STAND. COM. REP. NO. 3174

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.C.R. No. 173
                                        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.C.R. No. 173 entitled:

     "SENATE CONCURRENT RESOLUTION REQUESTING THE PUBLIC
     UTILITIES COMMISSION TO OPEN A NEW DOCKET ON DEMAND SIDE
     MANAGEMENT,"

begs leave to report as follows:

     The purpose of this measure is to facilitate the development
of Demand Side Management programs in the State.

     Testimony on the measure was received from the Public
Utilities Commission (PUC), Consumer Advocate, Kauai Electric, Na
Leo Pohai, Malama o Manoa, Hawaii Renewable Energy Alliance,
Hawaiian Electric Company, Inc. (HECO), Hawaii Solar Energy
Association, Life of the Land, and several individuals.

     Demand Side Management (DSM) programs encourage energy
efficiency and help to delay the need for the construction of new
electric generation facilities that contribute to global warming
and air pollution.  This measure requests that the PUC open a
generic docket on DSM so that interested parties may comment on
related issues such as competitive bidding and cost
effectiveness.

     Your Committee finds that residential DSM programs, such as
residential rebate programs for the installation of solar water
heating systems, are effective in moving the market toward
greater energy efficiency, reduce energy costs for ratepayers,

 
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                                   STAND. COM. REP. NO. 3174
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and aid the State's economy through the creation of new jobs.
For instance, since 1996, over ten thousand new residential solar
water heating systems have been installed in Hawaii, and
increased customer demand for systems has resulted in the
creation of two hundred new jobs in the solar industry.

     Your Committee further finds that HECO's recent reduction in
residential rebates for Oahu homeowners from $800 to $500 for
existing residences and from $1,500 to $1,000 for newly
constructed residences will hinder, rather than facilitate the
participation of ratepayers in the DSM program, and thereby
reduce the number of homes utilizing energy efficient solar
heating systems.  Therefore, your Committee has amended this
measure by:

     (1)  Deleting language relating to the original purpose of
          this measure which was to request the PUC to open a new
          DSM docket, and replacing it with a new title and
          language consistent with the measure's amended purpose
          which is to request that HECO retain solar water
          heating system rebates at their current levels for a
          minimum of one year after April 1, 2000; and

     (2)  Making technical, nonsubstantive amendments for
          purposes of style.

     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 concurs with the intent and purpose
of S.C.R. No. 173, as amended herein, and recommends that it be
referred to the Committee on Ways and Means, in the form attached
hereto as S.C.R. No. 173, S.D. 1.

                                   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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