HOUSE OF REPRESENTATIVES	H.B. NO.	2104
TWENTY-FIFTH LEGISLATURE, 2010
STATE OF HAWAII

A BILL FOR AN ACT

relating to agriculture.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature has recognized the challenges that agriculture producers face by establishing a preferential rate for non-potable and potable water used in agricultural activities.  The legislature now finds that many agricultural businesses use electric pumps and systems for crop irrigation.  Electricity to power these systems is sold by regulated electric utilities at a single commercial rate structure.  This also applies to electricity use in other agricultural activities such as vacuum cooling plants and canning operations.  The legislature finds that, for agriculture producers to remain competitive and self-sustaining, the State must provide additional incentives.

     The purpose of this Act is to require public utilities to provide preferential rates for electricity to qualified ratepayers engaged in agricultural activities.

     SECTION 2.  Section 269-1, Hawaii Revised Statutes, is amended by amending the definition of "agricultural activities" to read as follows:

     ""Agricultural activities" means a commercial agricultural, silvicultural, or aquacultural facility or pursuit conducted, in whole or in part, including the care and production of livestock and livestock products, poultry and poultry products, apiary products, and plant and animal production for nonfood uses; the planting, cultivating, harvesting, and processing of crops; and the farming or ranching of any plant or animal species in a controlled salt, brackish, or freshwater environment.  The term shall also include activities supporting or secondary to agricultural production, including but not limited to irrigation, cooling, canning, and storage."

     SECTION 3.  Section 269-26.5, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§269-26.5[]]  Preferential water and electricity rates for agricultural activities.  (a)  It is the policy of the State to promote the long-term viability of agriculture by establishing mechanisms that provide for preferential rates for potable water and electricity for ratepayers that engage in agricultural activities.  The public utilities commission shall have the authority to establish preferential rates for potable water and electricity used by ratepayers for agricultural activities in a public utility's service area.

     (b)  Upon receipt of a bona fide request for preferential rates for potable water or electricity to be used for agricultural activities[,] on lands within an agricultural district, and proof that the customer engages in agricultural activities[,] on lands within an agricultural district, a public utility shall provide proposed preferential rates for potable water, electricity, or both to be used only for qualified agricultural activities to the public utilities commission for approval.  All [such] rates approved by the public utilities commission shall be subsidized by the potable water or electricity rates charged to other customers of the public utility, if required, as determined by the public utilities commission.  In reviewing the proposed preferential rates, the public utilities commission, in consultation with the department of agriculture, may establish additional criteria to qualify bona fide agribusinesses for water or electricity used solely for agricultural activities.  For rate cases initiated pursuant to this section, the public utilities commission shall allow the recovery of any reasonable unamortized costs incurred by the public utility in its previous rate case; provided however, upon full amortization of these costs, rates shall be adjusted accordingly."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Public Utilities; Rates; Agriculture

Description:

Directs public utilities to establish discounted rates for electricity for agricultural activities located in agricultural districts.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.