SB897 SD3

part i

SECTION 1. 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:

"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.

"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.

"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 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 that are necessary to carry out the purposes of this part. All moneys in the fund shall be administered by the executive director 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; 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; provided further that the fund shall not be considered the property or asset of any of its contributors for purposes of a bankruptcy reorganization or other insolvency proceeding.

(b) The wildfire liability trust fund shall be placed within the department of commerce and consumer affairs for administrative purposes.

(c) The governor shall appoint, subject to confirmation by the senate, an executive director of the wildfire liability trust fund, who shall be exempt from chapter 76. The governor shall fix the executive director's compensation. The executive director shall serve for a four-year term and may only be removed by the governor.

(d) 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.

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

(1) Have a wildfire risk mitigation plan that has been approved by the commission and adhered to by the utility;

(2) Notify the executive director, in the year before becoming a contributor, that the utility 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 shall be $1,000,000,000 collectively, including:

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

(2) $ , which shall be funded by shareholders of the 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 pursuant to chapter A, 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 that participating public utilities or other entities involved in transmitting or distributing electric energy for sale to the public make supplemental contributions to the fund.

(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 all 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 made by 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) Finding that any contributor's action was not prudent if the action 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) 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.

(e) 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. (a) The executive director shall adopt rules pursuant to chapter 91 to create a process by 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.

(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 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.

(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 the 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.

§269-G Claims for payment by contributors; rules. The executive director shall adopt rules pursuant to chapter 91 to create a process by 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 may 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. Notwithstanding any law to the contrary, 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 a report on the activities of the fund to the legislature no later than ninety days prior to the convening of each regular session through the regular session of 2034.

(b) No later than ninety days prior to the convening of the regular session of 2035, the executive director shall submit a comprehensive 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 submitted under 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 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§269- Electric cooperative cost recovery for wildfire mitigation, repair, and restoration costs. (a) An electric cooperative may recover commission-approved wildfire mitigation, repair, and restoration costs through an automatic rate adjustment clause or other tariff recovery mechanism to be established by the commission.

(b) For purposes of this section, "electric cooperative" means an electric utility that satisfies the requirements under section 269-31(c)."

PART II

SECTION 3. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER A

SECURITIZATION

§A-1 Definitions. As used in this chapter, unless the context otherwise requires:

"Ancillary agreement" means a bond insurance policy, letter of credit, reserve account, surety bond, swap arrangement, hedging arrangement, liquidity or credit support arrangement, or other similar agreement or arrangement entered into in connection with the issuance of bonds that is designed to promote the credit quality and marketability of the bonds or to mitigate the risk of an increase in interest rates.

"Assignee" means a legally recognized entity to which an electric utility assigns, sells, or transfers, other than as security, all or a portion of the electric utility's interest in or right to wildfire recovery property. "Assignee" includes a corporation, limited liability company, general partnership or limited partnership, public authority, trust, financing entity, or any other legal entity to which an assignee assigns, sells, or transfers, other than as security, its interest in or right to wildfire recovery property.

"Bond" means any bond, note, certificate of participation or beneficial interest, or other evidence of indebtedness or ownership that is issued by the financing entity under a financing order, the proceeds of which are used directly or indirectly to recover, finance, or refinance financing costs of any wildfire recovery costs, and that are directly or indirectly secured by or payable from wildfire recovery property.

"Commission" means the public utilities commission.

"Consumer" means any individual, governmental body, trust, business entity, or nonprofit organization that consumes electricity that has been transmitted or distributed by means of electric transmission or distribution facilities, whether those electric transmission or distribution facilities are owned by the consumer, the electric utility, or any other party.

"Electric cooperative" means an electric utility that satisfies the requirements under section 269-31(c).

"Electric cooperative wildfire claims costs" means costs incurred by an electric cooperative to resolve third-party liability claims arising from any wildfire occurring in the State that are not covered by insurance and that the commission finds to be just and reasonable. "Electric cooperative wildfire claims costs" do not include costs incurred by an investor-owned electric utility.

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

"Executive officer" means any person who performs policy making functions and is employed by an electric utility subject to the approval of the board of directors, and includes the president, secretary, treasurer, and any vice president in charge of a principal business unit, division, or function of the electric utility.

"Financing costs" means the costs to issue, service, repay, or refinance bonds, whether incurred or paid upon issuance of the bonds or over the life of the bonds, if they are approved for recovery by the commission in a financing order. "Financing costs" may include any of the following:

(1) Principal, interest, and redemption premiums that are payable on bonds;

(2) A payment required under an ancillary agreement;

(3) An amount required to fund or replenish reserve accounts or other accounts established under an indenture, ancillary agreement, or other financing document related to the bonds;

(4) Taxes, franchise fees, or license fees imposed on a financing entity as a result of the issuance of the financing order; the assignment, sale, or transfer of any wildfire recovery property; or the sale of the bonds, or imposed on the wildfire recovery charges, or otherwise resulting from the collection of the wildfire recovery charge, in any such case whether paid, payable, or accrued;

(5) Costs related to issuing and servicing bonds or the application for a financing order, including without limitation servicing fees and expenses, trustee fees and expenses, legal fees and expenses, accounting fees, administrative fees, underwriting and placement fees, financial advisory fees, original issue discount, capitalized interest, rating agency fees, and any other related costs that are approved for recovery in the financing order; and

(6) Other costs as specifically authorized by a financing order.

"Financing entity" means an electric utility or an entity to which an electric utility or an affiliate of an electric utility sells, assigns, or pledges all or a portion of the electric utility's interest in wildfire recovery property, including an affiliate of the electric utility or any unaffiliated entity, in each case as approved by the commission in a financing order.

Subject to section A-6(c), an entity to which an electric utility sells, assigns, or pledges all or a portion of the electric utility's interest in wildfire recovery property may include any governmental entity that is able to issue bonds that are exempt from federal tax pursuant to section 103 of the Internal Revenue Code of 1986, as amended, including the State or a political subdivision thereof or any department, agency, or instrumentality of the State or political subdivision; provided that the bonds issued shall not constitute a general obligation of the State or any political subdivision thereof or any department, agency, or instrumentality of the State or political subdivision and shall not constitute a pledge of the full faith and credit of the entity or of the State or any political subdivision thereof, but shall be payable solely from the funds provided under this chapter.

"Financing order" means an order of the commission under this chapter that has become final and no longer subject to appeal as provided by law and that authorizes the issuance of bonds and the imposition, adjustment from time to time, and collection of wildfire recovery charges, and that shall include a procedure to require the expeditious approval by the commission of periodic adjustments to wildfire recovery charges and to any associated fixed recovery tax amounts included in that financing order to ensure recovery of all wildfire recovery costs and the costs associated with the proposed recovery, financing, or refinancing thereof, including the costs of servicing and retiring the bonds contemplated by the financing order.

"Financing party" means any holder of the bonds; any party to or beneficiary of an ancillary agreement; and any trustee, collateral agent, or other person acting for the benefit of any of the foregoing.

"Fixed recovery tax amounts" means those nonbypassable rates and other charges, including but not limited to distribution, connection, disconnection, and termination rates and charges, that are needed to recover federal and state taxes associated with wildfire recovery charges authorized by the commission in a financing order, but are not approved as financing costs financed from proceeds of bonds.

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

"Public utility" has the same meaning as defined in section 269-1.

"True-up adjustment" means a formulaic adjustment to the wildfire recovery charges as they appear on consumer bills that is necessary to correct for any overcollection or undercollection of the wildfire recovery charges authorized by a financing order and to otherwise ensure the timely and complete payment and recovery of wildfire recovery costs over the authorized repayment term.

"Wildfire recovery charges" means the nonbypassable charges, including but not limited to distribution, connection, disconnection, and termination rates and charges, that are authorized by section A-2 and in a financing order authorized under this chapter to be imposed on and collected from all existing and future consumers of a financing entity or any successor to recover principal, interest, and other financing costs relating to the bonds.

"Wildfire recovery costs" means an investor-owned electric utility's contributions to the wildfire liability trust fund, as set forth in part of chapter 269, and electric cooperative wildfire claims costs.

"Wildfire liability trust fund" means the wildfire recovery fund established by part of chapter 269.

"Wildfire recovery property" means the property right created pursuant to this chapter, including without limitation the right, title, and interest of the electric utility, financing entity, or its assignee:

(1) In and to the wildfire recovery charge established pursuant to a financing order, including the right to impose, bill, collect, and receive such wildfire recovery charges under the financing order and all rights to obtain adjustments to the wildfire recovery charge in accordance with section B-3 and the financing order; and

(2) To be paid the amount that is determined in a financing order to be the amount that the electric utility or its assignee is lawfully entitled to receive pursuant to this chapter and the proceeds thereof, and in and to all revenues, collections, claims, payments, moneys, or proceeds of, or arising from, the wildfire recovery charge that is the subject of a financing order.

"Wildfire recovery property" does not include a right to be paid fixed recovery tax amounts. "Wildfire recovery property" shall constitute a current property right, notwithstanding the fact that the value of the property right will depend on consumers using electricity or, in those instances where consumers are customers of the electric utility, the electric utility performing certain services.

