Regulations, culture must align with energy goals
By Sharon Miyashiro
Dee Hock, the former chief executive officer of VISA International, said, "If one is to properly understand events and to influence the future, it is essential to master four ways of looking at things: as they were, as they are, as they might become and as they ought to be."
A remarkable spirit of bipartisan public interest led to significant strides toward a more secure and sustainable energy future during this past legislative session, and created a stronger foundation for Hawai'i's preferred energy future building toward what it ought to be.
The final package includes proposals from the governor's omnibus bill, the Senate and House majority packages and from the 43-member Hawai'i Energy Policy Forum.
Some naysayers have criticized the Legislature for "punting" important questions to the state's Public Utilities Commission. But considering that energy is a very complex subject with policy, technical, legal and financial implications, relying on the PUC is wise.
The Legislature rightfully set broad policy directives and authorized the PUC to conduct the needed technical analyses, fact-finding and policy and standards development and enforcement. At the PUC, the consumer advocate represents the public interest and responsible stakeholders can have a place at the table.
There is no doubt that our energy future ought to be clean, renewable and secure.
However, that future cannot be achieved without the removal of regulatory barriers that impede the implementation of renewable or efficiency projects. Creating a conducive regulatory climate with rate structures and incentives is necessary to focus the electric companies on where we ought to be.
And the role of the PUC is extremely important in keeping the cost of electricity affordable and the service reliable for all members of our community.
The bills passed this session will aim to expand Hawai'i's use of renewable energy.
The state's Renewable Portfolio Standard law requires that 20 percent of electrical energy sales must come from renewable energy sources or through energy efficiency. The law was revised to require that at least half of that requirement must come from renewable sources such as wind, solar, geothermal, hydro and biomass. The PUC can require more than 50 percent and penalize the utilities if they do not meet that target.
The renewable energy technologies income tax credit designed to encourage private investment is now permanent and credit amounts have been raised to encourage consumers to install solar hot-water heaters and photovoltaic systems.
A pilot solar water heating "pay as you save" program will allow residents to purchase a solar hot-water system the best single way to save energy and cut home energy costs with no money up front. And they can pay off the cost over time on their electricity bill.
Along with renewables, greater efficiency is essential to our energy future. We need a new energy culture that focuses on conservation and efficiency.
The PUC already is looking at how to manage and encourage energy efficiency and the new laws will give the PUC the authority to establish an independent "energy efficiency utility" with the power to collect money from customers and spend it to encourage energy efficiency and renewables a task now managed by the utilities.
The PUC is also authorized to examine the "fuel price adjustment" clause, which is the cost of fuel for electricity that the utilities pass through to consumers, to determine whether changing the system will encourage utilities to pursue more renewables or just subject consumers to even higher costs.
Also passed this session are bills that set new planning and budget goals for state agencies to incorporate "green" building practices, including renewable energy, increased conservation, waste reduction and pollution prevention. Government agencies are encouraged to purchase environmentally friendly products such as fuel-efficient vehicles and alternative fuels.
That includes requiring county agencies that issue construction or development permits to give priority processing to projects that meet energy-efficiency and environmental-design standards.
While there are steps to be taken right away, the governor and Legislature recognized a responsibility to look to the energy horizon as well.
For example, a bill passed that will establish a renewable hydrogen program with an investment capital special fund of $10 million to support the first year's activities. This is a long-term investment and will support the growth and development of the other home-grown renewable resources as a feedstock for hydrogen.
While the session delivered a comprehensive and forward-looking set of new laws, we still face significant challenges in implementing these initiatives and filing in the gaps.
For example, if Hawai'i seriously intends to reduce its dependence on imported fossil fuel, it will also require dealing with transportation as well as electricity generation. The Forum had proposed a so-called "Hummers for hybrids" bill to increase licensing costs for gas guzzlers to offset reducing those costs for fuel-efficient vehicles, including hybrids.
We have a strong foundation and are well-positioned for the future. Now it's time for all of us to work together to get us where we ought to be.
Sharon Miyashiro is co-chair- woman of the Hawai'i Energy Policy Forum, which is based at the University of Hawai'i-Manoa. She wrote this commentary for The Advertiser.