NINTH OLBIIL ERA KELULAU
Seventh Regular Session, July 2014
RPPL No. 9—54
Passed as Senate Bill No. 9-124, SD2, HOI
AN ACT
To amend Title 37 of the Palau National Code to establish an Energy Administration
and provide a regulatory framework for the energy sector, and for other related purposes.
THE PEOPLE OF PALAU REPRESENTED IN THE OLBIIL ERA KELULAU DO ENACT AS FOLLOWS:
1 Section 1. Legislative findings. The Olbiil Era Kelulau finds that there is a
2 need to organize the energy sector in the Republic in order to promote energy
3 security by diversifying the supply of affordable electrical energy within Palau,
4 including renewable energy, and enhancing safety practices. There is also a need to
5 monitor, evaluate and report on the performance, progress and achievements of the
6 Palau energy sector. While the existing Palau Energy Office has played an important
7 role on energy policy issues, the scope of that office's responsibilities has been limited
8 and is not established by law. This bill provides a statutory mandate for the Energy
9 Administration and both defines and broadens its regulatory responsibilities 10 regarding the energy sector. Among other things, this bill incorporates into law the
11 National Energy Policy that was issued by the previous administration, defines the 12 overriding objectives that the policy must serve, and makes the Energy
13 Administration responsible for developing and updating it. This bill helps advance 14 the regional effort of Pacific island nations to become energy-secure and develop
15 sustainable sources of clean and affordable energy.
16 Section 2. Amendment. Title 37 of the Palau National Code is amended to add
17 a new Chapter 7 which states as follows:
18 "Chapter 7
19 Palau Energy Act
20 701. Short title.
21 702. Intent and purpose.
22 703. Definitions.
23 704. Energy Administration; establishment, duties and powers.
1 705. National Energy Policy.
2 706. Palau Annual Energy Report.
3 707. Independent Power Producers,
4 708. Electricity tariffs.
5 709. Energy efficiency.
6 701. Short title. This Chapter will be known and may be cited as the "Palau 7 Energy Act of 2015".
8 702. Intent and purpose. The intent and purpose of this Chapter is to
9 establish a comprehensive national framework to improve energy security by 10 diversifying the supply of energy to the people of Palau, including renewable-energy, 11 and promoting progressive policy development and implementation by a more
12 robust, cost-effective, and efficient Energy Administration.
13 703. Definitions. In this Act:
14 (a) "Central electricity grid" means the electricity infrastructure that is
15 operated by the Palau Public Utilities Corporation for the purpose of supplying
16 electricity to customers in Koror, Babeldaob, Iouldaob, and the outer islands.
17 (b) Administration" means the key agency within the executive
18 branch of the Government of Palau with responsibility for the regulation of the
19 energy sector.
20 (c) "Energy Monitoring, Evaluation and Reporting Framework" or "EMER 21 Framework" means the framework for monitoring, evaluating and reporting on the
22 performance, progress and achievements of the Palau energy sector.
23 (d) "National Energy Policy" or "NEP" means the policies that are developed
24 and declared by the Government of Palau in relation to the energy sector. This
25 includes relevant regional or international agreements that are adopted by the
26 Government of Palau.
27 (e) "Energy sector" means the Palau sector, including the
28 infrastructure, stakeholders and institutions that are directly or indirectly involved in
29 the importation, storage, transformation, delivery, and usage of resources and
30 services.
1 (f) "FAESP" means the Framework for Action on Security in the
2 Pacific: 2010-2020.
3 (g) "Government green fleet efficiency standards" means the fuel emissions
4 standards that the Energy Administration establishes for the fleets of relevant
5 government agencies.
6 (h) "Grid connection" means the process of generating electricity for the
7 purpose of exporting it to the central electricity grid.
8 (i) "Independent Power Producer" means a person or entity that enters into a
9 commercial agreement (the Power Purchase Agreement) with PPUC for the supply of
10 energy to the central electricity grid.
