STAND. COM. REP. NO. 491

Honolulu, Hawaii

RE: S.B. No. 1648

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 1648 entitled:

"A BILL FOR AN ACT RELATING TO POWER OUTAGES,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Create a default rule requiring a regulated utility to compensate customers for all actual damages incurred as a result of a power interruption affecting more than one thousand customers for four or more hours;

(2) Enable a regulated utility to seek a waiver from the Public Utilities Commission relieving them of the obligation to compensate customers, but only if the Public Utilities Commission determines that the interruption was the result of a specific subset of circumstances legitimately outside of the utility's control;

(3) Prevent a regulated utility from recovering losses and expenses from ratepayers; and

(4) Establish a clear timeline under which a regulated utility must pay compensation or seek a waiver, and under which the Public Utilities Commission must issue a decision on a waiver sought by a regulated utility.

Your Committee received testimony in opposition to this measure from Hawaiian Electric and Kauaʻi Island Utility Cooperative.

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

Your Committee finds that existing law unacceptably fails to provide utility customers with a clear, fair, equitable, and efficient system through which they are compensated for losses stemming from power outages. This measure will protect consumers by shifting the burden of responding to losses incurred due to a power outage to the utility, rather than the consumer.

Your Committee has amended this measure by:

(1) Allowing hospitals to seek emergency and contingency expenses incurred by the hospital as a result of certain power interruptions;

(2) Allowing the Public Utilities Commission to adopt rules in accordance with chapter 91, Hawaii Revised Statutes, for the new compensation waiver process established by this measure;

(3) Clarifying that payments shall not be recovered from funds collected from utility rate payers, rather than being paid out of funds collected from utility rate payers;

(4) Requiring electric utilities to submit a report to the Legislature before the 2026 Regular Session detailing the extent to which the utility already maintains service records containing certain information;

(5) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(6) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1648, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1648, S.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

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JARRETT KEOHOKALOLE, Chair