Honolulu, Hawaii


RE: S.B. No. 2641

S.D. 1




Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii




Your Committees on Water, Land, and Agriculture and Transportation and Energy, to which was referred S.B. No. 2641 entitled:




beg leave to report as follows:


The purpose and intent of this measure is to establish preferential rates for the purchase of energy for agricultural activities and to require electric and gas utilities to provide incentives for agricultural customers to acquire energy storage technology to support the viability of agricultural activities in the State.


Your Committees received testimony in support of this measure from the Department of Agriculture; Hawaii Cattlemen's Council, Inc.; Land Use Research Foundation of Hawaii; Hawaii Farm Bureau; Ulupono Initiative; and one individual.


Your Committees find that reductions to the cost of energy used for agricultural production are beneficial to the State.


Your Committees have heard the Public Utilities Commission's testimony and believes that the Commission should have the flexibility and discretion to select the most efficient and appropriate method to establish preferential rates without going through the formal rulemaking process. Your Committees also find the Ulupono Initiative's suggested amendments appropriate to help stabilize energy consumption demand and to ensure a fair, transparent, and non-discriminatory process in the Public Utilities Commission's approval of preferential rates.


Your Committees have therefore amended this measure by:


(1) Deleting language that would have required the Public Utilities Commission to adopt rules pursuant to chapter 91, Hawaii Revised Statutes;


(2) Replacing the term "preferential rates" with "preferential off-peak rates";


(3) Inserting language to require the Public Utilities Commission to notify the public of a request for a preferential off-peak rate, consider public comments, and approve the request only if the Public Utilities Commission determines that the requested preferential off-peak rate will provide benefit to ratepayers through improved system operations or other impacts; and


(4) Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.


As affirmed by the records of votes of the members of your Committees on Water, Land, and Agriculture and Transportation and Energy that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2641, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2641, S.D. 1, and be referred to your Committee on Commerce, Consumer Protection, and Health.


Respectfully submitted on behalf of the members of the Committees on Water, Land, and Agriculture and Transportation and Energy,