Energy policy in Hawaii

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Energy policy in Hawaii
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Quick facts
Energy department: Department of Business, Economic Development and Tourism
State population: 1.4 million
Per capita income: $44,024
Energy consumption
Total energy consumption: 286 trillion BTU [1][2]
Per capita energy consumption: 208 million BTU
Energy spending
Total state energy spending: $7,608 million
Per capita energy spending: $5,521
Residential natural gas price: $45.81 per thousand cubic foot
Residential electricity price: 37.24 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
Policypedia Energy logo.jpg
Energy Policy Project
Energy policy in the United States
Energy use in the United States
Glossary of energy terms
Energy policy in Hawaii
Fracking in Hawaii

Energy policy in Hawaii depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Hawaii, and many other states, focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and the use of renewable energy. Because Hawaii is isolated from the rest of the 50 states energy transmission is difficult and energy is quite expensive, especially when compared to the rest of the United States. Energy policy in Hawaii has then concentrated on keeping costs low and aggressively pursuing renewable energy development, as can be seen by their audacious Renewable Portfolio Standard, described below. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Hawaii

Energy overview

State facts

Below are quick facts about Hawaii's energy climate.

Hawaii

  • imports 94 percent of its energy.
  • has no fossil fuels.
  • has renewable energy in the form of biomass, biofuels, geothermal, hydroelectric energy, wind and solar energy.
  • ranks 11th in the nation for solar photovoltaic production.
  • has the world's largest commercial electricity generator fueled exclusively with biofuels.
  • is one of eight states with installed geothermal capacity.
  • mandates that 40 percent of all electricity come from renewable sources by 2030.[3]

In Hawaii

  • households consume about 34 percent less energy than the U.S. average, but spend 23 percent more for energy than the U.S. average.
  • almost three fourths of the electricity consumed comes from petroleum.
  • electricity is the main source of energy used in home heating, which is minimal due to Hawaii's warm climate.
  • renewable energy sources made up 13.7 percent of electricity generation in 2012.[4]
  • transportation is the largest energy-consuming sector in the state.[3]

Available energy resources

Hawaii has no traditional energy resources such as oil, coal or natural gas and has to import nearly all its energy. Petroleum, coal and a small amount of natural gas are shipped in by barge from pacific rim countries such as Indonesia or from Alaska. Hawaii does produce small amounts of "syngas" from naphtha feedstock, which is a waste product from local refineries.[3]

Hawaii has renewable energy resources that generate about 14 percent of the state's total electricity in 2012 according to the Hawaii State Government. Wind and solar generation are growing in Hawaii, but are limited by the small, independent grid systems of each island, which have high variability. Hawaii does have biomass capacity, with bagasse and municipal waste as feedstock. The world's largest commercial electricity generator fueled exclusively from biofuel is located in Hawaii. The Kilauea Volcano on Hawaii Island provides geothermal resources for commercial use. Despite having almost no hydroelectric capacity on its rivers, the military is experimenting with wave technology, which could potentially be a substantial source of power for the state.[3][5]

Consumption and prices

Energy consumption in Hawaii
HI energy consumption chart.png

Legend[6]
     Transportation       Residential     Industrial       Commercial
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As shown on the pie chart in 2011, roughly half of Hawaii’s energy use was for transportation. Tourism is Hawaii's largest industry, which consumes large amounts of jet fuel and gasoline. A little under a quarter was used for industry, and just over a quarter went to residential and commercial property combined. Most of the energy used in the state is in the form of petroleum used primarily for transportation and electricity generation.[7] Gasoline, used in transportation, accounts for over half of the petroleum consumed in the state, with electrical generation consuming another third. While gasoline prices in Hawaii tend to follow national trends, the price is consistently higher because of high transportation costs and high demand.[8][9] According to the EIA's February 2014 report, the federal excise tax is 18.40 cents/gallon of gasoline and 24.40 cents/gallon of diesel fuel. Hawaii has a 17 cent excise tax on gasoline, an added tax of 30.1, making the total tax per gallon of gas 47.1 cents, the third highest tax in the nation.[10][11]

