§269-27.2  Utilization of electricitygenerated from nonfossil fuels.  (a)  The public utilities commission shallinvestigate and determine the extent to which electricity generated fromnonfossil fuel sources is available to public utilities that supply electricityto the public, which electricity is in excess of that utilized or otherwiseneeded by the producers for their internal uses and which the producers arewilling to make available to the electric public utilities.

(b)  The public utilities commission may directpublic utilities that supply electricity to the public to arrange for theacquisition of and to acquire electricity generated from nonfossil fuel sourcesas is available from and the producers are willing and able to make availableto the public utilities, and to employ and dispatch the nonfossil fuelgenerated electricity in a manner consistent with the availability thereof tomaximize the reduction in consumption of fossil fuels in the generation ofelectricity to be provided to the public.  To assist the energy resourcescoordinator in effectuating the purposes of chapter 201N, the public utilitiescommission may develop reasonable guidelines and timetables for the creationand implementation of power purchase agreements.

(c)  The rate payable by the public utility tothe producer for the nonfossil fuel generated electricity supplied to thepublic utility shall be as agreed between the public utility and the supplierand as approved by the public utilities commission; provided that in the eventthe public utility and the supplier fail to reach an agreement for a rate, therate shall be as prescribed by the public utilities commission according to thepowers and procedures provided in this chapter.

The commission's determination of the just andreasonable rate shall be accomplished by establishing a methodology thatremoves or significantly reduces any linkage between the price of fossil fuelsand the rate for the nonfossil fuel generated electricity to potentially enableutility customers to share in the benefits of fuel cost savings resulting fromthe use of nonfossil fuel generated electricity.  As the commission deemsappropriate, the just and reasonable rate for nonfossil fuel generatedelectricity supplied to the public utility by the producer may includemechanisms for reasonable and appropriate incremental adjustments, such asadjustments linked to consumer price indices for inflation or other acceptableadjustment mechanisms.

(d)  Upon application of a public utility thatsupplies electricity to the public, and notification of its customers, thecommission, after an evidentiary hearing, may allow payments made by the publicutility to nonfossil fuel producers for firm capacity and related revenue taxesto be recovered by the public utility through an interim increase in ratesuntil the effective date of the rate change approved by the commission's finaldecision in the public utility's next general rate proceeding under section269-16, notwithstanding any requirements to the contrary of any other provisionin this chapter or in the commission's rules or practices; provided the amountrecovered by the utility and the amount of increase in rates due to thepayments for firm capacity and related revenue taxes to be charged to theconsumers of the electricity are found by the commission to be:

(1)  Just and reasonable;

(2)  Not unduly prejudicial to the customers of thepublic utility;

(3)  Promotional of Hawaii's long-term objective ofenergy self-sufficiency;

(4)  Encouraging to the maintenance or development ofnonfossil fueled sources of electrical energy; and

(5)  In the overall best interest of the generalpublic.

The evidentiary hearing provided for in thissubsection shall be conducted expeditiously and shall be limited to evidence relatedto the above findings.  Notwithstanding section 269-16, no public hearing shallbe required, except as the commission in its discretion may require. [L 1977, c102, §3; am L 1982, c 266, §2; am L 1983, c 243, §1; am L 1988, c 246, §2; am L2004, c 95, §3; am L 2006, c 162, §3; am L 2008, c 207, §4; am L 2009, c 50, §2]