.

Thank you. Hawaiian Electric in support.

Morning, Chair Lohan, Vice Chair Peruso, Members of the Committee, I'm Jamila Jarvin. On behalf of Hawaiian Electric, we stand and support of our testimony. We're here for any comments or questions.

Thank you. Then we have 350 Hawaii in support. Hawaii Electric Vehicle Association in support. Citizens Climate Lobby in support. Hawaii Energy now present in support.

Morning Chair Lowen, Vice Chair Peruso, Members of the Committee, Chester Carson on behalf of Caroline Carl for Hawaii Energy. And we stand our written testimony and support. Thank you.

Thank you. We have RER Rides EV and support Kauai Climate Action Coalition and support alliance for Automotive Innovation on Zoom not present. EAH Housing in support. Coalition Earth in support. And then we have 18 additional individuals all in support. Is there anyone else here to testify on this measure? If not Members, any questions?

Okay, that was an easy one. We will move on to House Bill 366 relating to renewable energy. This is relating to contested cases on environmental assessments for renewable energy projects. And first up to testify we have the Public Utilities Commission with comments.

No?

Hi, good morning. Chair, Vice Chair and Members of the Committee, Daniel park on behalf of Leo Suncheon, Chair of the Commission, we'll stand on our written testimony and I'm available for any questions.

Thank you. Office of Planning and Sustainable Development with comments.

Morning, Chair, Vice Chair, Member. I'm Tom Eisen with Office of Planning Sustainable Development's Environmental Review program. Still quite a mouthful. We stand on our submitted comment and remain available to respond to questions about our suggested edits. Thank you.

Thank you. Life of the Land with comments.

Chair, Vice Chair and Committee Members. It appears, at least to us, that there are two sections of law that offer both saying that they take precedent over other sections and offer some contradictions. Aloha.

Ted Bullen, Climate Protectors, Hawaii in support. Thank you. Kauai Island Utility Cooperative in support. And then we have 350Hawaii in opposition and Hawaii Clean Power alliance in opposition. That's all the testimony I had submitted in advance. Is there anyone else here to testify on this measure if not Members? Questions.

Henry, I think your in person testimony was as enigmatic as your written testimony. Would you like to explain what you mean?

Yeah. The Bill says that notwithstanding other sections of law, the Bill takes effect, takes precedent. And Chapter 269 guarding the PUC says the same thing, that not withstanding other sections of law, the PUC section takes precedent.

So the question is, if one says 20 megawatts or more and one says any amount and other things like that, which one holds? If one says incinerators are covered and one says incinerators aren't covered, which ones hold? So we think that one of them should save, takes Precedent over the other one and not both.

Okay, we'll take a closer look at that. All right, thank you. Any other questions, Members? All right. Seeing none, we will move on to House Bill 342 relating to renewable gas tariff. First up to testify, we have DCCA.

Morning chair, Vice Chair, Members of the Committee. My name is Michael Angelo, I'm the Executive Director of Division of Consumer Advocacy. We stand on our. Largely stand on our written comments. But I will note that we're in agreement with the PUC that a rate case is the preferred method for addressing this tariff. Thank you.

Thank you. Public Utilities Commission.

Good morning again. Daniel park for the PUC. We'll stand on our written testimony once again and echo the consumer advocate's comments that we do prefer that any sort of renewable gas tariff be considered in the context of a generic case. Thank you.

Okay, thank you. We have state energy office in support. It looks like we lost Maria. Henry Curtis, Life of the Land.

Aloha. Henry Curtis, life of the land. We support the CA and the PUC. This is not the proper vehicle. In addition, there is no indication by the gas company that they're increasing their use of renewable energy in the next five years and maybe much longer. Therefore, this bill will not incentivize them to move into renewable energy.

It will only allow them to have a higher profit margin on any renewables they currently have. And the profit margins are set by the PUC and should not be set by the utility. Thank you.

Thank you. Then we have Hawaii Gas in support.

Good morning, chair, Vice Chair, Members of the Committee. My name is Nathan Nelson. I'm the General counsel at Hawaii Gas. I want to take a step back and talk about what we're trying to solve for. We agree with the consumer advocate and the Public Utilities Commission that there is, in fact, a process to have a renewable tariff.

That process is a rate case. That rate case costs two to $3 million in order to prosecute, and it takes two to three years. Excuse me, two years up to two years to complete. That's important. And it's important for Hawaii Gas.

We are currently in a rate case right now, and Hawaii Gas tries to keep rates as stable as possible, and so they don't file rate cases frequently. What the impact of that means is that if we have to wait for another rate case, you're talking about 2030 before we'll propose another renewable natural gas tariff.

And that's important. And we think if we're serious about speeding up and getting faster, we should think about alternative mechanisms in order to do this. This is about a process. It's not about substantive. And I appreciate life of the Lands comments and others that try to get into details about fossil fuels and all the rest of that.

That's not what this is about. This is about a process. There'll be an opportunity to debate those what is and what isn't and what's renewable natural gas and what's not. And that's in the docketed proceeding itself.

But what we're trying to solve for is coming up with a faster process that doesn't cost two to $3 million and doesn't require us to wait two years for a rate case. We don't think that 2030 is the appropriate vehicle for that. So what are the types of issues that rate cases solve for?

And it's important they take a look at what the impacts of a proposed change will have on all of your customers. We agree. But if you look carefully at the language of what we are proposing, there's a couple of things. Number one, the proposed measure says we're not going to have an increase in customer rates. Okay.

Those are the types of things that you decide in a rate case. If there's no increase in customer rates and the rate is voluntary, people can ascribe to it. There's no harm or prejudice to others on the system, and that's important.

So what we're suggesting is that there be two vehicles, a rate case vehicle for certain renewable gas tariffs where there's a widespread implication for other customers on the system and separately an accelerated process. If there isn't, if you're not going to raise rates on other customers, we think it makes sense now.

It's not fair to to ask the Public Utilities Commission to step up to the plate and make a decision very, very quickly within six months. We get that. We understand that. At the same time, if we're going to ask them to move faster, we have to move faster as well.

And what we're proposing in this accelerated mechanism is the ability to file by August 31st a renewable natural gas tariff. So both people have their feets to the fire. The gas company has to move faster. The Public Utilities Commission has to move faster with respect to its decision making.

I think the other piece that's important is the part that I touched on about impact to customers, and that's really important, and that's the differentiation between the two processes. There's a rate case process if you have a big impact on customers, but there's an accelerated process if you don't.

And I think that there's General agreement with the Consumer Advocate and others. If there aren't impacts to rates for other customers, then it may make sense to do this. We've offered amendments to try to address some of the Public Utilities Commission concerns. And those amendments have been provided by the Clerk this morning.

And we hope that those amendments address at least what we understand of the Public Utilities Commission's concerns related to the bill. And with that, I'll rest and I'm happy to answer any questions that you may have.

All right, thank you. And then we have an additional individual in support. That is all the testimony I had submitted in advance. Is there anyone else here to testify on this measure? If not Members? Questions? All right. Seeing none, we will move on to House Bill 786. This is relating to the deposit beverage container program.

And some of the changes this Bill proposes are in service of trying to increase the availability and convenience of actually redeeming our deposit beverages to get our five cents back. And first up to testify is the Attorney General.

Good morning, Chair. Members of the Committee. I'm Lyle Leonard, Deputy Attorney General. The Department has identified an issue. The Bill provides for a grant but does not establish standards that may conflict with the state constitution. There are some suggested amendments in the written testimony. And. And I'm available for questions. Thank you.

Thank you. And then we have Department of Health.

Morning, Chair, Vice Chair, Members of the Committee, I'm Lane Otsu speaking on behalf of Department of Health. And we stand on our written testimony providing comments on the measure.

