STAND. COM. REP. NO. 1438-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: S.B. No. 2287
                                     S.D. 1
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred S.B. No.
2287, S.D. 1, H.D. 2, entitled: 

     "A BILL FOR AN ACT RELATING TO THE PUBLIC UTILITIES
     COMMISSION,"

begs leave to report as follows:

     The purpose of this bill is to provide a mechanism to
resolve the problem of equitably distributing the costs of
undergrounding utility lines, while retaining the flexibility
needed to address county and community interests.

     This bill enables a county to initiate projects to
underground utility lines and related facilities, subject to the
approval of the Public Utilities Commission (PUC).  Upon approval
of an undergrounding project, the cost of paying for the project
shall be divided as follows:

     (1)  One-third by the community;

     (2)  One-third by the county, which may choose to pay more
          than its share; and

     (3)  One-third by the owner of the utility lines and related
          facilities subject to the undergrounding of the
          project.

     In addition, this bill authorizes the counties to:

 
 
                                 STAND. COM. REP. NO. 1438-00
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     (1)  Establish special funds into which shall be deposited
          voluntary contributions and other funds to be used for
          an undergrounding projects;

     (2)  Establish community accounts into which shall be
          deposited community donations to be used to pay for the
          community's share of an undergrounding project;

     (3)  Issue general obligations bonds to finance
          undergrounding projects; and

     (4)  Use a portion of the franchise fees received from any
          utility company for undergrounding projects.

     Hawaiian Electric Company and its subsidiaries, Hawaii
Electric Light Company and Maui Electric Company, and Malama O
Manoa testified in support of this bill.  PUC, the Division of
Consumer Advocacy, and Kauai Electric supported the intent of
this bill.  GTE offered comments on this bill.

     Your Committee recognizes that underground utility lines
have significant aesthetic and safety advantages over aboveground
utility lines.  However, your Committee has concerns regarding
the cost-sharing mechanism proposed in this measure.

     More affluent communities, which are more able to pay for
their share of undergrounding, will be more likely to choose
undergrounding.  While the community's portion of the cost will
be borne by those individuals residing in the community, the
utility company's share will be borne by all ratepayers.
Similarly, the county's share will be borne by all county
citizens.  This may result in less-affluent communities paying a
share for the undergrounding of utility lines in more affluent
neighborhoods.

     Your Committee, therefore, urges that counties, utility
companies, and communities evaluate and seek alternative funding
mechanisms and cost-sharing methods for the purpose of
undergrounding utility lines that would be more equitable for all
citizens.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
2287, S.D. 1, H.D. 2, and recommends that it pass Third Reading.


 
 
 
                                 STAND. COM. REP. NO. 1438-00
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Finance,



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair