Column: Ige shouldn’t veto energy savings performance contract bill

Early last year, another 3,000 solar panels were installed at the Daniel K. Inouye International Airport. This was the latest phase of a large airport improvement project, launched in 2014, that includes nearly 100,000 new LED lights and new air conditioning systems. The project is expected to save the state over $600 million in energy costs. The most exciting part? It didn’t cost taxpayers a single cent.

The impressive benefits of such clean-energy projects motivated the Legislature this year to pass House Bill 1846 — billed the “lead by example” measure because it directed the state to implement all cost-effective energy efficiency measures in state facilities.

State government, through the facilities it owns or manages, comprises one of the largest electricity users in the entire state. With a grim outlook for the state budget as a result of the COVID-19 pandemic, opportunities to save money have never been more important. The Legislature appropriately recognized that the upgrades required by HB 1846 will save the state money, create good-paying jobs, and reduce climate change pollution.

We were therefore surprised to learn that Gov. David Ige is considering vetoing this important legislation — today is the veto deadline — but we hope he will reevaluate. Energy efficiency is a critical tool during our economic downturn to help our state recover.

HB 1846 — introduced by the House Energy and Environmental Protection chair, Rep. Nicole Lowen — amplifies our efficiency efforts by revitalizing a little-known program: the energy savings performance contract. This program, successfully employed at the airport, allows clean-energy upgrades to be funded by the guaranteed savings earned from those improvements. The statute requires that when contracts are signed for such work, the “total payments shall not exceed total savings.” This is an extremely powerful tool to modernize state buildings while reducing the cost of state government.

Unfortunately, this innovative financing tool has been underutilized. While the use of energy savings performance contracting — mainly between 2009 and 2014 — helped some agencies reduce their energy consumption, many agencies did not participate.

Additionally, no new energy service contracts have been awarded by state agencies for over four years and, in some cases, performance contracts were last awarded 10 years ago. Since that time, technology has evolved significantly and is far more efficient, resulting in greater cost-saving benefits for the state. Once a national leader on performance contracting, Hawaii is now falling behind other states — and it’s costing us all.

Energy efficiency is not only foundational to achieving our critical climate and clean energy goals, it boosts employment, economic activity and tax revenue. State energy efficiency projects will keep hundreds of people employed at a time when Hawaii is struggling to find new economic engines without tourism. The airport project, for example, employed about 1,000 people annually over the four years of its development. What other initiatives can provide that number of good jobs while simultaneously benefiting the state budget? And it’s not just reduced energy bills — these clean-energy projects will generate tax revenues through the state’s general excise tax.

For these reasons and others, HB 1846 received support from numerous organizations, businesses, individuals and state agencies. No testimony opposing the measure was received by the Legislature.

Vetoing this keystone clean energy legislation would mean a missed opportunity to reduce the taxpayer burden of state energy bills, create new jobs in clean energy, and decrease carbon emissions. At its core, HB 1846 is about more than just operating efficient buildings; it is a promise that the state will lead by example and be a model for our clean-energy transformation.

The new requirements in HB 1846 will inspire and demonstrate to everyone — consumers, building owners and managers, contractors and residents — how we use energy, make changes, and construct our buildings today for the generations of tomorrow.

HB 1846 shows how the state of Hawaii is leading by example on how our energy culture is changing.

We hope it becomes law.

Melissa Miyashiro is managing director for strategy and policy at Blue Planet Foundation; Sherry Menor-McNamara is president/CEO of the Chamber of Commerce Hawaii; Damien Kim is business manager /financial secretary for the International Brotherhood of Electrical Workers (IBEW) Local Union 1186.