Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.C.R. No. 98, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to request the opening of a Public Utilities Commission (PUC) docket on standby charges imposed on distributed energy resources by public utilities and customer retention discounts offered by the utilities.

Hess Microgen LLC and two individuals testified in support of this measure. The PUC opposed the measure. Hawaiian Electric Company, Inc., Kauai Electric, and The Gas Company submitted comments.

Your Committee finds that opening a single docket to address issues raised by standby rates and customer retention discounts utilized by public utilities may not be appropriate or practical given the uniqueness of each utility and utility contract. However, there may be generic policy issues that are appropriate for examination by the PUC.

Your Committee has amended this measure to request that the PUC consider the feasibility and appropriateness of opening a docket on standby charges and customer retention discount issues, rather than open such a docket at this time. In addition, the title of this measure has been amended to reflect its amended purpose.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 98, S.D. 1, as amended herein, and recommends its adoption in the form attached hereto as S.C.R. No. 98, S.D. 2.