THE SENATE

S.B. NO.

367

TWENTY-SIXTH LEGISLATURE, 2011

S.D. 3

STATE OF HAWAII

H.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO ENERGY.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that attaining independence from reliance on fossil fuels is a long-standing objective of the State.  Hawaii is the state most dependent on petroleum for its energy needs.  Reducing our dependence on oil and its consequent price volatility is critical in attaining energy security.

     Hawaii has an abundance of natural, renewable energy resources from wind, solar, ocean and wave, geothermal, and bio-based fuels.  Hawaii's clean energy policy mandates and strongly promotes the use of these renewable energy resources. 

     Act 155, Session Laws of Hawaii 2009, increased the 2020 renewable portfolio standard for electric utility companies from twenty per cent to twenty-five per cent, and added a new forty per cent requirement for the year 2030.  Act 155 also included the mandate that by January 1, 2015, one hundred per cent of a utility's renewable portfolio standard needs to be met by electrical generation using renewable energy as the source.       One of the key elements of Hawaii's energy policy concerns is the desire for reasonable fixed price indigenous renewable resources.  Reasonable fixed price indigenous renewable resources are the best hedge against rising oil prices that could return to the $147 per barrel level experienced in 2008.  For the State to meet its clean energy objectives, hundreds of megawatts of reasonable fixed price renewable energy must be developed in the near future.  The legislature recognizes that no single resource can provide the "silver bullet" solution as a hedge against oil price volatility.

     To achieve the State's aggressive renewable portfolio standard goals, electric utility companies need to emphasize technologies that are commercially available, are capable of being developed soon, are available on a large scale, and may be used to generate electricity that may be delivered to Hawaii's load centers.

     Electrical services on the islands of Oahu, Maui, Molokai, Lanai, and Hawaii are provided by affiliated, franchised electric utility companies.  None of the electric utility systems on these islands are presently electrically interconnected to an electric utility system on any other island.

     Oahu has the largest demand for electricity and the largest concentration of the population base.  A variety of renewable energy resources that are limited on Oahu are abundant on the neighbor islands.  To help attain renewable portfolio standard goals, strategies to link Oahu's demand to abundant reasonable fixed price resources from the neighbor islands are being pursued.  For example, technical implementation and routing studies have been conducted that show that it is technically feasible to connect renewable energy generation facilities in Maui county to the Oahu load using undersea high-voltage transmission cables.

     The islands of Maui and Hawaii currently have significant as-available renewable resource penetration levels, based on projects that are currently in service or that have power purchase contracts.  They also have significant potential for additional renewable resources.  There are plans to consider using high-voltage undersea transmission cables to link the electric utility systems on these islands to the electric utility system on Oahu.

     Economic analyses have shown that harnessing the wind resources for the islands appears to be a relatively cost-effective means for helping to meet Hawaii's energy policy objectives.  The cost of the energy delivered to the load center is expected to be at or below the cost of other commercially available large scale renewable resources in the near-term, and at or below the cost of petroleum based generation in the longer-term.  The capital costs of constructing renewable energy generation projects and developing the high-voltage electric transmission cable systems are substantial in relationship to the electric utility companies' existing rate bases, however, and it is expected that renewable energy generation projects and transmission cable projects will be installed by non-utility investors who assume financial responsibility for the projects until they achieve commercial operations.

     Non-utility investors in a cable project would be selected through a competitive bidding process authorized, reviewed, and approved by the public utilities commission and developed, with input and assistance from the state energy resources coordinator, by the electric utility that would use the cable.  The process would be conducted by the electric utility that would use the cable and the public utilities commission would determine whether a selected cable company would be certified.  The use of this process allows for the certified cable company, rather than utility ratepayers, to assume risks associated with obtaining permits for the cable project and the costs incurred to construct the cable, and to earn a return on investment commensurate with the assumption of these risks.  The renewable energy generation project developers would also bear development period risks, such as permitting and construction, for their projects, since the prices for energy from their projects will be fixed in their power purchase agreements with the electric utility, which are also reviewed and approved by the public utilities commission.

     The legislature also finds that the development of large-scale renewable energy projects has the potential to impact the communities where the projects are located, and that at least some of the environmental review processes conducted as part of the permitting process for the projects would occur after the public utilities commission would need to act on a cable certification application.  To foster communication with the affected communities and the commission, the legislature has incorporated within this Act a requirement that the commission hold a public hearing on each island proposed to be connected by the high-voltage electric transmission cable system for the purposes of obtaining input from interested parties.