Thank you. And then Hawaii Food Industry Association on Zoom.

Thank you, Chair and Committee Members. Lauren Zirbel, on behalf of Hawaii Food Industry Association. We submitted testimony in opposition. It's important to remember that retail businesses do not have control over the space in which they operate. Landlords have strict rules about what type of behavior is allowed in their stores.

Many of them prohibit collection of waste, including recyclables, in large quantities outside of the premise of the retail location. So for that reason, we., we oppose the Bill. And we also wanted to highlight some of the findings of the Auditor's report, which are really extensive.

And not one of the recommendations was about forcing retailers to accept the recyclables back to the premises. So thank you very much for the opportunity to testify.

Thank you. That's all the testimony we had submitted in advance. Is there anyone else here to testify on this measure, if not Members? Questions? I guess I'll start with Lauren.

Just to clarify, because you mentioned the Auditor's report, but I pulled that up to refresh my memory, and it was a financial report of the Deposit Beverage Container Special Fund that was sort of focused on whether there was fraud happening with the redemption centers and if it didn't recommend or recognize that there was an issue with the lack of convenience for consumers and, you know, how to redeem these deposit beverage containers.

That's because that wasn't the mandated topic of the audit. So how would you respond?

I mean, they did have a lot of extensive recommendations about attempting to reduce fraud and basically examples of fraud within the program which they felt had not been addressed.

Yeah, but I mean, I guess that was the core of your, of the testimony, was to say this wasn't recommended in the Auditor's report. A lot of things weren't recommended in the audit report.

Yeah. I mean, and also that [inaudible] premises that most of them are operating within the provisions provided by the landlords.

Yeah. Could you, the Bill does still have a blank for kind of exempting the smaller operations. Could, could you think about, like, what kind of square footage might be appropriate to.

I mean, both small and large operate under leases. I don't, I don't think there's really a, it's not necessarily a matter of small versus large as a matter of owned property versus not owned property and also like, regulations regarding the, you know, the area in which they operate.

Well, should we just make a number up then?

Well, I just. I think that there's an example of a lot of large retailers that are operating lease, under leases. I think the vast majority are, yeah.

But I would think a large retailer like a Safeway or a Foodland has confined space, you know, inside, if that's an issue. I mean, I would like to know if this claim about their landlord's lease is not allowing it, is how many of the actual facilities it applies to.

I think there's also, like, you know, health and safety concerns with, you know, bringing in, you know, potentially cockroaches and other critters that might be living in recycling bins. We're dumping those inside of a grocery store. That could potentially create some health insurance safety issues.

If we leave them outside, it can create some smell issues and, you know, rotting, etc. Because most of these items are not cleaned before they returned. And the Department of Health testimony actually is pretty good.

It talks about, you know, that there are kind of a lot of issues surrounding, you know, the rules, that there are a lot of people that attempted to do the reverse vending machines, that it was very costly, that none of them are currently operating, proposals that they even say in their testimony it proposed poses a financial and logistical hardship.

Thanks, Lauren. We did read the testimony.

Thank you.

Okay, well, if you can think about, I mean, whether it's reverse vending, I'm probably going to work on this Bill a little more before we pass it out. But I think the lack of convenience for redeeming these containers is a huge issue.

And the primary reason why, you know, that money sits there and doesn't get claimed is because it's very inconvenient to redeem them. And so whether it's reverse vending machines or through other, you know, options, I'd like to figure out a way to address it. And it would be nice to have help from HFIA in figuring that out.

Yeah. So our recommendation and other testimony that we submitted on a different Bill was to use some of the funds that, you know, over $50 million in the Fund to expand curbside recycling.

Because there's just a lot of data that that is the more efficient system and that.

well, curbside recycling gets the containers recycled, but it doesn't get the customers their deposit back.

Yeah, I mean, I'm gonna do a poll on that. I don't think 10 cents is gonna be enough to get people to drive, to return garbage in their cars. But, I mean.

You know, you know, I disagree because I've lived in places where you do redeem it, and when it's convenient. You redeem them and it works. So I've seen. We've seen it work in other jurisdictions.

So I think people are happy to get their $0.05 back if it's something they can take back when they go back to the grocery store. It happens in a lot of other states. All right, thank you. I guess for Department of Health.

Okay. Hi, sorry.

Good morning.

Can you. What is the balance in the deposit beverage container special Fund right now?

I don't have the precise amount, but it's in the neighborhood 50 million.

About 50 million. Okay. All right. I pulled it up online and it's. I mean, it was a 23, 24 special Fund report, and it looked like the balance was like 19 million. So I'm just curious, like, where we find those numbers and if it's more like 50.

I'll get back to you. Okay. Yeah, sorry.

Okay. I guess. I guess because your testimony did express how there has been issues with the reverse vending machines. I mean, what do you see as a more viable solution then? Because clearly the system isn't working as it should right now.

Actually, with the removal of the exemptions from, for the dealers to offer redemption services along with the proposed Regional Centers. I think that is actually. I mean, I think that has the potential to work because it keeps the siting of the CRCs, you know, up to the market, essentially, instead of us trying to, you know, plop in a CRC and supporting that CRC.

Well, I guess the idea of the, you know, grants for reverse vending machines, the idea was if we're going to remove all these exemptions to try to provide some kind of assistance or incentive back to the, you know, retailers. So it was more of.

Ones that have little space.

Yeah, I mean, it sounds like maybe they'd rather just repeal.

The reason why we inserted, you know, tried to explain that situation is we did actually have a RVM grant program in the early days of the program, pre2010. And we did fund CRC RVMs for a good number of CRCs.

I don't know if every CRC took advantage of it, but the larger ones, such as Reynolds, Triple R installed CRC RVMs both at physical locations, and Triple R developed mobile units where they had trucks going, you know, Tuesday, Thursday here, Monday, Wednesday, Friday there, that kind of thing.

And those kind of ran its course over the course, say, 2, 3, 4 years. And all of the CRCs that operated RVMs eventually stopped use of them because of operational issues.

They just break a lot.

Well, I. Mean even when they're working well, they have only limited capacity. Right. So you would have to have an attendant. Right.

Stop, empty, contain the RVM, reinsert and then customer can continue. That was one thing. And then sort of the cleanliness factor because soda, beer, juice, all that kind of stuff. And on the sort of operational side, the RVMs that were used then identify containers or DBC containers from non DBC by scanning the barcodes.

And so like the little databases in the machines would have to be updated as new products are introduced. Right. So I think there were, they might have been maybe on a lease basis and, right, because the company had to come in and update the software essentially.

And the last thing was essentially there was just one company that offered RVMs. It was a near monopoly situation. It was TOMRA out of Norway. So that was the other part. Right. It's all the way from Europe and.

Okay. Okay. Well, I think maybe after the hearing, you know, I'd like to get together and talk about what we can do then probably put decision making on this Bill off for a couple days. And also for Lauren, if she's still listening, we'd like to include you in those conversations. Thank you very much. Any other questions, Members?

All right, if not. Thank you. Thank you. We'll move on to House Bill 750 relating to the environment. This is our extended Producer Responsibility Needs assessment Bill. And first up. zero, sorry, I apologize. Hang on, I got a sticky note here that we. Someone was on zoom that was skipped over for the prior Bill.

So before we move on, we're going to go back to House Bill 342 and see get testimony from the Coalition for Natural Gas. If they're still there.

Yes, thank you. Honorable Chair, Members of the Committee, my name is Yannick Soreas. I'm the Western Legislative Affairs Manager at the Coalition for Renewable Natural Gas. Our coalition represents over 400 Members across North America. I'm here in support of HB 342.

We believe that this legislation represents a thoughtful and balanced approach to accelerating renewable energy development deployment while maintaining strong consumer protections and believe that this measure will help support Hawaii's transition to a sustainable and carbon free future.

