Bill Text: HI HB2525 | 2012 | Regular Session | Amended
Bill Title: Electric Reliability Standards; Interconnection Requirements; Grid Interconnection; Hawaii Electricity Reliability Administrator; Hawaii Electricity Reliability Surcharge
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-02-15 - (H) Report adopted. referred to the committee(s) on FIN as amended in HD 2 with none voting aye with reservations; none voting no (0) and Belatti, C. Lee, M. Lee, Tokioka excused (4). [HB2525 Detail]
Download: Hawaii-2012-HB2525-Amended.html
|
HOUSE OF REPRESENTATIVES |
H.B. NO. |
2525 |
|
TWENTY-SIXTH LEGISLATURE, 2012 |
H.D. 1 |
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO ELECTRICITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the capability and accessibility of Hawaii's electrical system have not kept pace with either the State's ambitious renewable portfolio standard mandate or the various technologies that generate electricity at both the distribution and transmission levels. Localized energy generation technology has become increasingly attainable for all types of renewable energy developers and the electricity consumer over the past several years. A highly diverse set of generation resources ranging from large wind projects to simple residential photovoltaic systems are now primed to deliver electricity to consumers across the State's isolated island grids. However, a number of technical, operational, and regulatory issues concerning Hawaii's long-running electrical system are stifling the full potential of local renewable energy production. The implementation of formal electric reliability standards to govern all segments of the electric power system to ensure fair and transparent grid access is a critical part of moving beyond the barriers confronting Hawaii's lofty clean energy requirements. In addition, clear regulatory oversight of the State's grids would ensure system reliability, resiliency, and accountability.
Electric reliability standards are formal planning and operating procedures that govern the design and operation of an electrical grid or grids to ensure the adequate reliability of that system or set of systems by establishing real-time protocols, such as resource and demand balancing, critical infrastructure protection, and interconnection reliability. The legislature finds that electric system planning, operations, and interconnections on the mainland United States are governed by a well-coordinated effort headed by the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation, with help from a group of subordinate regional oversight entities. Under federal commission oversight, the corporation and the regional entities collectively create and adopt national and regional reliability standards, administer related compliance and enforcement programs, and perform other additional functions as needed to ensure that all entities operating in connection to the bulk-power system follow applicable standards. With a recent blackout affecting millions of people throughout the southwestern United States and northern Mexico, the need for solid reliability standards and accompanying grid oversight of modern electrical systems is readily apparent. Although Hawaii is not part of the bulk power system that links the vast grid regions of North America, our local electrical system still requires a level of reliability protocols and oversight provided by a set of local standards and an accompanying enforcement system that is commensurate with the State's ambitious renewable energy mandates.
The public utilities commission continues to advance the development of local grid reliability standards and procedures via ongoing proceedings connected to Hawaii's feed-in tariff program and other interconnection-related dockets. Initial reliability standards tailored to Hawaii's electrical system are being formed by the Hawaii reliability standards working group, which, following commission approval of acceptable standards produced by the working group, will require ongoing enforcement and oversight by a dedicated body. However, the legislature finds the commission's efforts in this area are the result of a lack of formal, well-developed reliability and interconnection standards in Hawaii. This has been identified as a principal roadblock for a number of big- and small-scale clean energy projects. The State recently received $750,000 from the United States Department of Energy to assist in developing technical reliability standards to connect renewable energy projects to local grids. In addition, a number of major government and private renewable energy projects currently slated for development in the near future, including military solar installations estimated to create hundreds of megawatts of new electricity generation on Oahu by the middle of this decade, further necessitate the adoption of strong, formalized reliability and interconnection standards. Following the creation of initial standards, a well-organized, continuing effort to enforce the adopted standards, propose new or update existing standards, and oversee grid access will be required.