     To connect undersea high-voltage transmission cables to an electric utility system, the electric utility company will need to install on-island transmission infrastructure.  In addition, because of the fixed costs of renewable energy projects relative to the variable costs of fossil fuel generation, it is expected that electric utility ratepayers would benefit if the electric utility company acquires the undersea high-voltage transmission cables at or after the commencement of commercial operations.  Given the cost of the on-island transmission infrastructure, the need to have the on-island infrastructure available when the undersea high-voltage transmission cables commence commercial operations, and the potential acquisition cost of the undersea high-voltage transmission cables, the electric utility's credit quality, which is essential to the development of renewable energy resources in Hawaii, may be negatively impacted unless specified cost recovery provisions are added to the public utilities law.

     The purpose of this Act is to establish the regulatory structure under which interisland undersea transmission cables can be developed, financed, and constructed on commercially reasonable terms, such as those upon which successful cable projects have been undertaken in New York, California, and around the world.

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

"PART      .  INTERISLAND TRANSMISSION SYSTEM

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

     "Cable acquisition cost" means the electric utility company's costs, including reasonable transaction costs, to acquire a high-voltage electric transmission cable system pursuant to a turnkey cable contract or a cable purchase contract.

     "Cable company" means any person or persons, company, corporation, or entity that is selected through a request for proposals, or other process approved by the commission, to be a certified cable company applicant.

     "Cable purchase contract" means a contract to purchase a high-voltage electric transmission cable system at or after it achieves commercial operations.

     "Cable surcharge" means the surcharge approved by the commission pursuant to section 269-D.

     "Certified cable company" means any person or persons, company, corporation, or entity who owns or controls a high-voltage electric transmission cable system and who receives a certificate of public convenience and necessity from the commission pursuant to section 269-B.

     "Commercial operations" means the period after the high-voltage electric transmission cable system:

     (1)  Passes acceptance tests approved by the commission, as determined by a qualified independent engineer approved by the commission; and

     (2)  Meets other criteria the commission determines to be reasonable.

     "Commercial operations date" means the date upon which the high-voltage electric transmission cable system begins commercial operations, as determined by the commission.

     "Commission" means the public utilities commission.

     "Cost" means all capital investments, including rate of return; any applicable taxes; any applicable land costs; and all expenses, including capacity payments, operation and maintenance expenses, related to or resulting from the planning, licensing, permitting, designing, development, construction, or operation of a high-voltage electric transmission cable system.

     "Cost-effective" has the same meaning as in section 269-91.

     "Development period" means the period of time after the certified transmission entity has been granted a certificate of public convenience and necessity, but before commercial operations.

     "Electric utility company" means a public utility as defined under section 269-1, for the production, conveyance, transmission, delivery, or furnishing of electric power.

     "Electric utility system" means the electric system owned and operated by an electric utility company, including any non-utility owned facilities that are interconnected to the system, consisting of power plants, transmission and distribution lines, and related equipment for the production and delivery of electric power to the public.

     "Energy resources coordinator" or "coordinator" means the director of business, economic development, and tourism.

     "Expected commercial operations date" means the date reasonably determined by the certified cable company for the high-voltage electric transmission cable system to commence commercial operations.

     "High-voltage electric transmission cable system" means one hundred twenty kilovolts or greater of alternating current (AC) or direct current (DC) transmission cables constructed undersea, including connected transmission cables or lines installed on land that connect the electric utility systems on two or more islands or allow for the transmission of power from one or more renewable energy generation facilities to the electric utility system located on another island of the State; AC substation or AC/DC converter station; fiber optic communication cables; and other appurtenant facilities.

     "On-island transmission infrastructure" means the modifications and additions to the existing alternating current transmission grid on an island and other electric utility system modifications needed to reliably connect a high-voltage electric transmission cable system to an electric utility system, and to reliably accept power generated from large scale renewable energy generation facilities and transmitted via the high-voltage electric transmission cable system connecting two or more islands of the State's electric utility systems.

     "Power purchase agreement" means an agreement between an electric utility company and the developer of a renewable energy generation facility to sell the power generated by the facility to the electric utility company.