§A-2 Applications to issue bonds and authorize wildfire recovery charges. (a) An electric utility may apply to the commission for one or more financing orders to issue bonds to recover any wildfire recovery costs, each of which authorizes the following:

(1) The imposition, charging, and collection of a wildfire recovery charge, to become effective upon the issuance of the bonds, and an adjustment of any such wildfire recovery charge in accordance with a true-up adjustment mechanism under this chapter in amounts sufficient to pay the principal and interest on the bonds and all other associated financing costs on a timely basis;

(2) The creation of wildfire recovery property under the financing order; and

(3) The imposition, charging, and collection of fixed recovery tax amounts to recover any portion of the electric utility's federal and state taxes associated with those wildfire recovery charges and not financed from the proceeds of bonds.

(b) The application shall include all of the following:

(1) The wildfire recovery costs to be financed through the issuance of bonds;

(2) The principal amount of the bonds proposed to be issued and the selection of a financing entity;

(3) An estimate of the date on which each series of bonds is expected to be issued;

(4) The scheduled final payment date, which shall not exceed thirty years, and a legal final maturity date, which may be longer, subject to rating agency and market considerations, during which term the wildfire recovery charge associated with the issuance of each series of bonds is expected to be imposed and collected;

(5) An estimate of the financing costs associated with the issuance of each series of bonds;

(6) An estimate of the amount of the wildfire recovery charge revenues necessary to pay principal and interest on the bonds and all other associated financing costs as set forth in the application and the calculation for that estimate;

(7) A proposed design of the wildfire recovery charge and a proposed methodology for allocating the wildfire recovery charge among customer classes within the electric utility's service territory;

(8) A description of the financing entity selected by the electric utility;

(9) A description of a proposed true-up adjustment mechanism for the adjustment of the wildfire recovery charge to correct for any overcollection or undercollection of the wildfire recovery charge, and to otherwise ensure the timely payment of principal and interest on the bonds and all other associated financing costs; and

(10) Any other information required by the commission.

(c) An electric utility may file an application for a financing order, or as a joint applicant with one or more affiliate electric utilities, to issue bonds to recover wildfire recovery costs. The application shall include a description of:

(1) How the wildfire recovery charges will be allocated among the applicant electric utilities in a manner that is equitable and that need not correspond to the incurrence of wildfire recovery costs by each electric utility; and

(2) Whether and how the consumers of any of the applicant electric utilities will be responsible for the payment of wildfire recovery charges allocated to consumers of affiliate electric utilities.

In the alternative, an electric utility may apply for a financing order to issue bonds to recover wildfire recovery costs, including wildfire recovery costs incurred, or to be incurred, by the applicant and one or more of its affiliate electric utilities. In connection with the issuance of a financing order pursuant to this subsection, the commission shall issue a concurrent order to the affiliate electric utility or electric utilities directing the affiliate electric utility or electric utilities to impose rates on its or their consumers designed to generate revenue sufficient to pay credits over the life of the bonds to the applicant electric utility in the amount as the commission determines is equitable, just, and reasonable. The application shall describe the allocation method and adjustment mechanism for the affiliate electric utility credit payments proposed to be subject to the concurrent commission order.

(d) The commission shall issue an approval or denial of any application for a financing order filed pursuant to this section within ninety days of the last filing in the applicable docket but no later than one year after the application is filed.

(e) In exercising its duties under this section, the commission shall consider:

(1) Whether the recovery of costs is consistent with the public interest;

(2) Whether the structuring, marketing, and pricing of the bonds are expected to result in the lowest wildfire recovery charges consistent with market conditions at the time at which the bonds are priced and the terms of the financing order;

(3) Whether the terms and conditions of any bonds to be issued are just and reasonable;

(4) With respect to an application by an investor-owned utility, whether the recovery of wildfire recovery costs through the designation of the wildfire recovery charges and any associated fixed recovery tax amounts, and the issuance of bonds in connection with the wildfire recovery charges, would result in net savings or mitigate rate impacts to consumers, as compared to rate recovery without securitization; and

(5) Any other factors that the commission deems reasonable and in the public interest.

If the commission makes the determination specified in this section, the commission shall establish, as part of the financing order, a procedure for the electric utility to submit applications from time to time to request the issuance of additional financing orders designating wildfire recovery charges and any associated fixed recovery tax amounts as recoverable.

At the option of the electric utility, the electric utility may include in its application for a financing order a request for authorization to sell, transfer, assign, or pledge wildfire recovery property to a governmental entity if the electric utility expects bonds issued by a governmental entity would result in a more cost-efficient means, taking into account all financing costs related to the bonds, than using another financing entity to issue bonds to finance the same wildfire recovery costs, taking into account the costs of issuing the other financing entity's bonds.

