STAND. COM. REP. NO.6

Honolulu, Hawaii

, 2001

RE: H.B. No. 740

H.D. 1

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Energy and Environmental Protection, to which was referred H.B. No. 740 entitled:

"A BILL FOR AN ACT RELATING TO PUBLIC UTILITIES,"

begs leave to report as follows:

The purpose of this bill is to require retail suppliers of electricity in Hawaii to annually disclose information on the fuel mix of the electricity services they sell.

Your Committee notes that pursuant to chapter 196D, Hawaii Revised Statutes, the Department of Business, Economic Development, and Tourism annually issues reports on the fuel mix of Hawaii's electricity generation system in the "Energy Resource Coordinator's Annual Report". Your Committee finds that Hawaii's utilities and other energy providers have been cooperative in providing detailed information on their fuel mix to the Department.

Your Committee agrees with the intent of this bill to increase consumer awareness of retail electric services and the fuel choices made by the electric utilities operating in Hawaii. However, your Committee finds that the bill, as drafted, is too technical in its requirements and allows little flexibility in terms of implementing the disclosure requirements. In addition, your Committee finds that this bill may raise postage or other mailing costs for public utilities, which would in turn be passed on to rate payers.

Accordingly, your Committee has amended this bill by:

(1) Deleting most of the bill's provisions relating to disclosure labels, electricity product categories, and the disclosure format;

(2) Requiring the disclosure to begin on June 1, 2003, and every June 1 thereafter, rather than on January 1, 2002;

(3) Amending the purpose section to reflect that the Department of Business, Economic Development, and Tourism annually issues reports on the fuel mix of Hawaii's electricity generation system, and allowing disclosure to be derived from this information as necessary;

(4) Providing that the disclosure shall state the price of electricity expressed in a format that makes it possible for residential and small commercial customers to compare similar electricity products and services on a standard basis;

(5) Requiring the disclosure to be printed on the customer's bill or as a bill insert; provided that the disclosure does not require electric utilities to pay additional costs associated with mailing or postage, or result in increased costs to rate payers;

(6) Requiring disclosure to be posted and updated on the supplier's internet website, if any;

(7) Deleting all definitions except that of "fuel mix";

(8) Requiring the work group to be convened and coordinated by the Public Utilities Commission, in consultation the Department of Business, Economic Development, and Tourism, and the Consumer Advocate, as necessary. Since the Commission already regulates the electric utilities, your Committee finds that the Commission is in the best position to coordinate the participants of the work group to expedite the implementation of the program and enforce the disclosure requirements;

(9) Requiring the work group to establish guidelines as to how the fuel mix information will be calculated and reported, and specifying that the disclosure requirements are not to result in new costs for postage or other areas for utilities to comply with those requirements;

(10) Requiring the work group to submit its findings and recommendations to the Legislature no later than December 1, 2002, rather than December 1, 2003. Your Committee finds that the work group should meet prior to the date for the first annual fuel mix reporting by the retail suppliers. This would allow the details of the disclosure process to be developed by the work group to ensure the proper implementation and uniformity regarding how the fuel mix will be calculated and reported by each retailer, and will also help to minimize implementation costs and reduce costs to rate payers; and

(11) Making technical, nonsubstantive amendments.

As affirmed by the record of votes of the members of your Committee on Energy and Environmental Protection that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 740, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 740, H.D. 1, and be referred to the Committee on Consumer Protection and Commerce.

Respectfully submitted on behalf of the members of the Committee on Energy and Environmental Protection,

____________________________

HERMINA M. MORITA, Chair