Bill Text: HI HCR71 | 2014 | Regular Session | Introduced
Bill Title: Public Utilities Commission; Energy Regulation
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2014-03-10 - Referred to EEP, CPC, referral sheet 30 [HCR71 Detail]
Download: Hawaii-2014-HCR71-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.C.R. NO. |
71 |
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TWENTY-SEVENTH LEGISLATURE, 2014 |
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STATE OF HAWAII |
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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 regulatory compact model was developed in the context of an emerging industrial economy that was minimally concerned with environmental impacts, included seemingly unlimited access to petrochemical resources, and deployed large-scale, mechanized technology that was inaccessible to all but the largest interests; and
WHEREAS, the major advantage of the regulatory compact model in its original context is that its basis in long-range, fixed cost planning 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 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 modern concerns about environmental protection, the need
to mitigate the effects of climate change, 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, that can drive new economic growth with a
lessened impact on the health of the environment; 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 both long-range planning and in projecting timely service needs for large electric utilities since the utilities can no longer sustain a business model based on providing a stable amount of electricity to a fixed customer base; 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 dwindling electric utility customer base, if not balanced by appropriate regulatory policy, increases the costs of producing electricity since electric utilities cannot make needed capital investments to accommodate diverse fuel sources and unstable distribution patterns with confidence in recouping the cost of those investments; and
WHEREAS, increased costs of energy production and a shrinking customer base over which to distribute investment costs means that remaining electric utility customers are forced to bear the burden of higher utility rates and the risk of lowered quality of service, through no fault of their own and with no option to avoid the costs or risks; and
WHEREAS, the Public Utilities Commission has, over the past several decades, had occasion to consider adjustments to its system of energy regulation in light of the emergence of the renewable energy sector; and
WHEREAS, in 2008, the State's major energy utilities and regulatory agencies entered into the Energy Agreement Among the State of Hawaii, Division of Consumer Advocacy of the Department of Commerce and Consumer Affairs, and Hawaiian Electric Companies for the purpose of establishing a revised regulatory and planning framework for a Clean Energy Scenario Planning process; and
WHEREAS, since that time, the Hawaiian Electric Companies, which constitute the major electric utilities for the City and County of Honolulu and the Counties of Hawaii and Maui, have begun to move away from traditional integrated resource planning based on fixed, twenty-year projections and toward a planning process that incorporates flexible action plans with the ability to accommodate a dynamic energy future; and
WHEREAS, in light of the novel challenges and market unpredictability currently faced by both energy providers and utility regulators, the time has come to reassess the almost century-old regulatory compact model to ensure that providers and regulators are able to meet the needs of the emerging renewable energy market and to ensure safe and reliable energy access for energy customers; now, therefore,
BE IT RESOLVED by the House of Representatives of the Twenty-seventh Legislature of the State of Hawaii, Regular Session of 2014, 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 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, currently licensed electric utilities in the State, and representatives of the renewable energy sector to consider whether amendments to 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 2015; 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 chief executive officers of each
electric utility in the State, representatives of renewable energy in the State
as identified by the Chairperson, and the Executive Director of the Division of
Consumer Advocacy of the Department of Commerce and Consumer Affairs.
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OFFERED BY: |
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Public Utilities Commission; Energy Regulation