     "Predevelopment period" means the period of time before the certified transmission entity has been granted a certificate of public convenience and necessity.

     "Project-on-project financing risk" means the risk involved when mutually dependent projects, whose risk of completion, and therefore, financing, are dependent on each other, such as in the case of a high-voltage electric transmission cable system intended to connect a renewable energy generation facility to an electric utility system where the uncertainty as to whether the renewable energy generation facility can be financed or built results in increased risk for the high-voltage electric transmission cable system project because it is not viable without a source of energy to transmit, and vice versa.

     "Renewable electricity" means electrical energy generated using renewable energy as the source.

     "Renewable energy" has the same meaning as in section 269‑91.

     "Renewable energy generation facility" means a facility generating electrical energy using renewable energy as the primary source.

     "Renewable portfolio standard" has the same meaning as that provided in section 269-91.

     "Request for proposals" means a request for proposals issued pursuant to a competitive bidding process authorized, reviewed, and approved by the commission, and developed and conducted by the electric utility company or companies to which the capacity of a high-voltage electric transmission cable system will be made available, with input and assistance from the state energy resources coordinator, to select a cable company.

     "Turnkey cable contract" means a contract entered into pursuant to a request for proposal under which a cable company designs, builds, and transfers a high-voltage electric transmission cable system to an electric utility company upon commencement of commercial operations.

     §269-B  Certification.  (a)  Prior to installing a high-voltage electric transmission cable system, a cable company shall be selected through a request for proposals, or other process approved by the commission, and issued a certificate of public convenience and necessity by the commission pursuant to section 269-7.5.

     (b)  The utility and the energy resources coordinator, or the energy resources coordinator's designee, shall develop the request for proposals, and the energy resources coordinator or the energy resources coordinator's designee shall be a member of the selection committee that will review and evaluate the proposals.  The utility shall suspend or terminate the request for proposals at the discretion of the commission.

     (c)  Notwithstanding any provisions in section 269-7.5 to the contrary:

     (1)  The commission shall approve, disapprove, or approve subject to certain conditions, an application for a certificate of public convenience and necessity for a high-voltage electric transmission cable system, and shall issue a final order within one hundred eighty days after the application is filed; provided that the commission may extend the timeline as necessary;

     (2)  In determining whether the cable company is financially fit, the commission may allow for the use of commercially reasonable non-recourse project financing for the high-voltage electric transmission cable system;

     (3)  In determining whether the proposed transmission capacity service is or will be required by the present or future public convenience and necessity, the commission shall determine whether the high-voltage electric transmission cable system would be a cost-effective means of:

         (A)  Interconnecting two or more electric utility systems;

         (B)  Helping one or more electric utility companies meet the applicable renewable portfolio standard; or

         (C)  Achieving other considerations the commission may deem appropriate;

     (4)  If the primary source or sources of the renewable electricity that will be transmitted to an electric utility company or companies using the high-voltage electric transmission cable system will be provided pursuant to a power purchase agreement or agreements between the electric utility company or companies and an owner or owners of a new renewable energy generation facility or facilities, in reviewing and approving the application for a certificate of public convenience and necessity, the commission shall, among other factors, take into consideration:

         (A)  The status of the power purchase agreement or agreements;

         (B)  The extent to which the project-on-project financing risk of the high-voltage electric transmission cable system and the associated renewable energy generation facilities is materially reduced through agreements between the certified cable company and the owner or owners of the renewable energy generation facilities holding the power purchase agreement or agreements, or through common ownership arrangements; and

         (C)  The extent to which the certified cable company assumes financial responsibility for the high-voltage electric transmission cable system until both the cable system and the new generation facility or facilities have achieved commercial operations;

     (5)  In the certification process, the commission shall review and determine ratemaking principles appropriate and applicable to the high-voltage electric transmission cable system during commercial operations.  The ratemaking principles shall be used in determining the certified cable company's revenue requirement that is used to determine its transmission capacity charges, and may be used to fix the capital investment costs for the high-voltage electric transmission cable system upon which the certified cable company will be allowed to earn an authorized rate of return and the operating costs that may be included in the certified cable company’s revenue requirement;

     (6)  In determining the authorized rate of return that will apply to a certified cable company, the commission may consider the risks assumed by the certified cable company during the predevelopment, development, and commercial operations periods related to or resulting from the development, financing, construction, and operation of the high-voltage electric transmission cable system, including other factors deemed relevant and appropriate by the commission such as the terms and conditions of the transmission tariff as may be approved by the commission; and

     (7)  Prior to approving the application for a certificate of public convenience and necessity, the commission shall hold a public hearing on each island to be connected by the high-voltage electric transmission cable system to obtain input from the affected communities about the high-voltage electric transmission cable system.

