HB2660 HD1 HSCR253-02

 

STAND. COM. REP. NO.253-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2660

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Energy and Environmental Protection, to which was referred H.B. No. 2660 entitled:

"A BILL FOR AN ACT RELATING TO ELECTRIC UTILITIES,"

begs leave to report as follows:

The purpose of this bill is to impose a moratorium for an unspecified number of years on the practice of an electric utility charging standby charges and offering customer retention discounts for customer self-generation and distributed energy resources.

The Department of Research and Development of the County of Hawaii, Hawaii Renewable Energy Alliance, Sierra Club, Life of the Land, and several concerned citizens submitted testimony in support of the bill. The Department of Business, Economic Development, and Tourism supported the intent of the bill. The Public Utilities Commission (PUC), Hawaiian Electric Company, Hawaii Electric Light Company, and Maui Electric Company opposed the measure. The Gas Company and Kauai Electric offered comments.

After carefully considering the practice of electric utilities regarding standby charges and customer retention discounts and in an effort to achieve the appropriate balance between encouraging distributed energy resources (DER) and the need for equitable rates under a variety of arrangements between DER owners and electric utilities, your Committee has amended this bill by foregoing the imposition of a moratorium. In lieu thereof, the PUC will be required to consider a number of specific

 

issues in any PUC proceeding that relate to standby fees or customer retention discounts DERs.

Your Committee has amended the measure by:

(1) Specifying that it is the intention of the Legislature that the PUC achieve the appropriate balance between the Legislature's desire to encourage DER and the need for equitable rates under a variety of arrangements between DER owners and electric utilities with respect to any fossil-fueled onsite generation facility requiring some level of standby service;

(2) Prohibiting standby charges and customer retention discounts for renewable energy systems or net-meter systems;

(3) Requiring the PUC to consider a number of specific issues in any proceeding relating to standby charges or customer retention discounts related to DERs; and

(4) Requiring the PUC, if it fails to consider the specified issues in any proceeding relating to standby charges or customer retention discounts, to provide the Legislature a report in an unspecified number of days after the issuance of the decision and order, explaining how its decision is in the public interest.

As affirmed by the record of votes of the members of your Committee on Energy and Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2660, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2660, H.D. 1, and be referred to the Committee on Consumer Protection and Commerce.

Respectfully submitted on behalf of the members of the Committee on Energy and Environmental Protection,

 

____________________________ HERMINA M. MORITA, Chair