HB949

SECTION 1. The legislature finds that:

(1) The general welfare and prosperity of the State is dependent upon the availability of an adequate supply of oil;

(2) Hawaii is unique among the states in that it does not have indigenous energy sources, such as coal, natural gas, or hydroelectric power, and is therefore currently dependent upon imports of petroleum to meet its energy needs;

(3) Petroleum is used to generate electricity and manufacture synthetic gas;

(4) The cost of petroleum is a factor in the cost of every item produced or consumed in Hawaii and is shared by every user of electricity and propane gas and by every automobile user;

(5) The State is seeking to expand its economy, attract new industries, and develop itself into a pacific trade center; and

(6) Petroleum and petroleum products, the dominant energy source for the State, are crucial factors in this endeavor.

The purpose of this Act is to require the public utilities commission to regulate petroleum utilities and the gasoline service station industry in Hawaii.

SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269- Petroleum regulation. (a) The public utilities commission shall:

(1) Have general supervision over all petroleum utilities in this State;

(2) Notwithstanding section 486H‑10.4(a)(2), authorize new retail service stations and determine whether they may be operated by a petroleum utility. For the purposes of this section, the term "operate" has the same meaning as defined in section 486H-1;

(3) Restrict price increases when prices rise above a certain percentage over a benchmark market, as determined by rules adopted by the commission under chapter 91;

(4) Notwithstanding section 486H‑10.4(a), decide when a petroleum utility may convert a retail service station from one operated by a gasoline dealer to one operated by a manufacturer or jobber, as those terms are defined in section 486H-1, and vice versa;

(5) Decide when a petroleum utility may close a retail service station, to prevent communities from being underserved; and

(6) Enforce this section.

(b) In addition to the requirements of chapter 486J, every petroleum utility, upon the request of the commission, shall:

(1) Furnish to the commission all information the commission may require with respect to any of the matters within its jurisdiction;

(2) Permit the examination of its books, records, contracts, maps, and other documents by the commission or any person authorized by it in writing to make an examination; and

(3) Furnish the commission with a complete inventory of its property in such form as the commission may direct.

(c) The rates, fares, classifications, and rules of every petroleum utility shall be published by the petroleum utility in such a manner as the commission may require, and copies shall be furnished to any person on request.

(d) Any petroleum utility violating, neglecting, or failing in any particular to conform to or comply with this section or any order of the commission shall forfeit to the State not more than $10,000 for every violation, neglect, or failure, to be recovered pursuant to proceedings instituted in accordance with section 269-15. Each day of violation shall be a separate violation. A petroleum utility may be enjoined by the circuit court from carrying on its business while the violation, neglect, or failure continues.

(e) The commission shall adopt rules in accordance with chapter 91 as may be necessary to implement this section.

(f) The commission shall prepare and present to the governor and the legislature, through the chairperson, twenty days prior to the convening of every regular session of the legislature, a report relating to its actions under this section during the preceding fiscal year, including any recommendations for legislation. The report required by this section shall be submitted in conjunction with the report required to be submitted to the governor and legislature by section 486J-5(c)."

SECTION 3. Section 269-1, Hawaii Revised Statutes, is amended as follows:

1. By adding five new definitions to be appropriately inserted and to read:

""Commission" means the public utilities commission.

"Gasoline dealer" has the same meaning as defined in section 486H-1.

"Petroleum products" has the same meaning as defined in section 486H-1.

"Petroleum utility" includes any person, or the person's lessee, trustee, or receiver, who owns, manages, operates, leases, or controls within this State any pipeline, plant, property, equipment, facility, franchise, license, or permit for producing, obtaining, refining, processing, transporting, conveying, distributing, delivering, or furnishing crude petroleum oil or petroleum products, at wholesale or retail.

"Retail service station" has the same meaning as defined in section 486H-1."

2. By amending the definition of "public utility" to read:

""Public utility":

(1) Includes every person who may own, control, operate, or manage as owner, lessee, trustee, receiver, or otherwise, whether under a franchise, charter, license, articles of association, or otherwise, any plant or equipment, or any part thereof, directly or indirectly for public use, for the transportation of passengers or freight, or the conveyance or transmission of telecommunications messages, or the furnishing of facilities for the transmission of intelligence by electricity by land or water or air within the State, or between points within the State, or for the production, conveyance, transmission, delivery, or furnishing of light, power, heat, cold, water, gas, or oil, or for the storage or warehousing of goods, or the disposal of sewage; provided that the term shall include:

(A) Any person insofar as that person owns or operates a private sewer company or sewer facility; [~~and~~]

(B) Any telecommunications carrier or telecommunications common carrier; and

(2) Shall not include:

(A) Any person insofar as that person owns or operates an aerial transportation enterprise;

(B) Persons owning or operating taxicabs, as defined in this section;

(C) 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;

(D) Persons engaged in the business of warehousing or storage, unless the commission finds that regulation thereof is necessary in the public interest;

(E) The business of any carrier by water to the extent that the carrier enters into private contracts for towage, salvage, hauling, or carriage between points within the State and the carriage is not pursuant to either an established schedule or an undertaking to perform carriage services on behalf of the public generally;

(F) The business of any carrier by water, substantially engaged in interstate or foreign commerce, transporting passengers on luxury cruises between points within the State or on luxury round-trip cruises returning to the point of departure;

(G) Any person who:

(i) Controls, operates, or manages plants or facilities for the production, transmission, or furnishing of power primarily or entirely from nonfossil fuel sources; and

(ii) 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;

(H) A telecommunications provider only to the extent determined by the commission pursuant to section 269-16.9;

(I) 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;

(J) Any person who owns, controls, operates, or manages plants or facilities for the reclamation of wastewater; provided that:

(i) The services of the facility shall be provided pursuant to a service contract between the person and a state or county agency and at least ten per cent of the wastewater processed is used directly by the State or county [~~which~~] that has entered into the service contract;

(ii) The primary function of the facility shall be the processing of secondary treated wastewater that has been produced by a municipal wastewater treatment facility that is owned by a state or county agency;

(iii) The facility shall not make sales of water to residential customers;

(iv) The facility may distribute and sell recycled or reclaimed water to entities not covered by a state or county service contract; provided that, in the absence of regulatory oversight and direct competition, the distribution and sale of recycled or reclaimed water shall be voluntary and its pricing fair and reasonable. For purposes of this subparagraph, "recycled water" and "reclaimed water" mean treated wastewater that by design is intended or used for a beneficial purpose; and

(v) The facility shall not be engaged, either directly or indirectly, in the processing of food wastes; and

(K) 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.

If the application of this chapter is ordered by the commission in any case provided in paragraphs (2)(C), (2)(D), (2)(H), and (2)(I), the business of any public utility that presents evidence of bona fide operation on the date of the commencement of the proceedings resulting in the order shall be presumed to be necessary to public convenience and necessity, but any certificate issued under this proviso shall nevertheless be subject to such terms and conditions as the commission may prescribe, as provided in sections 269-16.9 and 269-20."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2007.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	949
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII