SB897 SD2

Section 1. The legislature finds that it is imperative to enable the development of affordable clean energy resources for the benefit of utility customers in the State. Many existing generating units in Hawaii will need to be retired in the next few years due to obsolescence and environmental permitting requirements. The impending retirement of these units makes it urgent to obtain replacement resources, without which the reliability of electrical supplies in the State will be at risk. In addition, continued reliance on these aging units, even if feasible, would result in increased costs for utility customers and continued reliance on fossil fuels, contrary to the State's policy to transition to renewable, non-carbon-emitting resources.

The procurement of replacement clean energy resources by a certain investor-owned electric utility and its electric utility subsidiaries is ongoing in its stage 3 request for proposals and further anticipated in its first integrated grid planning request for proposals. These requests for proposals implement energy plans that are developed through extensive engagement with local stakeholders and communities and reviewed and approved by the public utilities commission. The legislature finds that successful procurement of clean energy resources is in the public interest and necessary to avoid significant detrimental reliability and affordability impacts to electric utility customers.

The legislature also finds that the development of clean energy resources is essential to achieve the State's goals of one hundred per cent net electricity sales from renewable sources by 2045, a zero emissions economy by 2045, and greater energy security and energy diversification, as established by the Hawaii State Planning Act and existing public utility laws.

Accordingly, the purpose of this Act is to:

(1) Establish the wildfire liability trust fund to be administered by the Hawaii electricity reliability administrator;

(2) Require the public utilities commission to:

(A) Contract for a Hawaii electricity reliability administrator; and

(B) Require payment of the Hawaii electricity reliability surcharge.

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

"Part . wildfire liability trust fund

§269-A Definitions. As used in this part:

"Administrator" means the Hawaii electricity reliability administrator established under part IX.

"Catastrophic wildfire" means a wildfire occurring in the State on or after the operation date that destroys more than five hundred commercial structures or residential structures designed for habitation.

"Commission" means the public utilities commission.

"Contributor" means a public utility that satisfies all requirements to participate in the wildfire liability trust fund.

"Covered catastrophic wildfire" means a catastrophic wildfire that may have been caused, or whose severity may have been increased, by a contributor's facilities or actions.

"Electric utility" means a public utility that exists for the furnishing of electrical power.

"Executive director" means the executive director of the wildfire liability trust fund under the administrator.

"Fund" means the wildfire liability trust fund established pursuant to section 269-B.

"Government entity" means any government agency, department, division, subdivision, unit, component, bureau, commission, office, board, or instrumentality of any kind, including federal, state, and municipal entities.

"Investor-owned utility" means a public utility that is owned by shareholders and overseen by a board of directors elected by shareholders.

"Low carbon fuel" means fuel with a lower amount of lifecycle greenhouse gas emissions than that of fossil fuels.

"Operation date" means the first date for contributors to elect to participate in the wildfire liability trust fund pursuant to section 269-C(a) and any rules adopted pursuant to this part.

"Property insurer" means a person or entity that indemnifies another by a contract of insurance for loss of or damage to real or personal property in the State.

"Property owner" means an owner of real property in the State.

"Qualified claimant" means any property owner, property insurer, or tenant who alleges any qualifying damages.

"Qualifying action" means a civil action by a qualifying claimant to recover qualifying damages.

"Qualifying damages" means damages arising out of the loss of or damage to real or personal property from a covered catastrophic wildfire.

"Tenant" means a person or entity lawfully entitled to occupy real property in the State that the person or entity does not own.

"Wildfire risk mitigation capital expenditures" means investments required by the administrator consistent with a wildfire risk mitigation plan.

"Wildfire risk mitigation plan" means a plan, which may include a natural hazard mitigation report, in which a public utility addresses how the public utility will mitigate the risk to its equipment in the event of a wildfire.

§269-B Wildfire liability trust fund; establishment; executive director. (a) There is established outside the state treasury a wildfire liability trust fund and any accounts thereunder to carry out the purposes of this part. All moneys in the fund shall be administered by the administrator and expended exclusively for the uses and purposes set forth in this section. The fund shall not be subject to chapter 431. Any moneys in the fund not required for immediate use shall be invested by the executive director for the benefit of the fund or wildfire risk mitigation capital expenditures for the benefit of ratepayer safety; provided that no assets of the fund shall be transferred to the general fund of the State or to any other fund of the State or otherwise encumbered or used for any purpose other than those specified for the fund.

(b) The governor shall appoint an advisor to the wildfire liability trust fund, who shall be exempt from chapter 76, and shall fix the executive director's compensation.

(c) The executive director shall be responsible for the day-to-day operations and management of the fund and shall perform all functions necessary to implement this part, including entering into contracts and other obligations related to the operation, management, and administration of the fund, pursuant to the terms of the contract governing the administrator. The executive director may be removed only by the terms of the contract establishing the administrator.

§269-C Eligibility for participation as a contributor; contributions. (a) To be eligible to participate as a contributor, a person or entity shall:

(1) Be a public utility that has a wildfire risk mitigation plan that has been approved or accepted by the commission;

(2) Notify the executive director, in the year before the person or entity becomes a contributor, that it intends to participate in the fund; and

(3) Agree to make an initial contribution, the payment of which shall be a binding commitment enforceable by the executive director.

(b) The initial contributions from investor-owned electric utilities collectively shall be:

(1) $1,000,000,000 plus interest as provided in subsection (c) for amounts not securitized, which amounts shall be recovered from its customers in nonbypassable rates; and

(2) $500,000,000, which amount shall be funded by shareholders of those investor-owned electric utilities and used exclusively for the payment of salaries of the executive director and of all other persons retained by the executive director to implement this part, with any funds remaining as of 2035 to be transferred to the fund.

(c) An investor-owned electric utility may elect to make the initial contribution set forth in subsection (b)(1), to the degree not paid for through securitization, over a period not to exceed five years; provided that interest shall be added to any amounts paid after the first year, at an interest rate equal to the investor-owned electric utility's incremental cost of long‑term debt, with the interest recovered from customers in rates.

(d) The executive director shall determine the initial contributions from other public utilities based on an actuarial assessment of the risk of potential payments by the fund resulting from covered catastrophic wildfires created by a public utility.

(e) The executive director may propose supplemental contributions to the fund by participating public utilities or other entities involved in transmitting or distributing electric energy for sale to the public.

(f) If a contributor fails to pay any part of an initial contribution or a supplemental contribution that the contributor agreed to make, or elects not to agree to make a supplemental contribution, that contributor shall no longer be a contributor as of the date on which the payment was due, and the contributor shall not receive any refund of payments previously made; provided that a contributor that elects not to make a supplemental contribution shall be a contributor as to any catastrophic wildfire that occurs before the election date. After failing to, or electing not to, make a payment, a public utility may rejoin the fund as a contributor on a prospective basis if the public utility makes owed payments with interest.

(g) The executive director shall adopt rules pursuant to chapter 91 regarding the timing of initial and supplemental contributions, which may include upfront, annual, and retrospective payments, including payments made after a wildfire occurs.

(h) Initial and supplemental contributions of investor‑owned electric utilities shall constitute wildfire recovery costs.

§269-D Determination of a covered catastrophic wildfire. The executive director shall adopt rules pursuant to chapter 91 regarding how to determine whether a wildfire is a covered catastrophic wildfire. The rules shall include a requirement that a wildfire shall be determined to be a covered catastrophic wildfire if a party makes non-frivolous allegations in a legal action that a contributor's facilities caused or contributed to the severity of a catastrophic wildfire.

§269-E Replenishment of the wildfire liability trust fund. (a) If the fund has made payments with respect to a covered catastrophic wildfire and after resolution of substantially all third-party liability claims that were brought or could be brought against contributors arising from that covered catastrophic wildfire, each contributor whose facilities were implicated in the covered catastrophic wildfire shall initiate a proceeding before the commission to review the prudence of the public utility's conduct leading to the catastrophic wildfire.

(b) The commission shall determine whether the contributor acted prudently by:

(1) Considering only acts that may have caused the occurrence or contributed to the severity of the covered catastrophic wildfire;

(2) Evaluating the contributor's actions in the context of its overall systems, processes, and programs;

(3) Considering the recommendations of the executive director concerning the priority of wildfire risk mitigation capital expenditures, and the timeliness of contributor response; and

(4) Preventing a finding that any contributor action was prudent if it meets the standard of gross negligence.

(c) If the commission determines that imprudent conduct by the contributor caused the occurrence or contributed to the severity of a covered catastrophic wildfire, the commission shall determine whether to order the contributor to replenish the fund in whole or in part for payments from the fund in connection with the catastrophic wildfire. In determining the amount of replenishment, if any, the commission shall consider the extent and severity of the contributor's imprudence and factors within and beyond the contributor's control that may have led to or exacerbated the costs from the covered catastrophic wildfire, including but not limited to humidity, temperature, winds, fuel, merged wildfires with independent ignitions, third-party actions that affected the spread of the wildfire, and fire suppression activities.