Comparisons tables

The table below compares Hawaii’s consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of Delaware, which has similar population and resources. Hawaii is a unique state for energy because of its geographical isolation and lack of resources. Delaware can provide a comparison because both states rely on imported energy and have high energy costs. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Hawaii’s rank of 43rd in carbon emissions means that carbon emissions are higher in Hawaii than in Delaware, which has a ranking of 48th.
  • Per capita income in Hawaii is higher than the national average, and higher than in Delaware, which at 24th ranks six places behind Hawaii’s ranking of 18th.
  • Both Hawaii (at first) and Delaware (at 14th) pay above the national average for electricity.
  • Similarly, natural gas prices in Hawaii (1st) and Delaware (6th) are also high.
  • Energy consumption per capita in Delaware (30th) is higher than Hawaii (48th) due to its energy intensive chemical and petroleum refining industries.
Consumption and Expenditures Comparisons Summary
Type HawaiiDelawareU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population1.4 million40917,00045313.9 million
Per Capita Income Average$44,02418$41,94024$42,693
Total Consumption286 trillion BTU47272 trillion BTU4897,301 quadrillion BTU
Per Capita Energy Consumption208 million BTU48299 million BTU30312 million BTU
Total Spending on Energy$7,608 million40$3,957 million48$1,394,088 million
Per Capita Spending on Energy$5,5218$4,35728$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$45.811$14.666$12.48
Price of Electricity, cents per kWh37.24113.411412.31
Total Carbon Dioxide Emissions, million metric tons (2010)18.94311.7485,631
*Rank is from highest to lowest.

Natural gas heats almost 50 percent of homes in Hawaii, on the few days heating is needed. Electricity is the next most popular home heating source, followed by fuel oil, LPG and other fuel sources.

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Hawaii
Source Hawaii 2011 U.S. average 2011
Natural gas 2.1% 49.5%
Fuel oil 0% 6.5%
Electricity 32.1% 35.4%
Liquid Petroleum Gases (LPG) 1.2% 5%
Other/none 64.6% 3.6%

Production and transmission

Hawaii produced 19.1 BTU of energy in 2011. All of that production came from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[12]

Energy production by type in Hawaii, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Other 19.1 100% 0.27%

Electricity produced and consumed in Hawaii is primarily from petroleum, which produces three fourths of the state total. While Hawaii produces no crude oil, it does have two refineries, which supply about 90 percent of the state's demand. The crude oil that passes through these refineries comes from pacific countries, along with Africa, Russia and the Middle East. Jet fuel and propane come from Asia, Canada and the Caribbean.

Hawaii imports all the natural gas it consumes, but produces "syngas" from naphtha, a waste product from local oil refineries. It is produced in a plant on Oahu and delivered by a local pipeline to different areas of the island. Rural areas and some other islands use propane instead of natural gas or syngas. Two thirds of the natural gas demand in Hawaii comes from hotels and restaurants. Very few people use natural gas to heat their homes because of the mild climate.[3]

Where electricity comes from in Hawaii[13]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 623,000 71.86% 2.06%
Coal-fired 121,000 13.96% 0.01%
Other renewables 94,000 10.84% 0.05%
Total net electricity generation 867,000 100% 0.02%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Hawaii has four electrical utilities: Kauai Island Utility Cooperative (KIUC), Hawaiian Electric Company (HECO), Maui Electric Company (MECO) and Hawaii Electric Light Company (HELCO). Each services an island or group of islands. Hawaii only has one natural gas provider, Hawaii Gas.[14]

Energy policy

Policy Issues
From 2003 to 2012, Hawaii reduced its dependence on fossil fuels by 15 percent. The push for renewable resources is a result of Hawaii's unique, isolated situation. Energy costs are the highest in the nation because Hawaii has to import nearly all of its resources. Energy policy is based on the judgment that renewable energy resources give Hawaii the best chance to gain greater energy independence and sustainability.[15]
See also: Fracking in Hawaii

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Hawaii's dependence on petroleum has been one of the motivating factors in its movement towards renewable energy and energy efficiency. Hawaii passed its first Renewable Portfolio Standard (RPS) in 2001, which has since been updated. As of 2009, Hawaii's goal is that 40 percent of electrical generation come from renewable sources by 2030. Utilities are required to comply with the standard and are monitored by the Hawaii Public Utilities Commission (PUC). Under the standard, renewable energy includes: wind, solar, hydropower, biogas, geothermal, biomass, biofuels and hydrogen generation. Consumers pay for the Public Benefits Fund, which helps pay for renewable and energy efficient technology. In conjunction with Hawaii's RPS is the state's Energy Efficiency Portfolio Standard (EEPS), which is meant to reduce anticipated energy sales by 30 percent. Overall, Hawaii's goal is 70 percent clean energy by 2030, including renewable energy generation and energy efficiency measures. Some studies suggest that states with renewable portfolio standards have higher electricity costs.[16][17][18]

Hawaii ranked 20th on the Energy Efficiency Scorecard produced by the American Council for an Energy-Efficient Economy.[19] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[20][21]

