(1) Authorizes the Public Utilities Commission to redirect all or a portion of the funds collected from ratepayers through the current demand-side management surcharge by Hawaii's electric utilities into a public benefits fund to be used to support energy efficiency and demand-side management programs and services;

(2) Requires appointment of a fund administrator if the Public Utilities Commission redirects the demand-side management surcharge for energy efficiency and demand-side management programs and services and establishes qualifications and duties for the administrator;

(3) Requires the Public Utilities Commission to provide for the transition from the current demand-side management programs supported by the surcharge to the ones supported by the public benefits fund if it is established by the commission;

(4) Establishes energy efficiency portfolio standards;

(5) Adds and amends various definitions in section 269-91, HRS, regarding renewable portfolio standards;

(6) Establishes penalties for the failure of a utility to meet the renewable portfolio standard;

(7) Requires the Public Utilities Commission to establish a methodology to establish fixed prices for renewable energy under long-term agreements and requires a public utility to offer to purchase, under a long-term agreement, electricity generated by a producer using nonfossil fuel; and

(8) Makes clarifying amendments to section 269-95, HRS, regarding renewable portfolio standards.

(1) Deleting the purpose section;

(2) Clarifying the authority and duties of the fund administrator;

(3) Narrowing the scope of the plan required to transition from the current demand-side management programs supported by the surcharge to the ones supported by the public benefits fund;

(4) Deleting the proposed new section regarding energy efficiency portfolio standards and replacing it with standards for classifying energy as attributable to renewable or nonrenewable sources;

(5) Amending the requirement that the Public Utilities Commission establish a methodology for determining the just and reasonable rate that a public utility must pay for electricity generated by a producer using nonfossil fuel by requiring removal or significant reduction of any linkage between the price of fossil fuels and the rate for nonfossil fuel generated electricity to permit customers to share in potential savings derived from the use of nonfossil fuel generated electricity;

(6) By deleting the definitions to be added to section 269-92, HRS;

(7) By adding a definition of "renewable electrical energy" and amending the definitions of "renewable energy" and "renewable portfolio standard"; and

(8) Establishing criteria by which the Public Utilities Commission may waive, in whole or in part, penalties to be imposed on a public utility for failure to meet the renewable portfolio standard.

(1) Deleting the proposed new section regarding standards for classifying energy as attributable to renewable or nonrenewable sources;

(2) Replacing the proposed definition of "renewable electrical energy" with a definition suggested by the Public Utilities Commission;

(3) Inserting a new subsection (b) in section 269-92, HRS, originally proposed by House Bill No. 3053, H.D. 1, authorizing the Public Utilities Commission to establish standards for each utility that prescribe what portion of the renewable energy standards shall be met by specific types of resources;

(4) Adding a new subsection to section 269-16, HRS, requiring the public utilities commission, by December 31, 2007, or in the utility's next general rate case, whichever comes first, to examine the functioning of the utility's fuel adjustment clause to determine whether the clause operates in a manner that is fair to ratepayers and whether the clause should be modified to encourage greater use of renewable energy by the utility; and

(5) By making technical nonsubstantive amendments for clarity and style.