What happens when the state can’t pay its electric bills?
That was the situation that the Legislature faced this past session. The Department of Accounting and General Services, which manages most state buildings, and the University of Hawai`i were facing a shortfall of some $6.4 million in their budgets for energy expenses by June 30, when fiscal year 2006 comes to a close. As a result, the Legislature passed an emergency appropriation to cover the unanticipated expense, tied to the rapidly rising costs of the fossil fuels on which Hawai`i depends for most of its electrical generation.
But it went a step further. It passed legislation (House Bill 2175) intended to pare back the state’s reliance on fossil fuels. Among other things, the legislation, which became Act 96 with Governor Lingle’s signature on May 12:
• Allows the Department of Education to float bonds up to $5 million to place photovoltaic panels on at least one school in every county;
• Requires state agencies to employ energy-efficiency measures in the design and construction of new buildings. New housing on state land or financed with state dollars shall be insulated to help keep it cool and built on an orientation that facilitates installation of solar water-heating. All state agencies are to install solar water-heating when justified by an evaluation of its cost-effectiveness, implement water-conservation measures, recycle, and purchase environmentally friendly supplies and equipment;
• Requires state agencies, when buying new vehicles, to purchase the most fuel-efficient vehicles that meet their program needs. At the same time, they are to begin keeping records on mileage and gas consumption for each vehicle in their fleet;
• Authorizes three new positions for energy coordinators (one in the DOE, two more in the Department of Business, Economic Development, and Tourism); and
• Requires counties to give priority to developers and builders seeking permits for energy-efficient projects.
Press coverage of the legislation was generally favorable. But Henry Curtis, executive director of Life of the Land and probably the foremost energy policy wonk in Hawai`i’s environmental community, did not hold back in his criticism of the measure.
The provision for photovoltaic systems on schools, for example, “is very small,” he said. “This isn’t going to make much of a dent in anything. It is described as a pilot project, or R&D, but we don’t need any more demonstration projects; we need to make a move toward renewables. This is a major concern.”
Curtis extended his criticism to other energy bills passed by the Legislature but which (at press time) had not been signed into law.
Senate bill 2957 extends and modestly increases tax credits for renewable energy installations, such as solar water heating or wind energy. It also encourages purchase of biofuels by state agencies. Curtis has no particular beef with these provisions. But the bill also sets goals for the proportion of “alternative fuels” to be used in meeting highway demand (that is, the percent of alternate fuels used to power all highway vehicles, whether owned by the state or not): by 2010, the goal is 10 percent, by 2015, 15 percent, and by 2020, 20 percent. Says Curtis: “In defining ‘alternate fuels,’ the Legislature adopted the federal definition, which includes anything that’s not gas – including liquefied natural gas, naphtha, and a lot of other things” that are still fossil fuels. The legislators, he continued, “say they want to get to 20 percent by 2020, but the bill allows you to hit only 8 percent if you use cellulosic ethanol, since that counts for two-and-a-half times whatever else you use. Also, you can use liquefied coal – that counts as alternative fuel, but it’s not something we feel comfortable with. That ties into the new clean-coal campaign, sponsored by the coal industry, which argues that since we have so much coal in this country, we should do everything with coal.
“Ethanol isn’t the answer, either. It’s just something thrown out there to make people happy, but not a lot of thought went into it.”
Senate Bill 2957 also sets up a “Hawai`i renewable hydrogen program” within DBEDT, which is to “manage the state’s transition to a renewable hydrogen economy.” The first island designated for such transition is Hawai`i, which is to move “to a hydrogen-fueled economy” from 2010 to 2020. Curtis notes that the bill at times refers to a “renewable hydrogen economy,” and at other times simply a “hydrogen economy.” This, says Curtis, means that “we are going for a black hydrogen future.” “Green” hydrogen, Curtis explains, comes from renewables, “blue” from marine, while “black” is derived using fossil fuels. The measure calls for $10 million in general funds to be deposited into a new “hydrogen investment capital special fund,” which is to spur “research, development, testing, and implementation of the Hawai`i renewable hydrogen program.”
