STAND. COM. REP. NO. 1447

Honolulu, Hawaii

RE:    S.C.R. No. 37

       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 Ways and Means, to which was referred S.C.R. No. 37, S.D. 1, entitled:

"SENATE CONCURRENT RESOLUTION REQUESTING THE PUBLIC UTILITIES COMMISSION TO CONSIDER WHETHER STRANDED COSTS ARE A SIGNIFICANT FACTOR IN THE ELECTRIC UTILITIES' FAILURE TO RETIRE OLD, OIL-FIRED GENERATION PLANTS AND ANY APPROPRIATE MEASURES THAT WOULD ENCOURAGE ELECTRIC UTILITIES TO RETIRE OLD, OIL-FIRED GENERATION PLANTS AND THE POTENTIAL IMPACT THIS WOULD HAVE ON RATEPAYERS,"

begs leave to report as follows:

     The purpose and intent of this measure is to request the Public Utilities Commission to consider the issue of the retirement of old, oil-fired generation plants by electric utilities.

     More specifically, this measure requests the Public Utilities Commission to consider:

(1)  Whether stranded costs are a significant factor in the failure by electric utilities to retire their old, oil-fired generation plants; and

(2)  Any appropriate measures that would encourage electric utilities to retire their old, oil-fired generation plants and the potential impact that this would have on ratepayers.

     Your Committee received written comments on this measure from the Public Utilities Commission.

     Your Committee finds that the State must find environmentally friendly alternatives to fossil fuel electric power generation.  However, the early retirement of a power plant for the purpose of switching the power source from fossil fuels to renewable fuels potentially creates a stranded cost for electric utilities, which is a cost that usually cannot be recouped.

     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 concurs with the intent and purpose of S.C.R. No. 37, S.D. 1, and recommends its adoption.

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

____________________________

DAVID Y. IGE, Chair