Bill Text: HI HB10 | 2013 | Regular Session | Introduced

Hawaii House Bill 10 (Prior Session Legislation)

Introduced

Bill Title: Electric Utility Rate Determination; Legislative Oversight

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2013-01-18 - Referred to CPC, LMG, referral sheet 1 [HB10 Detail]

Download: Hawaii-2013-HB10-Introduced.html

HOUSE OF REPRESENTATIVES	H.B. NO.	10
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO eLECTRIC public UTILITIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that electric public utilities in the State are effectively provided a monopoly on the provision of electrical services to residents of the State. In exchange for the privilege to provide electrical services within the State, electric public utilities are subject to the supervision of the public utilities commission and are required to abide by regulations adopted by the commission.

The legislature also finds that one of the most important functions of the public utilities commission is to approve rate increases proposed by electric public utilities. The legislature further finds that the cost to ratepayers for electrical services has increased at a constant and precipitous rate that has created serious financial hardships for the residents of the State.

The legislature recognizes that electric public utilities, such as Hawaiian Electric Company, Inc., are guaranteed a reasonable rate of return on their rate base. However, the legislature finds that additional oversight and expertise is needed to protect ratepayers by determining what constitutes a reasonable rate of return.

The purpose of this Act is to establish:

(1) A permanent task force to determine what constitutes a reasonable rate of return on an electric public utility's rate base; and

(2) A joint legislative oversight committee to ensure that the public utilities commission is enforcing the reasonable rate of return as established by the task force.

SECTION 2. Chapter 269, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§269- Reasonable rate of return task force. (a) There is established in the department of budget and finance the reasonable rate of return task force. The task force shall consist of four members, or their designees, as follows:

(1) The chairperson of the public utilities commission;

(2) The director of labor and industrial relations;

(3) The director of business, economic development, and tourism; and

(4) The director of commerce and consumer affairs.

(b) The task force shall determine, and periodically revise as necessary, what constitutes a reasonable rate of return on an electric public utility's rate base for the purposes of ratemaking. Among other factors, the task force shall consider how the rate of return would impact the ratepayers' ability to afford any rate increase that might result when determining and revising what constitutes a reasonable rate of return on an electric public utility's rate base.

(c) The task force shall submit an annual report of its findings and recommendations to the public utilities commission no later than December 30 of each year."

SECTION 3. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

§ -1 Definitions. As used in this chapter, unless the context otherwise requires:

"Committee" means the bipartisan joint legislative reasonable rate of return oversight committee established under this chapter.

"Member" means a member of the committee.

§ -2 Establishment of the joint legislative reasonable rate of return oversight committee. (a) There is established within the legislature a bipartisan joint legislative reasonable rate of return oversight committee to determine if the public utilities commission is enforcing the reasonable rate of return on an electric public utility's rate base as established by the reasonable rate of return task force pursuant to section 269‑ .

(b) The committee shall consist of six members: three shall be representatives appointed by the speaker of the house of representatives and three shall be senators appointed by the president of the senate; provided that three of the six members shall be of the minority party. The appointing authority of each house shall make and announce the appointment or reappointment of members of the committee no later than fifteen days after the convening of the first regular session of each legislature. The committee shall elect bipartisan co-chairpersons from among its members.

(c) Members shall serve for the duration of the legislature during which they are appointed. If the presiding officer of either house has not appointed or reappointed members of the committee within fifteen days after the convening of the first regular session of the legislature, the incumbent members shall continue serving on the committee until successors are appointed. If a member of the committee is not reelected as a member of the legislature and the presiding officer of the respective house has not appointed a successor within fifteen days after the convening of the first regular session of the legislature in which the vacancy occurs, then the majority or minority leader of the respective house, as applicable, shall appoint a majority or minority member to fill the vacancy. When a member of the committee files a declaration of candidacy for an elective office other than that of member of either house of the legislature, and the member has not resigned from membership on the committee, the member's committee membership shall terminate on the date of filing.

(d) When a vacancy occurs in the membership of the committee for a reason other than a member not being reelected as a member of the respective house of the legislature, the presiding officer of the house incurring the vacancy shall fill the vacancy within thirty days. A legislator appointed to fill a vacancy shall be a member of the same political party as the member vacating the seat.

(e) Members of the committee shall serve without pay, but shall be reimbursed for their actual and necessary expenses, including travel expenses, incurred in carrying out their duties.