(d) For wildfire risk mitigation capital expenditures made by the executive director, the commission may determine whether to order the contributor to replenish the fund in whole or in part for payments from the fund in connection with the wildfire risk mitigation capital expenditures.

(e) Over any three-year period, the commission shall not order the contributor to reimburse the fund in an amount that exceeds twenty per cent of the contributor's transmission and distribution equity rate base.

(f) A contributor shall not recover in regulated rates any amount that the commission orders the contributor to pay to the fund as a replenishment under this section.

§269-F Claims for payment by qualified claimants; presentment requirement; wildfire risk mitigation capital expenditures by executive director. (a) The executive director shall adopt rules pursuant to chapter 91 to create a process:

(1) Through which a qualified claimant that is not a government entity may submit to the fund a claim for payment of economic damages arising out of property damage resulting from a covered catastrophic wildfire, including a deadline to submit claims; and

(2) By which the executive director can use the fund to make wildfire risk mitigation capital expenditures.

(b) A qualified claimant shall file a claim for payment for economic damages arising out of the loss of or damage to real or personal property from a covered catastrophic wildfire pursuant to this section. The claim of a qualified claimant that is not a property insurer shall be limited to uninsured economic damages. A qualified claimant shall not file or maintain a civil action against a contributor unless and until the qualified claimant rejects an offer of settlement from the fund. A qualified claimant who fails to file a claim by the deadline established by the executive director pursuant to rule shall be ineligible to receive payment from the fund and shall be barred from instituting or maintaining any qualifying action against a contributor.

(c) The executive director shall make an offer to settle each claim submitted, which the claimant may accept or reject. In determining the amount of each offer, the executive director shall consider, at a minimum:

(1) The economic damages sought by all qualified claimants in the aggregate;

(2) The amount available to the fund relative to the amount under paragraph (1);

(3) The weight of any evidence of contributor liability; and

(4) The weight of any evidence of involvement of non‑contributor third-parties.

(d) If the amount available to the fund, including assets held by the fund and all payments contributors are obligated to make to the fund, is less than fifty per cent of the aggregate liability limit as calculated in section 269-H, the fund shall make payment only to contributors pursuant to section 269-G.

(e) Wildfire risk mitigation capital expenditures undertaken by the executive director shall be chosen to reduce urgent risks that substantially increase the likelihood or magnitude of qualifying damages in the event of a covered catastrophic wildfire; provided that the expenditures shall be approved by the commission and shall not exceed a level to prevent claims for payment before the fund can be replenished.

§269-G Claims for payment by contributors; rules. The executive director shall adopt rules pursuant to chapter 91 to create a process through which a contributor may obtain payment from the fund to satisfy settled or finally adjudicated claims for recovery of qualifying damages after exhausting the contributor's available insurance. The rules shall establish the standard for approving any settlement. To the extent that the fund lacks sufficient funds to make a payment to a participating utility when sought, the fund shall make the payment upon receipt of contributions that contributors are obligated to make to the fund under payment schedules.

§269-H Limitation on aggregate liability. (a) The aggregate liability of all contributors for qualifying damages arising from a covered catastrophic wildfire, including economic and non-economic damages, shall not exceed the lesser of:

(1) $500,000,000; or

(2) The average assessed value of commercial structures and residential structures designed for habitation in the county in which the covered catastrophic wildfire occurred, multiplied by the number of commercial structures or residential structures designed for habitation that were destroyed, plus the value of personal property lost; or

(3) The aggregate assessed replacement value of commercial structures and residential structures designed for habitation in the county in which the covered catastrophic wildfire occurred, plus the value of personal property lost.

(b) The following amounts shall be added to determine whether the aggregate liability limit has been reached:

(1) Payments from the fund pursuant to section 269-F; and

(2) Payments by a contributor in connection with any settlement or judgment on a claim for qualifying damages.

(c) All civil actions arising out of a catastrophic wildfire shall be brought in the circuit in which the catastrophic wildfire occurred. The court shall adopt procedures to equitably apply the limit set forth in subsection (a) to all filed civil claims. All settlements or judgments for claims for qualifying damages shall be subject to approval by the court. The court shall not approve any settlement or judgment that would cause the aggregate liability of contributors to exceed the aggregate liability limit.

