HOUSE OF REPRESENTATIVES

H.B. NO.

1882

TWENTY-SIXTH LEGISLATURE, 2012

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO THE PUBLIC UTILITIES COMMISSION.

 

 

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

 


     SECTION 1.  The legislature finds that the public utilities commission, as it is presently composed, has proven to be unable to fulfill its administrative and adjudicative duties under chapter 269, Hawaii Revised Statutes.  The office of the auditor has conducted multiple management audits of the commission over the past thirty-six years and has consistently found serious and pervasive problems with staffing, management, and planning.

     The initial audit, conducted in 1975 and published in three volumes, found "considerable confusion" within the commission regarding staffing, roles, regulations, and the relevant law.  The next audit, conducted in 1989, found that "numerous and serious problems with organization and personnel management" first identified fourteen years earlier continued within the commission and that the commission "lacked adequate policymaking, enforcement, and administrative capabilities".  Most recently, in 2004, the auditor found that problems first identified more than three decades earlier continued to plague the commission and that both the commission and the division of consumer advocacy of the department of commerce and consumer affairs "are hard pressed to devote time and personnel required to strategically plan for desired results; consequently, program and activity plans are allowed to drift without direction".

     The legislature notes that the regulatory structures and the regulated industries that the commission manages have grown increasingly more complex since the formation of the commission.  The regulatory environment now includes increasing development of the neighbor islands and accompanying new demands for public utilities services.  Despite these new challenges, the structure and composition of the commission and the process for approving new public utilities have changed little since the commission's creation at statehood, even given the findings of the 1975, 1989, and 2004 management audits. 

     The legislature further finds that serious structural changes in the composition of the commission, the provision of experienced professional staff, and greater transparency in the approval process for certain public utilities are necessary to ensure that the commission accurately responds to the interests of the entire State and holds sufficient expertise in the relevant issue areas.

     The legislature also finds that problems identified in the 2004 audit of the commission have still not been resolved, despite attempts by the legislature to work with the commission towards reform.  In 2007, the legislature enacted Acts 177 and 183, Session Laws of Hawaii 2007, to approve and fund the restructuring of both the public utilities commission and the division of consumer advocacy according to proposals developed by each agency.  The reorganization plans included staff increases, relocation of offices, and redefinition of staff positions to improve workload efficiency. 

     In the four years since legislative approval, the commission's progress in implementing its plans for reform have been stymied by budget reductions and other economic factors beyond the commission's control.  As a result of long-standing fiscal constraints and despite the best efforts of commission staff, the commission has still been unable to overcome long delays and backlogs that stifle economic development.  

     To remedy past financial shortfalls, the legislature passed Act 130, Session Laws of Hawaii 2010, to appropriate additional funds and reauthorize staff positions for the purpose of enabling the commission to become fully functional.  The legislature finds that the creation of a new staff position authorized to function with a large degree of autonomy to coordinate all of the administrative functions of the commission will further the goals of increasing professionalism and enabling efficient functioning of the commission envisioned by the reorganization plan contained in Acts 177 and 183, Session Laws of Hawaii 2007.

     SECTION 2.  Section 269-2, Hawaii Revised Statutes, is amended to read as follows:

     "§269-2  Public utilities commission; number, appointment of commissioners, qualifications; compensation; persons having interest in public utilities[.]; composition.  (a)  There shall be a public utilities commission composed of [three] five members, to be called commissioners, [and] who shall be appointed in the manner prescribed in section 26-34, except as otherwise provided in this section.  All members shall be appointed for terms of six years each, except that the terms of the members first appointed shall be for two, four, and six years, respectively, as designated by the governor at the time of appointment.  The governor shall designate a member to be chairperson of the commission.  Each member shall hold office until the member's successor is appointed and qualified.  Section 26-34 shall not apply insofar as it relates to the number of terms and consecutive number of years a member can serve on the commission; provided that no member shall serve more than twelve consecutive years.

     In appointing commissioners, the governor shall select persons who have had experience in accounting, business, engineering, government, finance, law, or other similar fields[.]; provided that no more than two commissioners shall represent the same professional or occupational field; provided further that the composition of the commission shall reflect a diversity of professional knowledge and range of expertise.  At all times, the commission shall include at least two commissioners representing the counties of Hawaii, Kauai, and Maui; provided that these two commissioners shall not represent the same county.  The governor shall preserve geographic and professional diversity in making appointments to the commission.  The commissioners shall devote full time to their duties as members of the commission and no commissioner shall hold any other public office or other employment during the commissioner's term of office.  No person owning any stock or bonds of any public utility corporation, or having any interest in, or deriving any remuneration from, any public utility shall be appointed a commissioner.

     (b)  Effective July 1, 2005, the chairperson of the commission shall be paid a salary set at eighty-seven per cent of the salary of the director of human resources development[,] and each of the other commissioners shall be paid a salary equal to ninety-five per cent of the chairperson's salary.  The commissioners shall be exempt from chapters 76 and 89 but shall be members of the state employees retirement system and shall be eligible to receive the benefits of any state or federal employee benefit program generally applicable to officers and employees of the State, including those under chapter 87A.