§ -3 Powers and duties. (a) The committee shall:

(1) Be considered an investigating committee for purposes of issuing subpoenas pursuant to chapter 21;

(2) Have full and free access to records, reports, minutes, data, and other information of the public utilities commission deemed necessary by the committee; provided that the information shall be kept confidential;

(3) Exercise its powers during sessions of the legislature and in the interim between sessions, as necessary; and

(4) Exercise oversight over the electric utility ratemaking actions of the public utilities commission.

(b) The committee may suspend a decision and order of the public utilities commission that authorizes an electric utility rate increase if the committee finds that the public utilities commission did not apply the most recent rate established by the reasonable rate of return task force. The committee shall cause the suspension of an electric utility rate increase decision and order only if a concurrent resolution is adopted by majority vote in each house to authorize the suspension. If the legislature is not in session, then the concurrent resolution authorizing the rate increase suspension shall be adopted during the next occurring regular session in order for the suspension to be valid.

§ -4 Meetings, quorum, voting. (a) No action shall be taken by the committee at any meeting unless a quorum is present. The committee may act by a majority vote of the members present and voting at a meeting at which there is a quorum.

(b) A quorum shall consist of a majority of the total authorized membership of the committee.

SECTION 4. Section 269-16, Hawaii Revised Statutes, is amended by amending subsections (c) and (d) to read as follows:

"(c) The commission [~~may~~] in its discretion, after public hearing and upon showing by a public utility of probable entitlement and financial need, may authorize temporary increases in rates, fares, and charges; provided that the commission shall require by order the public utility to return, in the form of an adjustment to rates, fares, or charges to be billed in the future, any amounts with interest, at a rate equal to the rate of return on the public utility's rate base found to be reasonable by the commission, received by reason of continued operation that are in excess of the rates, fares, or charges finally determined to be just and reasonable by the commission[.]; provided further that the rate of return on an electric public utility's rate base shall be in accordance with the rate established by the reasonable rate of return task force. Interest on any excess shall commence as of the date that any rate, fare, or charge goes into effect that results in the excess and shall continue to accrue on the balance of the excess until returned.

(d) The commission shall make every effort to complete its deliberations and issue its decision as expeditiously as possible and before nine months from the date the public utility filed its completed application; provided that in carrying out this mandate, the commission shall require all parties to a proceeding to comply strictly with procedural time schedules that it establishes. If a decision is rendered after the nine-month period, the commission shall report in writing the reasons therefor to the legislature within thirty days after rendering the decision.

Notwithstanding subsection (c), if the commission has not issued its final decision on a public utility's rate application within the nine-month period stated in this section, the commission, within one month after the expiration of the nine-month period, shall render an interim decision allowing the increase in rates, fares and charges, if any, to which the commission, based on the evidentiary record before it, believes the public utility is probably entitled. The commission may postpone its interim rate decision for thirty days if the commission considers the evidentiary hearings incomplete. In the event interim rates are made effective, the commission shall require by order the public utility to return, in the form of an adjustment to rates, fares, or charges to be billed in the future, any amounts with interest, at a rate equal to the rate of return on the public utility's rate base found to be reasonable by the commission, received under the interim rates that are in excess of the rates, fares, or charges finally determined to be just and reasonable by the commission[.]; provided that the rate of return on an electric public utility's rate base shall be in accordance with the rate established by the reasonable rate of return task force. Interest on any excess shall commence as of the date that any rate, fare, or charge goes into effect that results in the excess and shall continue to accrue on the balance of the excess until returned.

The nine-month period in this subsection shall begin only after a completed application has been filed with the commission and a copy served on the consumer advocate. The commission shall establish standards concerning the data required to be set forth in the application in order for it to be deemed a completed application. The consumer advocate may[~~, within twenty-one days after receipt,~~] object to the sufficiency of any application[,] within twenty-one days after receipt, and the commission shall hear and determine any objection within twenty-one days after it is filed. If the commission finds that the objections are without merit, the application shall be deemed to have been completed upon original filing. If the commission finds the application to be incomplete, it shall require the applicant to submit an amended application consistent with its findings, and the nine-month period shall not commence until the amended application is filed."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

Report Title:

Electric Utility Rate Determination; Legislative Oversight

Description:

Establishes a permanent task force to determine and periodically revise a reasonable rate of return for electric utilities. Establishes a bipartisan joint legislative oversight committee to determine if the PUC is enforcing the reasonable rate of return established by the task force.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.