STAND. COM. REP. NO. 538

Honolulu, Hawaii

RE: S.B. No. 1220

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs, to which was referred S.B. No. 1220 entitled:

"A BILL FOR AN ACT RELATING TO RENEWABLE GAS TARIFF,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Require gas utility companies to submit proposed renewable gas tariffs to the Public Utilities Commission by August 31, 2025; and

(2) Require the Public Utilities Commission to establish a renewable gas tariff within six months of receiving a proposed renewable gas tariff.

Your Committees received testimony in support of this measure from the Hawaii State Energy Office, Kapolei Chamber of Commerce, Hawaiʻi Gas, Ulupono Initiative, Simonpietri Enterprises, and one individual.

Your Committees received testimony in opposition to this measure from Life of the Land.

Your Committees received comments on this measure from the Department of Commerce and Consumer Affairs and the Public Utilities Commission.

Your Committees find that the existing regulatory process in the State requires gas utility companies to file an application for a renewable gas tariff with the Public Utilities Commission, which then makes a decision on the application through the process of a general rate case. General rate cases cost between two and three million dollars and typically take two years to complete. Since customers ultimately pay this cost, and gas utility companies try to keep rates stable for as long as possible by delaying rate cases, an accelerated regulatory process is needed.

Your Committees find that this measure facilitates the timely consideration of tariff approvals. The requirement that gas utility companies file an application for a renewable gas tariff by August 31, 2025, coupled with the requirement that the Public Utilities Commission rule on an application within six months if provisions are met by the gas utility company, will help to prevent unnecessary delays in implementing a critical component of the State's decarbonization strategy. Streamlining the ability to establish a renewable gas tariff will enable customers to choose a cleaner energy option, supporting consumer demand for sustainable alternatives while providing a regulatory framework that ensures just and reasonable rates. Finally, this measure ensures that renewable gas tariffs do not lead to increased costs for non‑participating ratepayers, maintaining equity in the energy transition.

Your Committees have amended this measure by inserting an effective date of July 1, 2050, to encourage further discussion.

As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1220, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1220, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs,

________________________________ GLENN WAKAI, Chair

________________________________ JARRETT KEOHOKALOLE, Chair