STAND. COM. REP. NO. 2803

Honolulu, Hawaii

RE:    S.B. No. 2809

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2809, S.D. 1, entitled:

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

begs leave to report as follows:

     The purpose and intent of this measure is to align statutory language regarding utility ratemaking with widely accepted utility ratemaking principles and ratemaking practices already applied in Hawaii.

     Specifically, the measure requires that, in order for a utility to qualify to earn a fair return on utility property, the property must be deemed by the Public Utilities Commission as being both "used" and "useful," rather than one or the other.

     Your Committee received written comments in support of this measure from the Department of Business, Economic Development, and Tourism, the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs, and the Public Utilities Commission.  Written comments in opposition were received from the Hawaiian Electric Company, Inc.

     Your Committee finds that this measure will align statutory language with interpretations of the "used and useful" standard made by the Hawaii Supreme Court and Public Utilities Commission.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2809, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair