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Committees back PPA ‘step‑in’ language to support renewable project financing with safeguards
Summary
Senators advanced HB 974 HD1 to let the state act as a backstop for power purchase agreement payments in limited circumstances to improve developers’ access to financing, with numerous amendments designed to limit state exposure and require due diligence.
The Hawaii Senate on Thursday advanced HB 974 HD1, a measure to provide a state-level backstop for payments under power purchase agreements (PPAs) with independent power producers (IPPs). Supporters said the step-in mechanism is necessary to secure low-cost financing for renewable-energy projects while opponents and budget officials urged safeguards to avoid exposing the State to open-ended liability.
Hawaiian Electric, Clearway Energy and developers argued that uncertainty over the utility’s credit rating and financial condition is increasing financing costs and could delay or cancel planned renewable projects. “HB 974 HD1 is crucial for Hawaiian Electric’s customers and development of new renewable energy projects,” Colton Ching testified for the utility, saying the measure would help avoid higher power-purchase costs driven by higher financing spreads.
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