H.B. NO.














Relating to the audit authority of the Public Utilities Commission.





     SECTION 1.  The legislature finds that the Hawaiian Electric Companies (HECO) serve ninety-five per cent of the energy needs of Hawaii citizens and is accountable to the public utilities commission, yet is continually reported to be lagging in ability to meet requested standards.  The executive branch and legislature have established the goals and directives for energy initiatives in the State, and HECO is often criticized for its slow issuance of action plans, failure to integrate and upgrade infrastructure, and poor implementation of new technology.  The commission has ordered HECO to take immediate steps to implement new technologies and lower costs, but the result have been dismal.

     Therefore, the legislature further finds that in the interest of Hawaii residents, the commission must scrutinize more frequently the public utilities it oversees.

     The purpose of this Act is to mandate a periodic management, financial, and environmental audit by the public utilities commission of any public utility serving seventy-five per cent or more of the state industry market to ensure compliance with the expectations and goals of the commission as established by the legislature and executive branch.

     SECTION 2.  Section 269-144, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§269-144[]]  Compliance and enforcement.  (a)  The commission shall take all necessary steps, including audits, spot checks, data requests, report requests, and internal monitoring procedures, to ensure that any electric utility, any user, owner, or operator of the Hawaii electric system, or any other person, business, or entity connecting to the Hawaii electric system is in compliance with all adopted reliability standards and interconnection requirements, as appropriate.

     (b)  The commission may impose reasonable penalties on any user, owner, or operator of the Hawaii electric system, or any other person, business, or entity connecting to the Hawaii electric system acting in violation of an adopted reliability standard after notice as provided under section 269-12 and an opportunity for a proceeding under section 269-15 has been given.

     (c)  The commission shall adopt rules pursuant to chapter 91 for the issuance of any penalty under this section.  In adopting rules, the commission may make provisions for the Hawaii electric reliability administrator to recommend penalties and enforcement to the commission.

     (d)  The commission shall provide, at least every three years, for an independent third-party management and financial audit of any Hawaii public utility that services seventy-five per cent or more of the state industry market to determine if the utility is in compliance with all relevant programmatic, financial, and environmental requirements.  The auditor shall submit its findings and recommendations to the legislature no later than twenty days before the convening of the regular session following the year in which the audit is conducted.  The first audit shall occur within one year of July 1, 2015 and shall include but not be limited to the following:

(1)  The responsibilities, services, and activities of the utilities;

     (2)  The propriety of expenditures;

(3)  Compliance of utilities with the established goals of the public utilities commission as defined in Chapter 269 of the Hawaii Revised Statutes and pursuant to the germane administrative rules adopted by the commission; and

(4)  Any additional audit issues that the auditor deems appropriate."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.










Report Title:

Audit; Public Utilities Commission



Mandates a periodic audit of certain public utilities by the Public Utilities Commission for managerial, financial, and environmental compliance.




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