Green Infrastructure Fee

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DBEDT administers the ongoing GEMS bond obligations and the Green Infrastructure Fee, which is collected by the Hawaiian Electric Companies on behalf of DBEDT to pay bondholders.  As part of its obligations, DBEDT must monitor and direct the Green Infrastructure Fee, ensure that bondholders receive their payments, satisfy ongoing auditing, reporting and filing requirements, and any other items relating to the maintenance or new issuances of the GEMS bonds. The Hawaii Green Infrastructure Authority administers the GEMS Financing Program.

Question: What is the Green Infrastructure Fee?
Answer: The Green Infrastructure Fee (GIF) is a charge paid by all customers of the Hawaiian Electric Companies.  The GIF is a monthly flat fee that cannot be by-passed and is not contingent upon electricity usage, sales, or the price of fossil fuels.  The GIF was approved by the Hawaii Public Utilities Commission as a fee to be paid by all electric utility customers. It is pledged to bond holders in exchange for low-cost capital that is used to help Hawaiian Electric Companies’ customers finance clean energy installations through the Green Energy Market Securitization (GEMS) program.

A majority of residential utility customers will see virtually no impact on their bills as a result of the GIF, which began appearing on the December 2014 utility bills.  The GIF is accompanied by a reduction to the public benefits fund (PBF) surcharge on customer bills, which limits the overall impact to customers.  Customers have been paying the PBF surcharge since 2008 to support energy efficiency programs that benefit the customers of the Hawaiian Electric Companies.  To accommodate the GIF, the aggregate PBF collection is reduced by the amount collected through the GIF. The reduced PBF rate is then assessed on all customers.

Since the PBF surcharge is based on the amount of electricity purchased from the utility, customers who either reduced or zeroed out their electric bills through Net Energy Metering (NEM) pay a lower PBF surcharge, or for some no surcharge at all. As a result, their already reduced PBF surcharge may not be sufficient to completely offset the green infrastructure fee. Approximately 10 percent of utility customers participate in the NEM program.

Question: Why does the Green Infrastructure Fee amount change?
Answer: Every six months, DBEDT is required to assess the performance of the collections of the Green Infrastructure Fee to ensure that the correct amount is being collected.  In the case of over- or under-collections, DBEDT is required to adjust the collection amount to make sure customers do not pay more than necessary and bond holders are paid the entire amount owed to them.  This process was approved by the Hawaii Public Utilities Commission in their Financing Order (Decision and Order No. 32281 in Docket No. 2014-0134) and was integral to securing the rating for the bonds and securing the low interest rates paid on the bonds.  This assessment and adjustment process is referred to as the “True Up” process.

Question: How will the Green Infrastructure Fee change in the future?
Answer: Though we can’t predict the future, DBEDT anticipates minimal fluctuations in the Green Infrastructure Fee (GIF) going forward. As long as the number of electric utility customers remain relatively stable and electric utility customers pay their bills, there should be little change in the GIF. The GIF will continue to be offset by a reduction in the Public Benefits Fund surcharge for as long as the Hawaii Public Utilities Commission approves this offset.