(1) Provides reduced and stable cooling costs;

(2) Uses an abundant, infinite, renewable energy resource-cold, deep seawater—to provide more than seventy per cent of the cooling load;

(3) Eliminates the need for cooling towers and, as a result, reduces potable water use, toxic chemical use, and the production of sewage;

(4) Greatly reduces the use of harmful chemicals (refrigerants) used in conventional cooling systems;

(5) Provides energy savings of seventy per cent, or more, compared to conventional air conditioning systems;

(6) Incurs lower operating and maintenance costs than individual building air conditioning systems;

(7) Eliminates the need for up to 0.68 kilowatts of electricity generation capacity for each ton of cooling capacity;

(8) Generates millions of dollars in construction project spending. In addition to construction jobs, a significant number of long-term, well-paid jobs will also be created. Other local economic development benefits will accrue from money that stays in Hawaii and is not used to purchase oil; and

(9) Helps the federal government, State of Hawaii, and city and county of Honolulu to meet goals and mandates for energy efficiency and renewable energy use.

(1) Seawater air conditioning (SWAC) district cooling systems involve a limited number of customers. For example, the downtown Honolulu seawater air conditioning system under development by Honolulu Seawater Air Conditioning, LLC, may have as few as five customers, with a maximum of no more than one hundred. Similar, relatively small numbers of customers will be involved in other SWAC systems planned for Hawaii;

(2) SWAC system customers are sophisticated. Annual operational expenses are closely scrutinized by building owners, operators, and professional building managers. The smallest customer contemplated for the downtown Honolulu SWAC system is about eighty tons for a building of about forty thousand square feet;

(3) SWAC systems will be further monitored and controlled by a board of managers. Customers select, and will be represented by, three members on the board of managers;

(4) SWAC systems will use long-term customer contracts (Honolulu Seawater Air Conditioning, LLC will use twenty-year contracts);

(5) SWAC costs will be stable. Approximately eighty-five per cent of SWAC life-cycle costs are due to a fixed capital cost recovery charge, with approximately fifteen per cent due to electricity costs and other variable costs (labor, materials and supplies, repairs, replacements, etc.). Conventional air conditioning has approximately fifteen per cent fixed costs and eighty-five per cent variable costs. Variable costs for conventional air conditioning are primarily for electricity and the cost of electricity in Hawaii is a strong function of the cost for imported oil;

(6) This exemption would provide an exemption similar to that provided to qualifying facilities under the Public Utilities Regulatory Policy Act of 1978 (PURPA). PURPA's primary purposes were to promote conservation and to encourage greater use of alternative sources of power generation. PURPA provided an exemption from federal and state utility regulations. A SWAC system is analogous to a qualifying facility;

(7) SWAC systems could provide air conditioning to customers at less than or equal to the customers' cost of using conventional air conditioning;

(8) The State of Hawaii has already provided an exemption for "any person who controls, operates, or manages plants or facilities for the production, transmission, or furnishing of power primarily or entirely from non-fossil fuel sources; and provides, sells, or transmits all of that power, except such power as is used in its own internal operations, directly to a public utility for transmission to the public." A SWAC system also provides renewable energy to customers;

(9) SWAC systems employ a socially useful technology that can reduce Hawaii's and the United States' consumption of scarce and imported fuels, and an exemption from public utility regulation is one means of helping SWAC technology become established and expand;

(10) The expense of reporting and the compliance burden associated with the public utility commission can be avoided. This is a relatively higher cost for small systems, such as SWAC district cooling systems, than it is for large electric or telecommunications utilities that serve thousands, or even hundreds of thousands of customers;

(11) Revenues from small-scale systems cannot justify the financial and administrative burden of the utility regulatory process. SWAC projects will be easier to finance without public utility commission regulation; and

(12) The prospect of applying traditional regulations to SWAC district cooling services raises concerns for regulators, as well as for developers and investors:

(C) The effort to supervise and set cost-based rates for individual local systems is likely to be greatly disproportionate to the numbers of customers affected, the dollars involved, and the resources available to commissioners to discharge their primary responsibilities.

(1) Shall include any person insofar as that person owns or operates a private sewer company or sewer facility;

(2) Shall include telecommunications carrier or telecommunications common carrier;

(3) Shall not include any person insofar as that person owns or operates an aerial transportation enterprise;

(4) Shall not include persons owning or operating taxicabs, as defined in this section;

(5) Shall not include common carriers transporting only freight on the public highways, unless operating within localities or along routes or between points that the public utilities commission finds to be inadequately serviced without regulation under this chapter;

(6) Shall not include persons engaged in the business of warehousing or storage unless the commission finds that regulation thereof is necessary in the public interest;

(7) Shall not include:

(8) Shall not include any person who:

(9) Shall not include a telecommunications provider only to the extent determined by the commission pursuant to section 269-16.9;

(10) Shall not include any person who controls, operates, or manages plants or facilities developed pursuant to chapter 167 for conveying, distributing, and transmitting water for irrigation and such other purposes that shall be held for public use and purpose; [and]

(11) Shall not include any person who owns, controls, operates, or manages plants or facilities for the reclamation of wastewater; provided that:

(12) Shall not include any person who owns, controls, operates, or manages any seawater air conditioning district cooling project; provided that at least fifty per cent of the energy required for the seawater air conditioning district cooling system is provided by a renewable energy resource, such as cold, deep seawater."