The purpose of this Act is to authorize the public utilities commission to perform necessary electric system reliability and grid access oversight functions, and to allow the commission to contract for the services of a Hawaii electricity reliability administrator to support the commission in carrying out these critical functions throughout the State. In addition, this Act allows for a surcharge affecting users and operators of the Hawaii electric system for the purpose of maintaining system reliability.
SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:
"PART . ELECTRIC RELIABILITY
§269-A Definitions. As used in this part:
"Ancillary services" means those essential grid support services performed by an entity, facility, or other equipment to support and ensure the reliable generation, transmission, and distribution of electricity, including frequency response and regulation, inertial response, reactive power and voltage control, and operating reserves.
"Commission" means the public utilities commission.
"Electric element" means any plant, line, cable, facility, control system, equipment, or other technology used for the generation, transmission, distribution, storage, regulation, or physical control of electricity.
"Hawaii electric system" means all electric elements located within the State together with all interconnections located within the State that collectively provide for the generation, transmission, distribution, storage, regulation, or physical control of electricity over a geographic area; provided that this definition shall not include any electric element operating without any interconnection to any other electric element located within the State.
"Interconnection" means the physical contact point connecting an electric element to another electric element or group of electric elements that allows for the flow and transfer of electricity from one electric element to another or the reverse.
"Interconnection requirement" means a standard or rule, adopted by the commission under this part, concerning the performance levels, processes, practices, equipment, or facilities of any entity either having or seeking to obtain an interconnection to the Hawaii electric system under procedures established pursuant to section 269-E to ensure the reliable operation of the Hawaii electric system.
"Reliability standard" means an electric reliability requirement or requirements, adopted by the commission under this part, to ensure the reliable design and operation of any or all portions of the Hawaii electric system, including ancillary service requirements.
"User, owner, or operator of the Hawaii electric system" means any person, business, organization, or other entity who:
(1) Owns, controls, operates, or manages plants or facilities for the generation, transmission, or furnishing of electricity; and
(2) Provides, sells, or transmits all of that power, except power used in its own internal operations or for its own consumption, directly to a public utility for either transmission or distribution to the public;
provided that a user, owner, or operator of the Hawaii electric system shall not be considered a public utility within the meaning of this part.
§269-B Reliability standards; adoption and development; force and effect; interconnection requirements. (a) The commission may adopt, by rule or order, standards to ensure the reliable design and operation of the Hawaii electric system. Reliability standards adopted by the commission shall have the full force and effect of law on all utilities and any other user, owner, or operator of the Hawaii electric system. The commission shall not contract for the performance of the functions under this subsection to any other entity under section 269-F.
(b) The commission may develop reliability standards as it determines necessary or upon recommendation from any entity, including an entity contracted by the commission to serve as the Hawaii electricity reliability administrator provided for under this part, for the continuing reliable design and operation of the Hawaii electric system. Any reliability standard developed by the commission shall be adopted by the commission in accordance with subsection (a) to be effective. The commission shall not contract for the performance of the functions under this subsection to any other entity under section 269-F.
(c) The commission shall have jurisdiction over matters concerning interconnection requirements and interconnections located in the State between utilities, persons, businesses, entities, or any user, owner, or operator of an element connecting to the Hawaii electric system or otherwise applying to connect to the Hawaii electric system under processes established in accordance with section 269-E. Nothing in this subsection is intended to give the commission general supervision authority over any user, owner, or operator of an element within the Hawaii electric system or any other person, business, organization or other entity that is not a utility as defined in section 269-1.
§269-C Monitoring. (a) The commission shall have the authority to monitor the reliability and operation of the Hawaii electric system using any data, files, maps, reports, or any other information concerning any utility, person, business, entity, or any user, owner, or operator of an element within the Hawaii electric system considered by the commission to be necessary for ensuring the reliable operation of the Hawaii electric system. The authority of the commission to monitor information pursuant this section shall include the authority to request, acquire, or otherwise accumulate real-time data on any matter the commission deems necessary to monitor the reliable design and operation of the Hawaii electric system.