Finally, SB 2957 calls for studies costing $350,000 to investigate what would be required for Hawai`i to produce its own biofuels. But this, says Curtis, doesn’t include any requirement to look at environmental, social, or cultural impacts of such production – only the economic impacts.
A third major energy initiative is Senate Bill 3185, which passed the Legislature and (at this writing) also awaits the governor’s signature. The bill authorizes (but doesn’t require) the Public Utilities Commission to take all of the funds now collected by utilities for demand-side management programs and place them instead into a “public benefits fund,” which would be used to promote energy efficiency and demand-side management programs. In another section, it allows the PUC to tweak the renewable portfolio standards required of electric utilities, so long as at least 50 percent of the standards are met by energy generated from renewable sources (the remainder can come from efficiencies).
Curtis again is brutal in his assessment. The public benefits fund could have been designed to be independent, as it is in Vermont, he says. Efficiency Vermont is a statewide energy efficiency organization that pushes for conservation, while utilities try to get you to use more. You don’t have both functions within the same entity,” as you now have in Hawai`i, he says. But the Legislature subverted the potential independence of such a fund when it inserted language that requires the PUC to “encourage programs … that reasonably reflect current and projected utility integrated resource planning.” In other words, he says, “the new entity has to follow the utilities’ lead, which defeats the very purpose of having a separate entity figure out ways of reducing energy demand.”
The bill also has “a huge escape clause” for utilities that fail to meet the renewable portfolio benchmarks, which are, in any case, far too weak in Curtis’ view. “If a utility planned an unreasonable project and they get rejected by a regulator,” he says, SB 3185 allows them “to use this as a reason for not meeting the renewable portfolio requirements” and avoid being socked with penalties by the PUC. The list of what one might call acceptable excuses for failure to meet the benchmarks is indeed extensive. It includes not just natural disasters, weather-related damage, mechanical failures, non-performing subcontractors, and labor strikes or lockouts, but also:
• Actions of agencies that may hamper distribution of renewable electrical energy under contract to a utility;
• The “inability to acquire sufficient renewable electrical energy due to lapsing of tax credits related to renewable energy development;”
• The “inability to obtain permits or land use approvals for renewable electrical energy projects;”
• The “inability to acquire sufficient cost-effective renewable electrical energy;”
• “Substantial limitations, restrictions, or prohibitions on utility renewable electrical energy projects;” and
• “Other events and circumstances of a similar nature.”
In describing not just this bill, but the entire package of energy legislation that moved through the House and Senate this year, Curtis sees little more than a series of highways paved with good intentions – but with off-ramps at every turn. “There are off-ramps all over the place,” he says. “The off-ramps are larger than the road itself.”
It’s the Law
As of late May, the governor had signed several other bills besides House Bill 2175 that relate to the environment. Among them are the following:
Waimea Valley (Act 15, House Bill 2400). This made an emergency appropriation of $1.6 million in the 2006 fiscal year to help with the acquisition of Waimea Valley.
State Plan(Act 65, House Bill 2457) . This amends the state statute regarding development of the state plan. According to the findings section of the legislation, “the purpose of this Act is to emphasize that another objective and policy of the state plan is to promote the well-being of federal military installations and investment in the state and to fully support the continual operations of existing installations.” Basically, it requires the Office of Planning to recognize “as important state concerns” the presence of federal defense and security forces and agencies in the state when the office prepares its state plans. Just how much effect this act will have is questionable: the Office of Planning hasn’t prepared a state plan since the early 1990s.
Lobster, Crab Protection (Act 77, HB 2278) . This bans the taking of female spiny lobsters and female Kona and Samoan crabs from the wild.
Ka`ena Point Protection (Act 89, HB 2133). This prohibits vehicular access within or through Ka`ena Point Natural Area Reserve on O`ahu except emergency vehicles or those operated by employees of the Department of Land and Natural Resources in connection with their management responsibilities.