     The commission is placed within the department of budget and finance for administrative purposes.

     (c)  The commission shall establish two panels with membership of each panel consisting of two commissioners and the chairperson.  One panel shall have jurisdiction over issues relating to energy and private water and sewage utilities and the other panel shall have jurisdiction over issues relating to motor and water carrier transportation services, telecommunications, and warehousing of goods.  Each panel shall meet, confer, and take action pursuant to the requirements of this chapter on each matter under its subject matter jurisdiction; provided that an action by a panel shall constitute an action of the commission.  Proceedings of the panels shall be conducted pursuant to this chapter and rules shall be adopted by the commission pursuant to chapter 91; provided that all proceedings of the panels shall be public meetings subject to the requirements of chapter 92."

     SECTION 3.  Section 269-3, Hawaii Revised Statutes, is amended to read as follows:

     "§269-3  [Employment] Executive officer; appointment of assistants.  (a)  [The chairperson of the public utilities commission may] The commission shall employ a staff, which shall include an executive officer, administrative personnel, and other personnel as specified in this section and as otherwise necessary to carry out the duties of the commission.  The executive officer shall have sufficient administrative, managerial, and supervisory experience to carry out the duties established by this section.

     (b)  Subject to the supervision of the commission, the executive officer shall appoint [and], employ, and define the powers and duties of clerks, stenographers, agents, engineers, accountants, and other assistants for the public utilities commission as the [chairperson] executive officer finds necessary for the performance of the commission's functions [and define their powers and duties].  The chairperson may appoint and, at pleasure, dismiss [a chief administrator] the executive officer and hearings officers as may be necessary.  Notwithstanding section 103D-209[, the chairperson] and subject to the supervision of the commission, the executive officer shall appoint one or more attorneys independent of the attorney general who shall act as attorneys for the commission [and], define their powers and duties, and fix their compensation.  The [chief administrator,] executive officer, chief of policy and research, chief of administrative support, chief of consumer affairs and compliance, utility analysts, and attorneys shall be exempt from chapter 76.  Research assistants, economists, legal secretaries, legal assistants, and enforcement officers may be appointed by the executive officer with or without regard to chapter 76.  Other employees shall be appointed as may be needed by the [chairperson] executive officer in accordance with chapter 76[.] and subject to the supervision of the commission.

     [(b)] (c)  Notwithstanding section 91-13, the commission may consult with [its assistants] personnel appointed [under authority of] pursuant to this section in any contested case or agency hearing concerning any issue of facts[.  Neither]; provided that neither the commission nor any of its [assistants] personnel shall [in such proceeding] consult with any other person or party except upon notice and an opportunity for all parties to participate, save to the extent required for the disposition of ex parte matters authorized by law."

     SECTION 4.  By July 1, 2013, the public utilities commission shall comprise five commissioners who reflect the requisite geographical and professional diversity as provided by section 269-2, Hawaii Revised Statutes; provided that to transition to the five‑commissioner public utilities commission, the governor shall nominate new commissioners as needed to meet the requirements of section 269-2, Hawaii Revised Statutes.  The governor may reduce the term of any commissioner as necessary to provide, as nearly as is feasible, for the expiration of terms on a staggered basis.

     SECTION 5.  The public utilities commission shall submit a report to the legislature, no later than sixty days prior to the convening of the regular session of 2013 and each regular session thereafter, detailing the implementation and operation of the subject-matter panels established by section 269-2(c), Hawaii Revised Statutes.  Reports submitted pursuant to this section shall include recommendations for the continuance or abandonment of the panel structure considering the development of subject-matter expertise among the members of the panels and the efficiency of operations of the commission as a whole.

     SECTION 6.  There is appropriated out of the public utilities commission special fund established pursuant to section 269-33, Hawaii Revised Statutes, the sum of $700,000 or so much thereof as may be necessary for fiscal year 2012-2013 for the salaries of the two additional commissioners added to the public utilities commission by section 2 of this Act and the executive officer required by section 3 of this Act.

     The sum appropriated shall be expended by the public utilities commission for the purposes of this Act.

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

     SECTION 8.  This Act shall take effect upon its approval; provided that:

     (1)  Section 6 of this Act shall take effect on July 1, 2012;

     (2)  The new subsection (c) of section 269-2, Hawaii Revised Statutes, established by section 2 of this Act shall be repealed on July 1, 2017; and


     (3)  Section 5 of this Act shall be repealed on July 1, 2017.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Public Utilities Commission; Commissioners; Staff; Appropriation

 

 

Description:

Increases the membership of the public utilities commission from three to five; temporarily creates two subject matter panels within the public utilities commission; authorizes the employment of an executive officer; provides for transition to five-member composition; requires report to the legislature on panel structure; makes appropriation from the public utilities commission special fund.

 

 

 

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