Major legislation

  • The Hawaii Renewable Portfolio Standard (HB 1464), in 2009 created Hawaii's most recent renewable portfolio standard (RPS), with a goal that 40 percent of Hawaii's electrical generation would come from renewable sources by 2030. Renewable energy includes: wind, solar, hydroelectric energy, biogas, geothermal, biomass, biofuels and hydrogen generation. HB 1464 gives the Hawaii Public Utilities Commission (PUC) authority to establish standards for each utility regarding which renewable sources it should use. Every five years, the PUC is required to contract the Hawaii Natural Energy Institute (HNEI) to conduct a study reviewing the progress of utilities towards the goal. Utilities are required to comply with an increasing standard of renewable electricity generation every five years until the goal of 40 percent by 2030 is reached. The schedule for those standards begins with 10 percent in 2010, 15 percent by 2015, 25 percent by 2020 and finally 40 percent by 2030. HB 1464 also created Hawaii's Energy Efficiency Portfolio Standard (EEPS), which aims to reduce electricity use by 4,300 gigawatts by 2030. The bill directs the PUC to set benchmarks for utilities between 2009 and 2030 to help them reach the goal. Energy efficiency is allowed to count towards a utility's renewable generation until 2015, when it will become separate from the Renewable Portfolio Standard. Technologies for energy efficiency include: solar water heating, seawater air conditioning systems, solar air conditioning and ice storage. Energy efficiency programs created by utilities also count towards meeting the EEPS.[22][23]
  • The Public Benefits Fee Authorization (HRS § 269-121) in 2006, created the Public Benefits Fund (PBF), which was amended in 2013 to provide financing for renewable energy technology. The PBF is funded through a utility bill surcharge.The surcharge is based off total utility revenue, which is also used to set the budget for the PBF. The fund is administered by a third party, created by the Hawaii Government, called Hawaii Energy. Utility customers are eligible to receive incentives through Hawaii Energy's rebate programs for home appliances, industrial energy efficiency and other technology.[24]
  • HB 2175 (2006), created energy standards for state owned facilities and operations. All buildings designed and constructed are required to meet the Leadership in Energy and Environmental Design's (LEED) silver standard, or a similar guideline. This includes using high-performance windows, and maximizing natural light and ventilation. Solar water heaters are required for all state buildings. The bill requires agencies to use energy efficient technology, products and materials wherever possible and can use utility rebate programs to lessen costs. Agencies should also use alternative fuel whenever possible. HB 1464 created new requirements for existing buildings larger than 5,000 square feet or that use more than 8,000 kWh annually. These buildings must take measures to become more energy efficient wherever possible.[25]

Government agencies and committees

Policypedia
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.

State environmental policy


See also
Local fracking on the ballot

Statewide fracking on the ballot

  • The Hawaii Public Utilities Commission (PUC) was created in 1913 and was originally funded by fees required from the specified utilities which the PUC was directed to regulate. The governor appoints the three commissioners, with the consent of the Senate, to one, two, or three year terms. They operate under the Hawaii Division of Budget and Finance. The PUC prescribes rates, tariffs, charges and fees and determines the allowable rate of earnings for utilities. They also create guidelines regarding the management of utility businesses, and act on requests for the acquisition, sale, disposition or exchange of utility property.[28]
  • The Hawaii State Energy Office coordinates the state's energy policy development and activities. They operate under the Department of Business, Economic Development and Tourism. Their goals focus on diversifying the state's energy portfolio, connecting the islands' electricity through a grid, balancing environmental and economic concerns, fostering energy innovation and allowing for free markets to "pick the winners." This agenda is part of the Hawaii Clean Energy Initiative, which is an energy agreement Hawaii made with the US Department of Energy. The State Energy Office helps to carry out the provisions of that agreement.[29][30]
  • The Department of Consumer Advocacy (DCA), housed in the Hawaii Department of Commerce and Consumer Affairs (DCCA), was established to represent consumer interests before the PUC and other regulatory agencies. The DCA reviews the rate change applications submitted by utilities and makes recommendations to the PUC. The DCA also promotes state energy policy with emphasis on the needs of Hawaii's consumers.[31]
  • The Hawaii Clean Energy Initiative (HCEI), a partnership between the State of Hawaii and the U.S. Department of Energy, was created in 2008 to help Hawaii develop its renewable resources and decrease its petroleum dependence. The core membership of the HCEI is composed of groups of different organizations. These groups were created to represent important constituencies which would be affected by energy policy and who could help create plans for future energy policy. The HCEI is designed to be a collaborative effort "to leverage their respective strengths in achieving a clean energy future." The HCEI helped create Hawaii's Renewable and Energy Efficiency Portfolio Standards.[32][33]
  • The Hawaii Board of Land and Natural Resources is a seven member board that manages the state's natural resources. The chairperson oversees this board and the Hawaii Department of Land and Natural Resources. The chairperson oversees 11 divisions as part of the Department of Land and Natural Resources.[34]