We especially wanted to note that this, the bill's voluntary structure is particularly noteworthy and believe that it allows environmentally conscious consumers to support renewable gas development while ensuring that no cost impacts to other customers. This approach aligns perfectly with Hawaii's goals to reduce dependence on imported petroleum as well as strengthen energy security.

I appreciate the opportunity to provide testimony today and I am available to answer any questions.

Thank you. Does anyone have questions for this testifier? All right. If not, we will move on to House Bill 750, the EPR needs assessment. First up to testify, we have Climate Mitigation Change and Mitigation Adaptation Commission.

Aloha, Chair Lowen and Vice Chair Peruso. Members of the Committee, Leah Laramie with the Climate Change Mitigation Adaptation Commission. We stand on our testimony and support. Mahalo.

Thank you, and then Department of Health.

Morning Chair, Vice Chair, Members of the Committee, Lyn Otsu speaking on behalf of Department of Health. We stand on our written testimony in support of this measure.

Thank you. And Hawaii Food Industry Association with comments on Zoom?

Committee Members, we submitted comments on this measure. We would like to request that the list of stakeholder Members on the Advisory Council be amended to include one representative from a business which manufactures consumer packaged goods for sale in Hawaii.

And also a recommended amendment that they exempt things like prescription medication, medical devices and supplements. There's other states EPR programs has exempted these items due to the fact that there's a very complex and highly regulated framework for OGC consumer healthcare packaging. Thank you very much for the opportunity.

Thank you. And then we have Hawaii Reef and Ocean Coalition, Ted Bolen in support. Thank you. Ameripen on Zoom offering comments.

Yep. Good morning. Chair Lowen, Vice Chair Peruso, my name is Andy Hackman. Here on behalf of Ameripen represent the entire packaging supply supply chain, folks that make packaging components, brands that use those components and some folks that recycle those components.

We stand on our comments, but we also want to thank you and the Committee for its work on this legislation since last year. We would encourage additional amendments to potentially consider adopting the Producer Responsibility Organization. But we appreciate that the definition of producer is going to be something that's going to be examined under the needs assessment.

We believe the Advisory Council is a good addition to the legislation. We'd support the comments of the Hawaii Food and Industry Association as well and just really appreciate the work that's gone into this needs assessment process. Thank you.

Thank you. And then we have the Democratic Party of Hawaii in support, American Cleaning Institute in support, Hawaii Farmers Union in support, Environmental Caucus of the Democratic Party of Hawaii in support, Flexible Packaging Association comments and three additional individuals in support. Is there anyone else here to testify on this measure? If not Members questions?

If not, I have a quick question for Department of Health for this, for this bill I'm thinking about as a source of funding for the needs assessment. Actually instead of doing a General Fund appropriation, maybe using some of that funds that some of the funds that are sitting in the deposit beverage container special Fund.

Do you think that the allowable uses of the special Fund already accommodate that or would there need to be an amendment?

There would need to be an amendment.

Okay. Okay. All right, we'll think about doing that then. And if you can think about what the wording on that might want, might need to look like.

Okay. And for sure I'm getting back to you about it.

Okay, thank you. Any other questions, Members? Nope. All right. All right. If not, we will move on to House Bill 339 relating to electric utilities.

So this requires the PUC to consider imposing certain conditions on approval of an application for an acquisition, merger, consolidation of an electric utility and establishes a process where if there's a proposed acquisition, merger or consolidation of a utility there would be an opportunity for competing bids from non investor owned utilities.

And first up to testify we have Department of Commerce and Consumer Affairs Consumer Advocate.

Chair, Vice Chair, Members of the Committee name is Michelangelo, Executive Director of dca. We stand on our written testimony providing comments. Thank you.

Thank you. And the Public Utilities Commission.

Chair, Vice Chair, Members of the Committee, Leo Asuncion, Chair of the PUC will also stand on our written testimony providing comments. And we do have suggested language should the Committee decide to move the measure forward.

Thank you. And Ulupono Initiative support.

Hello, Good morning, Chair, Vice Chair, Members of the Committee, my name is Michael Colon. I'm the Director of Energy at Ulupona Initiative. Just wanted to briefly reiterate our strong support for this Bill. We believe that State of Hawaii has made significant progress and shown tremendous leadership in the policy space, particularly as it relates to energy.

As everyone knows, we were the first to go 100% in the RPS. We also have a very forward looking, very forward thinking performance based rate making that's currently being evaluated and updated through the Public Utilities Commission process.

And we think that a Bill like this really seeks to reassert and reaffirm to everybody our commitment to these policy wins over time.

And we wouldn't want, you know, the crisis du jour crisis of the day, financial crisis to somehow undermine all of those hard fought wins by being overly accommodating to a newcomer or exiting from a bankruptcy process. So we're just looking, we think this is a good Bill to reassert that and send a message. Thank you very much.

Thank you. And then we have IBEW comments.

Morning Chair, Vice chairs, Committee Members, Kiko Bukowski on behalf of IBEW 1260. We stand on our written testimony and support and offer proposed amendments to expand protections to include workforce retention and workforce protection. Thank you.

Thank you. And then climate protectors, Hawaii and support. And that is all the testimony we had submitted in advance. Is there anyone else here wishing to testify on this measure, if not Members? Any questions? All right, I don't think I have questions, so we will move on.

I have a quick question. zero, okay. Go ahead. For IBEW. Nice try. So the amendments that you suggested, it's my understanding that that language would just be permissive. So these. It would just lay out options for consideration. Is that your understanding of how the. Amended language would affect the Bill?

Layout options for the Legislature to consider or for the.

For the. Sorry.

Right, for the Commission.

Commission.

The. We're proposing language that would be part of. We're suggesting that if they were to consider an event like this, that they would include language that would protect the workforce in the. In the event of a. An acquiring entity.

Right. But I mean, I guess my question is even if the Bill and the law, if it's passed, ultimately contains the amending language, it doesn't necessitate that they actually retain all covered employees, for example. But just that they consider that. That they.

The intent is that they require it.

Okay.

Thank you.

And if that's not what's being conveyed, then we'll take another look at it.

But I think the current language in the Bill, for all the conditions, is it's not a mandate, it's. The PUC can consider imposing these conditions on their approval, but it's also a strong message to the PUC for all of those.

Thank you.

Thank you. Thank you, Chair, any other questions? All right. All right. If not, we'll move on to House Bill 978 relating to electric utilities. And this is the bill just amending the receivership statute to include electric utilities along with other types of utilities. First up to testify, we have DCCA.

Chair, Vice Chair, Members of the Committee, Michel Angelo for DCA. We stand on our testimony providing written comments. Thank you.

Thank you. And then Public Utilities Commission. Sorry, go ahead.

Supporting the bill.

Okay. I was wondering.

Chair, Vice Chair, Members of the Committee, Leo Asuncion, chair of the Puc. We'll stand on a written testimony providing comments and proposed amendments to the Bill.

Thank you. And Climate protectors, Hawaii in support. That's all the testimony we had submitted in advance. Is there anyone else here to testify? Please come forward.

Morning, Chair, Vice Chair, Nate Nelson on behalf of Hawaii Gas. We just have a concern with respect to the proposed legislation to the extent that it includes gas utilities. I think it doesn't contemplate possibly having a combined structure like we do. We have an unregulated and regulated side of our business.

The Public Utilities Commission would not have jurisdiction over the non regulated side of our business. And so there's a complication element.

I don't necessarily think that it can't be resolved, but we should take a look at with respect to the bill because it might make it difficult with respect to the unregulated side of our business because we're operated as one company as a whole. And the Public Utilities Commission would not have jurisdiction over that.

