Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 1903, S.D. 1, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to exempt seawater air conditioning district cooling projects (SWAC projects) that use renewable energy resources to generate at least 50 percent of the energy needed for the cooling system, from regulation by the Public Utilities Commission (PUC).

Testimony in support of this bill was received from the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs, Honolulu Seawater Air Conditioning, LLC, and Jacoby Development, Inc. PUC commented.

Your Committee finds that the use of cold seawater to air-condition buildings will advance Hawaii's energy goals. Not only is fossil fuel-generated energy consumption reduced, but also peak-use demand for electricity, thus avoiding the need for additional fossil fuel-generating plants to satisfy peak-use demand. Exempting SWAC projects from PUC regulation will encourage the use of this renewable resource and help to make SWAC projects economically viable.

In addition, your Committee finds that SWAC projects possess qualities that make PUC oversight unnecessary as they are not sole providers of a service essential for the public health and welfare. Instead, SWAC projects involve a limited number of sophisticated building owners and operators who negotiate long-term contracts to identify and protect their rights and obligations.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1903, S.D. 1, H.D. 1, and recommends that it pass Third Reading.