(b) The commission shall have the authority to monitor and compel the production of data, files, maps, reports, or any other information concerning any utility, person, business, or entity, or any user, owner, or operator of an element within the Hawaii electric system considered by the commission to be necessary for exercising jurisdiction over interconnections or for administering the process for interconnection to the Hawaii electric system under section 269-E.
(c) Any and all data, files, maps, reports, or any other information the commission requests under subsection (a) and subsection (b) above shall be produced in a timely manner. The commission may institute proceedings in accordance with section 269-15 upon a determination that any party for or on behalf of a utility, person, business, entity, or any other user, owner, or operator of an element within the Hawaii electric system has refused to provide or is causing unreasonable delay in providing information requested under this section.
§269-D Compliance and enforcement. (a) The commission shall take all necessary steps, including audits, spot checks, data requests, report requests, and internal monitoring procedures, to ensure that any utility, person, business, or entity connecting to the Hawaii electric system, or any other user, owner, and operator of an element within the Hawaii electric system is in compliance with all adopted reliability standards.
(b) The commission may impose reasonable penalties on any person, business, or organization acting in violation of an adopted reliability standard after notice as provided under section 269-12 and an opportunity for a proceeding under section 269-15 has been given. Any entity issuing a penalty in the performance of its duties as Hawaii electricity reliability administrator provided for under contract with the commission under section 269-F shall first file with the commission a notice and record of proceeding pursuant to this subsection. The commission shall adopt rules pursuant to chapter 91 for the issuance of any penalty under this section.
§269-E Grid access; procedures for interconnection; dispute resolution. (a) Each person, business, or other entity seeking to make an interconnection on the Hawaii electric system shall do so in accordance with procedures to be established by the commission by rule or order.
(b) The commission shall have the authority to make final determinations regarding any dispute between a utility person, business, or any other entity, or any other user, owner, or operator of an element within the Hawaii electric system, concerning either an existing interconnection on the Hawaii electric system or an interconnection to the Hawaii electric system created under the processes established by the commission under this section.
§269-F Contracting of functions. The commission may contract for the performance of its functions under this part to a person, business, or organization that will serve as the Hawaii electricity reliability administrator provided for under this part, but excluding any utility as defined under this chapter; provided that the commission shall not contract for the performance of its functions under sections 269-B(a) and (b) and 269-G. The commission shall select an entity with which to contract for the performance of its functions in accordance with state law, including chapter 103D.
§269-G Hawaii electricity reliability surcharge; authorization; cost recovery. (a) The commission may require, by rule or order, that all utilities, persons, businesses, or entities connecting to the Hawaii electric system, or any other user, owner, or operator of any electric element within the Hawaii electric system shall pay a surcharge that shall be collected by Hawaii's electric utilities. The commission shall not contract or otherwise delegate the ability to create the Hawaii electricity reliability surcharge under this section to any other entity. This surcharge amount shall be known as the Hawaii electricity reliability surcharge.
(b) Amounts collected through the Hawaii electricity reliability surcharge shall be transferred in whole or in part to the entity contracted by the commission to act as the Hawaii electricity reliability administrator as provided under this part.
(c) The Hawaii electricity reliability surcharge shall be used for the purposes of ensuring the reliable operation of the Hawaii electric system and overseeing grid access on the Hawaii electric system through the activities of the Hawaii electricity reliability administrator contracted under section 269-H; provided that amounts collected under the Hawaii electricity reliability surcharge shall not be available to meet any current or past general obligations of the State.
(d) The commission may allow a utility to recover appropriate and reasonable costs under the Hawaii electricity reliability surcharge for any existing interconnection, as opposed to any new interconnection, to the Hawaii electric system from electric utility customers through a surcharge or assessment subject to review and approval by the commission under section 269-16.