(f) Wildfire recovery charges and any associated fixed recovery tax amounts shall be imposed only on existing and future consumers in the utility service territory. Consumers within the utility service territory of the electric utility that are subject to the financing order shall continue to pay wildfire recovery charges and any associated fixed recovery tax amounts until the bonds and associated financing costs are paid in full by the financing entity.

§A-3 Wildfire recovery financing order. (a) A financing order shall remain in effect until the bonds issued under the financing order and all financing costs related to the bonds have been paid in full or defeased by their terms.

A financing order shall remain in effect and unabated notwithstanding the bankruptcy, reorganization, or insolvency of the electric utility or the commencement of any judicial or nonjudicial proceeding on the financing order.

(b) Notwithstanding any other law to the contrary, with respect to wildfire recovery property that has been made the basis for the issuance of bonds and with respect to any associated fixed recovery tax amounts, the financing order, the wildfire recovery charges, and any associated fixed recovery tax amounts shall be irrevocable. The State and its agencies, including the commission, pledge and agree with bondholders, the owners and assignees of the wildfire recovery property, and other financing parties that the State and its agencies shall not take any action listed in this subsection. This subsection shall not preclude an action if the action would not adversely affect the interests of the electric utility and of assignees of the wildfire recovery property. The prohibited actions shall be the following:

(1) Alter the provisions of this chapter, which authorize the commission to create an irrevocable contract right or choice in action by the issuance of a financing order, to create wildfire recovery property and make the wildfire recovery charges imposed by a financing order irrevocable, binding, nonbypassable charges for all existing and future consumers;

(2) Take or permit any action that impairs or would impair the value of wildfire recovery property or the security for the bonds or revise the wildfire recovery costs for which recovery is authorized;

(3) In any way impair the rights and remedies of the bondholders, assignees, and other financing parties;

(4) Except for changes made pursuant to the formula-based true-up mechanism authorized under subsection (d), reduce, alter, or impair wildfire recovery charges that are to be imposed, billed, charged, collected, and remitted for the benefit of the bondholders, any assignee, and any other financing parties until any and all principal, interest, premium, financing costs, and other fees, expenses, or charges incurred, and any contracts to be performed, in connection with the related bonds have been paid and performed in full.

The financing entity may include this pledge in the bonds.

(c) Under a financing order, the electric utility shall retain sole discretion to select the financing entity and to cause bonds to be issued, including the right to defer or postpone the issuance, assignment, sale, or transfer of wildfire recovery property.

(d) The commission may create, pursuant to an application from an electric utility, a nonbypassable charge referred to as a wildfire recovery charge, which shall be applied to recover principal, interest, and other financing costs relating to the bonds. The wildfire recovery charge shall be a dedicated, discrete tariff rider.

The commission, in any financing order, shall establish a procedure for periodic true-up adjustments to wildfire recovery charges, which shall be made at least annually and may be made more frequently. Within thirty days after receiving an electric utility's filing of a true-up adjustment, the commission's review of the filing shall be limited to mathematical or clerical errors as determined in accordance with any true-up adjustment formulas set forth in the applicable financing order.

The commission shall either approve the filing or inform the electric utility of any mathematical or clerical errors in its calculation. If the commission informs the electric utility of mathematical or clerical errors in its calculation, the electric utility shall correct its error and refile its true-up adjustment. The timeframes previously described in this subsection shall apply to a refiled true-up adjustment.

(e) Neither financing orders nor bonds issued under this chapter shall constitute a general obligation of the State or any of its political subdivisions, nor shall they constitute a pledge of the full faith and credit of the State or any of its political subdivisions, but shall be payable solely from the wildfire recovery property provided under this chapter.

All bonds shall contain on the face thereof a statement to the following effect: "Neither the full faith and credit nor the taxing power of the State of Hawaii is pledged to the payment of the principal of, or interest and premium on, this bond."

The issuance of bonds under this chapter shall not directly, indirectly, or contingently obligate the State or any of its political subdivisions to levy or pledge any form of taxation or to make any appropriation for their payment.

(f) Wildfire recovery charges are wildfire recovery property when, and to the extent that, a financing order authorizing the wildfire recovery charges has become effective in accordance with this chapter, and the wildfire recovery property shall thereafter continuously exist as property for all purposes, and all of the rights and privileges relating to that property shall continuously exist for the period and to the extent provided in the financing order, but in any event until the bonds, including all principal; premiums, if any; interest with respect to the bonds; and all other financing costs are paid in full. A financing order may provide that the creation of wildfire recovery property shall be simultaneous with the sale of the wildfire recovery property to an assignee as provided in the application of the pledge of the wildfire recovery property to secure the bonds.

(g) Any successor to a financing entity shall be bound by the requirements of this chapter and shall perform and satisfy all obligations of and have the same rights under a financing order as, and to the same extent as, the financing entity.

