Report Title:
Electric companies; competition and deregulation
Description:
Streamlines process for obtaining franchise for electric companies; deregulates electric companies with respect to rates and other matters.
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THE SENATE |
S.B. NO. |
2993 |
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TWENTY-FIRST LEGISLATURE, 2002 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO PUBLIC UTILITIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The cost of electricity in the state of Hawaii is disproportionately high when compared to the electric rates on the United States mainland. Unlike Hawaii's consumers, many mainland consumers have the freedom to choose the company that supplies their electricity. Deregulation of the electricity industry in the state will open the doors for increased competition while simultaneously encouraging alternative energy sources to enter the Hawaii market, to the benefit of Hawaii's energy consumers.
The Legislature finds that reducing government control of the electric industry will greatly benefit Hawaii's consumers by opening up the local energy industry to much-needed competition, thus enhancing services and lowering rates for all who purchase energy. The Legislature further finds that by further removing barriers to entering the Hawaii energy market will only promote competition and therefore provide the best rates for Hawaii's consumers. The purpose of this Act is to streamline the process for obtaining a franchise for electric companies and to reduce regulation with respect to rates and other matters.
SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§269- Provisions not applicable to electric utilities. The provisions of sections 269-17, 269-17.5, 269-18, 269-19, and 269-19.5 shall not apply to electric utilities, as defined in section 269-1."
SECTION 3. Section 269-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:
""Electric utility" includes a public utility, as defined herein, which produces, conveys, transmits, delivers, or furnishes electric power."
SECTION 4. Section 269-7, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The commission may investigate any person acting in the capacity of or engaging in the business of a public utility within the State, without having a certificate of public convenience and necessity or other authority previously obtained under and in compliance with this chapter or the rules promulgated under this chapter[.], in cases where such certificate or authority is required."
SECTION 5. Section 269-7.5, Hawaii Revised Statutes, is amended by adding a new subsection to be appropriately designated and to read as follows:
"( ) No electric utility, as defined in section 269-1, shall be required to obtain a certificate of public convenience and necessity under this section."
SECTION 6. Section 269-15, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) In addition to any other remedy available, the commission or its enforcement officer may issue citations to any person acting in the capacity of or engaging in the business of a public utility within the State, without having a certificate of public convenience and necessity or other authority previously obtained under and in compliance with this chapter or the rules promulgated thereunder[.], if such certificate or authority is required.
(1) The citation may contain an order of abatement and an assessment of civil penalties as provided in section 269-28(c). All penalties collected under this subsection shall be deposited in the treasury of the State. Service of a citation issued under this subsection shall be made by personal service whenever possible, or by certified mail, restricted delivery, sent to the last known business or residence address of the person cited.
(2) Any person served with a citation under this subsection may submit a written request to the commission for a hearing, within twenty days from the receipt of the citation, with respect to the violations alleged, the scope of the order of abatement and the amount of civil penalties assessed. If the person cited under this subsection timely notifies the commission of the request for a hearing, the commission shall afford an opportunity for a hearing under chapter 91. The hearing shall be conducted by the commission or the commission may designate a hearings officer to hold the hearing.
(3) If the person cited under this subsection does not submit a written request to the commission for a hearing within twenty days from the receipt of the citation, the citation shall be deemed a final order of the commission. The commission may apply to the appropriate court for a judgment to enforce the provisions of any final order, issued by the commission or designated hearings officer pursuant to this subsection, including the provisions for abatement and civil penalties imposed. In any proceeding to enforce the provisions of the final order of the commission or designated hearings officer, the commission need only show that the notice was given, a hearing was held or the time granted for requesting the hearing has run without such a request, and a certified copy of the final order of the commission or designated hearings officer.
(4) If any party is aggrieved by the decision of the commission or the designated hearings officer, the party may appeal to the supreme court provided that the operation of an abatement order will not be stayed on appeal unless specifically ordered by a court of competent jurisdiction after applying the stay criteria enumerated in section 91-14(c). The sanctions and disposition authorized under this subsection shall be separate and in addition to all other remedies either civil or criminal provided in any other applicable statutory provision. The commission may adopt rules under chapter 91 as may be necessary to fully effectuate this subsection."
SECTION 7. Section 269-16, Hawaii Revised Statutes, is amended by adding a new subsection to be appropriately designated and to read as follows:
"( ) This section shall not apply to electric utilities, as defined in section 269-1."
SECTION 8. Section 269-16.3, Hawaii Revised Statutes, is amended by adding a new subsection to be appropriately designated and to read as follows:
"( ) This section shall not apply to electric utilities, as defined in section 269-1."
