STAND. COM. REP. NO. 590

Honolulu, Hawaii

RE: S.B. No. 1328

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 1328 entitled:

"A BILL FOR AN ACT RELATING TO THE PUBLIC UTILITIES COMMISSION SPECIAL FUND CARRYOVER BALANCE,"

begs leave to report as follows:

The purpose and intent of this measure is to increase the balance that may be retained in the Public Utilities Commission Special Fund (PUC special fund) at the end of each fiscal year from $1,000,000 to $3,000,000.

Your Committee received testimony in support of this measure from Department of Commerce and Consumer Affairs; Public Utilities Commission; Hawaiian Electric Company, Inc.; and Ulupono Initiative, LLC.

Your Committee finds that each year, public utilities operating in the State pay a public utility fee, which is deposited into the PUC special fund in July and December. The PUC special fund is the primary source of funding for the Public Utilities Commission. Existing law requires that at the end of each fiscal year, which occurs on June 30, all moneys in excess of $1,000,000 in the PUC special fund be transferred to the state general fund. Thus, each year, the Public Utilities Commission must meet its financial obligations from June 30 until mid-August, when the public utility fees become available, by utilizing the $1,000,000 carryover balance. While this carryover balance was sufficient in 1994 when the law was enacted, the responsibilities and operational costs of the Public Utilities Commission have grown significantly. With the Public Utilities Commission's role in developing renewable energy projects in order to meet the State's renewable energy goals, the $1,000,000 carryover balance will soon be insufficient to meet the Public Utilities Commission's obligations between the end of the fiscal year and the availability of the mid-year deposit into the PUC special fund. This measure increases the carryover balance that may be retained in the PUC special fund from $1,000,000 to $3,000,000.

Your Committee has amended this measure by:

(1) Inserting a blank amount that may be retained in the PUC special fund; and

(2) Inserting an effective date of July 1, 2050, to encourage further discussion.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1328, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1328, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

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JARRETT KEOHOKALOLE, Chair