And in the event of some type of default, bankruptcy or otherwise, the lenders essentially would have control of that receivership through bankruptcy action. So I think it just creates a complication that we need to think through a little bit more with respect to the gas utility.

All right. Okay. Thank you. Anyone else here to testify on this? If not Members questions?

can I just ask that you submit your testimony in written form so that we can include it.

Sure. Happy to.

Thank you. Good call. I guess. Quick question for DCCA. Just following up on Hawaii Gas comments because I was I'm not sure if the statute specifies regulated public utilities and I was intending to pass it out just calling them public utilities instead of saying sewer, water, electric, just to simplify that.

But do you think that we should have a different approach.

Defer to the legal.

Can you restate your question?

Just the testimony from Hawaii Gas just brought up a new something new that I hadn't thought about or was even aware of. So in changing this statute, if we change this Bill right now, the language kind of lists public water utilities, sewer utilities, and then we're proposing the Bill proposes to add electric utilities.

And I was planning to change it to public utilities, regulated public utilities. But should we not do that given those comments or how do we address the concerns of White Gas?

Well, if I can split by the way, Mickey Knox, attorney for the Consumer Advocate, if I can split your question into two parts.

So if you change it to public utilities, then it would probably tie back to the definition In 269-1 and the public utilities that are under the Commission's jurisdiction under that definition would be would be subject to the statute per that definition.

I think that Mitch Nelson for the Hawaii Gas brings up an interesting point that would need to get thought about a little bit.

For the I think Hawaii Gas and Young Brothers also has some regulated and some unregulated parts of their business.

Okay.

Okay. Okay. Well, I guess we intend to move this forward, but if you so probably we don't have that amendment today, but if we can think about what would be appropriate language to address that concern. We'll make a note in the Committee report.

Mr. Curtis brought up a good point. I deferred to the Attorney General's Office about the Hawaii constitutions.

We'll check with our. That's a good point. We'll check with our internal council on that. Thank you. Any other questions, Members? All right, seeing none. The last Bill on the agenda this agenda Today, House Bill 976 relating to renewable fuel, and this establishes a tax credit for sustainable aviation fuel, essentially.

First up to testify we have the Hawaii State Energy Office.

Aloha. Maria Tome, Hawaii State Energy Office will. Stand on our written testimony providing comments.

Thank you. Thank you. And next we have Department of Taxation with comments.

Morning. Clinton Piper, Department Taxation Chair, Vice Chair. Members of the Committee will stand on our written comments.

Thank you. Environmental Caucus of the Democratic Party of Hawaii and support life of the land comments.

Aloha. Henry Curtis, left land. I believe we're in support of the Bill rather than comments. Certainly aviation is one of the three things that we have to address greenhouse gas emissions with in any way we can sharply reduce greenhouse gas emissions associated with aviation is good. Mahalo.

Thank you. Climate Protectors Hawaii in support Ted Bolan.

Climate Protectors Hawaii I did file in support, but I've had second thoughts which include Sorry about that, folks. I certainly support more aviation fuel. You know, as Henry just said, we've got a big problem with greenhouse gas emissions from aviation, but how you burn it, how you produce it, how you produce the fuel matters.

And if you use, for example, biomass or C and D waste to generate aviation fuel, you're not making an improvement in the environment, you're making it worse. So I think there's some provisions in here. I would restore the life cycle greenhouse gas requirement that is stricken from the Bill and a few other provisions along the way.

So please look at the details of the Bill. They matter in terms of environmental protection. Thank you.

Thank you. And then we have Americans for Democratic Action in opposition. Hawaii Renewable Fuels Coalition support.

Aloha Chair, Vice Chair, Members of the Committee, my name is Nahilani Parsons. I'm here to testify on behalf of. The Hawaii Renewable Fuels Coalition in strong. Support of this measure. Our coalition includes Hawaii Farm Bureau, Ponto Pacific Airlines for America, which is Hawaiian and Alaska Par Hawaii and Pacific Biodiesel, plus Many more.

We are working on growing Camelina as a crop to make renewable fuel that could be used to reduce carbon emissions for our transportation and for our utilities, including the area where we use the most of our energy, which is in our aviation.

Our written testimony includes some amendments that we've carefully worked through with many of the stakeholders that are testifying on this measure today, including dotaks, Texas foundation of Hawaii and Pacific Biodiesel. We respectfully ask the Committee to consider those amendments for adoption today. And we appreciate you hearing this Bill. So thank you.

Thank you. Pono Pacific Land Management in support.

Chair, Vice Chair, Members of the Committee, Chris Bennett on behalf of Pono Pacific. Pono Pacific is currently growing an oil seed called Camelina. When harvested, it can be processed into renewable fuel for our planes, ships and utilities.

Over the past year and a half, Pono Pacific has partnered with two of Hawaii's largest food producers, Alune Farms and Mahipono, as well as medical dairies to grow Camelina.

The results of these trials have been very encouraging, with yields ranging from£1,000 an acre up to£2,000 an acre, which is in line with our goal of achieving about 1200-1400 pounds an acre.

Camelina produces 30 to 40% oil from the seeds that can be processed into renewable fuel, While the remaining 60 to 70% produces a seed cake that's an approved animal feed suitable for cattle, chickens and other livestock. These two revenue streams make Camelina production a viable option for Hawaii's farmers to grow in addition to the current food crops.

We stand on our written testimony and support and I'm happy to answer any questions.

Thank you. And then Alaska and Hawaiian Airlines in support.

Jacob Aki on Zoom Aloha, Chair, Vice Chair. We stand in strong support and I'm here with my colleague who would also like to provide comments.

Hi, good morning. Chair Lohan, Vice Chair Peruso and Members of the Committee. My name is Elana James, Managing Director of Sustainability Initiatives at Hawaiian Airlines. Here today representing Alaska and Hawaiian Airlines. I'll just briefly reiterate our strong support for this Bill.

This Bill establishes incentives to promote the production and import of sustainable aviation fuel, or saf, in Hawaii. SAF is widely acknowledged as the most promising technology to address aviation carbon emissions. It's a proven drop in fuel. It works with existing engines, existing fuel infrastructure, as long as it's blended up to 50% with conventional jet fuel.

Also, SAF has really meaningful reduction in life cycle greenhouse gas emissions. With SAF, you can get 50 to 80% lower life cycle greenhouse gas emissions. When you compare it to conventional jet fuel.

Now, the tax incentives in this Bill are intended to bridge the cost gap to conventional fuels and also importantly to provide incremental value for SAF compared to renewable diesel. In order to level the playing field with renewable diesel, the Bill also establishes a 50% lifecycle greenhouse gas reduction threshold in order to qualify for the credit.

These incentives represent a positive step forward in the state's economy, wide decarbonization goals, particularly in the aviation sector, which is a critical industry here in our islands. I'm happy to answer any questions that you may have.

Thank you. And then next up we have PAR Hawaii in support.

Hello Chair, Vice Chair, Members of the Committee, My name is Mark Inoue from PAR Hawaii. Thank you very much for allowing us to be present here and hearing our Bill.

You know, as a refinery part of this transition into 100% renewable energy for our state, I just kind of want to make sure that you guys understand also that, you know, we have different sectors we impact, including aviation, utilities, ground transportation and aviation marine.

So as we kind of move forward, the good news is that Part Hawaii has already invested over $90 million in our refinery. We're collaborating with stakeholders such as the Hawaii Renewable Fuels Coalition and many of our customers who are planning to adopt these renewable fuels by the end of the year.

We would really appreciate if you take a really hard look at this Bill and these incentives would help us create a bigger demand in our economy today. Thank you again for letting us hearing this Bill for HB 976. And I'll be here for any questions. Thank you.

And then we have Energy Justice Network, Mike Ewell on zoom. Go ahead.

