STAND. COM. REP. NO. 2140

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2280
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 2280 entitled: 

     "A BILL FOR AN ACT MAKING AN APPROPRIATION TO QUANTIFY
     BENEFITS OF UNDERGROUNDING UTILITY LINES,"

begs leave to report as follows:

     The purpose of this measure is to appropriate funds to the
Consumer Advocate for a study that develops measurement standards
to quantify the benefits of underground high-voltage utility
lines, including the measurement of externalities associated with
underground lines. 

     The Public Utilities Commission (PUC), Department of
Commerce and Consumer Affairs, Kauai Electric, GTE, Life of the
Land, and Na Leo Pohai submitted testimony in support of the
measure.  The Hawaiian Electric Company, Inc., submitted comments
expressing concerns about the measure.

     Section 269-27.6, Hawaii Revised Statutes, requires that the
PUC, in considering a public utility's application to construct a
high-voltage electric transmission system, determine whether the
system's utility lines should be placed above or below the
ground.  The law further requires that the PUC consider several
factors in its determination, including whether a benefit exists
that outweighs the costs of placing the system underground.

     The Legislative Reference Bureau (LRB), in a report on
undergrounding public utility lines prepared pursuant to

 
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                                   STAND. COM. REP. NO. 2140
                                   Page 2


Senate Concurrent Resolution No. 30, passed by the 1999
Legislature, noted that the law sets no standards for valuing
benefits, and that measurement standards are essential to an
accurate cost-benefit analysis.  The LRB proposed that the
Legislature authorize the development of standards by
appropriating funds of $500,000 to $700,000 to the Consumer
Advocate to measure the externalities involved in a cost-benefit
analysis, and this Act implements that recommendation.  

     Your Committee intends that the Consumer Advocate's study
include a quantification of the direct and indirect costs
associated with underground utility lines and that the Consumer
Advocate seek input from community members, utility
representatives, and regulators to ensure that all the relevant
issues are analyzed in its study.
  
     Your Committee has amended this measure by:

     (1)  Appropriating the moneys for the study out of the
          public utilities commission special fund, rather than
          the general revenues of the State; and

     (2)  Increasing the amount of the appropriation from
          $500,000 to $700,000.

     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. 2280, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 2280, S.D. 1, and be referred to the Committee on Ways and
Means.

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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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