Safe Harbor Extension (Act 90, SB 2357). This gives five more years of life to the law that allows the state to enter into Safe Harbor Agreements and Habitat Conservation Plans, and to issue incidental take licenses. The new expiration date is July 1, 2012.
Coqui Are Pests (Act 108, SB 3076). This measure does what the Department of Agriculture had already proposed doing by rule: define the noisy coqui tree frog as a pest species so that state agents can enter private property to eradicate it without landowner permission. It also accomplishes something possibly even more significant: it amends the pest species law (Section 141-3, HRS) to apply to pests injurious not just to “vegetation of value” but also to those that harm the environment.
Invasive Species Council (Act 109, SB 2486). This measure adds eight members of the Legislature to the parties that the Hawai`i Invasive Species Council is required to consult with. The legislators are to be designated, one from each county, by the speaker of the House and the Senate president. The measure also eliminates the sunset date of July 1, 2008.
Passed but Pending
July 11 is the deadline by which the governor must sign bills, veto them, or let them become law without her signature. As of press time, the following bills remained unsigned:
Environmental Covenants (HB 1706). The intent of this bill, which would create a new chapter of Hawai`i Revised Statutes, is to establish a means of tracking agreements entered into with the Department of Health that call for cleaning up contaminated properties. Essentially, such agreements are to be attached to the land and run with the land unless it ends upon satisfaction of its own terms or when certain other conditions are met.
Meth Lab Clean-up Rules (HB 2039). This requires the Department of Health to adopt standards for cleaning up sites contaminated by the production of methamphetamine, or “ice.”
Agricultural Tourism (HB 2145). Increasingly, large ranches in Hawai`i are turning to tourism for a growing share of their revenue. This, however, has created problems, since the state Land Use Law (Chapter 205), does not specify tourism as one of the permitted use of agricultural land. House Bill 2145 adds “agricultural tourism” as a permitted activity, “provided that the … activity is accessory and secondary to the principal agricultural use and does not interfere with surrounding farm operations.” In addition, agricultural tourism would be allowed only in counties that adopt ordinances regulating the activity. Those ordinances would have to address access issues (including roads and parking) and accessory operations (such as gift shops and restaurants – but specifically could not include provisions for overnight accommodations), among other things. Further, each county could require operators of agricultural tourism activities to prepare an environmental assessment before permitting the operation.
Kaka`ako Development (HB 2555). This measure effectively overrides the Hawai`i Community Development Authority’s agreement to have Alexander & Baldwin develop the Kaka`ako area, near downtown Honolulu, under a plan calling for high-rise, fee-simple condominiums makai of Ala Moana Boulevard. The agreement with A&B had seemed to be a done deal until a coalition of grass-roots organization lobbied the Legislature to block the project.
Sustainability Planning (HB 2805 and HB 2806). Last year, in its special session, the Legislature overrode a governor’s veto to pass Act 8. This law established a Hawai`i 2050 sustainability task force, charged with reviewing and reporting on the sufficiency of the current Hawai`i State Plan. After receiving the task force report, it authorized the Office of the Auditor to prepare a Hawai`i 2050 Sustainability Plan. The task force met several times last year and reported to the Legislature that it would need more time to conduct the required research and community outreach. House Bill 2805 gives the task force an additional year – until June 30, 2008 – to complete its work. House Bill 2806 gives the Office of the Auditor $650,000 to complete the sustainability study and $50,000 to “make a comprehensive assessment of the feasibility and benefits of establishing ‘Hawai`i’ as a brand name with values that will support diverse products and services other than tourism in the United States and foreign markets.”
Energy Policy Forum (HB 2848). This measure calls for reconvening a Hawai`i Energy Policy Forum (last convened in 2002), to assess ways for Hawai`i to implement the earlier forum’s recommendations. It also asks the forum to investigate the feasibility of the state becoming a participant in the Chicago Climate Exchange, a market where greenhouse-gas emission allowances are bought and sold. To carry out the intent of the bill, DBEDT would receive a $200,000 appropriation, with instructions to pass it on to the Social Sciences Public Policy Center at the University of Hawai`i, which would conduct the actual work.