Yes, good morning Chair Lowen, Vice Chair Peruso and Committee Members. Our written testimony, which I won't try to read, addresses several concerns about the production systems, emissions and problems with investing in differently dirty burnable fuels.

When we ought to be focusing first on all other energy sectors where there are clean non burn alternatives already available to flesh out some concerns that aren't spelled out in my testimony. Though it is very questionable whether greenhouse gases are actually reduced with biofuels and waste based fuels. Carbon is not the only thing that matters.

And the studies should not be based just on carbon intensity, but on various other measures of pollutants and production systems, including the use of biotechnology in production systems. But I primarily like to draw attention to this issue of adding construction and demolition waste and other wastes as feedstocks to make this so called sustainable aviation fuel.

Construction and demolition waste contains a lot of different Materials including painted and treated woods, woods, chlorine sources, pvc, plastics, lead and mercury from paints, treated Wood, chemicals like arsenic, copper and chromium. And these are very toxic when burned.

Some of the testimony I saw on the packet from the Hawaii Natural Energy Institute on page 41 affirms that there are high levels of arsenic, chromium and lead in construction and demolition waste with arsenic concentrations 200 times higher than the Clean Wood that they found in their research.

The research also shows high levels of hydrochloric acid, copper and zinc in that construction and demolition waste. But they don't go as far as pointing out the significant conclusion from this in that there's a number of published studies showing that those metals, particularly the copper and the zinc, are the most potent catalysts for dioxin formation.

So you put them in there with the same stuff that produces the hydrochloric acid, that chlorine and the hydrocarbons and you have a recipe for making the most toxic chemicals known to science. Dioxins and furans, which are produced in the same conditions that are present in the production systems of the so called sustainable aviation fuel.

And those chemicals wind up concentrating bioaccumulating in the food chain where 92% of our exposure is from eating meat and dairy products.

So even if we're thinking, gee, that plant out Aloha Carbon wants to build in Caramba Industrial park, well, those emissions are mostly going to blow out to sea except for about one day a week when it blows back toward people. Those pollutants will come back to us in the form of seafood.

So I think there are serious toxic concerns. The waste based fuels need to be removed from this Bill at a minimum. But this Bill in General, there's a lot to be questioned about whether it's as sustainable as they claim. Thank you so much.

Thank you. And then we have Hawaii Farm Bureau in support, Tax foundation of Hawaii with comments on zoom.

Good morning Chair, Vice Chair, Members of the Committee, Tom Yamachika from Tax Foundation. We have submitted mostly technical comments. Some of them have been addressed in the amendments sought by the Hawaii Renewable Fuels Coalition. I'd be happy to answer any questions.

Thank you. And then we have Ted Metros in opposition.

Hello, I'm Ted Metros. I used to work for PAR Hawaii. I have significant comments on this Bill. My comments for so long, I'm sure you didn't read them, so let me date a few of them here. This is a very big Bill. The $80 million is per year. It's going to be at least 20 years.

And there's projections that we're going to need SAF well beyond 2040 and 2045. So you're talking about a Bill that's almost $1.5 billion or more in terms of its expenditure. Basically a public subsidy for an oil company and for the airlines. I will go ahead and describe a little bit more of it.

But the problem with the Bill is it does not deliver on the ambitions that it has proposed and advocated for. There's just not the type of return that you're expecting. This Bill at best, at best covers 10% of the aviation fuel. And that's only if we cut things down and really look at it very narrowly.

I would like to point out that this sentiment is not mine. The State Energy office actually expresses a very good concern as well. I would call it breaking the bank. The State Energy office is much more diplomatic.

They state that the proposed structure to increase renewable fuels tax credits and amounts and eliminate the cap could have a disproportionate impact on the state budget and might undermine the overall support for renewable energy.

So if this Bill cost 80 million a year, and that's just for the production portion of it, another 50 million per year for the import side, which doesn't get its fair share, it's a very robust Bill. So what can you do to limit and restrict it?

The very last line is the most important thing that was provided in testimony from dotex, so I do want to highlight it. DOTEX also recommends making the credit non refundable as refundable credits are more susceptible to waste, fraud and abuse. That's a very important step.

It will put a realistic cap such that the benefactors of this Bill, which incidentally will never make its way into the hands of local farmers because there's no mechanism for getting there at all.

Anyhow, this will put a serious cap because the income taxes that people have liabilities on here are far, far short of the $80 million per year that might be generated. And as I mentioned, let's even say it was 10% of what we needed. That could be 800 million a year if it was extrapolated on out.

Now, in addition to eliminating the refundable nature of the credits, I would ask that you add in a good standing clause to this Bill. The IRS has a tax Bill and they are providing par already with $1.75 per gallon tax credit which was the catalyst and the driving for putting the renewable project together.

That should have been enough. But the good standing clause would ensure that any outstanding liabilities and issues, and some of which are open, would be resolved. The state doles out additional tax dollars, public subsidies for the development of it. This to try to put a little quantification. PAR has an estimated number of barrels.

Close to 60 million gallons a year would be produced. Maybe 60 of that. 60% of that would be SAF. That translates into 36 million gallons. 36 million gallons. The reason why I'm going through this math, 36 million gallons times the 2.56 per gallon equates to $90 million of subsidies in one year.

So immediately, with just a small portion of the credits, they are consumed in year one. And then of course, so there's no room or opportunity for any other renewable fuel to come on in whatsoever.

Can you summarize quickly the rest? Thank you.

Well, again, the reinstatement is key. This Bill has the potential to really, you know that down the road, as in years past, the credit has been asked for and extended again and it's inevitably going to be done again. I did want to mention the reason why we're here is because we've got an ultimatum.

The state got an ultimatum from PAR to either provide tax credits or they're going to be shipping the renewable fuel out of state. And so the reason why we're here is to provide credits so that they don't do that.

The second reason why we're here is because the airlines who claim to be fully committed to the renewable program, they will not pay additional dollars and make a financial commitment in addition to their emotional support that they have provided for the Bill.

And so it'd be nice if the correlation could work together and actually throw in a dollar or two per gallon and buy it local.

Thank you, I really appreciate it. We have additional testimony from individuals. Two in support, three in opposition, one with comments. Is there anyone else here to testify on this measure? Please come forward.

Apologies, Chair, Vice Chair, Members of the Committee. My name is Danielle Bast, State Sustainability Coordinator of the Office of Planning and Sustainable Development. It appears that our testimony was not enrolled. I'm happy to resubmit as late our office offers comments on this measure. Due to the fact that it's not online. I happy to just quickly summarize.

Essentially, we find this Bill to align with the state's clean energy and decarbonization laws by addressing our aviation emissions coming into the State of Hawaii. We also find this to be in alignment with the State of Hawaii's carbon offsetting report, which is published by the. Office of Planning and sustainable development in 2019.

That report was commissioned by this Legislature to determine ways that the State of Hawaii could reduce our carbon emissions and greenhouse gas emissions. Given that the office supply and sustainable development found that carbon offsetting in fact limits and we strongly dissuaded the state's use of reliance of carbon offset programs. We do.

We are generally in support of sustainable aviation fuels. We do recommend that use in terms of specific financing, tax credits and energy energy management. We do defer to the Department of Taxation at Hsu. I'm available for questions. Mahalo.

Thank you. And did you want to testify? Laura?

Aloha, Chair, Vice Chair, Members of the Committee, Laura Kaakua for Department of Transportation. I believe that our testimony may have been submitted late as as well, so. I'll make sure that you have it following the hearing.

The Department of Transportation supports the intent of House Bill 976 to increase the use of renewable fuel statewide and to establish tax credits to promote the expansion of local production of sustainable aviation fuel. Department of Transportation is currently developing our.