(d) A court shall consolidate cases arising from a covered catastrophic wildfire. Any circuit court that is not the consolidating court shall transfer any civil case to facilitate the consolidation.

§269-I Limitations on claims. (a) No qualifying action may be instituted or maintained by a qualified claimant against contributors or their affiliates, employees, agents, or insurers if the qualified claimant accepts an offer under section 269-F; provided that the rights of a property insurer to bring an action as a subrogee of its policyholder shall not be affected by a property owner's or tenant's acceptance of an offer under section 269-F and the subrogation rights shall be affected only if the property insurer elects to accept an offer under section 269-F.

(b) No suit, claim, arbitration, or other civil legal action for indemnity or contribution for amounts paid, or that may be paid, as a result of a covered catastrophic wildfire, shall be instituted or maintained by any persons or entities against contributors or their affiliates, employees, agents, or insurers for damages arising out of the loss of or damage to real or personal property from a covered catastrophic wildfire.

§269-J Several liability. Any law to the contrary notwithstanding, joint and several liability shall not apply to any qualifying damages; provided that, in any action to recover qualifying damages from a person or entity, the person or entity may claim, in defense, apportionment of fault to any other person or entity regardless of whether that person or entity is a party to the action.

§269-K Reporting; refunds authorized by legislature. (a) The executive director shall submit to the legislature an annual report regarding the fund no later than ninety days before the beginning of each regular session through 2034. The annual report submitted by the executive director shall include an update on the activities of the fund.

(b) No later than ninety days before the regular session of 2035, the executive director shall submit a report to the legislature regarding the financial status and resources of the fund relative to the then-current assessment of actuarial risk of a catastrophic wildfire.

(c) Based on the report in subsection (b), the legislature may determine, based on recommendation by the executive director, that the fund is overfunded and direct the executive director to refund contributions, in whole or in part. Any payments made to the fund that were recovered in regulated rates from customers, and any investment earnings associated with those payments, shall be refunded first.

§269-L Admissibility of evidence. Any findings made or evidence submitted for purposes of proceedings under sections 269-D, 269-F, and 269-G shall be subject to the limits of admissibility under rule 408, Hawaii rules of evidence."

SECTION 3. Section 76-16, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The civil service to which this chapter applies shall comprise all positions in the State now existing or hereafter established and embrace all personal services performed for the State, except the following:

(1) Commissioned and enlisted personnel of the Hawaii National Guard and positions in the Hawaii National Guard that are required by state or federal laws or regulations or orders of the National Guard to be filled from those commissioned or enlisted personnel;

(2) Positions filled by persons employed by contract where the director of human resources development has certified that the service is special or unique or is essential to the public interest and that, because of circumstances surrounding its fulfillment, personnel to perform the service cannot be obtained through normal civil service recruitment procedures. Any contract may be for any period not exceeding one year;

(3) Positions that must be filled without delay to comply with a court order or decree if the director determines that recruitment through normal recruitment civil service procedures would result in delay or noncompliance, such as the Felix-Cayetano consent decree;

(4) Positions filled by the legislature or by either house or any committee thereof;

(5) Employees in the office of the governor and office of the lieutenant governor, and household employees at Washington Place;

(6) Positions filled by popular vote;

(7) Department heads, officers, and members of any board, commission, or other state agency whose appointments are made by the governor or are required by law to be confirmed by the senate;

(8) Judges, referees, receivers, masters, jurors, notaries public, land court examiners, court commissioners, and attorneys appointed by a state court for a special temporary service;

(9) One bailiff for the chief justice of the supreme court who shall have the powers and duties of a court officer and bailiff under section 606-14; one secretary or clerk for each justice of the supreme court, each judge of the intermediate appellate court, and each judge of the circuit court; one secretary for the judicial council; one deputy administrative director of the courts; three law clerks for the chief justice of the supreme court, two law clerks for each associate justice of the supreme court and each judge of the intermediate appellate court, one law clerk for each judge of the circuit court, two additional law clerks for the civil administrative judge of the circuit court of the first circuit, two additional law clerks for the criminal administrative judge of the circuit court of the first circuit, one additional law clerk for the senior judge of the family court of the first circuit, two additional law clerks for the civil motions judge of the circuit court of the first circuit, two additional law clerks for the criminal motions judge of the circuit court of the first circuit, and two law clerks for the administrative judge of the district court of the first circuit; and one private secretary for the administrative director of the courts, the deputy administrative director of the courts, each department head, each deputy or first assistant, and each additional deputy, or assistant deputy, or assistant defined in paragraph (16);

