PUC; Petroleum Regulation

Requires the public utilities commission to regulate petroleum
utilities and the gasoline service station industry in the State.

THE SENATE                              S.B. NO.           51
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT


 1      SECTION 1.  The legislature finds that:
 2      (1)  The general welfare and prosperity of the State is
 3           dependent upon the availability of an adequate supply
 4           of oil;
 5      (2)  Hawaii is unique among the states in that it does not
 6           have any indigenous energy sources, such as coal,
 7           natural gas, or hydroelectric power, and is therefore
 8           currently dependent upon imports of petroleum to meet
 9           its energy needs;
10      (3)  Petroleum is used to generate electricity and
11           manufacture synthetic gas;
12      (4)  The cost of petroleum is a factor in the cost of every
13           item produced or consumed in Hawaii and is shared by
14           every user of electricity and propane gas, and by every
15           automobile user;
16      (5)  The State is seeking to expand its economy, attract new
17           industries, and develop itself into a Pacific trade
18           center; and
19      (6)  Petroleum and petroleum products, the dominant energy

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 1           source for the State, are crucial factors in this
 2           endeavor.
 3      The purpose of this Act is to require the public utilities
 4 commission to regulate petroleum utilities and the gasoline
 5 service station industry in Hawaii.
 6      SECTION 2.  Chapter 269, Hawaii Revised Statutes, is amended
 7 by adding a new section to be appropriately designated and to
 8 read as follows:
 9      "269-    Petroleum regulation.  (a)  The public utilities
10 commission shall:
11      (1)  Have general supervision over all petroleum utilities
12           in this State; 
13      (2)  Notwithstanding section 486H-10.4(a)(2), authorize new
14           retail service stations and determine whether they may
15           be operated by a petroleum utility.  For the purposes
16           of this section, the term "operate" has the same
17           meaning as defined in section 486H-10.4(e);
18      (3)  Restrict price increases when prices rise above a
19           certain percentage over a benchmark market, as
20           determined by rules adopted by the commission under
21           chapter 91;
22      (4)  Notwithstanding section 486H-10.4(a), decide when a

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 1           petroleum utility may convert a retail service station
 2           from one operated by a gasoline dealer to one operated
 3           by a petroleum utility, and vice versa;
 4      (5)  Decide when a petroleum utility may close a retail
 5           service station, to prevent communities from being
 6           underserved; and
 7      (6)  Enforce this section.
 8      (b)  Every petroleum utility, upon the request of the
 9 commission, shall:
10      (1)  Furnish to the commission all information the
11           commission may require with respect to any of the
12           matters within its jurisdiction;
13      (2)  Permit the examination of its books, records,
14           contracts, maps, and other documents by the commission
15           or any person authorized by it in writing to make an
16           examination; and
17      (3)  Furnish the commission with a complete inventory of its
18           property in such form as the commission may direct.
19 Petroleum utilities that are required to submit statements or
20 informational reports to the department of business, economic
21 development, and tourism pursuant to section 486J-3 or 486J-4 may
22 submit copies of those statements or reports to the commission to

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 1 fulfill the requirements of this subsection to the extent that
 2 the information contained in those statements or reports is
 3 responsive to the requests of the commission; provided that the
 4 petroleum utilities shall submit any additional information to
 5 the commission as requested by the commission pursuant to this
 6 subsection to enable the commission to enforce this section.
 7      (c)  The rates, fares, classifications, and rules of every
 8 petroleum utility shall be published by the petroleum utility in
 9 such a manner as the commission may require, and copies shall be
10 furnished to any person on request.
11      (d)  Any petroleum utility violating, neglecting, or failing
12 in any particular to conform to or comply with this section or
13 any order of the commission shall forfeit to the State not more
14 than $10,000 for every violation, neglect, or failure, to be
15 recovered pursuant to proceedings instituted in accordance with
16 section 269-15.  Each day of violation shall be a separate
17 violation.  A petroleum utility may be enjoined by the circuit
18 court from carrying on its business while the violation, neglect,
19 or failure continues.
20      (e)  The commission shall adopt rules in accordance with
21 chapter 91 as may be necessary to implement this section.
22      (f)  The commission shall prepare and present to the

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 1 governor and the legislature, through the director, in January of
 2 each year, a report relating to its actions under this section
 3 during the preceding fiscal year, including any recommendations
 4 for legislation.  The report required by this section shall be
 5 submitted in conjunction with the report required to be submitted
 6 to the governor and legislature by section 486J-5(d)."
 7      SECTION 3.  Section 269-1, Hawaii Revised Statutes, is
 8 amended as follows:
 9      1.  By adding five new definitions to be appropriately
10 inserted and to read:
11      ""Commission" means the public utilities commission.
12      "Gasoline dealer" has the same meaning as defined in section
13 486H-1.
14      "Petroleum product" has the same meaning as defined in
15 section 486H-1.
16      "Petroleum utility" includes any person, or the person's
17 lessee, trustee, or receiver, who owns, manages, operates,
18 leases, or controls within this State any pipeline, plant,
19 property, equipment, facility, franchise, license, or permit for
20 producing, obtaining, refining, processing, transporting,
21 conveying, distributing, delivering, or furnishing crude
22 petroleum oil or petroleum products, at wholesale or retail.