(e) Nothing in this section shall create or be construed to cause amounts collected through the Hawaii electricity reliability surcharge to be considered state or public moneys subject to appropriation by the legislature or be required to be deposited into the state treasury.
§269-H Hawaii electricity reliability administrator; contracting. (a) The commission may contract with an entity to serve as the Hawaii electricity reliability administrator for the purpose of carrying out its functions under this part.
(b) Any entity contracted by the commission to serve as the Hawaii electricity reliability administrator pursuant to the requirements of section 269-F shall be selected by the commission in accordance with state law, including chapter 103D. The Hawaii electricity reliability administrator shall, if so enabled by the commission through mutual agreement under the laws of the State of Hawaii, hold the powers and rights held by the commission under this part for the term of the contract executed pursuant to the requirements of section 269-F; provided that the commission shall retain both full authority over the Hawaii electricity reliability administrator and the exclusive authority to carry out functions and responsibilities enumerated under sections 269-B(a) and (b) and 269-G.
§269-I Hawaii electricity reliability administrator; qualifications. Any entity contracted by the commission to serve as the Hawaii electricity reliability administrator shall:
(1) Maintain the necessary staff with the appropriate skills and expertise to enforce and offer recommendations on the development of reliability standards adopted by the commission under this part, including the technical skills required to properly monitor operations of the Hawaii electric system using information provided under section 269-C; and
(2) Maintain the necessary staff with the appropriate level of independence to fairly and impartially review matters concerning interconnection to the Hawaii electric system under section 269-E, including independence of the entity from any utility, person, business, or other entity connected to the Hawaii electric system, or any user, owner, operator of an element within the Hawaii electric system.
§269-J Funding; reporting. (a) The Hawaii electricity reliability administrator shall use funds collected through the Hawaii electricity reliability surcharge provided for under section 269-G to carry out its operations, including any and all administrative, technological, or other related requirements for effectively ensuring the reliability of the Hawaii electric system.
(b) The Hawaii electricity reliability administrator shall report to the commission each year on the date of agreement under section 269-H following the original contract between the Hawaii electricity reliability administrator and the commission the status of its operations, its financial position, and a projected operational budget for the fiscal year following the date of the report.
(c) The Hawaii electricity reliability administrator shall be subject to regulation by the commission under any provision applicable to a public utility in sections 269-7, 269-8, 269-8.2, 269-8.5, 269-9, 269-10, 269-13, 269-15, 269-19.5, and 269-28. Notwithstanding any other provision of law to the contrary, the Hawaii electricity reliability administrator shall not be an electric public utility or an electric public utility affiliate."
SECTION 3. Section 269-1, Hawaii Revised Statutes, is amended by amending the definition of "public utility" to read as follows:
""Public utility":
(1) Includes every person who may own, control, operate, or manage as owner, lessee, trustee, receiver, or otherwise, whether under a franchise, charter, license, articles of association, or otherwise, any plant or equipment, or any part thereof, directly or indirectly for public use for the transportation of passengers or freight; for the conveyance or transmission of telecommunications messages; for the furnishing of facilities for the transmission of intelligence by electricity within the State or between points within the State by land, water, or air; for the production, conveyance, transmission, delivery, or furnishing of light, power, heat, cold, water, gas, or oil; for the storage or warehousing of goods; or for the disposal of sewage; provided that the term shall include:
(A) An owner or operator of a private sewer company or sewer facility; and
(B) A telecommunications carrier or telecommunications common carrier; and
(2) Shall not include:
(A) An owner or operator of an aerial transportation enterprise;
(B) An owner or operator of a taxicab as defined in this section;
(C) Common carriers that transport only freight on the public highways, unless operating within localities, along routes, or between points that the public utilities commission finds to be inadequately serviced without regulation under this chapter;
(D) Persons engaged in the business of warehousing or storage unless the commission finds that regulation is necessary in the public interest;
