Hawaii Energy

Hawaii Energy is a public benefits fund (PBF) funded by a surcharge on utility bills that is based on a percentage of total utility revenue. The PBF pays for a number of clean energy incentive, rebate, and exchange programs. For more information on specific programs, visit the Hawaii Energy website.

The percentage of total utility revenue is used to establish a target budget for the PBF. The surcharge is set on a cents per kilowatt-hour ($/kWh) basis to meet the target budget. The surcharge is determined by dividing the target budget (based on a percentage of total utility sales) by projected sales. Any difference in the amount collected from the surcharge and the target budget will be addressed by adjusting the following year’s surcharge (by either increasing or decreasing the surcharge). There will be separate residential and commercial/industrial components, with 45% of collections from residential customers and 55% of collections from commercial and industrial customers. The surcharge appears as a separate line item on customers’ bills.

For 2009 and 2010, the PBF had a target budget of 1% of total projected revenue, including revenue taxes. For 2011 and 2012, the PBF has a target budget of 1.5% of total projected revenue. From 2013 onwards, the PBF will have a projected target budget of 2% of total projected revenue.  The PUC engages in rulemaking to set the target percentage for the total projected revenue each year.  All utilities in Hawaii, with the exception of KIUC, collect this surcharge on utility bills. Customers of HECO, HELCO, and MECO are eligible to receive incentives from the public benefits fund. Programs supported by Hawaii Energy include rebates for home appliances, industrial energy efficiency, and solar water heaters, among others.

In addition, as amended by the 2013 legislation, the Department of Business, Economic Development, and Tourism can issue Green Infrastructure Bonds in order to raise funds for renewable energy and energy efficiency projects. Revenue from the bonds will be used for on-bill financing and loan programs offered by the state and bondholders will be repaid with PBF funds.

History

In June 2006, the Hawaii State Legislature enacted legislation to create a public benefits fund (PBF) for energy efficiency and demand side management. In July 2013, the law was amended to allow for the financing of renewable energy technologies that are eligible under the Renewable Portfolio Standard. The statutory language included a provision that prevents the PBF funds from being re-appropriated by the legislature or put into the state treasury. This legislation granted authority to the Public Utilities Commission (PUC) to develop the details of the third-party administered public benefits fund. In December 2008, the PUC issued an order in Docket No. 2007-0323, outlining the structure of the PBF. In July 2009, Hawaii Energy was created, and administration of the public benefits funds programs transitioned from the utilities to a third-party administrator.