(h) No electric utility approved for a financing order shall increase compensation for its executive officers unless the utility's wildfire mitigation plan compliance reports have been approved by the commission for five consecutive years; provided that the commission may consider an alternative symmetric performance incentive mechanism, if the commission deems appropriate. For the purposes of this subsection, "wildfire mitigation plan compliance report" has the same meaning as defined in section A-1.

§A-4 Bonds; issuance; wildfire recovery property interests. (a) The electric utility may sell and assign all or portions of its interest in wildfire recovery property to one or more financing entities that make that wildfire recovery property the basis for issuance of bonds, to the extent approved in a financing order. The electric utility or financing entity may pledge wildfire recovery property as collateral, directly or indirectly, for bonds to the extent approved in the pertinent financing orders providing for a security interest in the wildfire recovery property, in the manner set forth in this section. In addition, wildfire recovery property may be sold or assigned by either of the following:

(1) The financing entity or a trustee for the holders of bonds or the holders of an ancillary agreement in connection with the exercise of remedies upon a default under the terms of the bonds; or

(2) Any person acquiring the wildfire recovery property after a sale or assignment pursuant to this chapter.

(b) To the extent that any interest in wildfire recovery property is sold, assigned, or is pledged as collateral pursuant to subsection (a), the commission may authorize the electric utility to contract with the financing entity or its assignees that the electric utility will:

(1) Continue to operate its system to provide service to consumers within its service territory;

(2) Collect amounts in respect of the wildfire recovery charges for the benefit and account of the financing entity or its assignees; and

(3) Account for and remit these amounts to or for the account of the financing entity or its assignees.

Contracting with the financing entity or its assignees in accordance with that authorization shall not impair or negate the characterization of the sale, assignment, or pledge as an absolute transfer, a true sale, or a security interest, as applicable. To the extent that billing, collection, and other related services with respect to the provision of the electric utility's services are provided to a consumer by any person or entity other than the electric utility in whose service territory the consumer is located, that person or entity shall collect the wildfire recovery charges and any associated fixed recovery tax amounts from the consumer for the benefit and account of the electric utility, financing entity, or assignees with the associated revenues remitted solely for the person's benefit as a condition to the provision of electric service to that consumer.

Each financing order shall impose terms and conditions, consistent with the purposes and objectives of this chapter, on any person or entity responsible for billing, collection, and other related services, including without limitation collection of the wildfire recovery charges and any associated fixed recovery tax amounts, that are the subject of the financing order.

(c) The financing entity may issue bonds upon approval by the commission in a financing order. Bonds shall be nonrecourse to the credit or any assets of the electric utility, other than the wildfire recovery property as specified in that financing order.

(d) Wildfire recovery property that is specified in a financing order shall constitute an existing, present property right, notwithstanding the fact that the imposition and collection of wildfire recovery charges depend on the electric utility's continuing to provide services or continuing to perform its servicing functions relating to the collection of wildfire recovery charges or on the level of future service consumption (e.g., electricity consumption). Wildfire recovery property shall exist whether or not the wildfire recovery charges have been billed, have accrued, or have been collected and notwithstanding the fact that the value for a security interest in the wildfire recovery property, or amount of the wildfire recovery property, is dependent on the future provision of service to consumers. All wildfire recovery property specified in a financing order shall continue to exist until the bonds issued pursuant to a financing order and all associated financing costs are paid in full.

(e) Wildfire recovery property; wildfire recovery charges; and the interests of an assignee, bondholder, or financing entity, or any pledgee in wildfire recovery property and wildfire recovery charges shall not be subject to setoff, counterclaim, surcharge, recoupment, or defense by the electric utility or any other person or in connection with the bankruptcy, reorganization, or other insolvency proceeding of the electric utility, any affiliate of the electric utility, or any other entity.

(f) Notwithstanding any law to the contrary, any requirement under this chapter or a financing order that the commission acts upon shall be binding upon the commission, as it may be constituted from time to time, and any successor agency exercising functions similar to the commission, and the commission shall have no authority to rescind, alter, or amend that requirement in a financing order.

§A-5 Wildfire recovery charge. (a) The wildfire recovery charge created pursuant to a financing order approved pursuant to section A-2 shall be a nonbypassable charge of a financing entity that shall be applied to the repayment of bonds and related financing costs as described in this chapter. The wildfire recovery charge and any associated fixed recovery tax amounts may be a usage-based charge, a flat user charge, or a charge based upon customer revenues as determined by the commission for each consumer class in any financing order.

(b) As long as any bonds are outstanding and any financing costs have not been paid in full, any wildfire recovery charge and any associated fixed recovery tax amounts authorized under a financing order shall be nonbypassable. Subject to any exceptions provided in a financing order, a wildfire recovery charge and any associated fixed recovery tax amounts shall be paid by all existing and future consumers within the utility service territory.