     §269-C  Transmission tariff.  The commission shall, by order, approve, disapprove, or approve subject to certain conditions, the tariff of the certified cable company pursuant to which the certified cable company shall make the capacity of its high-voltage electric transmission cable system available to the electric utility company or companies.  The tariff shall be consistent with the tariff provisions provided in the request for proposals.  The tariff shall specify the terms and conditions under which the certified cable company will be entitled to receive revenues collected through the cable surchargeThe certified cable company may submit its proposed tariff for approval prior to the expected commercial operations date, and the commission shall take final action on the proposed tariff within one hundred twenty days after submittal of the proposed tariff with supporting documentation as may be required by the commission; provided that the commission may extend the timeline as necessary.

     §269-D  Cable Surcharge.  (a)  The commission shall establish a cable surcharge to allow recovery of the high-voltage electric transmission cable system costs designated for recovery according to the ratemaking principles pursuant to section 269‑B.

     (b)  Pursuant to the transmission tariff, the commission shall, by order, designate the electric utility company or companies to which the capacity of the high-voltage electric transmission cable system shall be made available as the agent of the certified cable company to collect the cable surcharge approved by the commission.  The electric utility company or companies collecting the cable surcharge for the benefit of the certified cable company shall have no right, title, or interest in the moneys.  The commission shall approve a fee, to be collected by the electric utility company or companies concurrently with the cable surcharge, for acting as the collection agent for the certified cable company.

     (c)  Notwithstanding any requirements to the contrary, a high-voltage electric transmission cable system may be deemed "used or useful for public utility purposes" upon commencing commercial operations, subject to the commission's determination and approval.

     §269-E  Electric utility company acquisition of cable system.  (a)  The commission may approve an electric utility company's acquisition of a high-voltage electric transmission cable system pursuant to a commission-approved turnkey cable contract or cable purchase contract.

     (b)  In the case of a turnkey cable contract, the commission shall review and approve, disapprove, or approve subject to certain conditions, the contract upon application filed by the electric utility company.

     (c)  In the case of a cable purchase contract, the commission shall review and approve, disapprove, or approve subject to certain conditions, the option to purchase in the same proceeding in which the commission reviews and approves a certificate of public convenience and necessity for a cable company providing the option to purchase or a power purchase agreement containing the option to purchase, and shall review and approve, disapprove, or approve subject to certain conditions, the cable purchase contract resulting from exercise of the option to purchase upon application filed by the electric utility company proposing to acquire the high-voltage electric transmission cable system.

     §269-F  Recovery of electric utility company costs.  (a)  An electric utility company may recover its revenue requirement, as approved by the commission, resulting from the costs that it prudently incurs in acquiring a high-voltage electric transmission cable system throughout the commercial operations period after it is acquired; provided that the acquisition is approved by the commission.

     (b)  An electric utility company shall be entitled to recover, through an automatic rate adjustment clause, its revenue requirement resulting from the capital costs that it prudently incurs for on-island transmission infrastructure; provided that the commission has approved the utility's commitment of capital expenditure costs for the project.

     (c)  To provide for timely recovery of the revenue requirement, the commission shall establish a separate automatic rate adjustment clause for that purpose, or modify an existing automatic rate adjustment clause.  The use of the automatic rate adjustment clause to recover the revenue requirement shall be allowed to continue until the revenue requirement is incorporated in rates in an electric utility company's rate case.

     (d)  The electric utility company's revenue requirement shall include:

     (1)  The commission-approved rate of return, as set in the electric utility company's last rate case, on the utility's net investment in the high-voltage electric transmission cable system from the acquisition date of the high-voltage electric transmission cable system, and in the on-island transmission infrastructure from the date the on-island transmission infrastructure is completed and available for service;

     (2)  Depreciation; and

     (3)  Revenue taxes and other relevant costs as approved by the commission.