Greenhouse gas reduction plan, which will provide Department of Transportation and the public with immediate actions we can take to reduce. Greenhouse gas emissions to meet our 2045. Net zero goal and to provide for zero emissions in the transportation sector long term. Although our specific strategies are still in. Development for our plan, it's clear from.

Our initial calculations that we will not be able to reach zero emissions within. The aviation portion of our transportation sector. Without a large increase in sustainable aviation fuel production. And so that's why we support the measures intent and ask the Committee to. Advance the development, adoption and scaling of. Sustainable aviation fuel and renewable fuels as.

Part of our collective efforts to reduce greenhouse gas emissions. Mahalo.

Thank you. If there's no further testimony, Members, any questions? All right. In the interest of time, I think we'll go ahead and recess for decision making and be right back.

SA Committee on Energy and Environmental Protection, 9am agenda. First up we have House Bill 470 relating to noise. For this Bill we're going to make some technical amendments for clarity, consistency and style and then we will defect the date and move this forward. Members, any questions or comments or concerns? Seeing none.

Vice Chair, Chair's recommendation is to pass HB 470 with amendments noting Chair and Vice Chair as aye. Representative Kahaloa, aye. Representative Kush, aye. Representative Quinlan aye. And Representative Ward is excused. Chair, your recommendation has been adopted.

Thank you. And House Bill 742 relating to Transit Oriented Development on this, we're going to continue this discussion for the time being and just affect the date this to 7/1/3000 and move this forward. Members, any comments? Seeing none.

Vice Chair, chair's recommendation HB 742 is to pass with amendments. Chair and Vice Chair vote aye. Noting the presence of all I mentioned before. Are there any no's? Are there any reservations? Seeing none. Charity recommendation has been adopted.

Thank you. And then for House Bill 340 and House Bill 243, these are somewhat similar subject matter in terms of what they're attempting to address. So we are going to use House Bill 243 as the vehicle and defer House Bill 340.

And what we will do is take the contents of 340 with some amendments and put that into 243. The amendments will include on page 4, line 18, replace within 180 days of the effective date of this act with the date certain of October 1, 2026.

So that should satisfy the concerns of the AG and also extend that timeline a little. For the PUC. We will adopt the HSEA suggested amendments to add language to include electric vehicle charging. But I think in their testimony they had a typo of a date of July 1, 2025.

So we will make that date also October 1, 2026. We will blank out the cost sharing fee of $350 so we can consider if that should be greater. And we will remove section six which relates to the Hawaii, the HERA Administrator and the section seven reporting requirements.

We will require that of the PUC and then page five, subsection four we will delete provided that the upgrade shall be completed within three months of certain date again to address concerns. And then we'll defect the date of July to July 1st, 3000. Members. Those are all the suggested amendments. Any questions or comments? Seeing none.

Vice Chair, please take the vote on HB 243.

Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Are there any reservations? Any no votes. Chair recommendation has been adopted.

Thank you. For House Bill 350, this is relating to the heat, the water heater requirements. We will just on this for now defect the date to July 1st, 3000, noting that we need to look into that suggested amendment from Solar Rabe just to better understand what the impacts of that would be. So with that.

Any comments Seeing none.

Vice Chair on House Bill 350, Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Any reservations? Any no votes Seeing none. Chair, your recommendation has been adopted.

House Bill 346 relating to electric vehicle charging infrastructure, EV ready affordable housing. On this we will just defect the date to 7/1/3000 and move this forward for further consideration. Members, any comments seeing none.

Vice Chair on House Bill 346, Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Are there any reservations? Any no votes Seeing none. Chair, your recommendation has been adopted.

Thank you. And on House Bill 366 relating to renewable energy, this is the streamlined process for contested cases with eiss. We we will accept the amendments offered by Office of Planning and Sustainable Development and make some additional technical amendments for clarity, consistency and style and affect the date to 7/1/3000. And that is all Members.

Any discussion Seeing none.

Vice Chair on House Bill 366, Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Are there any reservations? Representative Quinlan, reservations Any no votes Seeing none. Chair recommendation has been adopted.

Thank you. And then on House Bill 342 relating to a renewable gas tariff, we have some amendments here. So on page four, subsection B, we will change this wording to or as otherwise determined by the PUC. On page four, subsection C, we'll strike out designated time period and replace that with monthly billing cycle.

We will move this to session laws instead of having it in HRS. And I think there's an additional amendment on page three, line 15.

We'll change that to read, the Public Utilities Commission shall establish an initial revised renewable gas tariff or tariffs no later than six months after the filing of a completed application for a proposed renewable gas tariff, the completeness of which shall be determined by the Public Utilities Commission no later than 30 days after the application is filed.

We have some technical amendments for clarity, consistency and style and we will defect the date to July 1st, 3000 Members. Any discussion Seeing none.

Vice Chair Chair's recommendation on House Bill 342 is to pass with amendments. Chair and Vice Chair voting aye. Are there any reservations? Any no votes? Seeing none. Chair, your recommendation has been adopted.

Okay. On House Bill 786, this is relating to deposit beverage container recycling. We are going to defer decision making to Thursday. Wait, hang on a second. Thursday, January 30th at the end of the 9am agenda on House Bill 750 relating to the environment. This is the extended producer responsibility needs assessment.

We are going to amend the Members of the advisory council to include HFIA's recommendation to add a representative from a business that manufactures consumer packaged goods for sale in Hawaii. And we will also add a representative from the composting industry. We will add a section to this. Actually maybe we won't do that for now.

We will add a note to the Committee report that we would like to look at funding this out of the deposit beverage container special fund. And you know, we'll work with Department of Health to come up with language to allow for that.

And then I just also wanted to note we appreciate the request for exemptions for prescriptions and certain items and think that's probably a valid request.

But because this is just a needs assessment, we want to not start considering a bunch of different exemptions that are going to come into play later and then defect the date to July 1st, 3000 Members. Any discussion?

Seeing none. Vice Chair on House Bill 750, Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Noting the absence of Representative Quinlan. Are there any reservations or no votes? Seeing none. Chair, your recommendations adopted? Yes, but he was always okay.

Okay. Next we have House Bill 339 relating to electric utilities. So for this we're going to add some amendments based on the PUC testimony so that Instead of the 180 day pause and competing bids being submitted to the PUC, we would require that put that requirement onto the electric utility to show. Let me just read this language.

It'll be easier than trying to paraphrase. So we'll direct the electric utility company that subject of an application for a proposed acquisition merger consolidation by an acquiring entity to demonstrate that that company has first solicited bids from acquired entities that operate under non investor owned utility ownership model.

And so they'll have to show the PUC that they solicited competing bids and explain why they were or were not accepted and would then, you know, if they were accepted they would then present that to the Public Utilities Commission. So we're going to amend the language to include that Suggestion in. In the correct language.

And then we'll also adopt the amendments of IBEW suggested amendments. We have additional technical amendments for clarity, consistency and style. And we'll defect the date to July 1st, 3000. Members, any discussion session? Seeing none. Vice Chair.

On House Bill 339, Chair's recommendation is to pass with amendments. Chair and Vice Chair voting. I. Noting the absence of Representative Quinlan and Representative Ward. Are there any reservations or no votes? Seeing none. Chair, your recommendation has been adopted.

And for House Bill 978 relating to electric utilities, I think for this we're going to delete the appropriation section, make some technical amendments, defect the date to July 1st, 3000 and then note in the Committee report the concern raised by Hawaii Gas.

And that will be looking, you know, in future committees to potentially address that concern and affect the date to 7/1/3000. Did I say that already? If not. Members, any discussion? Seeing none. Vice Chair.

On House Bill 978, Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye. Noting the absence of Representative Quinlan and Representative Ward. Are there any reservations or no votes? Seeing none. Chair recommendation has been adopted.