(c) The wildfire recovery charge shall be collected by an electric utility or its successors, in accordance with section A-8(a), in full through a charge that is separate and apart from the electric utility's rates.

(d) An electric utility may exercise the same rights and remedies under its tariff and applicable law and regulation based on a consumer's nonpayment of the wildfire recovery charge as it could for a consumer's failure to pay any other charge payable to that electric utility.

§A-6 Security interests in wildfire recovery property; financing statements. (a) A security interest in wildfire recovery property is valid and enforceable against the pledgor and third parties, subject to the rights of any third parties holding security interests in the wildfire recovery property perfected in the manner described in this section, and attaches when all of the following have occurred:

(1) The commission has issued a financing order authorizing the wildfire recovery charge to be included in the wildfire recovery property;

(2) Value has been given by the pledgees of the wildfire recovery property; and

(3) The pledgor has signed a security agreement covering the wildfire recovery property.

(b) A valid and enforceable security interest in wildfire recovery property is perfected when it has attached and when a financing statement has been filed with the bureau of conveyances of the State of Hawaii naming the pledgor of the wildfire recovery property as "debtor" and identifying the wildfire recovery property.

Any description of the wildfire recovery property shall be sufficient if it refers to the financing order creating the wildfire recovery property. A copy of the financing statement shall be filed with the commission by the electric utility that is the pledgor or transferor of the wildfire recovery property. The commission may require the electric utility to make other filings with respect to the security interest in accordance with procedures that the commission may establish; provided that the filings shall not affect the perfection of the security interest.

(c) A perfected security interest in wildfire recovery property shall be a continuously perfected security interest in all wildfire recovery property revenues and proceeds arising with respect thereto, whether or not the revenues or proceeds have accrued. Conflicting security interests shall rank according to priority in time of perfection. Wildfire recovery property shall constitute property for all purposes, including for contracts securing bonds, whether or not the wildfire recovery property revenues and proceeds have accrued.

(d) Subject to the terms of the security agreement covering the wildfire recovery property and the rights of any third parties holding security interests in the wildfire recovery property, perfected in the manner described in this section, the validity and relative priority of a security interest created under this section shall not be defeated or adversely affected by the commingling of revenues arising with respect to the wildfire recovery property with other funds of the electric utility that is the pledgor or transferor of the wildfire recovery property, or by any security interest in a deposit account of that electric utility perfected under article 9 of chapter 490, into which the revenues are deposited.

Subject to the terms of the security agreement, upon compliance with the requirements of section 490:9-312(b)(1), the pledgees of the wildfire recovery property shall have a perfected security interest in all cash and deposit accounts of the electric utility in which wildfire recovery property revenues have been commingled with other funds.

(e) If default occurs under the security agreement covering the wildfire recovery property, the pledgees of the wildfire recovery property, subject to the terms of the security agreement, shall have all rights and remedies of a secured party upon default under article 9 of chapter 490 and shall be entitled to foreclose or otherwise enforce their security interest in the wildfire recovery property, subject to the rights of any third parties holding prior security interests in the wildfire recovery property perfected in the manner provided in this section.

In addition, the commission may require in the financing order creating the wildfire recovery property that in the event of default by the electric utility in payment of wildfire recovery property revenues, the commission and any successor thereto, upon the application by the pledgees or assignees, including assignees under section B-5 of the wildfire recovery property, and without limiting any other remedies available to the pledgees or assignees by reason of the default, shall order the sequestration and payment to the pledgees or assignees of wildfire recovery property revenues. Any financing order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the debtor, pledgor, or transferor of the wildfire recovery property. Any surplus in excess of amounts necessary to pay principal; premiums, if any; interest, costs, and arrearages on the bonds; and associated financing costs arising under the security agreement, shall be remitted to the debtor, pledgor, or transferor, for the purpose of remitting such amounts to customers via the electric utility.

(f) Sections 490:9-204 and 490:9-205 shall apply to a pledge of wildfire recovery property by the electric utility, an affiliate of the electric utility, or a financing entity.

§A-7 Transfers of wildfire recovery property. (a) A transfer or assignment of wildfire recovery property by the electric utility to an assignee or to a financing entity, or by an assignee of the electric utility or a financing entity to another financing entity, which the parties in the governing documentation have expressly stated to be a sale or other absolute transfer, in a transaction approved in a financing order, shall be treated as an absolute transfer of all of the transferor's right, title, and interest, as in a true sale, and not as a pledge or other financing, of the wildfire recovery property, other than for federal and state income and franchise tax purposes.

