Hawaii-2020-SB2733-Introduced

SECTION 1. The legislature finds that the public utilities commission regulates all chartered, franchised, certificated, and registered public utility companies operating in the State with the purpose of balancing the interests of consumers against the interests of regulated companies. Regulated companies and utilities tend to have significant resources to advocate for their interests before the public utilities commission, but few organizations or individuals have a similar capacity to advocate for the interests of consumers.

The legislature further finds that in many other states, organized and well-funded community advocacy organizations exist to ensure the interests of consumers are represented in major decisions made by those states' public utilities commissions. However, there are very few organizations in Hawaii dedicated to advocating for the interest of consumers, and most intervenors in public utilities commission proceedings tend to participate to pursue their own agendas, which only sometimes overlap with public interests.

While Hawaii's consumer advocate has a broad mission and is directed to act on behalf of individual consumers, the consumer advocate must also represent the interests of large industrial consumers and commercial entities. This can potentially limit advocacy on behalf of individual consumers when their interests conflict with those of the larger entities the consumer advocate also represents.

The legislature further finds that to encourage meaningful advocacy on behalf of the interests of the public, seven states currently allow intervenors to receive reimbursement for their costs when they make a substantial contribution to a public utilities commission proceeding that produces a clear benefit for consumers.

The California Intervenor Compensation Program, enacted in 1981, has successfully encouraged advocacy on behalf of consumers that resulted in reduced rate hikes by utilities. This advocacy saved California consumers billions of dollars. A 2013 audit found that the Intervenor Compensation Program was well-managed and that, between 2008 and 2012, it had received three hundred and seventy-seven claims from intervenors and awarded $25,500,000. Some of those intervenors include the Utility Reform Network, Utility Consumers' Action Network, Disability Rights Advocates, Aglet Consumer Alliance, The Greenlining Institute, Center for Biological Diversity, Consumer Federation of California, Green Power Institute, and Rancho Penasquitos Concerned Citizens.

The purpose of this Act is to establish an intervenor compensation program, based on other existing state models, that compensates intervenors who make a substantial contribution to a public utilities commission proceeding and that produces a positive result or savings for consumers.

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

"Part . intervenor compensation program

§269- Definitions. As used in this part, unless the context requires otherwise:

"Commission" means the public utilities commission.

"Compensation" means payment for all or part, as determined by the commission, of reasonable advocate's fees, reasonable expert witness fees, and other reasonable costs of preparation for and participation in a proceeding, and includes the fees and costs of obtaining an award under this section and of obtaining judicial review, if any.

"Expert witness fees" means recorded or billed costs incurred by an intervenor for an expert witness.

"Intervenor" means a person or organization that has been admitted as an intervenor or participant in a commission proceeding.

"Intervenor compensation special fund" means the intervenor compensation special fund established in this part.

"Notice of intent to claim intervenor compensation" means a standardized document available on the commission website.

"Other reasonable costs" means reasonable out-of-pocket expenses directly incurred by an intervenor that are directly related to the contentions or recommendations made by the customer that resulted in a substantial contribution.

"Proceeding" means an application, complaint, or investigation; rulemaking; alternative dispute resolution procedures in lieu of formal proceedings as may be sponsored or endorsed by the commission; or other formal proceeding before the commission.

"Request for an award of compensation" means a standardized document available on the commission website.

"Substantial contribution" means that, in the judgment of the commission, the intervenor's presentation has substantially assisted the commission in making its order or decision because the order or decision has adopted in whole or in part one or more factual contentions, legal contentions, or specific policy or procedural recommendations presented by the intervenor. "Substantial contribution" includes evidence or argument that supports part of the decision, even if the commission does not adopt a party's position in total.

§269- Intervenor compensation program; established. (a) There is established an intervenor compensation program to provide compensation for reasonable advocate's fees, reasonable expert witness fees, and other reasonable costs to an intervenor who makes a substantial contribution to a proceeding resulting in a decision favorable to the interests of consumers. The commission shall not be legally required to reimburse an intervenor for any estimated or claimed expenses. The commission shall undertake a detailed review of the reasonableness of the actual claimed costs when it reviews an intervenor compensation claim.

(b) The provisions of this part shall apply to all formal proceedings of the commission involving electric, gas, water, wastewater, and transportation, and shall be administered in a manner that encourages the effective and efficient participation of all groups that have a stake in the public utility regulation process.

(c) The process for finding eligibility for intervenor compensation shall be streamlined, whereby the preliminary showing by an intervenor shall be of issues, budget, and costs.

(d) Intervenors shall be compensated for making a substantial contribution to proceedings of the commission, as determined by the commission in its orders and decisions.

(e) Intervenor compensation shall be awarded to eligible intervenors in a timely manner, within a reasonable period after the intervenor has made the substantial contribution to a proceeding that is the basis for the compensation award.

(f) This part shall be administered in a manner that avoids unproductive or unnecessary participation that duplicates the participation of similar interests otherwise adequately represented or participation that is not necessary for a fair determination of the proceeding.

(g) Participation by an intervenor that materially supplements, complements, or contributes to the presentation of another party or the commission staff, may be fully eligible for compensation if the participation makes a substantial contribution to a commission order or decision.

§269- Intervenor compensation program; awarding. (a) An intervenor who intends to seek an award for compensation under this part shall, at the earliest reasonable time, file a notice of intent to claim intervenor compensation with the commission. The intervenor shall include within the filing a statement of the nature and extent of the intervenor's planned participation, an itemized estimate of the compensation that the customer expects to request, including anticipated expert witness fees and other reasonable costs, and a statement explaining the intervenor's significant financial hardship.

(b) An intervenor who has made a substantial contribution to a commission decision or order may file a request for an award of compensation within sixty days after the decision or order is issued, or within thirty days of the closing of the proceeding.

(c) Any computer model that is the basis for any intervenor compensation shall be available to, and subject to verification by, the commission and parties to the hearing or proceedings to the extent necessary for cross-examination or rebuttal.

(d) The computation of compensation awarded shall take into consideration the market rates paid to persons of comparable training and experience who offer similar services. The compensation awarded may not, in any case, exceed the comparable market rate for services paid by the commission or the public utility, whichever is greater, to persons of comparable training and experience who are offering similar services.

(e) The commission may audit the records and books of the intervenor to the extent necessary to verify the basis for the award.

(f) The commission shall deny any award to any intervenor who attempts to delay or obstruct the orderly and timely fulfillment of the commission's responsibilities.

(g) The commission may require public utilities to pay into the intervenor compensation special fund or from the public benefits fee.

(h) The award shall be paid out of the intervenor compensation special fund.

§269- Intervenor compensation special fund. There is established the intervenor compensation special fund within the department of commerce and consumer affairs for administrative purposes, into which shall be deposited any funds so designated by the commission, and from which awards for intervenor compensation under this part may be paid.

§269- Rules. The commission shall adopt rules pursuant to chapter 91 as necessary to implement this part."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2020-2021 for the purposes of this Act.

The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2020.

INTRODUCED BY:

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THE SENATE	S.B. NO.	2733
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII