A bill signed by Gov. David Ige last week will allow new types of energy projects to be financed by the state.
House Bill 2231 presents a clarification within an existing section of Hawaii’s Revised Statutes, which states than an “energy project” is able to receive state special purpose revenue bonds.
The bill adds “publicly owned energy cooperative” to the definition of energy project.
“This doesn’t grant special purpose revenue bonds; it just clarifies what they can be used for,” said state Rep. Nicole Lowen, who introduced the bill. “(The bonds) still have to be approved by Budget and Finance.”
Still, having access to special purpose revenue bonds “essentially means lower cost of money if and when we have the opportunity to move forward,” said Marco Mangelsdorf, president of the Hawaii Island Energy Cooperative.
HIEC was formed last year amidst the proposed sale of Hawaiian Electric Co. to NextEra Energy to explore the possibility of creating a publicly owned energy entity on the Big Island. One of the uncertain elements of establishing such a co-op has been initial financing.
There are other federal financing resources available if a co-op plan were to move forward, such as the Rural Utility Service funding, part of the U.S. Department of Agriculture.
“Having the state back you, (and) having the government back you, reduces the liability for lenders and reduces the rates,” Mangelsdorf said.
Currently, the only electricity co-op in the state is the Kauai Island Utility Cooperative.
Lowen said that a portion of this year’s state budget was going to study alternative utility models.
“I think there’s a lot of popular support for the co-op,” she said. “I need data before being able to say what is the best choice going forward, but I definitely support getting all the data.”
HIEC’s plans are currently in a holding pattern as members wait for a decision from the federal Public Utilities Commission regarding a proposed sale of Hawaiian Electric. The last day for submitting to the PUC docket for the sale was May 2.
“We’re waiting for a decision so that we can one way or the other move on,” Mangelsdorf said.
He said HIEC members still felt there was a “very positive path forward to be able to reduce electric costs under the co-op model.”
The bill signed by Ige takes effect July 1.
Email Ivy Ashe at iashe@hawaiitribune-herald.com.
