Renewable Portfolio Standard

Requirements

Under Hawaii's Renewable Portfolio Standard (RPS), each electric utility company that sells electricity for consumption in Hawaii must establish the following percentages of "renewable electrical energy" sales:

• 10% of its net electricity sales by December 31, 2010;
• 15% of its net electricity sales by December 31, 2015;
• 30% of its net electricity sales by December 31, 2020;
• 40% of its net electricity sales by December 31, 2030;
• 70% of its net electricity sales by December 31, 2040;
• 100% of its net electricity sales by December 31, 2045;

Existing renewables may be counted in the total. In addition, an electric utility company and its electric utility affiliates may aggregate their renewable portfolios in order to achieve the renewable portfolio standard (i.e., the Hawaiian Electric Company and its affiliates-- Maui Electric Company and Hawaii Electric Light Company -- may add together their renewable energy numbers to meet the goal).

Eligible Technologies

"Renewable energy" means energy generated or produced using the following sources: (1) wind; (2) the sun; (3) falling water; (4) biogas, including landfill and sewage-based digester gas; (5) geothermal; (6) ocean water, currents, and waves, including ocean thermal energy conversion; (7) biomass, including biomass crops, agricultural and animal residues and wastes, and municipal solid waste and other solid waste; (8) biofuels; and (9) hydrogen produced from renewable energy sources.

"Renewable electrical energy" means: (1) Electrical energy generated using renewable energy as the source and, beginning January 1, 2015, includes customer-sited, grid-connected renewable energy generation; and (2) Electrical energy savings brought about by: (A) The use of renewable displacement or off-set technologies, including solar water heating, seawater air-conditioning district cooling systems, solar air-conditioning, and customer-sited, grid-connected renewable energy systems; provided that, beginning January 1, 2015, electrical energy savings shall not include customer-sited, grid-connected renewable-energy systems; or (B) The use of energy efficiency technologies, including heat pump water heating, ice storage, ratepayer- funded energy efficiency programs, and use of rejected heat from co-generation and combined heat and power systems, excluding fossil-fueled qualifying facilities that sell electricity to electric utility companies and central station power projects."

Compliance

The Public Utilities Commission (PUC) can establish standards for each utility that prescribe what portion of the renewable portfolio standards shall be met by specific types of renewable electrical energy resources. The standards established by the PUC cannot conflict with the following rules outlined in the legislation. Prior to January 1, 2015, at least 50% of the RPS must be met with electricity generated using renewables. Beginning January 1, 2015, the RPS must be entirely met by electricity generated using renewables. On that date, electrical energy savings brought about by the use of energy efficiency technologies or renewables to displace or off-set electricity demand will no longer count towards compliance with the RPS.* Customer-sited, grid-connected renewable energy systems will continue to count towards RPS compliance and will no longer be included as “electrical energy savings” beginning January 1, 2015. Where electrical energy is generated or displaced by a combination of renewable and nonrenewable means, the proportion attributable to the renewable means shall be credited as renewable energy. Where fossil and renewable fuels are co-fired in the same generating unit, the unit shall be considered to generate renewable electrical energy (electricity) in direct proportion to the percentage of the total heat value represented by the heat value of the renewable fuels.

The PUC can assess penalties if an electric utility company fails to meet the renewable portfolio standard.  Hawaii RPS annual compliance reports are available on the DBEDT website.  The PUC is required to contract with the Hawaii Natural Energy Institute to conduct a peer-reviewed study each five years. The standard must be evaluated in 2013, with the findings reported to the legislature before the 2014 legislative session. The percentage of renewable energy required by the RPS may be revised by the PUC if recommended by the peer-reviewed study.

Background

Hawaii established a renewable portfolio goal in 2001. Hawaii's renewable portfolio goal was replaced with an enforceable renewable portfolio standard (RPS) upon the enactment of SB 2474 (Act 95, Session Laws of Hawaii 2004) in June 2004. Under Hawaii’s original renewable portfolio goal, established by Act 272 (SLH 2001), each electric utility was required to establish goals to increase net renewable energy sales to 9% by December 31, 2010. The 2004 standard raised this target and required that 20% of electricity be generated from renewable resources by the end of 2020. Additional modifications were made to Hawaii's RPS law in June 2006 by SB 3185 (Act 162, SLH 2006). The 2006 amendments allowed electrical energy savings generated by renewables including solar water heating and seawater air-conditioning district cooling systems, among others, to count towards the RPS. The 2006 amendments also allowed electrical energy savings generated by certain energy efficiency technologies to count towards the RPS. In January 2008, the U.S. Department of Energy (DOE) and the State of Hawaii signed a Memorandum of Understanding (MOU) establishing the Hawaii Clean Energy Initiative. This agreement established an aggressive goal to help Hawaii greatly increase its renewable and clean energy production capabilities, and to transition exclusively to renewable energy use on the smaller islands. Although the MOU is not legally binding, it has the potential to help reduce oil consumption in Hawaii by 72% if implementation is successful. The expansion of Hawaii’s RPS in 2009 formalized many of the goals established by the Hawaii Clean Energy Initiative in 2008. Hawaii’s renewable portfolio standard was significantly expanded by legislation passed in 2009. HB 1464, signed by the governor in June 2009, increased the amount of renewable electrical energy generation required by utilities to 40% by 2030. On June 8th 2015, Hawaii became the only state with a legislative goal of 100% renewable energy by 2045 with the signing of HB 623.

*Note: HB 1464 of 2009 created separate Energy Efficiency Portfolio Standards (EEPS). The legislation set a goal of 4,300 gigawatt-hour (GWh) reduction in electricity use by 2030. The Public Utilities Commission must establish interim goals and can adjust the 2030 goal by rule or order. Electrical energy savings from renewable displacement or offset technologies and energy efficiency technologies will count towards the EEPS.