REP AWESC 003 07/18/2012 2010-2012

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REPORT OF THE COMMITTEE ON AGRICULTURE, WATER AND ENERGY SUSTAINABILITY DATE: July 18, 2012 RE: Comm. No. 778/Res. No. 277-12 PLACE: Council Chambers Kailua-Kona, Hawai`i TIME: 3:55 p.m. Council Chair and Members Hawaii County Council Hilo, Hawaii 96720 Your Committee on Agriculture, Water and Energy Sustainability, to which was referred Resolution No. 277-12, reports as follows: Resolution No. 277-12, transmitted by Chairperson Dominic Yagong via Communication No. 778, dated July 11, 2012, encourages the State of Hawaii Public Utilities Commission to raise Hawai`i Electric Light Company's (HELCO) renewable feeder penetration threshold from 15 percent of peak load to 50 percent of minimum load. Net Energy Metering is a system that allows customers who generate electricity (using wind, solar, etc.) primarily for their own consumption to sell excess electricity to the electric utility company. According to HELCO, there is a limited amount of Net Energy Metering systems that can be interconnected to HELCO's grid on each individual distribution feeder before significant impacts may occur to the reliability of electrical service provided to customers. The Public Utilities Commission has set a 15 percent threshold for the amount of excess electricity that may be delivered by Net Energy Metering systems to each individual distribution feeder. According to HELCO's Rule 14H, when the 15 percent threshold is exceeded in an individual distribution feeder, a Supplemental Review of the customer's application is required, which will most likely result in an Interconnection Requirements Study that would cost the customer between $2,000 and $100,000, depending on the size of the Net Energy Metering system. If the study determines that additional equipment or grid improvements are needed, then the customer would be responsible for those costs as well. Increasing the minimum threshold would provide HELCO the opportunity to work with companies such as National Energy Partners, LLC to negotiate financing of general upgrades and improvements to the electrical utility grid as an alternative to requiring the Interconnection Requirements Study. There were five testifiers from the Hilo Council Chambers and four from the Pahoa Council Office. All nine testifiers spoke in support of the resolution. Mr. Yagong submitted the following amendments via Communication No. 778.1: • Change "50 percent" to "100 percent" in the resolution title and the BE IT RESOLVED clause. AWESC Report No. 3