(b) The characterization of the sale, assignment, or transfer as an absolute transfer and true sale and the corresponding characterization of the property interest of the assignee shall not be affected or impaired by, among other things, the occurrence of any of the following:

(1) Commingling of wildfire recovery charge revenues with other amounts;

(2) The retention by the seller of either of the following:

(A) A partial or residual interest, including an equity interest, in the financing entity or the wildfire recovery property, whether direct or indirect, subordinate or otherwise; or

(B) The right to recover costs associated with taxes, franchise fees, or license fees imposed on the collection of wildfire recovery charge;

(3) Any recourse that an assignee may have against the seller;

(4) Any indemnification rights, obligations, or repurchase rights made or provided by the seller;

(5) The obligation of the seller to collect wildfire recovery charges on behalf of an assignee;

(6) The treatment of the sale, assignment, or transfer for tax, financial reporting, or other purpose; or

(7) Any true-up adjustment of the wildfire recovery charge as provided in the financing order.

(1) The commission issues the financing order authorizing the wildfire recovery charge included in the wildfire recovery property; and

(2) An assignment of the wildfire recovery property in writing has been executed and delivered to the assignee.

(d) As between bona fide assignees of the same right for value without notice, the assignee first filing a financing statement with the bureau of conveyances of the State of Hawaii in accordance with part 5 of article 9 of chapter 490, naming the assignor of the wildfire recovery property as debtor and identifying the wildfire recovery property, shall have priority. Any description of the wildfire recovery property shall be sufficient if it refers to the financing order creating the wildfire recovery property. A copy of the financing statement shall be filed by the assignee with the commission, and the commission may require the assignor or the assignee to make other filings with respect to the transfer in accordance with procedures the commission may establish; provided that these filings shall not affect the perfection of the transfer.

§A-8 Financing entity successor requirements; default of financing entity. (a) Any successor to an electric utility subject to a financing order, whether pursuant to any bankruptcy, reorganization, or other insolvency proceeding, or pursuant to any merger, sale, or transfer, by operation of law, or otherwise, shall be bound by the requirements of this chapter. The successor of the electric utility shall perform and satisfy all obligations of the electric utility under the financing order in the same manner and to the same extent as the electric utility, including the obligation to collect and pay the wildfire recovery charge to any financing party as required by a financing order or any assignee. Any successor to the electric utility shall be entitled to receive any fixed recovery tax amounts otherwise payable to the electric utility.

(b) The commission may require in a financing order that, if a default by the electric utility in remittance of the wildfire recovery charge collected arising with respect to wildfire recovery property occurs, the commission, without limiting any other remedies available to any financing party by reason of the default, shall order the sequestration and payment to the beneficiaries of the wildfire recovery charge collected arising with respect to the wildfire recovery property. Any order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the electric utility.

§A-9 Severability. If any provision of this chapter is held to be invalid or is superseded, replaced, repealed, or expires for any reason:

(1) That occurrence shall not affect any action allowed under this chapter that is taken prior to that occurrence by the commission, a financing entity, a bondholder, or any financing party, and any such action shall remain in full force and effect; and

(2) The validity and enforceability of the rest of this chapter shall remain unaffected."

PART III

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."

PART IV

SECTION 6. Section 269-92, Hawaii Revised Statutes, is amended to read as follows:

"§269-92 Renewable portfolio standards. (a) Each electric utility company that sells electricity for consumption in the State shall establish a renewable portfolio standard of:

(1) Ten per cent of its net electricity sales by December 31, 2010;

(2) Fifteen per cent of its net electricity sales by December 31, 2015;

(3) Thirty per cent of its net electricity sales by December 31, 2020;

(4) Forty per cent of its net electricity generation by December 31, 2030;

(5) Seventy per cent of its net electricity generation by December 31, 2040; and

(6) One hundred per cent of its net electricity generation by December 31, 2045.

(b) The public utilities commission may establish standards for each electric utility company that prescribe the portion of the renewable portfolio standards that shall be met by specific types of renewable energy resources; provided that:

(1) Before January 1, 2015, at least fifty per cent of the renewable portfolio standards shall be met by electrical energy generated using renewable energy as the source, and after December 31, 2014, the entire renewable portfolio standard shall be met by electrical generation from renewable energy sources;

(2) Beginning January 1, 2015, electrical energy savings shall not count toward renewable energy portfolio standards;

(3) Where electrical energy is generated or displaced by a combination of renewable and nonrenewable means, the proportion attributable to the renewable means shall be credited as renewable energy; and

(4) Where fossil and renewable fuels are co-fired in the same generating unit, the unit shall be considered to generate renewable electrical energy (electricity) in direct proportion to the percentage of the total heat input value represented by the heat input value of the renewable fuels.