(E) A carrier by water to the extent that the carrier enters into private contracts for towage, salvage, hauling, or carriage between points within the State; provided that the towing, salvage, hauling, or carriage is not pursuant to either an established schedule or an undertaking to perform carriage services on behalf of the public generally;
(F) A carrier by water, substantially engaged in interstate or foreign commerce, that transports passengers on luxury cruises between points within the State or on luxury round-trip cruises returning to the point of departure;
(G) [Any person who:
(i) Controls, operates, or manages
plants or facilities for the production, transmission, or furnishing of power
primarily or entirely from nonfossil fuel sources; and
(ii) Provides, sells, or transmits all
of that power, except as is used in its own internal operations, directly to a
public utility for transmission to the public;] Any user, owner, or
operator of the Hawaii electric system as defined under section 269-A;
(H) A telecommunications provider only to the extent determined by the public utilities commission pursuant to section 269-16.9;
(I) Any person who controls, operates, or manages plants or facilities developed pursuant to chapter 167 for conveying, distributing, and transmitting water for irrigation and other purposes for public use and purpose;
(J) Any person who owns, controls, operates, or manages plants or facilities for the reclamation of wastewater; provided that:
(i) The services of the facility are provided pursuant to a service contract between the person and a state or county agency and at least ten per cent of the wastewater processed is used directly by the state or county agency that entered into the service contract;
(ii) The primary function of the facility is the processing of secondary treated wastewater that has been produced by a municipal wastewater treatment facility owned by a state or county agency;
(iii) The facility does not make sales of water to residential customers;
(iv) The facility may distribute and sell recycled or reclaimed water to entities not covered by a state or county service contract; provided that, in the absence of regulatory oversight and direct competition, the distribution and sale of recycled or reclaimed water shall be voluntary and its pricing fair and reasonable. For purposes of this subparagraph, "recycled water" and "reclaimed water" means treated wastewater that by design is intended or used for a beneficial purpose; and
(v) The facility is not engaged, either directly or indirectly, in the processing of food wastes;
(K) Any person who owns, controls, operates, or manages any seawater air conditioning district cooling project; provided that at least fifty per cent of the energy required for the seawater air conditioning district cooling system is provided by a renewable energy resource, such as cold, deep seawater;
(L) Any person who owns, controls, operates, or manages plants or facilities primarily used to charge or discharge a vehicle battery that provides power for vehicle propulsion; and
(M) Any person who:
(i) Owns, controls, operates, or manages a renewable energy system that is located on a customer's property; and
(ii) Provides, sells, or transmits the power
generated from that renewable energy system to an electric utility or to the
customer on whose property the renewable energy system is located; provided
that, for purposes of this [clause,] subparagraph, a customer's
property shall include all contiguous property owned or leased by the customer
without regard to interruptions in contiguity caused by easements, public
thoroughfares, transportation rights-of-way, and utility rights-of-way.
If the application of this chapter is ordered by the commission in any case provided in paragraphs (2)(C), (2)(D), (2)(H), and (2)(I), the business of any public utility that presents evidence of bona fide operation on the date of the commencement of the proceedings resulting in the order shall be presumed to be necessary to the public convenience and necessity, but any certificate issued under this proviso shall nevertheless be subject to terms and conditions as the public utilities commission may prescribe, as provided in sections 269-16.9 and 269-20."
SECTION 4. In codifying the new part and sections added to chapter 269, Hawaii Revised Statutes, by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating and referring to the new sections in this Act.
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2012.
Report Title:
Electric Reliability Standards; Grid Interconnection; Hawaii Electricity Reliability Administrator; Hawaii Electricity Reliability Surcharge
Description:
Authorizes the Public Utilities Commission to develop, adopt, and enforce reliability standards for electric systems, and to oversee electric grid access; authorizes the Public Utilities Commission to contract for the performance of related duties with a party to be designated as the Hawaii Electricity Reliability Administrator. Effective July 1, 2012. (HB2525 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