     (e)  The electric utility company's net investment includes the cable acquisition cost in the case of the high-voltage electric transmission cable system and the costs of planning, permitting, and constructing the on-island transmission infrastructure, including an allowance for funds used during construction where the utility finances the planning, permitting, and construction costs, less offsets such as accumulated depreciation and associated unamortized deferred income taxes.

     (f)  The on-island transmission infrastructure shall be available for service before the commercial operations date of the high-voltage electric transmission cable system.  Notwithstanding any other provision in this chapter to the contrary, at the time the commission approves the electric utility company's commitment of capital expenditure costs for the project, the commission may either:

     (1)  Allow the electric utility company to recover its approved revenue requirement resulting from the capital costs that it prudently incurs for on-island infrastructure at the time that the infrastructure is available for service; or

     (2)  Allow the company to continue to accrue an allowance for funds used during construction on such prudently incurred capital costs until the commercial operations date for the high-voltage electric transmission system.

     (g)  If the electric utility company elects not to complete the on-island transmission infrastructure, and the commission approves this election, or the electric utility company is precluded from completing construction of the on-island transmission infrastructure, the electric utility company shall be allowed to recover all costs determined by the commission to have been prudently incurred by the electric utility company during the predevelopment and development periods.  The electric utility company shall recover these costs through the cable surcharge over a period equal to the period during which the costs were incurred or five years, whichever is greater."

     SECTION 3.  Chapter 239, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§239‑    Cable surcharge amounts exempt.  Amounts received in the form of a cable surcharge by an electric utility company acting on behalf of a certified cable company under section 269‑D shall not be counted as gross income of that electric utility company for purposes of this chapter; provided that any amounts retained by that electric utility company for collection or other costs shall not be included in this exemption."

     SECTION 4.  Chapter 240, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§240‑    Cable surcharge amounts exempt.  Amounts received in the form of a cable surcharge by an electric utility company acting on behalf of an affected certified cable company under section 269-D shall not be counted as gross receipts for that electric utility company for purposes of this chapter; provided that any amounts retained by that electric utility company for collection or other costs shall not be included in this exemption."

     SECTION 5. Section 235-7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There shall be excluded from gross income, adjusted gross income, and taxable income:

     (1)  Income not subject to taxation by the State under the Constitution and laws of the United States;

     (2)  Rights, benefits, and other income exempted from taxation by section 88-91, having to do with the state retirement system, and the rights, benefits, and other income, comparable to the rights, benefits, and other income exempted by section 88-91, under any other public retirement system;

     (3)  Any compensation received in the form of a pension for past services;

     (4)  Compensation paid to a patient affected with Hansen's disease employed by the State or the United States in any hospital, settlement, or place for the treatment of Hansen's disease;

     (5)  Except as otherwise expressly provided, payments made by the United States or this State, under an act of Congress or a law of this State, which by express provision or administrative regulation or interpretation are exempt from both the normal and surtaxes of the United States, even though not so exempted by the Internal Revenue Code itself;

     (6)  Any income expressly exempted or excluded from the measure of the tax imposed by this chapter by any other law of the State, it being the intent of this chapter not to repeal or supersede any express exemption or exclusion;

     (7)  Income received by each member of the reserve components of the Army, Navy, Air Force, Marine Corps, or Coast Guard of the United States of America, and the Hawaii national guard as compensation for performance of duty, equivalent to pay received for forty-eight drills (equivalent of twelve weekends) and fifteen days of annual duty, at an:

         (A)  E-1 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2004;

         (B)  E-2 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2005;

         (C)  E-3 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2006;

         (D)  E-4 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2007; and

         (E)  E-5 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2008;

     (8)  Income derived from the operation of ships or aircraft if the income is exempt under the Internal Revenue Code pursuant to the provisions of an income tax treaty or agreement entered into by and between the United States and a foreign country; provided that the tax laws of the local governments of that country reciprocally exempt from the application of all of their net income taxes, the income derived from the operation of ships or aircraft that are documented or registered under the laws of the United States;

     (9)  The value of legal services provided by a prepaid legal service plan to a taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

    (10)  Amounts paid, directly or indirectly, by a prepaid legal service plan to a taxpayer as payment or reimbursement for the provision of legal services to the taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

    (11)  Contributions by an employer to a prepaid legal service plan for compensation (through insurance or otherwise) to the employer's employees for the costs of legal services incurred by the employer's employees, their spouses, and their dependents;

    (12)  Amounts received in the form of a monthly surcharge by a utility acting on behalf of an affected utility under section 269-16.3 shall not be gross income, adjusted gross income, or taxable income for the acting utility under this chapter.  Any amounts retained by the acting utility for collection or other costs shall not be included in this exemption; [and]

    (13)  Amounts received in the form of a monthly cable surcharge by an electric utility company acting on behalf of a certified cable company under section 269‑D shall not be counted as gross income, adjusted gross income, or taxable income for that electric utility company under this chapter; provided that any amounts retained by that electric utility company for collection or other costs shall not be included in this exemption.

   [(13)] (14)  One hundred per cent of the gain realized by a fee simple owner from the sale of a leased fee interest in units within a condominium project, cooperative project, or planned unit development to the association of owners under chapter 514A or 514B, or the residential cooperative corporation of the leasehold units.

          For purposes of this paragraph:

              "Condominium project" and "cooperative project" shall have the same meanings as provided under section 514C‑1.

              "Fee simple owner" shall have the same meaning as provided under section 516-1; provided that it shall include legal and equitable owners[;].

              "Legal and equitable owner", and "leased fee interest" shall have the same meanings as provided under section 516-1[; and].

              ["Condominium project" and "cooperative project" shall have the same meanings as provided under section 514C‑1.]"

     SECTION 6.  Section 269-30, Hawaii Revised Statutes, is amended to read as follows:

     "§269-30  Finances; public utility fee.  (a)  Sections 607-5 to 607-9 shall apply to the public utilities commission and each commissioner, as well as to the supreme and circuit courts, and all costs and fees paid or collected pursuant to this section shall be deposited with the director of finance to the credit of the public utilities commission special fund established under section 269-33.

     (b)  There also shall be paid to the public utilities commission in each of the months of July and December of each year, by each public utility subject to investigation by the public utilities commission, a fee equal to one-fourth of one per cent of the gross income from the public utility's business during the preceding year, or the sum of $30, whichever is greater.  This fee shall be deposited with the director of finance to the credit of the public utilities commission special fund.

     (c)  Each public utility paying a fee under subsection (b) may impose a surcharge to recover the amount paid above one-eighth of one per cent of gross income.  The surcharge imposed shall not be subject to the notice, hearing, and approval requirements of this chapter; provided that the surcharge may be imposed by the utility only after thirty days' notice to the public utilities commission.  Unless ordered by the public utilities commission, the surcharge shall be imposed only until the conclusion of the public utility's next rate case; provided that the surcharge shall be subject to refund with interest at the public utility's authorized rate of return on rate base if the utility collects more money from the surcharge than actually paid due to the increase in the fee to one-fourth of one per cent.

     (d)  Notwithstanding any provision of this chapter to the contrary, the public utilities commission may, upon the filing of a petition by a public utility, credit a public utility for amounts paid under subsection (b) toward amounts the public utility owes in one call center fees under section 269E-6(f). (e)  Amounts received in the form of a cable surcharge by an electric utility company acting on behalf of a certified cable company under section 269-D shall not be counted as gross income for that electric utility company for purposes of this section; provided that any amounts retained by that electric utility company for collection or other costs shall not be included in this exemption."

     SECTION 7.  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 8.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

SECTION 9.  This Act shall take effect on July 1, 2011.


 


 

Report Title:

Energy; Interisland High Voltage Electric Transmission Cable System; Public Utilities Commission; Tax Exemptions

 

Description:

Establishes a regulatory structure for the installation and implementation of an interisland high voltage electric transmission cable system and for the construction of on-island transmission infrastructure.  Allows for the utility company to collect surcharges from its ratepayers to recover the costs of the cable installation on behalf of the cable company.  Exempts the surcharges from being counted as gross income, adjusted gross income, or taxable income for tax purposes.  Provides for the eventual acquisition of the cable system by the utility company from the cable company.  Allows the utility company to recover the costs of acquiring the cable system and developing the on island infrastructure through an automatic rate adjustment clause and then through its rates.  Allows the utility to recover the reasonable costs, as determined by the public utilities commission, of predevelopment and development in the event that the system is not completed.  Effective July 1, 2011.  (SB367 HD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.