Thank you. And then finally, we have House Bill 976 relating to renewable fuel. This is the tax credit that we were just discussing discussing. So we have a few amendments here. We will adopt.

There was one suggested amendment from Life of the Land, I believe, that we will adopt to strike through allowing carbon offsetting to be part of the life cycle analysis, I believe. Is that correct? Okay. Well, we're going to adopt the amendment from Life of the Land and then also the amendments of the Hawaii Renewable Fuels Coalition.

And we will blank out the dollar amounts on page 7 and 8 and 17 and 18. We will make some technical, additional technical amendments for clarity, consistency and style, defect the date to 7/1/3000 and move this forward. Forward. Members, any discussion, go ahead.

So I support you in moving this forward and moving the conversation forward, but I do hope that we have much more conversation on this because I find that I have a lot more to learn about this area of sustainable aviation fuels. So I'm looking forward to those conversations.

And as this bill progresses through, I hope that we can pay close attention to some of the testimony, the implications of some of the testimony that was submitted today.

Yes. Thank you. Any other discussion? Seeing none. Vice Chair.

On House Bill 976, Chair's recommendation is to pass with amendments. Chair and Vice Chair voting aye and noting the excuse absence of Representative Quinlan and Representative Ward. Are there any Reservations or no votes, Seeing none, charity recommendation has been adopted.

All right, thank you. We're going to adjourn this hearing and then just the next one will start as soon as we can. I think there's some Members that have to pause for a minute and go do other things. So apologies for such a late start to the next agenda, but we're adjourned. Thank you.

All right, we are back. Reconvening or sorry? Convening the 10am agenda. Sorry for the delay. The joint committees on Energy and Environmental Protection and the Committee on Agriculture and Food Systems. And welcome to Chair Kahaloa, who is also a Member of eep. We have one Bill on our agenda this Morning, House Bill 760 relating to taxation.

This is the carbon tax bill that we see every year. First up to testify, we have Department of Taxation with comments.

Aloha, Chair, Vice Chair, Members. I'm Eliza from the Department of Taxation. We stand on our written testimony, comments, and we have some suggestions in case you pass this Bill.

Thank you. Thank you. Then we have Department of Budget and Finance offering comments. Hawaii State Department of Health with comments. Hawaii State Department of Agriculture in support.

Good morning. Chair Lowen, Chair Kahaloa, Vice Chair Kusch and no one else. I am Matthew Loke, Ag Development Administrator. And the Department will stand by its testimony as submitted in support of this Bill. We deeply appreciate the Legislature's intent to reestablish the Agricultural Development and Food Security Special Fund, which was repealed earlier. Thank you for that.

Mahalo.

Thank you. And then we have Kauai Climate Action Coalition in support. Citizens Climate Lobby in support. Life of the Land in opposition.

Aloha. Two Chairs, two Vice Chairs. I guess one Vice Chair. Aloha. Life of Land has been actively and aggressively fighting greenhouse gases for more than 20 years. We won the two Hawaii Supreme Court cases requiring life cycle greenhouse gas analysis in all combustion applications at the Public Utilities Commission.

We note that in the last 25 years, there has been only one fossil fuel plant built by Hiko Mikoro Helko. They built a Campbell Industrial Park CT1 plant and powered it by biofuels. But when the Scofield project generator came online and Scofield was converted to biofuels, the CT1 unit was converted to petroleum.

That's the only case of a fossil fuel coming online in the last 25 years. Going forward, everything coming online is going to be renewables. So we have three choices. We can continue transitioning to renewables at the current rate. We can accelerate it through legislation, or we can tax fossil Fuels.

The tax has no mandate to increase renewable energy. It simply generates funds like the TAT to use for whatever you want to use it for. So it's interesting that we found a study that found that 78% of the hundred largest fossil fuel company oil and gas companies in the world support a carbon tax.

After all, it legitimizes what they're doing. They pay the tax, they're part of the solution, they can greenwash their advertising. Everything is fantastic for them. Economists love carbon taxes because for some reason they're against mandates and they want to tweak the marketplace and then get paid to do studies on figuring out what the tweak has done.

A mandate rapidly increases the use of of renewables.

The Indigenous Environmental Network and the Climate Justice Alliance, a coalition of about 100 frontline groups in the United States said quote, "Carbon pricing is a name for a tool that governments, financial institutions and corporations have adopted in order to try to reconcile their continuing commitment to fossil fuel use with the need to to appear to take total action on climate change," unquote.

So you could, as a Legislature make a dramatic reduction in greenhouse gases by saying that no new fossil fuel powered vehicles will be sold in this state by 2030, going forward.

You could take drastic action as you're doing for sustainable aviation fuel or you could say we'll just impose a tax on carbon emissions on the use of fossil fuels. Interestingly enough, there will be two sectors that will be hit hardest with a carbon tax.

First are Big Island residents who are far away from the tourism sections of Kohala and that need to drive to work. And there's inadequate bus service on the Big Island. So they will be the ones who will be hit hard.

The other group that will be hit hard are diversified farmers who will see every aspect of farming taxed while imports escape the tax, widening the gap between the price of imported food versus domestic food. Thank you.

Thank you. Next we have Carbon Cashback Hawaii. Douglas Hagan on zoom.

Aloha Chairs and Vice Chair. Chair Lowen, Chair Kahalo and Vice Chair Kusch. Thank you for hearing HB760. Now is the time to put a price on pollution. Carbon Cashback complements and accelerates all the initiatives that drive our state towards renewables. Carbon Cashback benefits not burdens lower income families and is proven to reduce emissions.

Carbon Cashback is an incremental step forward. It will reduce Hawaii carbon emissions by 10 to 14%. That's the equivalent tailpipe emissions of 400,000 fossil fuel powered vehicles per year. Please support this efficient Effective and equitable Bill. Thank you.

Thank you. And next we have Climate Future Forum and Citizens Climate Lobby at Iolani School in support. Coalition Earth in support. Grassroots Institute of Hawaii in opposition. Retail Merchants of Hawaii in opposition on zoom. Not present. Citizens Climate Lobby at UH Manoa in support. Tax Foundation of Hawaii offering comments on Zoom.

Good morning, Chair Lowen and Chair Kahaloa. This is Jade Mcmillen. On behalf of the Tax Foundation of Hawaii, we've submitted some comments on the measure. We'll stand on our written comments. Thank you very much.

Thank you. Greenpeace Hawaii in opposition on zoom.

Hello, can you hear me? You can hear me?

Yes. Go ahead.

Okay, great. Thank you. Sorry. Great. Thank you so much for having us being able to testify. Greenpeace Hawaii is one of the oldest and the largest climate environmental organization in the world. Greenpeace works with the climate scientists. We have our Greenpeace research laboratories and School of Biosciences and University of Exeter in the UK.

Our scientists do a lot of climate modeling and focus on climate change and environmental issues. The problem with this Bill and this whole idea is a design flaw. They have plenty of planes they tried to build in the early days and a lot of planes didn't fly. And they didn't fly because of their design.

And that's basically built into the problem of Carbon Cashback, which is what this is all based on. The idea here is that we're going to raise the price of fuel, forcing people as punitive to get out of the vehicles and then go to other alternatives.

Those other alternatives, as Henry Curtis was just talking about, are not available for folks. So it's going to really hurt people. So these pricing and climate and taxing schemes have been out for 30 years. There was a study done of all 37 studies looking at will they reduce carbon emissions.

And Jessica Green, the Professor at the University of Toronto who did the study, found that they really only decreased carbon emissions from 0 to 2%, which is almost nothing. And she said, We've had 30 years experience of carbon pricing and not a hell of a lot to show for it, which is true.

So we already know that carbon pricing and taxing cannot, will not and has not cut carbon emissions, as Sandy Curtis was talking about. And the retail merchants are also stating that it's going to raise prices on all goods. So it's going to.

