Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Water, Land, and Agriculture and Energy, Environment, and International Affairs, to which was referred H.B. No. 1707, H.D. 2, entitled:

beg leave to report as follows:

The purpose of this measure is to exempt seawater air conditioning district cooling projects from public utility regulation.

The Department of Commerce and Consumer Affairs, Honolulu Seawater Air Conditioning LLC, and Jacoby Development, Inc. submitted testimony in support of this measure. The Public Utilities Commission submitted comments.

Seawater air conditioning district cooling systems are a renewable energy technology that have the potential to contribute to Hawaii's renewable portfolio standard requirements by reducing some of the electric company's peak commercial load. Your Committees find that because these cooling systems will not be the sole providers of a service that is essential for public health and welfare, public utility regulation of the cooling systems is not necessary.

Your Committees further find that a similar measure, S.B. No. 1903, was heard and approved by both Committees and was subsequently heard and approved, with amendments, by the Committee on Commerce, Consumer Protection, and Housing. Your Committees have amended this measure to reflect the provisions in S.B. No. 1903, S.D.1, by:

As affirmed by the records of votes of the members of your Committees on Water, Land, and Agriculture and Energy, Environment, and International Affairs that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 1707, H.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 1707, H.D. 2, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection, and Housing.