Tradewinds Revenue Bonds (HB 2878). This authorizes the Department of Budget and Finance to issue up to $25 million in special-purpose revenue bonds to help Tradewinds Forest Products, LLC, build a veneer mill and co-generation plant on the Big Island. Tradewinds holds a license to log timber from state-owned land in Waiakea, south of Hilo. It has been stalled in efforts to develop a mill by financing issues.
Limu Management Area (SB 895). In response to reports of dwindling limu off `Ewa Beach, on O`ahu’s southern shore, the Legislature passed this bill, which would make limu-gathering off-limits unless you are a Native Hawaiian or have been given a special permit by the DLNR to pick limu as part of a replanting effort. In 2010, the restrictions would be lifted somewhat, so that anyone could pick up to one pound of limu in daylight hours during the months of July, November, and December.
GM Papaya (SB 1899). More than a decade ago, papaya growers whose crops had been devastated by the ringspot virus embraced the genetically modified Rainbow papaya as an answer to their prayers. However, the lucrative Japanese market for papaya exports (accounting for 40 percent of all papaya exports from the state) has remained off-limits to the Rainbow, since Japan will not allow the import of the genetically modified fruit. Senate Bill 1899 would give the Department of Agriculture $200,000 to “provide the scientific information to support the deregulation process which will allow the genetically engineered Hawaiian rainbow papaya to be introduced into the Japanese market.” In addition, the DOA is to “initiate the development and implementation of a marketing plan to promote the transgenic and non-transgenic Hawaiian papaya in Japan and in future markets, including China and the European Union.”
Ban on Opihi Sales (SB 2006). In an effort to protect opihi, whose numbers have been declining in recent years owing almost certainly to overharvesting, this measure bans the sale of these delectable limpets. Opihi can still be taken for personal use, but possession of anything more than a half-gallon of opihi (with shell) is to be considered evidence of intent to sell. Jewelry or trinkets made with opihi shells at least 1 ¼ inches in diameter can still be sold. Also, the measure makes an exception for opihi-gatherers who are “residents of any populated island that is privately owned and has a population of five hundred or less.”
HCDA Public Notice (SB 2090). The Hawai`i Community Development Authority’s plan to redevelop Kaka`ako was widely panned by grass-roots organizations (see HB 2555). To head off further such after-the-fact protests, the Legislature approved this measure, which expands the public-notice requirements that the agency must meet in approving any development plan.
EIS Review (SB 2145). The Office of Environmental Quality Control is authorized by this measure to spend up to $82,000 on a contract reviewing the provisions regarding environmental justice in the state’s Environmental Impact Statement law, Chapter 343. It also appropriates $108,000 for the OEQC to contract with the University of Hawai`i’s Environmental Center to undertake a comprehensive review of the EIS process, with particular attention to potential impacts on cultural practices.
Small Boat Harbors (SB 2150). The Lingle administration has been trying to foist onto counties ownership of the state’s small boat harbors. In the preamble to this measure, the Legislature states: “it is the legislature, not the department of land and natural resources, that will determine the disposition of the small boat harbors.” This bill prohibits transfer to any county of the state’s small boat harbors, “including but not limited to its jurisdiction, duties, authorizations, programs, records, equipment and materials, funding, and personnel … unless expressly provided by statute.” Despite the apparent strong feelings behind this measure, it has a curiously short shelf-life: by its own terms, it would be repealed June 30, 2007.
Forest Reserve Funds (SB 2358). This measure would change the current system of depositing fines from violations of the state’s Forest Reserve laws into the general fund and allow them instead to be placed into the Forest Stewardship Fund. It would increase the current criminal penalties to $2,000 (from $1,000), or up to a year in prison, or both. In addition, a fine of up to $2,000 would be levied for each tree illegally taken. Also, it would create a new section in the Forest Reserves law addressing administrative penalties. For a first violation, the penalty would be a fine of $2,500; for a second violation within five years of an earlier one, a fine of up to $5,000; and for a third or subsequent violation with five years of the earlier violation, a fine of up to $10,000. In addition, a fine of up to $10,000 could be levied for each koa tree taken from a forest reserve, with fines of up to $2,000 per tree for other species. One of the most important provisions is its amendment of the purposes on which monies in the Forest Stewardship Fund can be spent. Previously, the DLNR could not use any of the monies for management of lands in state Forest Reserves. This measure lifts that prohibition.
