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Senate committees approve step‑in agreement bill to backstop payments to independent power producers
Summary
SB1501, a bill creating a mechanism for state step‑in guarantees and a reserve fee to assure payments to independent power producers (IPPs) if an investor‑owned utility defaults, passed committees after proponents stressed the measure is essential to secure financing for renewable projects.
Joint Senate committees voted to pass SB1501, a bill that would allow the state to provide payment assurance mechanisms — often called ‘step‑in’ agreements — to support independent power producers (IPPs) contracted to sell energy to Hawaiian Electric. Committees adopted a suite of amendments to protect the state and clarify operations before advancing the measure.
Why it matters: Witnesses said HECO’s current non‑investment grade credit rating makes financing new renewable projects difficult and can lead to higher costs or project cancellations. IPPs and developers testified that clear state assurance is necessary for lenders to underwrite multi‑decade power purchase agreements at…
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