(10) First deputy and deputy attorneys general, the administrative services manager of the department of the attorney general, one secretary for the administrative services manager, an administrator and any support staff for the criminal and juvenile justice resources coordination functions, and law clerks;

(11) (A) Teachers, principals, vice-principals, complex area superintendents, deputy and assistant superintendents, other certificated personnel, and no more than twenty noncertificated administrative, professional, and technical personnel not engaged in instructional work;

(B) Effective July 1, 2003, teaching assistants, educational assistants, bilingual or bicultural school-home assistants, school psychologists, psychological examiners, speech pathologists, athletic health care trainers, alternative school work study assistants, alternative school educational or supportive services specialists, alternative school project coordinators, and communications aides in the department of education;

(D) Members of the faculty of the University of Hawaii, including research workers, extension agents, personnel engaged in instructional work, and administrative, professional, and technical personnel of the university;

(12) Employees engaged in special, research, or demonstration projects approved by the governor;

(13) (A) Positions filled by inmates, patients of state institutions, and persons with severe physical or mental disabilities participating in the work experience training programs;

(B) Positions filled with students in accordance with guidelines for established state employment programs; and

(C) Positions that provide work experience training or temporary public service employment that are filled by persons entering the workforce or persons transitioning into other careers under programs such as the federal Workforce Investment Act of 1998, as amended, or the Senior Community Service Employment Program of the Employment and Training Administration of the United States Department of Labor, or under other similar state programs;

(14) A custodian or guide at Iolani Palace, the Royal Mausoleum, and Hulihee Palace;

(15) Positions filled by persons employed on a fee, contract, or piecework basis, who may lawfully perform their duties concurrently with their private business or profession or other private employment and whose duties require only a portion of their time, if it is impracticable to ascertain or anticipate the portion of time to be devoted to the service of the State;

(16) Positions of first deputies or first assistants of each department head appointed under or in the manner provided in section 6, article V, of the Hawaii State Constitution; three additional deputies or assistants either in charge of the highways, harbors, and airports divisions or other functions within the department of transportation as may be assigned by the director of transportation, with the approval of the governor; one additional deputy in the department of human services either in charge of welfare or other functions within the department as may be assigned by the director of human services; four additional deputies in the department of health, each in charge of one of the following: behavioral health, environmental health, hospitals, and health resources administration, including other functions within the department as may be assigned by the director of health, with the approval of the governor; two additional deputies in charge of the law enforcement programs, administration, or other functions within the department of law enforcement as may be assigned by the director of law enforcement, with the approval of the governor; three additional deputies each in charge of the correctional institutions, rehabilitation services and programs, and administration or other functions within the department of corrections and rehabilitation as may be assigned by the director of corrections and rehabilitation, with the approval of the governor; two administrative assistants to the state librarian; and an administrative assistant to the superintendent of education;

(17) Positions specifically exempted from this part by any other law; provided that:

(A) Any exemption created after July 1, 2014, shall expire three years after its enactment unless affirmatively extended by an act of the legislature; and

(B) All of the positions defined by paragraph (9) shall be included in the position classification plan;

(18) Positions in the state foster grandparent program and positions for temporary employment of senior citizens in occupations in which there is a severe personnel shortage or in special projects;

(19) Household employees at the official residence of the president of the University of Hawaii;

(20) Employees in the department of education engaged in the supervision of students during meal periods in the distribution, collection, and counting of meal tickets, and in the cleaning of classrooms after school hours on a less than half-time basis;

(21) Employees hired under the tenant hire program of the Hawaii public housing authority; provided that no more than twenty-six per cent of the authority's workforce in any housing project maintained or operated by the authority shall be hired under the tenant hire program;

(22) Positions of the federally funded expanded food and nutrition program of the University of Hawaii that require the hiring of nutrition program assistants who live in the areas they serve;

(23) Positions filled by persons with severe disabilities who are certified by the state vocational rehabilitation office that they are able to perform safely the duties of the positions;

(24) The sheriff;

(25) A gender and other fairness coordinator hired by the judiciary;

(26) Positions in the Hawaii National Guard youth and adult education programs;

(27) In the Hawaii state energy office in the department of business, economic development, and tourism, all energy program managers, energy program specialists, energy program assistants, and energy analysts;

(28) Administrative appeals hearing officers in the department of human services;

