STAND. COM. REP. NO. 2199

Honolulu, Hawaii

RE: S.B. No. 3326

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs, to which was referred S.B. No. 3326 entitled:

"A BILL FOR AN ACT RELATING TO ENERGY,"

beg leave to report as follows:

The purpose and intent of this measure is to require the Public Utilities Commission to initiate the separation of ownership and control of electric energy generation services from transmission and distribution services through the adoption of rules and to provide reports to the Legislature.

Your Committees received testimony in support of this measure from Retail Merchants of Hawaii and Pacific Resource Partnership.

Your Committees received testimony in opposition to this measure from Hawaiian Electric and International Brotherhood of Electrical Workers Local 1260.

Your Committees received comments on this measure from the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs, Public Utilities Commission, and Life of the Land.

Your Committees find that the State's electricity consumers experience some of the highest power costs in the nation. This measure would require the separation of the generation segment of the State's electric utility market from the transmission and distribution segments to increase competition and facilitate development of a more resilient and modernized grid, which can lead to fewer outages and lower electricity costs for consumers.

Your Committees have amended this measure by:

(1) Replacing "unbundling" with "separate" or "separation" throughout the measure, as applicable;

(2) Specifying that the Public Utilities Commission shall preserve all existing statutory programs and protections for customers;

(3) Inserting language requiring the Public Utilities Commission to protect existing labor and collective bargaining agreements;

(4) Deleting language that would have required the Public Utilities Commission to adopt final rules within a certain timeframe;

(5) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(6) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3326, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3326, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs,

________________________________ GLENN WAKAI, Chair

________________________________ JARRETT KEOHOKALOLE, Chair