Major organizations

  • The Conservation Council for Hawaii (CCH) is a non-profit organization formed in 1950 to protect Hawaii's environment. Since its founding, membership has grown to over 5,500 people, mostly Hawaiians, who work together to promote responsible environmental policy. CCH is funded by dues and donations, but also by grants for specific projects. Along with advocating for public policy, they contribute to local projects and emphasize education and environmental responsibility. They also participate in litigation as plaintiffs and as an interested party.[35][36]
  • The Hawaii Conservation Alliance (HCA) was founded in 1988 as the Hawaii Conservation Biology Initiative and Secretariat for Conservation Biology. The alliance is a collaboration by the leaders of 23 Hawaiian government, cultural, educational and non-profit organizations. Their goals are to increase education and awareness of Hawaii's environmental issues, help create the capacity for effective conservation and restoration and advocate for investment in natural resource management and conservation. Each year, the HCA hosts the Hawaii Conservation Conference to increase collaboration and knowledge sharing among natural resource professionals in the Pacific.[37][38]
  • The Hawaii Natural Energy Institute (HNEI) is in the School of Ocean and Earth Science and Technology at the University of Hawaii at Manoa. It was created by law in 1974 after the oil embargo to lessen Hawaii's dependence on petroleum, meet Hawaii's growing energy demand and create new energy technology. HNEI works by conducting and supporting research to better understand Hawaii's natural resources and investigating the social, financial and environmental impacts of energy-marine activities. One of their recent accomplishments was the discovery and now use, of geothermal resources in Hawaii.[39]

In the news

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See also

External links

References

  1. These figures come from the U.S. Energy Information Administration (EIA) State Profiles and Energy Estimates, Hawaii Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, "Hawaii Overview," accessed February 14, 2014
  3. 3.0 3.1 3.2 3.3 3.4 U.S. Energy Information Administration, "Hawaii Profile Analysis", December 18, 2013
  4. Hawaii State Government, "Hawaii Energy Facts and Figures," accessed March 12, 2014
  5. Hawaii State Government, "Hawaii Energy Facts and Figures", accessed March 12, 2014
  6. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  7. "U.S. Energy Information Administration", "Hawaii Profile Analysis," accessed February 3, 2014
  8. Gas Buddy, “Historical Gas Charts,” accessed March 7, 2014
  9. To compare current gasoline prices in Hawaii to the U.S averages, go to GasBuddy.com
  10. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014, accessed February 14, 2014
  11. Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013, accessed February 19, 2014
  12. U.S. Energy Information Administration, “State Energy Data System, Production,” accessed February 18, 2014
  13. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Hawaii Overview," accessed February 5, 2014
  14. Hawaii Public Utilities Commission, "Annual Report, 2012-13," accessed March 7, 2014
  15. Hawaii Public Utilities Commission, "Annual Report, 2012-13," accessed March 7, 2014
  16. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  17. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  18. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  19. For a full explanation of how the ACEEE calculates this ranking see the executive summary of their report here [1]
  20. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  21. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013
  22. U.S. Department of Energy, "Hawaii Renewable Portfolio Standard," accessed March 8, 2014
  23. U.S. Department of Energy, "Hawaii Energy Efficiency Portfolio Standard," accessed March 8, 2014
  24. U.S. Department of Energy, "Hawaii Energy," accessed March 8, 2014
  25. U.S. Department of Energy, "Hawaii Renewables and Efficiency in State Facilities and Operations," accessed March 8, 2014
  26. Hawaii State Legislature, "Senate Committee on Energy and Environment," accessed March 7, 2014
  27. Hawaii State Legislature, "House Committee on Energy and Environmental Protection," accessed March 7, 2014
  28. Hawaii Public Utilities Commission, "Commission History," accessed March 7, 2014
  29. Hawaii State Energy Office, "Home," accessed March 11, 2014
  30. Hawaii Department of Business, Economic Development and Tourism, "The Future Is Bright," accessed March 7, 2014
  31. Hawaii Department of Commerce and Consumer Affairs, "DCA Overview/Services," accessed March 8, 2014
  32. U.S. Office of Energy Efficiency and Renewable Energy, "Memorandum of Understanding Between The State of Hawaii and The U.S. Department of Energy," accessed March 8, 2014
  33. U.S. Department of Energy, "HCEI Roadmap 2011 Edition," accessed March 8, 2014
  34. Hawaii Department of Land and Natural Resources, "Division and Offices," accessed September 26, 2011
  35. Conservation Council for Hawaii, "About Us," accessed March 8, 2014
  36. Conservation Council for Hawaii, "History," accessed March 8, 2014
  37. Hawaii Conservation Association, "What We Do," accessed March 8, 2014
  38. Hawaii Conservation Association, "Who We Are," accessed March 8, 2014
  39. Hawaii Natural Energy Institute, "History of HNEI," accessed March 8, 2014