HB338 amends Hawaii’s renewable energy rate-setting law for nonfossil fuel generated electricity. The bill directs the Public Utilities Commission, when setting just and reasonable rates for electricity sold by renewable or other nonfossil fuel producers, to use a methodology that reduces the link between fossil fuel prices and renewable energy rates. It also expressly allows the commission to include reasonable incremental adjustment mechanisms, including inflation-based adjustments and adjustments to cover unavoidable increases in financing costs caused by the public utility’s credit status, if the producer proves those costs by clear and convincing evidence.
The bill’s stated purpose is to help ensure that renewable energy projects remain financeable and can be completed despite challenges affecting utility procurement and the credit status of the investor-owned utility and its subsidiaries. The findings describe concerns that higher borrowing costs could jeopardize independent power producer and community-based renewable energy projects, which in turn could affect reliability, affordability, and the state’s clean energy goals. The measure is set to take effect on July 1, 3000, which is a common placeholder effective date used in some Hawaii bills to avoid immediate implementation.
Impact
HB338 would amend section 269-27.2, Hawaii Revised Statutes, governing rates paid by public utilities to producers of nonfossil fuel generated electricity. It would give the Public Utilities Commission explicit authority to include certain adjustment mechanisms in renewable energy contracts or commission-set rates, particularly to account for inflation and for financing-cost increases tied to the utility’s credit status. The bill would therefore affect renewable energy developers, independent power producers, community-based renewable energy projects, public utilities, and the PUC’s ratemaking authority.
Sentiment
The bill appears generally supportive of renewable energy development and utility decarbonization, with its findings emphasizing affordability, reliability, resilience, and energy equity. No committee transcripts or recorded votes were provided, so there is no direct evidence of opposition or support from legislators in the available record. Based on the text alone, the measure is framed as a technical fix intended to preserve project viability rather than as a broad policy shift.
Contention
The main point of potential contention is whether renewable energy rates should be allowed to rise to reflect higher financing costs caused by the utility’s weakened credit status. Supporters would likely argue that without such adjustments, projects may be canceled or delayed, harming reliability and the state’s clean energy transition. Opponents or skeptics could argue that ratepayers should not bear added costs tied to utility financial problems, or that the clear-and-convincing-evidence standard may still leave room for disputes over what costs are truly unavoidable and reasonable.