REPORT TITLE:
Utility Lines


DESCRIPTION:
Establishes a utility lines and related facilities undergrounding
program and a mechanism to fund the program.  (SB2287 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2287
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                H.D. 2
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE PUBLIC UTILITIES COMMISSION.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that over the past several
 
 2 years there has been growing community interest in placing
 
 3 utility lines underground.  Community discussion of the issue has
 
 4 primarily focused on the aesthetic benefits of underground as
 
 5 opposed to overhead lines, rather than the concern that overhead
 
 6 lines do not meet essential utility needs of the community.
 
 7      The legislature finds that the most significant barrier to
 
 8 placing utility lines underground is determining who will bear
 
 9 the cost.  In 1993, the planning commission of the city and
 
10 county of Honolulu estimated the cost to underground all existing
 
11 lines in Honolulu as $16,500,000,000 over twenty years.  In 1998,
 
12 Lanikai estimated that costs of undergrounding all utility lines
 
13 in Lanikai would be $4,744,000.  Given these estimates, placing
 
14 utility lines underground would clearly have a substantial
 
15 economic impact on the State's economy and those paying for the
 
16 costs of undergrounding.
 
17      Through its regulation of public utilities, the public
 
18 utilities commission (PUC) has jurisdiction over the decision to
 
19 place utility lines above or under the ground.  The legislature
 
20 recognizes that at present, little incentive exists for PUC to
 

 
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 1 underground utility lines.  Although undergrounding may have
 
 2 safety, maintenance, and health benefits, these benefits are
 
 3 debatable.  The clear and primary benefit of undergrounding is
 
 4 aesthetic, a benefit that is difficult to factor into the
 
 5 decision making of PUC, whose primary concern is to ensure
 
 6 reliable utility service at reasonable rates.  PUC has recognized
 
 7 that unless ratepayers as a whole consent to bear the cost of
 
 8 putting lines underground, there is no requirement that a utility
 
 9 do so.  In addition, there exists no mechanism under PUC
 
10 procedures that would allow consumers who desire underground
 
11 lines to consent to increased utility rates.
 
12      The legislature also recognizes that financing
 
13 undergrounding solely through increased utility rates may have
 
14 undesirable consequences.  Utility rates are not income
 
15 sensitive--they do not differentiate based on a user's ability to
 
16 pay.  Further, an increase in utility rates would have a greater
 
17 financial impact on those less well off who pay a higher
 
18 proportion of their income for utility services.
 
19      Yet, the legislature recognizes that certain communities
 
20 feel very strongly about the need to place community utility
 
21 lines underground, with some members of these communities
 
22 expressing their desire to voluntarily pay more for utility
 
23 services to place lines underground.  The legislature also
 

 
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 1 recognizes that the counties have shown interest in
 
 2 undergrounding utility lines, and should have some control over
 
 3 resolution of the issue, which is shaped by each community's
 
 4 individual interests and ability to support undergrounding.
 
 5 Finally, the legislature recognizes that the aesthetic benefits
 
 6 of undergrounding utility lines can enhance the lives of all
 
 7 residents of the island, and provide economic benefits by
 
 8 preserving the beauty of the State, and its desirability as a
 
 9 tourist destination.
 
10      The purpose of this Act is to provide a mechanism to resolve
 
11 the problem of equitably distributing the costs of
 
12 undergrounding, while retaining the flexibility needed to address
 
13 interests at the county and community level.  This Act allows the
 
14 community or county to take the lead in the decision to
 
15 underground utilities, and facilitates sharing of costs by all
 
16 affected parties.  In addition to allowing community or county
 
17 initiation of the project, this Act provides that the cost of the
 
18 project may be shared one-third by the requesting community, one-
 
19 third by the county, and one-third by the utilities whose lines
 
20 are being placed underground, with maximum community and utility
 
21 contributions limited to their one-third share of the cost of the
 
22 project.  This Act allows counties to elect to contribute more
 
23 than one-third of the cost.
 

 
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 1      This Act also authorizes the counties to issue general
 
 2 obligation bonds, as well as to use public utility franchise fees
 
 3 collected under chapter 240, Hawaii Revised Statutes, to cover
 
 4 the county's share of undergrounding costs.  The counties are
 
 5 also authorized to establish community accounts for the purpose
 
 6 of accepting contributions from each community toward the
 
 7 community's share of undergrounding its utility lines, and a
 
 8 special fund to contain, among other moneys, voluntary
 
 9 contributions by the public and other interested parties or
 
10 organizations, to be used to supplement the funds of communities
 
11 that may not otherwise be able to pay their one-third share.
 
12      SECTION 2.  Chapter 46, Hawaii Revised Statutes, is amended
 
13 by adding a new part to be appropriately designated and to read
 
14 as follows:
 
15           "PART   .  UNDERGROUND UTILITY LINES PROJECT
 
16      §46-  Definitions.  For the purposes of this part:
 
17      "Utility company" includes a privately-owned company,
 
18 whether or not regulated, that owns utility lines and related
 
19 facilities.
 
