Bill > SB1501

This bill requires the Department of Budget and Finance to create a mechanism to support the development of clean energy resources in Hawaii by entering into step-in agreements with independent power producers. Specifically, the bill establishes a Power Purchase Costs Trust Fund where revenues from power purchase charges and reserve fees will be held in trust to ensure payments to independent power producers if the electric utility defaults on its payment obligations. The legislation is primarily motivated by the recent Maui wildfires, which have negatively impacted the credit rating of the local electric utility and created uncertainty for renewable energy project developers. The bill allows the electric utility to serve as a billing and collection agent for the Department of Budget and Finance, and requires the Public Utilities Commission to create a surcharge (reserve fees) to help secure payments. The step-in agreements are limited to specific renewable energy proposal processes and will terminate once the electric utility regains an investment-grade credit rating. Importantly, the state's full faith and credit is not pledged to these agreements, and the department's payment obligations are strictly limited to the revenues in the trust fund. The overall purpose is to protect public health, safety, and welfare by supporting the development of clean energy resources needed for reliable and reasonably priced electric supply.

Agriculture and Natural Resources, Budget and Finance, Government Affairs

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1501&year=2025