SECTION 9. Section 269-28, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) Notwithstanding the provisions of subsection (a), any person acting in the capacity of or engaging in the business of a public utility in the State without having a certificate of public convenience and necessity or other authority previously obtained under and in compliance with this chapter and the rules promulgated thereunder, if such certificate or authority is required, may be subject to a civil penalty not to exceed $5,000 for each such offense, and, in the case of a continuing violation, $5,000 for each day that uncertified activity continues."
SECTION 10. Section 269-54, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) Whenever it appears to the consumer advocate that: (1) any public utility has violated or failed to comply with any provision of this part or of any state or federal law; (2) any public utility has failed to comply with any rule, regulation, or other requirement of the public utilities commission or of any other state or federal agency; (3) any public utility has failed to comply with any provision of its charter or franchise; (4) changes, additions, extensions, or repairs to the plant or service of any public utility are necessary to meet the reasonable convenience or necessity of the public; or (5) the rates, fares, classifications, charges, or rules of any public utility whose rates are regulated by the public utilities commission are unreasonable or unreasonably discriminatory, the consumer advocate may institute proceedings for appropriate relief before the public utilities commission. The consumer advocate may appeal any final decision and order in any proceeding to which the consumer advocate is a party in the manner provided by law."
SECTION 11. Section 269-27.2, Hawaii Revised Statutes, is repealed.
["§269-27.2 Utilization of electricity generated from nonfossil fuels. (a) The public utilities commission shall investigate and determine the extent to which electricity generated from nonfossil fuel sources is available to public utilities that supply electricity to the public, which electricity is in excess of that utilized or otherwise needed by the producers for their internal uses and which the producers are willing to make available to the electric public utilities.
(b) The public utilities commission may direct public utilities that supply electricity to the public to arrange for the acquisition of and to acquire electricity generated from nonfossil fuel sources as is available from and which the producers of same are willing and able to make available to the public utilties, and to employ and dispatch the nonfossil fuel generated electricity in a manner consistent with the availability thereof to maximize the reduction in consumption of fossil fuels in the generation of electricity to be provided to the public.
(c) The rate payable by the public utility to the producer for the nonfossil fuel generated electricity supplied to the public utility shall be as agreed between the public utility and the supplier and as approved by the public utilities commission; provided that in the event the public utility and the supplier fail to reach an agreement for a rate, the rate shall be as prescribed by the public utilities commission according to the powers and procedures provided in this chapter.
In the exercise of its authority to determine the just and reasonable rate for the nonfossil fuel generated electricity supplied to the public utility by the producer, the commission shall establish that the rate for purchase of electricity by a public utility shall not be less than one hundred percent of the cost avoided by the utility when the utility purchases the electrical energy rather than producing the electrical energy. In determining the amount of the payment in relation to avoided cost, as that cost is or shall later be defined in the rules of the commission, the commission shall consider, on a generic basis, the minimum floor a utility should pay, giving consideration not only to the near-term adverse consequences to the ultimate consumers of utility provided electricity, but also to the long term desirable goal of encouraging, to the greatest extent practicable, the development of alternative sources of energy.
Nothing in this subsection shall affect existing contracts between public utilities and suppliers of nonfossil fuel generated electricity.
(d) Upon application of a public utility that supplies electricity to the public, and notification of its customers, the commission, after an evidentiary hearing, may allow payments made by the public utility to nonfossil fuel producers for firm capacity and related revenue taxes to be recovered by the public utility through an interim increase in rates until the effective date of the rate change approved by the commission's final decision in the public utility's next general rate proceeding under section 269-16, notwithstanding any requirements to the contrary of any other provision in this chapter or in the commission's rules or practices; provided the amount recovered by the utility and the amount of increase in rates due to the payments for firm capacity and related revenue taxes to be charged to the consumers of the electricity are found by the commission to be:
(1) Just and reasonable;
(2) Not unduly prejudicial to the customers of the public utility;
(3) Promotional of Hawaii's long-term objective of energy self-sufficiency;
(4) Encouraging to the maintenance or development of nonfossil fueled sources of electrical energy; and
(5) In the overall best interest of the general public.
The evidentiary hearing provided for in this subsection shall be conducted expeditiously and shall be limited to evidence related to the above findings. Notwithstanding section 269-16, no public hearing shall be required, except as the commission in its discretion may require."]
SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 13. This Act shall take effect upon approval.
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INTRODUCED BY: |
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