20      "Utility lines and related facilities" include facilities
 
21 used for the purpose of providing electric, telephone,
 
22 communications, control, cable television, street lighting,
 
23 traffic control, or other similar services within the affected
 

 
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 1 county, whether or not the entity providing the service or owning
 
 2 the facilities is a governmental entity, a company regulated by
 
 3 the public utilities commission, or other regulatory body, or an
 
 4 unregulated company.
 
 5      §46-  Underground utility lines project; cost sharing.
 
 6 (a)  The counties may initiate projects to underground utility
 
 7 lines and related facilities.  Approval of the public utilities
 
 8 commission under section 269-   shall be required prior to
 
 9 commencement of any project involving public utilities subject to
 
10 regulation under chapter 269.  Authorization under this section
 
11 shall not apply to the construction, removal, relocation,
 
12 replacement, or reconstruction of utility lines or related
 
13 facilities on state or county federal-aid highway projects under
 
14 sections 264-33 and 264-33.5.
 
15      (b)  An underground utility lines project may be paid for as
 
16 follows:
 
17      (1) One-third of the cost of the project shall be paid by
 
18          the requesting community out of a community account
 
19          established under section 46-  ;
 
20      (2) One-third shall be paid by the county, which may opt to
 
21          pay more than its one-third share; and
 

 
 
 
 
 
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 1      (3) One-third shall be paid by the owner of the utility
 
 2          lines and related facilities that are subject to
 
 3          undergrounding under the project.
 
 4      Where utility lines and related facilities subject to
 
 5 undergrounding are owned in whole or in part by the county, the
 
 6 owner's one-third share shall be allocated between the county and
 
 7 any other owner in proportion to their respective ownership
 
 8 interest.
 
 9      §46-      Underground utility lines project special fund.
 
10 Notwithstanding any law to the contrary, the counties may
 
11 establish through their respective governing bodies, special
 
12 funds into which shall be deposited voluntary contributions and
 
13 other funds to be expended for the purpose of undergrounding
 
14 utility lines and related facilities under a project established
 
15 pursuant to section 46-  .
 
16      §46-   Underground utility lines project community
 
17 accounts.(a)  Notwithstanding any law to the contrary, the
 
18 counties may establish through their respective governing bodies,
 
19 an underground utility lines community account into which shall
 
20 be deposited community donations to be expended to fund the
 
21 community's share of a project to underground utility lines and
 
22 related facilities under section 46-  .
 

 
 
 
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 1      §46-   Underground utility lines project special fund and
 
 2 community account procedures.  The director of finance of any
 
 3 county establishing an underground utility lines project special
 
 4 fund or community account may establish procedures for accepting
 
 5 contributions made for the purpose of undergrounding utility
 
 6 lines and related facilities within the county.  Funds shall be
 
 7 expended to pay for the costs of undergrounding utility lines and
 
 8 related facilities.
 
 9      §46-   General obligation bonds.  Subject to the
 
10 requirements of chapter 47, the counties may issue general
 
11 obligation bonds to finance the undergrounding of utility lines
 
12 and related facilities under a project established pursuant to
 
13 section 46-  , including but not limited to meeting the county's
 
14 one-third share of project costs.
 
15      §46-   Franchise fees.  The counties may use a portion of
 
16 the franchise fees received from any utility company under
 
17 chapter 240 to underground utility lines and related facilities
 
18 under a project established pursuant to section 46-  , including
 
19 but not limited to matching voluntary donations to the
 
20 underground utility lines project special fund; provided that
 
21 utility franchise fees shall not be used to fund the
 
22 undergrounding of utility lines and related facilities of utility
 
23 companies that do not pay the franchise fee."
 

 
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 1      SECTION 3.  Chapter 269, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "§269-      Commission approval of underground utility lines
 
 5 projects required.  The approval of the public utilities
 
 6 commission shall be required prior to commencement of an
 
 7 underground utility lines project undertaken pursuant to section
 
 8 46-     involving public utilities subject to chapter 269."
 
 9      SECTION 4.  Section 46-47, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "§46-47  Franchise fees, disposition of.  All moneys
 
12 received by any county from any public utility corporation under
 
13 the provisions of the franchise granted to the corporation shall
 
14 be kept in the highway fund created by section 249-18 and
 
15 expended on the construction, maintenance, improvement, and
 
16 repair of public roads and highways of, and undergrounding of
 
17 utility lines and related facilities in the county in which the
 
18 same are received, including for the purposes of this section,
 
19 the installation, maintenance, and repair of street lights and
 
20 power, and other charges for street lighting purposes as well as
 
21 the replacement of old street lights, and footpaths or sidewalks;
 
22 provided that in the city and county of Honolulu, the city
 
23 council may expend the moneys to provide for the maintenance of
 
24 the traffic department, for other purposes and functions
 

 
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 1 connected with the prevention of automobile accidents and
 
 2 preservation of safety upon the highways and streets in the city
 
 3 and county of Honolulu, and for the establishment and
 
 4 maintenance, under the direction of the police department, of one
 
 5 or more vehicle testing stations[, from the moneys]."
 
 6      SECTION 5.  Statutory material to be repealed is bracketed.
 
 7 New statutory material is underscored.
 
 8      SECTION 6.  This Act shall take effect upon its approval.