11 (j) "Minister" means the Minister of Public Infrastructure, Industries and
12 Commerce.
13 (k) "PIFACC" means the Pacific Islands Framework for Action on Climate
14 Change.
15 (l) "Power Purchase Agreement" means a commercial agreement between an
16 Independent Power Producer and PPUC that specifies the terms and conditions
17 under which PPUC shall compensate the Independent Power Producer for exporting 18electricity to the central electricity grid, including the price PPUC will pay and the
19 duration of the agreement.
20 (m) "PPUC" means the Palau Public Utilities Corporation.
21 (n) "President" means the President of the Republic of Palau.
22 (o) "Renewable energy" means energy derived from renewable sources, such
23 as_solar power, water power, or wind power.
24 (p) "Tourism marine vessel efficiency standards" means the fuel emissions
25 standards that the Energy Administration establishes for marine vessels used by
26 private tourism operators.
27 (q) "UNFCCC" means the United Nations Framework Convention on Climate
28 Change.
29 704. Energy Administration; establishment, duties and powers.
30 (a) There is established an Energy Administration which shall:
1 (1) be a separate entity within the Ministry of Public Infrastructure,
2 Industries and Commerce;
3 (2) be responsible for the proper and effective administration of this
4 Act; and
5 (3) report to the Minister on its key regulatory responsibilities.
6 (b) The general duties and powers of the Energy Administration are to:
7 (1) monitor all energy-related matters in the Republic and prepare the
8 Palau Annual Energy Report, as specified by Section 706 of this Act;
9 (2) provide advice on matters of energy sector policy and
10implementation to the President, Minister, and any energy-related institution,
11including but not limited to PPUC;
12 (3) facilitate energy-related grants in the energy sector;
13 (4) educate the public concerning energy-related matters, as specified
14 by Section 709 of this Act;
15 (5) coordinate maintenance contracts for solar-facilities owned by the
16 Government of Palau; and
17 (6) promulgate regulations necessary to carry out the provisions of this
18 Act.
19 (c) The Energy Administration is responsible for reporting and coordinating
20 with the relevant executive branch climate change office such energy-related climate
21 change information as is specified by applicable international and regional initiatives
22 to which the Government of Palau has made a commitment, including:
23 (1) PIFACC;
24 (2) FAESP; and
25 (3) UNFCCC.
26 (d) The Energy Administration is responsible for setting energy efficiency 27benchmarks for public utilities such as PPUC and for monitoring and reporting on
28 their performance against such benchmarks.
29 705. National Energy Policy.
30 (a) The Energy Administration will develop and disseminate the NEP. The
31 objectives of the NEP are the delivery of clean, secure, and affordable energy within
1 Palau, and to respond to the risks of climate change through adaptation and
2 mitigation measures that enhance social and economic resilience and reduce
3 greenhouse gas emissions from the sector.
4 (b) The Energy Administration will review and update the NEP on an ongoing
5 basis through the EMER Framework. The key energy metrics of the EMER
6 Framework are:
7 (1) the Palau renewable energy target;
8 (2) the Palau energy efficiency target;
9 (3) FAESP energy security indicators;
10 (4) Tourism marine vessel efficiency standards; and
11 (5) the Government green fleet efficiency standards.
12 (c) The Administration will make publicly available an updated
13 version of the NEP on its official website.
14 706. Palau Annual Energy Report.
15 (a) The Administration shall support the development of the National
16 Energy Policy through the preparation of a Palau Annual Energy Report that it must
17 submit to the Minister, President, Senate, and House of Delegates by the 30th of
18 September each year. The objectives of this report are to:
19 (1) Report to the Minister, the President, the Senate and the House of
20 Delegates on the key energy metrics covered under the EMER Framework;
21 and
22 (2) Promote private sector investment in Palau's energy sector by 23 providing a range of information for Independent Power Producers.
24 (b) In reporting on the key energy metrics, the Energy Administration shall 25 assess the following in the Annual Energy Report:
26 (1) Technical and economic indicators relating to the existing
27 deployment of renewable technologies;
28 (2) Potential for additional renewable energy deployment, and ability to
29 meet the Palau renewable energy target;
30 (3) Progress towards the Palau energy efficiency target;
1 (4) The performance of the Republic of Palau under energy security 2 indicators from FAESP;
3 (5) Progress towards the Government green fleet efficiency standards;
4 (6) The efficiency of marine vessels used by operators in the tourism
5 industry; and
6 (7) Any other reporting areas specified by the Minister.
