THE SENATE

S.B. NO.

1214

TWENTY-EIGHTH LEGISLATURE, 2015

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO THE ISSUANCE OF SPECIAL PURPOSE REVENUE BONDS TO ASSIST HAWAIIAN ELECTRIC COMPANY, INC., MAUI ELECTRIC COMPANY, LIMITED, AND HAWAII ELECTRIC LIGHT COMPANY, INC.

 

 

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

 


PART I

SECTION 1. The legislature finds, in the interest of maximizing the benefits from bonds issued pursuant to part VI, chapter 39A, Hawaii Revised Statutes, that consumer transparency and disclosure of information related to electric utility rates and charges in conjunction with such bonds are in the public interest.

To promote public trust in electric utilities that receive financing assistance through special purpose revenue bonds, and thus promote the timely repayment of such bonds, customer utility bills should be unbundled to provide improved transparency and clarity on the rates and charges paid by customers. This objective can be accomplished by providing insight into how much of each electric bill goes toward fuel costs, transmission and distribution, renewable energy, utility management and profit, and other energy services and fees. Such an accounting on the bill would reduce customer confusion and provide customers with a more accurate representation of the costs and values that they are receiving from electric utilities. Such transparency will also help the electric utilities, customers, and other energy service providers understand their roles in the transition to a new energy paradigm.

SECTION 2. Chapter 39A, Hawaii Revised Statutes, is amended by adding a new section to part VI to be appropriately designated and to read as follows:

"39A-    Electric utilities; unbundling electric rates and charges. (a) To be eligible to receive financing assistance through special purpose revenue bonds issued pursuant to this part, an electric utility shall unbundle customer rates and charges in a manner approved by the public utilities commission. No later than July 1, 2016, each electric utility that receives or seeks to receive financing assistance through special purpose revenue bonds shall file an application with the commission to unbundle its existing rate schedules.

(b) Unbundled customer bills shall separately identify and charge for each discrete service and fee on customer bills, in a manner that is accessible to and understandable for the relevant customers.

(c) The application to unbundle a rate schedule shall establish a manner of billing customers for the following non-exhaustive list of services and fees to be separately identified and charged on customer bills:

(1) Fossil fuel costs and cost per kilowatt-hour for electricity generation, including costs incurred by the electric utility and by independent power producers providing electricity to the electric utility and any applicable carbon tax or environmental response, energy, and food security tax;

(2) Fossil fuel powerplant operations and maintenance cost and cost per kilowatt-hour, including costs incurred by the electric utility and by independent power producers providing electricity to the electric utility;

(3) Renewable energy cost and cost per kilowatt-hour, including costs incurred by the electric utility and by independent power producers providing renewable electricity to the electric utility;

(4) Electricity transmission and distribution costs;

(5) Grid reliability costs, other than costs for operations and maintenance for electricity transmission and distribution;

(6) Customer service, billing, and metering costs;

(7) Electric utility profits;

(8) Other taxes;

(9) Other required fees; and

(10) Any other energy service or expense deemed appropriate by the public utilities commission for consumer transparency."

PART II

SECTION 3. The legislature finds and declares that the issuance of special purpose revenue bonds under this Act is in the public interest and for the public health, safety, and general welfare.

SECTION 4. Pursuant to part VI, chapter 39A, Hawaii Revised Statutes, the department of budget and finance, with the approval of the governor, is authorized to issue special purpose revenue bonds in a total amount not to exceed $        , in one or more series, for the purpose of assisting Hawaiian Electric Company, Inc., Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc., all Hawaii corporations, to continue multi-project capital improvement programs, including costs to cover the acquisition of land or the construction or acquisition of facilities used or related to the production, transmission, or distribution of electricity, or any combination thereof; provided that the approval of the public utilities commission shall be required for any project financed by the issuance of special purpose revenue bonds under this Act. The special purpose revenue bonds shall be issued for the aforementioned purposes in the following distribution:

(1) Up to $         for Hawaiian Electric Company, Inc.;

(2) Up to $         for Maui Electric Company, Limited; and

(3) Up to $         for Hawaii Electric Light Company, Inc.

The legislature hereby finds and determines that the capital improvement projects and programs of Hawaiian Electric Company, Inc., Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc., constitute energy projects as defined in part VI, chapter 39A, Hawaii Revised Statutes, and the financing thereof constitutes assistance to utilities serving the general public in providing electric energy.

SECTION 5. The special purpose revenue bonds and the refunding special purpose revenue bonds issued under this Act shall be issued pursuant to part VI, chapter 39A, Hawaii Revised Statutes, relating to the power to issue special purpose revenue bonds to assist utilities serving the general public in providing electric energy.

SECTION 6. The department of budget and finance is authorized, from time to time, including times subsequent to June 30,    , to issue special purpose revenue bonds in whatever principal amounts the department shall determine to be necessary to refund the special purpose revenue bonds authorized in section 4 and to refund special purpose revenue bonds authorized in this section, regardless of whether the outstanding special purpose revenue bonds or refunding special purpose revenue bonds have matured or are the subject of redemption or whether the refunding special purpose revenue bonds shall be bonds for the multi-project programs described in section 4. In making this determination, the department shall comply with federal law relating to the exemption from federal income taxation of the interest on bonds of the nature authorized by this section.

SECTION 7. The authorization to issue special purpose revenue bonds under this Act shall lapse on June 30,    .

PART III

SECTION 8. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2015.


 


 

Report Title:

Special Purpose Revenue Bonds; Electric Utilities; HECO

 

Description:

Authorizes the issuance of special purpose revenue bonds to assist Hawaiian Electric Company, Inc., Maui Electric Company, Limited, and Hawaii Electric Light Company, Inc. Requires electric utilities to unbundle customer rates and charges to be eligible to receive financing assistance through SPRBs. (SB1214 HD1)

 

 

 

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