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. 739 entitled:

begs leave to report as follows:

The purpose of this measure is to create statutory language pertaining to electric cooperatives.

The Department of Commerce and Consumer Affairs and one individual supported the intent of this measure. The Public Utilities Commission (PUC) opposed it. Life of the Land offered comments.

Your committee finds that many electric cooperatives on the mainland are unregulated because the service is provided to the member, who is also the ratepayer/shareholder, at cost. Cost savings or profits accrued usually result in lower rates or dividends paid to the member. The bill as initially written allowed electric cooperatives to "opt out" of Public Utility Commission regulation by a vote of the membership. Given the State's lack of experience in dealing with the electric cooperative model your Committee finds it is not prudent to preclude PUC oversight at this time.

Therefore, your Committee has amended the bill by deleting its contents expect for the definition of electric cooperative and the provision that such cooperative shall be regulated by the Public Utilities Commission.

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. 739, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 739, H.D. 1, and be referred to the Committee on Consumer Protection and Commerce.