HOUSE OF REPRESENTATIVES	H.C.R. NO.	126
TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII

HOUSE CONCURRENT

RESOLUTION

 

 

URGing the public utilities commission to open a docket to consider the appropriateness of amending the regulatory structure applicable to electric utilities in light of ongoing developments in the deployment of renewable energy.

 

 

 

     WHEREAS, the regulatory compact, also known as cost-of-service regulation, is the traditional regulatory theory that has governed electric utilities since the beginning of the modern energy industry in the early Twentieth Century; and

 

     WHEREAS, the regulatory compact model recognizes an electric utility as a natural monopoly and allows it to function as such in return for a commitment to providing service to all consumers within the utility's authorized service area; and

 

     WHEREAS, the major advantage of the regulatory compact model in its original context has been its basis in long-range, fixed-cost planning, which allowed electric utilities to make large capital investments in infrastructure and distribution systems and to recoup those costs through rate charges over a long enough period of time and from a large enough customer base that the burden of recoupment on individual customers was minimal; and

 

     WHEREAS, the current energy economy is rapidly evolving in light of contemporary concerns about environmental protection, climate change mitigation, looming resource shortages, the end of the industrial era, and the emergence of a technology-based economy; and

 

     WHEREAS, developments in technology and renewable energy have created opportunities for innovative energy generation and distribution strategies, including decentralized generation; and

     WHEREAS, while the use of renewable energy sources carries many undeniable environmental and economic advantages, including allowing some customers the potential for total energy independence, it creates uncertainty in long-range planning and in projecting supply and demand for large electric utilities; and

 

     WHEREAS, although the use and availability of alternate energy sources is growing exponentially, many electricity customers remain wholly or partially dependent on large utilities for electricity; and

 

     WHEREAS, the uncertainty created by the emerging renewable energy market and a dwindling electric utility customer base, if not balanced by appropriate regulatory policy, subjects the State and its residents and businesses to risks, including increasing electricity rates and decreasing service quality and reliability; and

 

     WHEREAS, in light of the challenges and market unpredictability currently faced by electric utilities, utility regulators, and utility ratepayers, along with the growing numbers and needs of independent energy producers, the time has come to reassess the almost century-old regulatory compact model to ensure safe and reliable energy access for the State and its businesses and residents under a model that responds to changing technology, accommodates a dynamic energy future, and reflects prevailing public policy; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-eighth Legislature of the State of Hawaii, Regular Session of 2016, the Senate concurring, that the Public Utilities Commission is urged to open a docket to consider the appropriateness of amending the regulatory structure applicable to electric utilities in light of ongoing developments in energy, including the deployment of renewable energy; and

 

     BE IT FURTHER RESOLVED that the Public Utilities Commission is encouraged to work with the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs, the electric public utilities in the State, and representatives of the renewable energy sector to consider whether amendments to or a wholesale revisioning of the current regulatory structure are necessary to respond to the State's current and future needs for safe, reliable energy and environmental protection; and

 

     BE IT FURTHER RESOLVED that the Chairperson of the Public Utilities Commission is requested to submit a report of the Commission's findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days before the convening of the Regular Session of 2017; and

 

     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Chairperson of the Public Utilities Commission, who in turn is requested to transmit copies to the Executive Director of the Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs; the chief executive officers of each electric utility in the State; and representatives of renewable energy in the State, as identified by the Chairperson.

 

 

 

	OFFERED BY:	_____________________________

Report Title:

Public Utilities Commission; Regulatory Structure; Electric Utilities