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 1      "Retail service station" has the same meaning as defined in
 2 section 486H-1."
 3      2.  By amending the definition of "public utility" to read:
 4      ""Public utility" includes every person who may own,
 5 control, operate, or manage as owner, lessee, trustee, receiver,
 6 or otherwise, whether under a franchise, charter, license,
 7 articles of association, or otherwise, any plant or equipment, or
 8 any part thereof, directly or indirectly for public use, for the
 9 transportation of passengers or freight, or the conveyance or
10 transmission of telecommunications messages, or the furnishing of
11 facilities for the transmission of intelligence by electricity by
12 land or water or air within the State, or between points within
13 the State, or for the production, conveyance, transmission,
14 delivery, or furnishing of light, power, heat, cold, water, gas,
15 or oil, or for the storage or warehousing of goods, or the
16 disposal of sewage; provided that the term:
17      (1)  Shall include any person insofar as that person owns or
18           operates a private sewer company or sewer facility;
19      (2)  Shall include telecommunications carrier or
20           telecommunications common carrier;
21      (3)  Shall include petroleum utilities;
22     [(3)] (4)  Shall not include any person insofar as that

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 1           person owns or operates an aerial transportation
 2           enterprise;
 3     [(4)] (5)  Shall not include persons owning or operating
 4           taxicabs, as defined in this section;
 5     [(5)] (6)  Shall not include common carriers transporting
 6           only freight on the public highways, unless operating
 7           within localities or along routes or between points
 8           that the public utilities commission finds to be
 9           inadequately serviced without regulation under this
10           chapter;
11     [(6)] (7)  Shall not include persons engaged in the business
12           of warehousing or storage unless the commission finds
13           that regulation thereof is necessary in the public
14           interest;
15     [(7)] (8)  Shall not include:
16           (A)  The business of any carrier by water to the extent
17                that the carrier enters into private contracts for
18                towage, salvage, hauling, or carriage between
19                points within the State and the carriage is not
20                pursuant to either an established schedule or an
21                undertaking to perform carriage services on behalf
22                of the public generally; and

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 1           (B)  The business of any carrier by water,
 2                substantially engaged in interstate or foreign
 3                commerce, transporting passengers on luxury
 4                cruises between points within the State or on
 5                luxury round-trip cruises returning to the point
 6                of departure;
 7     [(8)] (9)  Shall not include any person who:
 8           (A)  Controls, operates, or manages plants or
 9                facilities for the production, transmission, or
10                furnishing of power primarily or entirely from
11                nonfossil fuel sources; and
12           (B)  Provides, sells, or transmits all of that power,
13                except such power as is used in its own internal
14                operations, directly to a public utility for
15                transmission to the public;
16     [(9)] (10)  Shall not include a telecommunications provider
17           only to the extent determined by the commission
18           pursuant to section 269-16.9; and
19    [(10)] (11)  Shall not include any person who controls,
20           operates, or manages plants or facilities developed
21           pursuant to chapter 167 for conveying, distributing,
22           and transmitting water for irrigation and such other

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 1           purposes that shall be held for public use and purpose.
 2      In the event the application of this chapter is ordered by
 3 the commission in any case provided in paragraphs [(5),] (6),
 4 [(9), and] (7), (10), and (11), the business of any public
 5 utility that presents evidence of bona fide operation on the date
 6 of the commencement of the proceedings resulting in the order
 7 shall be presumed to be necessary to public convenience and
 8 necessity, but any certificate issued under this proviso shall
 9 nevertheless be subject to such terms and conditions as the
10 commission may prescribe, as provided in sections 269-16.9 and
11 269-20."
12      SECTION 4.  This Act does not affect rights and duties that
13 matured, penalties that were incurred, and proceedings that were
14 begun, before its effective date.
15      SECTION 5.  Statutory material to be repealed is bracketed.
16 New statutory material is underscored.
17      SECTION 6.  This Act shall take effect upon its approval.
19                              INTRODUCED BY:______________________