(c) The public utilities commission shall establish standards that require each electric utility company to remove from the rate base a commensurate amount of costs related to fossil fuel resources when adding new or converted firm renewable electrical energy and renewable energy resources, as defined in section 269-91.

[~~(c)~~] (d) If the public utilities commission determines that an electric utility company failed to meet the renewable portfolio standard, after a hearing in accordance with chapter 91, the utility shall be subject to penalties to be established by the public utilities commission; provided that if the commission determines that the electric utility company is unable to meet the renewable portfolio standards because of reasons beyond the reasonable control of the electric utility company, as set forth in subsection (d), the commission, in its discretion, may waive in whole or in part any otherwise applicable penalties.

[~~(d)~~] (e) Events or circumstances that are beyond an electric utility company's reasonable control may include, to the extent the event or circumstance could not be reasonably foreseen and ameliorated:

(1) Weather-related damage;

(2) Natural disasters;

(3) Mechanical or resource failure;

(4) Failure of renewable electrical energy producers to meet contractual obligations to the electric utility company;

(5) Labor strikes or lockouts;

(6) Actions of governmental authorities that adversely affect the generation, transmission, or distribution of renewable electrical energy under contract to an electric utility company;

(7) Inability to acquire sufficient renewable electrical energy due to lapsing of tax credits related to renewable energy development;

(8) Inability to obtain permits or land use approvals for renewable electrical energy projects;

(9) Inability to acquire sufficient cost-effective renewable electrical energy;

(10) Inability to acquire sufficient renewable electrical energy to meet the renewable portfolio standard goals beyond 2030 in a manner that is beneficial to Hawaii's economy in relation to comparable fossil fuel resources;

(11) Substantial limitations, restrictions, or prohibitions on utility renewable electrical energy projects;

(12) Non-renewable energy generated by electric generation facilities where the electric utility company otherwise does not have direct control or ownership of independent power producers, government and non-government agencies, and any persons or entities, including merchant or co-generation facilities; and

(13) Other events and circumstances of a similar nature.

(f) For purposes of this section, "firm renewable" means a renewable energy resource available on a continuous or relatively continuous basis as determined by the public utilities commission."

SECTION 7. Section 269-95, Hawaii Revised Statutes, is amended to read as follows:

"§269-95 Renewable portfolio standards study. The public utilities commission shall:

(1) By December 31, 2007, develop and implement a utility ratemaking structure, which may include performance‑based ratemaking, to provide incentives that encourage Hawaii's electric utility companies to use cost‑effective renewable energy resources found in Hawaii to meet the renewable portfolio standards established in section 269-92, while allowing for deviation from the standards in the event that the standards cannot be met in a cost-effective manner or as a result of events or circumstances, such as described in section [~~269-92(d),~~] 269-92(e), beyond the control of the electric utility company that could not have been reasonably anticipated or ameliorated;

(2) Gather, review, and analyze empirical data to:

(A) Determine the extent to which any proposed utility ratemaking structure would impact electric utility companies' profit margins; and

(B) Ensure that the electric utility companies' opportunity to earn a fair rate of return is not diminished;

(3) Use funds from the public utilities special fund to contract with the Hawaii natural energy institute of the University of Hawaii to conduct independent studies to be reviewed by a panel of experts from entities such as the United States Department of Energy, National Renewable Energy Laboratory, Electric Power Research Institute, Hawaii electric utility companies, environmental groups, and other similar institutions with the required expertise. These studies shall include findings and recommendations regarding:

(A) The capability of Hawaii's electric utility companies to achieve renewable portfolio standards in a cost-effective manner and shall assess factors such as:

(i) The impact on consumer rates;

(ii) Utility system reliability and stability;

(iii) Costs and availability of appropriate renewable energy resources and technologies, including the impact of renewable portfolio standards, if any, on the energy prices offered by renewable energy developers;

(iv) Permitting approvals;

(v) Effects on the economy;

(vi) Balance of trade, culture, community, environment, land, and water;

(vii) Climate change policies;

(viii) Demographics;

(ix) Cost of fossil fuel volatility; and

(x) Other factors deemed appropriate by the commission; and

(B) Projected renewable portfolio standards to be set five and ten years beyond the then current standards;

(4) Evaluate the renewable portfolio standards every five years, beginning in 2013, and may revise the standards based on the best information available at the time to determine if the standards established by section 269‑92 remain effective and achievable; and

(5) Report its findings and revisions to the renewable portfolio standards, based on its own studies and other information, to the legislature no later than twenty days before the convening of the regular session of 2014, and every five years thereafter."

PART V

SECTION 8. In codifying the new sections added by section 1 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 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on May 13, 2040.

THE SENATE	S.B. NO.	897
THIRTY-THIRD LEGISLATURE, 2025		S.D. 3
STATE OF HAWAII