(29) In the Med-QUEST division of the department of human services, the division administrator, finance officer, health care services branch administrator, medical director, and clinical standards administrator;

(30) In the director's office of the department of human services, the enterprise officer, information security and privacy compliance officer, security and privacy compliance engineer, security and privacy compliance analyst, information technology implementation manager, assistant information technology implementation manager, resource manager, community or project development director, policy director, special assistant to the director, and limited English proficiency project manager or coordinator;

(31) The Alzheimer's disease and related dementia services coordinator in the executive office on aging;

(32) In the Hawaii emergency management agency, the executive officer, public information officer, civil defense administrative officer, branch chiefs, and emergency operations center state warning point personnel; provided that for state warning point personnel, the director shall determine that recruitment through normal civil service recruitment procedures would result in delay or noncompliance;

(33) The executive director and seven full-time administrative positions of the school facilities authority;

(34) Positions in the Mauna Kea stewardship and oversight authority;

(35) In the office of homeland security of the department of law enforcement, the statewide interoperable communications coordinator;

(36) In the social services division of the department of human services, the business technology analyst;

(37) The executive director and staff of the 911 board;

[[](38)[]]Senior software developers in the department of taxation;

[[](39)[]]In the department of law enforcement, five Commission on Accreditation for Law Enforcement Agencies, Inc., coordinator positions;

[[](40)[]]The state fire marshal; [~~and~~

[](41)[]]The administrator for the law enforcement standards board[.]; and

(42) The advisor of the wildfire liability trust fund.

The director shall determine the applicability of this section to specific positions.

Nothing in this section shall be deemed to affect the civil service status of any incumbent as it existed on July 1, 1955."

SECTION 4. Section 269-146, Hawaii Revised Statutes, is amended as follows:

1. By amending its title and subsection (a) to read:

"[[]§269-146[]] Hawaii electricity reliability surcharge; authorization; cost recovery. (a) The commission [~~may~~] shall require, by rule or order, that all utilities, persons, businesses, or entities connecting to the Hawaii electric system, or any other user, owner, or operator of any electric element that is a part of an interconnection on the Hawaii electric system shall pay a surcharge that shall be collected by Hawaii's electric utilities[.] on behalf of the Hawaii electricity reliability administrator. The commission shall not contract or otherwise delegate the ability to create the Hawaii electricity reliability surcharge under this section to any other entity. This surcharge amount shall be known as the Hawaii electricity reliability surcharge."

2. By amending subsections (d) and (e) to read:

"(d) The commission may allow an electric utility, on behalf of the Hawaii electricity reliability administrator, to recover appropriate and reasonable costs under the Hawaii electricity reliability surcharge for any interconnection to the Hawaii electric system, including interconnection studies and other analysis associated with studying the impact or necessary infrastructure and operational requirements needed to reliably interconnect a generator, as well as from electric utility customers through a surcharge or assessment subject to review and approval by the commission under section 269-16.

(e) Nothing in this section shall create or be construed to cause amounts collected through the Hawaii electricity reliability surcharge to be considered state or public moneys subject to appropriation by the legislature or be required to be deposited into the state treasury[.], nor shall any amounts collected be considered a utility's property available to satisfy an obligation of that utility."

SECTION 5. Section 269-147, Hawaii Revised Statutes, is amended to read as follows:

"[[]§269-147[]] Hawaii electricity reliability administrator; contracting. (a) The commission [~~may~~] shall contract for the performance of its functions under this part with a person, business, or organization, except for a public utility as defined under this chapter, that will serve as the Hawaii electricity reliability administrator provided for under this part; provided that the commission shall not contract for the performance of its functions under sections 269-142(a) and (b) and 269-146.

(b) Any entity contracted by the commission to serve as the Hawaii electricity reliability administrator under this section shall be selected by the commission in accordance with state law, including chapter 103D. The Hawaii electricity reliability administrator, [~~if so~~] when enabled by the commission through mutual agreement under the laws of the State of Hawaii, shall hold the powers and rights delegated by the commission under this part for the term of the executed contract; provided that the commission shall retain full authority over the Hawaii electricity reliability administrator and the exclusive authority to carry out functions and responsibilities enumerated under sections 269-142(a) and (b) and 269-146."

SECTION 6. 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 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on May 13, 2040.

THE SENATE	S.B. NO.	897
THIRTY-THIRD LEGISLATURE, 2025		S.D. 2
STATE OF HAWAII