Economic problems are stifling the push for new clean energy programs in Hawaii.
In the just-ended legislative session, two major energy bills were considered, with one passing and one failing.
The difference between the two? The one that passed put money into state coffers to help make up its and the one that failed didn’t.
The so-called “barrel tax” was hailed as the crowning clean energy jewel of the 2010 session by Sen. and Rep. Hermina Morita, chairs of the Senate and House Energy and Environment Committees, respectively.
The Legislature overrode Gov. Linda Lingle’s of , which will increase the tax on a barrel of oil products from 5 cents to $1.05 starting July 1. The tax hike is expected to bump gasoline prices up by between 2 and 3 cents per gallon and push up the average residential electric bill by 75 or 80 cents per month.
Of each $1.05 raised by the tax, 5 cents will be used for oil spill planning, prevention and removal; 15 cents for energy security work; 10 cents for energy systems development; and 15 cents for agricultural development and food security. The remaining 60 cents will be diverted to the state’s General Fund, a concession Gabbard said was necessary to pass the bill.
Mike Hamnett, co-chair of the University of Hawaii’s , said he thinks the fact that around $13 million of the $22 million raised by the tax will help balance the state’s budget was a “sweetener” for legislators and led to the bill’s surprise passage after a similar proposal failed in 2009. The 45 cents that will go to energy and food security are just riding on the “coattails” of the fiscal benefits, he said.
While Blue Planet Foundation Executive Director Jeff Mikulina was happy the “carbon tax” passed, but he said the final version “wasn’t exactly the bill we were looking for.” He would prefer that Hawaii “tap the source of our problem — imported oil — and use that to fund the solution — clean energy” by having the full 100 percent go to funding those programs.
Morita said not all was lost because the General Fund, which is the main operational fund for state government, is used for renewable income tax credits and agricultural inspections, among other things. She said work in the energy sector is tricky because “you’re changing the wheels while the bus is moving. People expect reliability and affordability, and we can’t just stop and try to fix everything.”
The common thread between the barrel tax and the handful of smaller energy bills passed this session is that none appear to draw money from the General Fund. Among the successful measures described by Mikulina as “manini” are , which uses money from a special fund for the Public Utilities Commission, , which prevents homeowners associations from limiting solar installations, and , which prohibits condos from preventing the installation of electric vehicle charging stations near parking stalls.
Tellingly, the major clean energy initiative that was rejected, , would have required a sizable commitment by the state. A loan program, funded by a state bond, would have eliminated the up-front costs of installing clean energy systems. The program called for homeowners and business owners to pay off the loans through increased property taxes.
Complaints from the mortgage industry; concerns from counties, which collect property taxes and are facing their own budgetary struggles; and, perhaps, the lack of any apparent short-term fiscal benefits to the state led lawmakers to defer action on the Property Assessed Clean Energy proposal.
Morita, the House’s environmental committee chair, took heat from clean energy advocates for letting the bill languish after first introducing it. By the end of the session, Morita and others agreed to merely more.
She argued in her blog on the last day of the legislative session that the bill was simply “” because it has “no track record or risk evaluation.”
Gabbard, the Senate’s energy chair, said he was disappointed in the decision to wait a year. He called the bill “a key piece of the energy puzzle” because Hawaii spends billions of dollars annually importing oil.
“We’re really frustrated that those novel ideas didn’t get moving, and similarly frustrated that a more aggressive carbon tax didn’t pass,” Blue Planet Foundation’s Mikulina said. “We’re happy that we moved a handful of these measures, but a lot was left on the table.”
In the end, UH’s Hamnett said lawmakers earned a grade of C-plus for their work on clean energy this year, an accomplishment given what was going on around them. “Given the horrible budget situation, we were lucky to get what we got,” he said. “There just wasn’t as much energy activity this year because there wasn’t much money and we got most of the low-hanging fruit before.”
Gabbard also gave his colleagues a C-plus grade. “We tried our best, but we [were] chasing that $1.2 billion shortfall. … In greener times financially, I think we would have been able to get a lot more done.”
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