HOUSE OF REPRESENTATIVES
TWENTY-EIGHTH LEGISLATURE, 2015
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE MERGER, ACQUISITION, AND CONSOLIDATION OF ELECTRIC UTILITIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the merger, acquisition, or consolidation of an electric utility could have far-reaching effects on the health of the State's citizens, local industries, and environment. Therefore, it is necessary that the proposed merger, acquisition, or consolidation of an electric utility be subject to a thorough examination to determine whether the transaction is reasonable and in the public interest, and whether the successor electric utility is fit, willing, and able to perform the service currently offered by the existing electric utility.
The legislature further finds that public participation in the examination of any electric utility merger, acquisition, or consolidation is essential to safeguard the public interest when a proposed merger, acquisition, or consolidation is considered.
The purpose of this Act is to:
(1) Clarify standards to evaluate a proposed sale, lease, assignment, mortgage, disposition, encumbrance, merger, or consolidation of an electric utility; and
(2) Afford a reasonable opportunity for public participation in the evaluation process.
SECTION 2. Section 269-19, Hawaii Revised Statutes, is amended to read as follows:
"§269-19 Merger and consolidation of
public utilities. (a) Except as provided in subsection [
no public utility shall sell, lease, assign, mortgage, or otherwise dispose of
or encumber the whole or any part of its road, line, plant, system, or other
property necessary or useful in the performance of its duties to the public, or
any franchise or permit, or any right thereunder, nor by any means, directly or
indirectly, merge or consolidate with any other public utility without first
having secured from the public utilities commission an order authorizing it so
to do. Every such sale, lease, assignment, mortgage, disposition, encumbrance,
merger, or consolidation, made other than in accordance with the order of the
commission shall be void.
(b) Whenever an electric utility proposes a transaction covered by subsection (a), the electric utility shall file an application with the public utilities commission in a form as the commission may require. Upon filing of the application, the commission shall open a docket to determine whether the transaction is reasonable and in the public interest and whether the successor electric utility is fit, willing, and able to perform the service currently provided by the electric utility. In the evaluation of the application:
(1) The commission and division of consumer advocacy shall consider relevant factors, including but not limited to:
(A) The impact of the proposed transaction upon the following elements of the public interest:
(i) Affordability of electric service;
(ii) Safety and reliability of electric service;
(iii) Access to onsite generation and other options for customers to manage their energy usage;
(iv) Achievement of clean energy goals and related public policy objectives articulated by the State and the commission; and
(v) Economic benefits to Hawaii, including employment and industries in the State; and
(B) In determining whether the successor electric utility is fit, willing, and able to perform the service currently offered, whether the utility has the commitment and demonstrated ability to:
(i) Provide safe and reliable electric service at just and reasonable rates;
(ii) Implement the clean energy goals and related public policy objectives articulated by the State and the commission;
(iii) Develop and maintain the transmission and distribution infrastructure to optimize the system and maximize customer benefits; and
(iv) Expand customer energy options, including energy efficiency and distributed energy resources; and
(2) The commission shall:
(A) Review the electric utility's franchise in light of the elements of the public interest set forth in paragraph (1)(A) and recommend to the legislature whether the language of the franchise should be revised; and
(B) Afford a reasonable opportunity for interested persons to be heard by:
(i) Insofar as practicable, holding a public hearing in each service territory affected by the proposed transaction; and
(ii) Liberally construing any applicable standard of intervention for interested persons to become parties to the proceeding in order to enable the participation of a diverse group of stakeholders.
If the commission approves the application, the commission may impose terms and conditions as the commission determines are necessary for the transaction to satisfy the standards set forth in paragraphs (1) and (2).
(b)] (c) A public utility,
under circumstances that it deems exigent and in its judgment require a
response that rapidly restores one of its customers to normal, or near normal,
operating status in order to prevent serious disruption of essential public
services, or avoid serious risk to public safety, or to mitigate severe
economic losses to that customer, may transfer, assign, or otherwise dispose of
its property without prior approval from the public utilities commission as required
in subsection (a); provided that in so doing:
(1) The public utility does not unduly hinder or degrade the public utility's operation with respect to its services or other customers;
(2) The public utility is duly compensated for its property; and
(3) The public utility reports in detail to the public utilities commission within thirty days of any such action unless otherwise approved by the public utilities commission for good cause shown.
For purposes of this subsection, "property" does not include real property."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2112.
Public Utilities Commission; Division of Consumer Advocacy; Electric Utility Companies; Mergers and Consolidations; Standards; Hearings
Clarifies standards and criteria for the Public Utilities Commission and Division of Consumer Advocacy to apply when determining whether to approve a sale, lease, assignment, mortgage, disposition, encumbrance, merger, or consolidation, of an electric utility. (HB619 HD3)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.