H.B. NO.



H.D. 2
















     SECTION 1.  The legislature finds that Hawaii's electricity customers continue to endure the highest electricity prices in the country, and the high cost of electricity imposes substantial burdens on Hawaii's households and businesses.  Although some states in the 1990s opted to fully or partially unbundle their electricity sectors to allow for competitive generation segments, separate transmission and distribution segments, and independent system operators, Hawaii has yet to unbundle its electricity sector, with each island's utility still operating as a vertically-integrated regulated monopoly.

     The legislature also finds that retail wheeling refers to the distribution of electricity owned by an independent power supplier and sold to a retail consumer over transmission and distribution lines of a public utility that is not itself producing the electricity.  Fifteen states have actively restructured their energy markets and adopted retail wheeling in some form.  However, in Hawaii, independent power producers must sell power to a public utility rather than allowing for direct sale to end users.

     The legislature believes that given Hawaii's environment and electricity market, wheeling can provide a vehicle for increased competition in energy markets and improved service and customer choice without requiring the utility to divest its own generation assets or lose control over the operation of transmission and distribution.

     The legislature finds that retail wheeling can be an effective means of fostering innovation and greater renewable energy production, as independent power producers can take advantage of end user preferences for cleaner power to secure higher prices for their output than may be possible under a given utility's avoided cost formula.  Retail wheeling would provide an alternative option for independent power producers that is not available under the feed-in-tariff schedule being established by the public utilities commission and the consumer advocate.

     The legislature believes that expanding independent power producers' off-take options will help to attract additional renewable energy investment, thus contributing to local economic development, job creation, and greater energy security for the State.

     The purpose of this Act is to require the public utilities commission to explore the feasibility of retail wheeling in Hawaii to increase competition within Hawaii's electrical markets, expand customer choice, reduce customers' electrical bills, and diversify Hawaii's energy base without jeopardizing the stability of the grid or services.

     SECTION 2.  The public utilities commission shall explore, through its docket process, the feasibility of retail wheeling in Hawaii.  If the public utilities commission concludes through its docket process that retail wheeling will be beneficial to consumers and the public interest, the public utilities commission shall explore the appropriate steps to be taken to implement retail wheeling.  The public utilities commission shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2018.  If retail wheeling is deemed feasible and in the public and consumer interest, the public utilities commission shall include proposed retail wheeling implementation plans and associated deadlines in its report to the legislature.

     SECTION 3.  This Act shall take effect on July 1, 2112.


Report Title:

Electricity; Retail Wheeling; Public Utilities Commission



Requires the Public Utilities Commission to explore the feasibility of retail wheeling in Hawaii, report to the Legislature, and, if retail wheeling is deemed feasible and in the public and consumer interest, to submit proposed implementation plans and associated deadlines with its report.  (HB152 HD2)




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