HB1999.DOC

SECTION 1. The legislature finds that electrical utilities are monopolies with the exclusive right to transmit and generate electricity within the State. The legislature further finds that, when dealing with other single entities such as cable services, the State has established stringent licensing procedures to ensure that the public good is given priority. The legislature further finds that a similar licensing requirement for electric utilities, and proceedings to approve the license application, will ensure that the public's needs are an integral part of an electric utility's operational goals.

The purpose of this Act is to require licensing for electric utilities that seek to operate monopolies in the State.

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

"Part . Electric Utility licensing

§269-A Definitions. As used in this part, unless the context otherwise requires:

"Applicant" means a person that initiates an application or proposal for a license to be issued under this part.

"Application" means an unsolicited filing for a license to be issued under this part.

"Commission" means the public utilities commission.

"Facility" means all property owned or used by an electric utility for the production, conveyance, transmission, delivery, or furnishing of electric power to the public, including but not limited to real property, power plants, transmission and distribution lines, and related equipment for the production and delivery of electric power.

"Person" means an individual, partnership, association, joint stock company, trust, corporation, or governmental agency.

"Proposal" means a filing solicited by the commission.

"Service area" means the geographic area for which an electric utility has been issued an electric utility license.

§269-B Electric utility license required. No person shall construct, operate, or acquire an electric utility, or extend an existing electric utility outside its designated service area, without first obtaining an electric utility license issued by the commission.

§269-C Application or proposal; fee. (a) No license shall be issued except upon written application or proposal to the commission, by a fee of $1,000.

(b) An application for issuance of an electric utility license shall be made in a form prescribed by the commission. The application shall set forth the facts as required by the commission to determine in accordance with section 269-E(b) whether an electric utility license should be issued, including facts as to:

(1) The citizenship and character of the applicant;

(2) The financial, technical, and other qualifications of the applicant;

(3) The principals and ultimate beneficial owners of the applicant;

(4) The public interest to be served by the requested issuance of an electric utility license; and

(5) Any other matters deemed appropriate and necessary by the commission.

(c) A proposal for issuance of an electric utility license shall be accepted for filing in accordance with section 269-D only when made in response to the written request of the commission for the submission of proposals.

§269-D Public hearing; notice. An application or proposal for an electric utility license shall be processed as follows:

(1) After the application or proposal and required fee are received by the commission and within a time frame established by rule, the commission shall notify an applicant in writing of the acceptance or nonacceptance for filing of an application or proposal for issuance of an electric utility license required by this part;

(2) After the issuance of a notice of acceptance for filing and within a time frame established by rule, the commission shall hold a public hearing on the application or proposal to afford interested persons the opportunity to submit data, views, or arguments, orally or in writing. Notice thereof shall be given to the council and mayor of the county in which the proposed service area is located. The commission shall also give public notice of the application and hearing at least once in each of two successive weeks in the county in which the proposed service area is located. The last notice shall be given at least fifteen days prior to the date of the hearing;

(3) After holding a public hearing, the commission shall approve the application or proposal in whole or in part, with or without conditions or modifications, or shall deny the application or proposal, with reasons for denial sent in writing to the applicant. If the commission does not take final action after the issuance of a notice of acceptance for filing and within a time frame established by rule, the application or proposal shall be deemed denied; and

(4) The time limit for final action may be extended, on the commission's approval of the applicant's request and justification in writing for an extension of time to the commission at least two weeks in advance of the requested effective date of the extension, or by mutual agreement.

§269-E Issuance of license; criteria; content. (a) The commission may issue an electric utility license to construct and operate facilities for an electrical system upon the terms and conditions provided in this part.

(b) The commission, after a public hearing as provided in this part, shall issue an electric utility license to the applicant when the commission is convinced that it is in the public interest to do so. In determining whether an electric utility license shall be issued, the commission shall take into consideration, among other things:

(1) Content of the application or proposal;

(2) Public need for the proposed service;

(3) Ability of the applicant to offer safe, adequate, and reliable service at a reasonable cost to ratepayers;

(4) Suitability of the applicant;

(5) Financial responsibility of the applicant;

(6) Technical and operational ability of the applicant to perform efficiently the service for which license is requested;

(7) Any objections arising from the public hearing or elsewhere; and

(8) Any other matters as the commission deems appropriate in the circumstances.

(1) Geography and topography of the proposed service area; and

(2) Present, planned, and potential expansion in facilities or services of the applicant's proposed electrical system and existing electrical systems.

(d) In issuing an electric utility license under this part, the commission shall not be restricted to approving or disapproving the application or proposal but may issue it for only partial exercise of the privilege sought or may attach to the exercise of the right granted by the license terms, limitations, and conditions that the commission deems to be in the public interest. The electric utility license shall be nonexclusive, shall include a description of the service area in which the electrical system is to be constructed, extended, or operated and the approximate date on which the service is to commence and shall authorize the electric utility to provide service for a term of fifteen years."

SECTION 3. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1999
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII