Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Energy and Environmental Protection, to which was referred H.B. No. 435 entitled:

begs leave to report as follows:

The purpose of this bill is to exempt public utilities owned and not operated by the State, any county, or other political subdivision, from Public Utilities Commission (PUC) regulation. These utilities would be exempt as long as the fees generated by utility operation are not used for general funded operations or non-utility related expenses or projects.

The Consumer Advocate and County of Kauai testified in support of the intent of the bill. PUC and Kauai Island Utility Cooperative offered comments on the bill.

Your Committee finds that exemption from PUC oversight may be better addressed by the subsequent committee.

However, your Committee finds that the bill, as received, may have unintended consequences because it is unclear whether utilities that are both owned and operated by a governmental entity would remain exempt. A strict interpretation of the law would allow only those utilities that are owned by a governmental entity and operated by non-governmental entity to enjoy this exemption.

Your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Energy and Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 435, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 435, H.D. 1, and be referred to the Committee on Consumer Protection and Commerce.