STAND. COM. REP. NO. 459

Honolulu, Hawaii

RE:    S.B. No. 120

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 120, S.D. 1, entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to authorize the Public Utilities Commission to establish a policy to implement economic incentives and cost recovery regulatory mechanisms to induce and accelerate electric utilities' cost reduction efforts, encourage greater utilization of renewable energy, accelerate the retirement of utility fossil generation, and increase investments to modernize the State's electrical grids.

     Your Committee received testimony in support of this measure from the Department of Business, Economic Development, and Tourism; Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs; Public Utilities Commission; Hawaiian Electric Company, Inc.; and Blue Planet Foundation.

     Your Committee finds that this measure gives policy guidance to incentivize Hawaii's electric utility companies to make needed reforms that attain lower electricity rates and achieve Hawaii's clean energy objectives.  The various mechanisms in this measure also represent regulatory tools that make the State's transition to an affordable clean energy-focused system mutually beneficial to electric utilities and ratepayers.  Your Committee further finds that this measure allows the Public Utilities Commission sufficient flexibility to evaluate, select, and tailor the best set of incentive mechanisms to transform Hawaii's electric industry and achieve an affordable clean energy future.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 120, S.D. 1, and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

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

____________________________

ROSALYN H. BAKER, Chair