A state agency directing Hawaii energy policy in areas including security, resiliency and environmental health is at risk of losing its independence.
State senators recently sent the House of Representatives a bill to turn the Hawaii State Energy Office into a division of the state Department of Business, Economic Development and Tourism.
The introduction and advancement of Senate Bill 3282 follows displeasure with the Energy Office in recent years from some of the bill’s introducers, and comes four years after the Legislature reorganized the agency to improve its focus and achievements in part by converting it from a DBEDT division to an agency with a Cabinet-level director.
In addition to folding the Energy Office into DBEDT, SB 3282 would change the office’s leader to an administrator appointed by DBEDT’s director instead of an appointee of the governor.
Mark Glick, who was appointed to lead the agency in 2023 by Gov. Josh Green and was the office’s leader from 2011 to 2016 under two prior governors when the office was a DBEDT division, suggested in written testimony on the bill that the proposed changes would hurt agency work.
“HSEO suggests that the Legislature reversing its course in SB 3282 would be a distraction from the important work conducted by the energy office,” he said. “Furthermore, DBEDT is such a diverse and multifaceted department given the growth of its responsibilities over the years — it would be detrimental to treat the energy sector as ‘just another issue’ under DBEDT’s portfolio.”
Currently, the Energy Office is one of about 10 agencies that have independent authority but are attached to DBEDT only for administrative support. Other such agencies include the Hawaii Tourism Authority, the Hawaii Community Development Authority, the Hawaii Technology Development Corp. and the Hawaii Housing Finance and Development Corp.
DBEDT has several divisions doing work in areas that include economic research, business development support, foreign trade zone administration and support for creative industries that include the film industry. The Energy Office had been a division until a 2019 change directed by the Legislature.
Glick in his written testimony on SB 3282 highlighted Energy Office achievements, including plans to drill test wells for exploring geothermal energy resources on Oahu, Maui and Hawaii island, production of a decarbonization strategy, and recent completion of an Oahu energy system and critical infrastructure vulnerability and resiliency assessment.
Glick also said the agency is studying options for replacing low-sulfur fuel oil and lower-efficiency power generation to mitigate oil price volatility and reduce electricity rates and carbon dioxide emissions, and expects to soon apply for federal energy efficiency rebate grants that include $250 million for a statewide sensor-based system to shut off power for compromised electric transmission and distribution lines during wildfires.
“Given the productivity of the Energy Office under the direction of Gov. Green, the fundamental question in considering SB 3282 may be, ‘If it is not broke, why fix it?’ ” Glick wrote.
The Energy Office also oversees the state’s goal of deriving 100% of energy from renewable sources by 2045, for which some lawmakers who support SB 3282 have criticized the agency.
Some of that criticism relates to utility-scale solar farm projects that have been delayed or canceled by developers over cost or material supply issues under contracts with Hawaiian Electric Co. and approved by the state Public Utilities Commission; the PUC’s rejection of a biomass power plant project called Hu Honua on Hawaii island; and the shutdown of a coal-fired AES Corp. power plant on Oahu in 2022, which was endorsed by the Legislature.
Part of SB 3282 would have the proposed new DBEDT division develop a state energy plan that includes strategies and actions for one-, five-, 10- and 15-year forecasts for the annual achievement of state energy policy goals.
DBEDT didn’t submit testimony on SB 3282, though Deputy Director Dane Wicker said in response to a question at a Feb. 8 hearing on the bill that DBEDT can work with divisions more quickly to develop strategic plans compared with attached agencies that sometimes have their own boards of directors, though the Energy Office doesn’t have a board.
Glick said at the same hearing, held by the Senate Committee on Energy, Economic Development and Tourism, that the Energy Office already works closely with DBEDT.
The committee advanced the bill in a 5-0 vote led by Sens. Lynn DeCoite (D, East and Upcountry Maui-Molokai-Lanai) and Glenn Wakai (D, Kalihi-Salt Lake-Pearl Harbor), who are chair and vice chair, respectively, and were co-introducers of the bill.
The bill’s lead introducer is Sen. Donovan Dela Cruz, who said the Energy Office lacks oversight by DBEDT.
Dela Cruz (D, Mililani-Wahiawa-Whitmore Village) chairs the Senate Ways and Means Committee, which advanced the bill in a 11-0 vote Feb. 23.
At the Ways and Means hearing, Dela Cruz noted his intention to tie the Energy Office’s base budget from state general funds for next fiscal year to SB 3282 instead of the main state budget bill that typically provides agencies with funding for basic operations that include staff payroll.
Glick noted that the Energy Office’s base budget for next fiscal year was approved last year, and that trying to tie the agency’s budget to an organizational overhaul is terrible on principal.
“It’s not consistent with budget principals of state agencies,” he said in an interview. “That’s a terrible practice.”
Dela Cruz said SB 3282 aims to restructure the office, so its funding was put into the bill.
A 25-0 vote by the full Senate on March 5 sent the bill to the House for consideration. No House committee had scheduled a hearing on the bill as of Friday.
