STAND. COM. REP. NO. 2708

Honolulu, Hawaii

RE:    S.B. No. 3002

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

Madam:

     Your Committee on Commerce, Consumer Protection, and Affordable Housing, to which was referred S.B. No. 3002 entitled:

"A BILL FOR AN ACT RELATING TO PROPERTY OF PUBLIC UTILITIES,"

begs leave to report as follows:

     The purpose of this measure is to provide rapid utility service restoration to customers in an event of exigent circumstances by allowing a public utility to transfer property needed for service restoration without prior approval of the Public Utilities Commission (PUC).

     Specifically, this measure amends section 269-19, Hawaii Revised Statutes, to provide an exception for a public utility to sell, lease, assign, mortgage, or otherwise dispose of or encumber its property without first securing an authorizing order from the PUC only under exigent circumstances that call for rapid service restoration in order to prevent serious disruption of essential public services, avoid serious risk to public safety, or mitigate severe economic losses to a utility customer; provided that this action does not hinder or degrade the utility company's operations with respect to its services or other customers, and the utility company is duly compensated and reports in detail to the PUC within thirty days of the action.

     Testimony in support of this measure was submitted by the Public Utilities Commission; the Division of Consumer Advocacy, Department of Commerce and Consumer Affairs; Hawaiian Electric Company, Inc.; Maui Electric Company, Ltd.; and Hawaii Electric Light Company.

     The PUC requires a public utility to obtain prior approval from the PUC if a public utility intends to sell, lease, assign, mortgage, or otherwise dispose of the whole or any part of its road, line, plant, system, or other property necessary or useful in the performance of the public utility's duties to the public.  Your Committee finds that exigent circumstances can create an environment in which prudent, prompt, time-sensitive action by a public utility may be necessary to restore services, and immediate transfer or encumbrance of utility property is necessary to rapidly restore a customer to full or near full operational status.  Allowing a public utility to transfer property needed for service restoration without prior approval of the PUC will enable customers to receive prompt restoration services without sustaining prolonged disruption of service or economic loss.

     Your Committee has amended this measure by:

     (1)  Changing the effective date of this measure from upon its approval to July 1, 2050 to ensure further discussion on this matter; and

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and style.

     Your Committee believes that this measure, as amended, fulfills the intent of this measure, which is to provide rapid utility service restoration to customers in an event of exigent circumstances.

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Affordable Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3002, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3002, S.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Affordable Housing,

____________________________

RUSSELL S. KOKUBUN, Chair