7 (c) The Annual Energy Report will include an assessment of the following:
8 (1) Existing energy infrastructure and the utilization of that
9 infrastructure;
10 (2) A forecast of the future energy needs of the Republic of Palau;
11 (3) PPUC's and any other utilities' performance under energy
12 efficiency performance benchmarks set by the Energy Administration; and
13 (4) Any other dataset or information that is considered by the Energy
14 Administration to be consistent with this objective.
15 (d) The Energy Administration shall make the Annual Energy Report
16 publicly available.
17 707. Independent Power Producers.
18 (a) The Energy Administration shall set standards for different categories of
19 renewable energy providers, and shall provide the information necessary for
20 Independent Power Producers to participate in a solicited or unsolicited process
21 whereby a proposal is made for the development of a renewable energy project.
22 (b) Requests for proposals for renewable energy projects may be made by the
23 Administration or PPUC. Unsolicited requests for grid connection for
24 renewable projects must be made to both PPUC and the Energy
25 Administration.
26 (c) The Energy Administration, in consultation with PPUC, shall establish and
27 publish forms and guidelines for the submission and assessment of applications for
28 grid connection. These guidelines shall address the following criteria:
29 (1) Technical requirements;
30 (2) Economic considerations;
31 (3) Social considerations; and
1 (4) Environmental factors.
2 (d) PPUC shall decide based on the established guidelines whether to accept or
3 reject an application for grid connection. The Energy Administration will also review
4 the application based on the established guidelines and provide its recommendations
5 regarding the application to PPUC, which must take such recommendations under
6 consideration when making a decision regarding the application. PPUC shall
7 communicate its final decision in writing to the applicant and the Energy
8 Administration.
9 (e) PPUC shall enter into a Grid Connection Agreement and Power Purchase
10 Agreement with successful applicants after submitting the proposed agreements to
11 the Energy Administration for its review and taking into consideration the Energy
12 Administration's comments regarding the agreements.
13 (f) The Energy Administration or PPUC may work with an applicant to help
14 the applicant satisfy the application guidelines for grid connection. The Energy
15 Administration, in conducting its assessment of an application, may conduct a public
16 consultation process.
17 (g) Upon entering into a Grid Connection Agreement and Power Purchase
18 Agreement with a successful applicant, PPUC will issue the applicant a Generation
19 License that contains:
20 (1) A complete description of the technology involved, including the
21 capacity, the fuel type, the expected output, and the proposed schedule; and
22 (2) Proof of a Power Purchase Agreement and Grid Connection
23 Agreement with PPUC.
24 708. Electricity tariffs.
25 (a) The Energy Administration shall develop guidelines under which it will
26 review PPUC's electricity tariffs and tariff formula.
27 (b) PPUC will submit its proposed tariff schedule to the Energy
28 Administration for review and comments. Concerns raised by the Energy
29 Administration must be considered by PPUC in formulating its schedule.
30 709. efficiency.
1 (a) The Energy Administration will develop energy efficiency programs in
2 accordance with the objectives of the National Energy Policy. In so doing, the Energy
3 Administration shall:
4 (1) Develop and deliver business, community and residential programs
5 which promote energy savings;
6 (2) Create education and public awareness programs about relevant
7 energy issues related to the National Energy Policy; and
8 (3) Report the outcomes of these programs against the EMER
9 Framework.
10 (b) In keeping with the objectives of the National Energy Policy, and in the
11 interest of improving economic productivity, reducing localized pollution and curbing
12 the emission of greenhouse gases, the Energy Administration shall:
13 (1) Introduce efficiency standards for the road and marine fleets of the
14 Government of Palau; and
15 (2) Introduce efficiency standards for buses and marine vessels that are
16 used in private tourism enterprises, and for all other vehicles and vessels in the
17 Republic."
18 Section 3. Effective date. This Act shall takes effect upon its approval by the
19 President of the Republic, or upon becoming law without such approval.
Approved this 5th day of February, 2016.
HE Tommy E. Remengesau, Jr.
President
Republic of Palau