Grounded Vessels (SB 2360). By this measure, the DLNR is given the authority to take control of vessels that have run aground on coral reefs, which are in imminent danger of breaking up, or which cannot be safely removed by their owners. The department is also authorized to attempt recovery of its costs through legal means.
Wai`opae Tidepools (SB 2480). This measure appropriates $150,000 to the Hawai`i County Department of Environmental Management to study the feasibility of constructing a wastewater treatment system for the Kapoho Vacationlands and Farmlots area and of building a restroom for visitors to the Wai`opae Tidepools Marine Life Conservation District that fronts the Kapoho Vacationlands subdivision. As the conference committee report states, “due to the high groundwater table and close proximity to valuable nearshore water and porous ground formations, it is suspected that wastewater from these communities may be impacting the nearshore waters.”
Ha`ena Fishing Area (SB 2501). The waters off Ha`ena, Kaua`i, would be designated a community-based subsistence fishing area under this measure, with rules to be developed by the DLNR in close consultation with the area’s residents. It also extends the ban on net fishing in Kahului Harbor until June 30, 2007, or when the DLNR adopts rules addressing user conflicts in the harbor, whichever comes earlier.
Wai`anae Baseline Study (SB 2575). Last year, the Legislature overrode a governor’s veto to call for a baseline environmental study of the Wai`anae Coast. This legislation appropriates $1 million to the DLNR to conduct the study.
East Kaua`i Irrigation System (SB 2753). Since the demise of Amfac, the irrigation system that furnished water to sugar fields in East Kaua`i has been on hard times. A users’ co-op set up to take over operations of the system has had trouble coming up with the cost of keeping it in good trim. This measure appropriates $100,000 to the Agribusiness Development Corporation toward the cost of keeping the system running.
Automatic Approval Opt-Out (SB 2909). “The legislature finds that automatic approval is poor public policy,” the first sentence in this measure reads. But instead of simply doing away with this “poor public policy” altogether, this measure give counties alone the ability to opt out if they pass ordinances exempting either the whole county or specific agencies from the statute, which provides that permit applications are deemed approved if not acted on within 180 days.
Legacy Lands Advisors (SB 3077). This establishes a Legacy Lands Conservation Commission, whose purpose is to advise the DLNR on the acquisition of lands qualified for purchase through the Land Conservation Fund established by the 2005 Legislature. Of the nine members, four are to have expertise in conservation science; one is to be from the environmental community; one is to be from a “land conservation organization organized in the state;” one is to be a member of a “statewide agricultural association;” one is to be knowledgeable about native Hawaiian culture. The chair of the Natural Areas Reserve System Commission is also to serve as chair of this panel and is an ex-officio voting member. In addition, the legislation requires the DLNR to consult in advance with the speaker of the House and the Senate president before it gives the Land Board its recommendations on acquisitions using the Land Conservation Fund.
The Superferry (HB 1900, the budget bill). To be sure, the state budget bill deals with far more than the planned interisland ferry. But the bill does contain language that would slow down the ferry juggernaut. Section 88.1 of the budget bill stipulates that no additional bond money can be spent for ferry terminal improvements until the state Department of Transportation and the Superferry company conduct site surveys and assessments, “in collaboration with the Hawai`i harbor users group, to implement a plan for harbor improvements,” including those improvements carried out on behalf of the Superferry, at all state-owned harbors affected by Superferry operations. It also requires the DOT and Hawai`i Superferry to hold three public informational briefings over the next nine months in each county affected by Superferry operations, with the first meeting to take place no later than June 30.
— Patricia Tummons
Volume 16, Number 12 June 2006