Bill to Allow Interest-Free GEMS Loans to Cool Schools Goes to Governor

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DOE workers applying heat-reflective paint to cool portable classrooms on on O`ahu. (DOE photo)
DOE workers applying heat-reflective paint to cool portable classrooms on O`ahu. (DOE photo)

In our May issue, we look closely at two GEMS-related bills that had advanced far in the 2017 legislative session. Both House Bill 1593 and House Bill 957 would make significant changes to the way in which the Hawai`i Green Infrastructure Authority manages the $144 million remaining in the Green Energy Market Securitization (GEMS) fund.

Now that the session has ended, we can report that House Bill 957 made it out of conference and now has been transmitted to the governor for his signature. HB 1593 didn’t make it out of conference committee.

House Bill 957

This measure allows up to $46.6 million of GEMS funds to be loaned to the Department of Education, in furtherance of its “cool the schools” initiative. Last year, a bill that would have loaned up to $100 million in GEMS funds to the DOE for air-conditioning and other technologies failed, with critics pointing out that air-conditioning would only increase the DOE’s energy consumption, contrary to the very purpose for which the GEMS fund was established.

This year, HB 957 gets around that by stating that the GEMS funds would be used for “implementing energy efficiency measures to substantially reduce energy consumption and lower kW load, which may allow classrooms earmarked for the ‘cool the schools’ initiative to install air conditioners without requiring expensive and time consuming electrical upgrades.”

The DOE was given no appropriation for repaying the loan; instead, the principal is to be repaid from “savings resulting from reduced utility costs as a result of the implementation of energy efficient lighting and other energy efficiency measures.”

In any case, the DOE is off the hook when it comes to interest payments. Specific terms of the loan are to be worked out between the DOE and HGIA, so long as “the loan shall be issued free of interest charges.”

House Bill 1593

HB 1593 did not make it out of conference; House and Senate conferees scheduled four meetings over four consecutive days in the last week of the session, but that bill never crossed the finish line.

During the session, HB 1593 did receive some press attention because it would have allowed a large fraction of the GEMS funds to be used for rebates on purchases of energy-saving technologies, rather than solely for loans to help underserved segments of society enjoy the benefits of those same technologies. At the same time, however, it would have removed Public Utilities Commission oversight from the HGIA. That oversight, requiring submission of reports and annual plans, has been the primary way in which the public has been able to follow HGIA activities.

The May edition of Environment Hawai`i has additional background on these bills and other GEMS-related developments.

 

Patricia Tummons

 

 

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