People are pretty close to the edge here financially and it will raise prices on all goods and services. As also Henry Curtis was mentioning, our super commuters are going to have a big problem because it will raise prices for them. There are some 17,000 super commuters in the state and they are going to be hit the hardest.

And last year they had this Bill and you could figure out how much money they were going to get back and how much they were going to be paid. We found definitely this commuter is going to be hurt.

I tried to find it in the Bill now and I couldn't figure out how much they're going to have to be paying, get an idea of how much they're going to get back. But I still think the super commuters are going to be hurt, which is not going to work out for anyone.

The other thing is that they're putting the horse before the cart. You know, as I said, it's punitive. It's forcing people. You got to get out of your vehicle. So we're going to raise the price. But then there is no infrastructure available. There are no buses, there are no charging stations.

There's no rebate to get an electric vehicle. So that would be a better way to go. If you really want to get people out of their vehicles, you really want to cut carbon emissions. Their other thing is that they focus on Canada is their, you know, the ship that this is the best thing ever.

But what they do is citizens climate lobby kind of cherry picks their data and they only focus on the data that supports their issues. Actually, Canada is having a big problem now.

Dave, can you summarize?

Well, I'm so sorry. Anyway.

Yes, I didn't mean to go on like that, but yes, we do not support and please do not pass this. Thank you so much.

Thank you.

And then we have Hawaiian Islands Republican Women in opposition. Airlines for America in opposition. Hawaii Farmers Union in support. Kauai Island Utility Cooperative in opposition. Maui Chamber of Commerce offering comments. And then we have an additional. Hang on, let me call some people who are here in person. We have Paul Bernstein in support. She's on the list.

Audrey? Sure. Audrey Lynn on zoom. Are you still there? Okay, sorry for the delay. Go ahead.

Thank you. Aloha, Honorable chair, Vice Chair, Committee Members. My name is Audrey Lynn. I'm 18 years old and I'm a senior at Iolani School in Honolulu, Hawaii. There's the bell. I'm actually in the classroom right now. Today, I stand in strong support of HB760.

As a high school student, I view climate change as the greatest threat to humanity today. And therefore I urge our state Legislature to HB 760, a Bill that places a carbon fee on fossil fuels, which are the very emissions that warm the Earth. And create climate climate havoc in Hawaii and globally.

At Iolani, in both class and club meetings, my teachers, peers and I have discussed HB760. We have evaluated data and we see it as an effective method to incentivize both businesses and individuals to use fewer fossil fuels and shift towards renewable energy. Additionally, I would also like to propose one amendment to HB 760.

I respectfully request that the Committee replace Section 4 with Section 4 of HB 1375. And with this change, all the revenues other than administrative fees would be returned to all the people. And I would argue that this amendment in Section four makes our communities better off. So yeah. My name is Audrey Lynn.

I am a representative for Youth People, Young People and the Climate Future Forum. And I urge the state Legislature to please pass HB 760. Thank you for the opportunity to submit testimony for the Bill.

Thank you so much. All right, now we'll go to Paul.

Mahalo, Chair Lowen, Chair Kahaloa, Vice Chair Kusch. I'm one of the economists that people disdain, I guess. But I'd like to address two key points of opposition of the Bill. First, there's a claim that carbon pricing is ineffective and simply doesn't hold up or, sorry, doesn't work. And that simply doesn't hold up to empirical evidence.

To say carbon pricing doesn't work is to say that if the price of Coke continued to rise, people would drink the same amount of Coke and not switch to Pepsi. We know prices matter. We check our Longs ads when they come out, we go into the store, we check what the price is.

Pricing carbon creates a financial disincentive to reduce emissions. It is exactly the principle we want, namely polluters pay. And in addition, the Uhero studies show exactly this, right, that carbon pricing reduces emissions.

As for the second concern about the impact of the policy to households, I want to second Audrey Lynn's recommendation that the Bill be a change to simply swap out section four, which deals with how the dividends come about to people, change it so that almost all the dividends except those for administrative issues go back to the people, go back to the people in equal shares.

It makes the Bill progressive. And as the Uhero studies have found and various national studies at the federal level, this leaves the vast majority of low and middle income households better off. Thank you.

Thank you.

And then we have JoAnn Yukimura on zoom. Go ahead, JoAnn.

Okay, thank you, Chair Lowen, Chair Kahaloa and Vice Chair Kusch. Thank you so much, Chair Lowen, for hearing this. Bill on the most important issue of our lifetime, my name is JoAnn Yukimura. I support the concept of the carbon fee as embodied in House Bill 760.

I also support the concept of a dividend, but not in the way it is presently structured for only low income families. I also do not support any carbon fee revenues going into the General Fund except for the purposes of this Bill. My reasons are explained in my written testimony, which I hope you will read.

There are two things to remember here. A fee on carbon is essential if we are to stop or reduce climate change. And two, the cash back makes the policy compassionate and workable. 2023 was the hottest year on record in the history of the planet until 2024 when that record and the 1.5 degree benchmark were both surpassed.

And in 2023, we witnessed with horror the unimaginable that happened in Lahaina. And then, though it seemed nothing could be worse, then LA fires happened on a more massive and terrifying scale. There's a lot of concern about cost of living. While climate change also increases the cost of living, which everyone's talking about in Hawaii.

What will the cost of building materials be after the Lahaina and LA fires? Or the cost of insurance? Or the cost of food as natural disasters damage crops and lifestyle? In Hawaii, most of the focus is on adaptation, which is futile if we don't address cause. When a water pipe breaks, we don't try to adapt to it.

We fix the broken pipe. So let's fix, let's slow down and reverse climate change. Now, to do this, Hawaii must significantly reduce the use of fossil fuels, which since the pandemic has barely gone down. That's because a crucial policy framework has not yet been put in place. You, the Legislature can change this.

In a study of 41 countries and 1,500 climate policies, carbon pricing, which increases the price of carbon to reflect its real cost, was found to be effective in significantly reducing greenhouse gases.

Together, the carbon fee and its universal dividend will provide an effective and compassionate way for Hawaii to transition to a sustainable fossil fuel free future as we do our part to bring the planet back into balance. With your courageous and clear sighted leadership, Hawaii can again lead the way. I'm open to any questions.

Thank you so much. And then we have Mark Healey on zoom. Please go ahead.

Hi, it's actually Mary Healy.

Oh, okay. I'm sorry, I misread that. That was my fault. Mary, go ahead.

Yes, thank you so much. Aloha. And thank you for hearing my testimony. I strongly oppose HB 760 and its companion SB 633. Please vote no on further taxation. This carbon tax or carbon emissions tax proposed in this Bill is fundamentally a massive increase in the rate of taxation.

The Bill's language is not in the interests of We the People of Hawaii or the state's economy. Hawaii has the highest cost of living in the USA. The Bill will harm all families and individuals, especially low income families, which is unacceptable to the state's already overtaxed and burdened citizens.

It is unacceptable for the Legislature to ignore all the concerns about local Kamaina and the Kanaka Native Hawaiian residents leaving the state only to introduce yet another tax at the state level. While this Bill includes rebates to those considered low income, the rebate process could confuse families and ultimately lose that income if not done effectively and prudently.

It also punishes those who make above the median income as they receive no rebate. The incremental increases in the tax rate over time inherently place a burden on all families, especially lower income families, and the state has a rising cost of living. Hawaii already has the highest energy rates in the country. It is not a valid solution.

I'd like to highlight the economic burden on residents businesses, the impact on the agricultural sector which stands to suffer greatly and is essential for our sustainability. Farmers face numerous challenges from further taxation and this tax will undermine the goal of food security. Also ineffective, ineffective use of funds collected through similar taxes will lead to public distrust.