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 impacts 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 utility is fit, willing, and able to perform the service currently offered by the existing utility.
The legislature further finds that public participation in the examination of any utility merger, acquisition, or consolidation is essential to safeguard the public interest when the public utilities commission considers a proposed merger, acquisition, or consolidation.
The purpose of this Act is to:
(1) Establish standards to evaluate a proposed merger, acquisition, or consolidation of an electric utility; and
(2) Require public hearings to enable 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 (b), 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 a transaction concerning an electric utility is proposed under subsection (a), the electric utility, or the person or persons, seeking an order under subsection (a), shall present an application to the commission in a form as the commission may require. The commission shall open a docket to determine whether the transaction is reasonable and in the public interest and whether the successor utility is fit, willing, and able to perform the service currently provided by the electric utility. In its evaluation of the application, the commission shall:
(1) Consider the impact of the proposed transaction upon the following elements of the public interest:
(A) Affordability of electric service;
(B) Safety and reliability of electric service;
(C) Access to onsite generation and other options for customers to manage their energy usage;
(D) Achievement of clean energy goals and related public policy objectives articulated by the State and the commission; and
(E) Economic benefits to Hawaii, including employment and industries in the State;
(2) In determining whether the successor utility is fit, willing, and able to perform the service currently offered, consider whether the utility has the commitment and demonstrated ability to:
(A) Provide safe and reliable electric service at just and reasonable rates;
(B) Implement the clean energy goals and related public policy objectives articulated by the State and the commission;
(C) Develop and maintain the transmission and distribution infrastructure to optimize the system and maximize customer benefits; and
(D) Expand customer energy options, including energy efficiency and distributed energy resources;
(3) Review the electric utility's franchise in light of the elements of the public interest set forth in paragraph (1) and recommend to the legislature whether the language of the franchise should be revised; and
(4) Afford a reasonable opportunity for interested parties to be heard; provided that in conducting a hearing, the commission shall:
(A) Require the applicants to attend at least three public hearings in each service territory affected by the proposed transaction;
(B) Liberally construe 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; and
(C) Grant the intervention of any party requested by the senate president and the speaker of the house; and
(5) Be relieved from any compliance with any statutory deadline prescribed in section 269-16(d).
If the commission approves of the transaction, 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) through (5).
(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 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act shall take effect upon its approval.
PUC; Electric Utilities; Mergers and Consolidations; Standards; Hearings
Requires the PUC to apply certain standards and criteria and hold a public hearing to determine whether to approve a merger, acquisition, or consolidation of an electric utility.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.