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Hawaii Clean Energy Initiative
HCEI was formed in early 2008 when Governor Linda Lingle declared the goal for 70% clean energy by 2030. It has produced the Oct-20 agreement with Hawaiian Electric to rapidly advance clean energy sources. Inside this agreement are the following stipulations for a FIT:
On behalf of the people of Hawaii, we believe that the future of Hawaii requires that we move more decisively and irreversibly away from imported fossil fuel for electricity and transportation and towards indigenously produced renewable energy and an ethic of energy efficiency. The very future of our land, our economy and our quality of life is at risk if we do not make this move and we do so for the future of Hawaii and of the generations to come.
Successfully developing Hawaii’s energy economy will make the State a global model for achieving a sustainable, clean, flexible, and economically vibrant energy future. The parties are all committed to the rapid development of as much renewable energy as possible.
Support the installation of third-party and customer PV systems through feed-in tariffs that offer known, stable pricing terms and standardized interconnections
Feed-in Tariffs
The parties agree that feed-in tariffs are beneficial for the development of renewable energy, as they provide predictability and certainty with respect to the future prices to be paid for renewable energy and how much of such energy the utility will acquire. The parties agree that feed-in tariffs should be designed to cover the renewable energy producer’s costs of energy production plus some reasonable profit, and that the benefits to Hawaii from using a feed-in tariff to accelerate renewable energy development (from lowering oil imports, increasing energy security, and increasing both jobs and tax base for the state), exceed the potential incremental rents paid to the renewable providers in the short term. To that end, the parties agree to the following:
• The parties will respectfully request that by March, 2009, the Commission will conclude an investigative proceeding to determine the best design for feed-in tariffs that support the Hawaii Clean Energy Initiative, considering such factors as categories of renewables, size or locational limits for projects qualifying for the feed-in tariff, how to manage and identify project development milestones relative to the queue of projects wishing to take the feed-in tariff terms, what annual limits should apply to the amount of renewables allowed to take the feed-in tariff terms, what factors to incorporate into the prices set for feed-in tariff payments, and the terms, conditions, and duration of the feedin tariff that shall be offered to all qualifying renewable projects, and the continuing role of the Competitive Bidding Framework;
• In addition, the parties will respectfully request that by July, 2009, the Commission will adopt a set of feed-in tariffs and prices that implement the conclusions of the feed-in tariff investigation;
• Utility PPA of renewable energy made using the Commission-approved feed-in tariff shall be deemed to be prudent and their costs shall be approved for rate recovery;
• Utility purchases of renewable energy under the feed-in tariff shall be counted toward the utility’s Renewable Portfolio Standard requirements;
The parties agree in principle that 10% of the utility’s energy purchases under feed-in tariff PPA will be included in the utility’s rate base through January 2015.
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The Hawaiian Electric Companies will be allowed to pass through reasonably incurred purchase power contract costs, including all capacity, O&M and other non-energy payments approved by the Commission (including those acquired under the feed-in tariff) through a separate surcharge.
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