HOUSE OF REPRESENTATIVES

H.B. NO.

2642

TWENTY-FIFTH LEGISLATURE, 2010

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING to utilities regulation.

 

 

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

 


     SECTION 1.  The public utilities commission and the division of consumer advocacy are funded entirely by fees and other revenues collected by the commission and deposited in the public utilities commission special fund.  This fund was established by the legislature by Act 226, Session Laws of Hawaii 1994, to ensure that the public utilities commission and the division of consumer advocacy would have sufficient resources to provide the essential services required to effectively regulate Hawaii's public utilities.  At that time, the legislature recognized the need to provide adequate funding for the regulatory agencies, and it found that, in addition to the ordinary processing of regulatory cases, adequate funding would allow agencies to cut regulatory delays and handle the many challenges of the changing environment in public utilities.

     The legislature finds that adequate staffing of the public utilities commission and the division of consumer advocacy is essential for these agencies to effectively perform their missions.  The legislature acknowledged this in Act 226, Session Laws of Hawaii 1994, when it established the public utilities special fund, in Act 143, Session Laws of Hawaii 2006, when it required the public utilities commission and the division of consumer advocacy to prepare reorganization plans, and again in Act 177 and Act 183, Session Laws of Hawaii 2007, when it passed legislation to reorganize the two agencies in order to revitalize Hawaii's utility regulatory program.  The reorganizations approved for these agencies by Act 177 and Act 183 provided for:

     (1)  Increased staff levels;

     (2)  Agency re-structuring and re-description of several positions to modernize the operation of the agencies; and

     (3)  Necessary relocation of the commission offices.

     In fiscal year 2009-2010, however, the budget for the public utilities commission was reduced, taking away nine positions, leaving two additional positions unfunded, and leaving the previously-approved relocation of the public utilities commission offices unfunded.  The loss of all of these positions negatively impacts the overall reorganization plan and hobbles the commission's effectiveness.

     Similarly, in fiscal year 2009-2010, the budget for the division of consumer advocacy was reduced such that eight positions that were in the process of being re-described as part of the reorganization were taken away, and the new positions provided for in the reorganization of the division could not be filled.  This reduction in staff and budget severely impairs the division's ability to effectively meet its duties and objectives.  Coupled with the additional effects of furloughs and other associated restrictions and reductions, there has been an approximately 9.5 per cent reduction in employee work hours.  At its present level of staffing and approved budget, the division faces difficulty, and it has delayed, as much as possible, participating in all of the matters filed with the commission.  In addition, processing times for applications, licenses, registrations, investigations and case-handling have all increased, except where established by law.  For example, to date in fiscal year 2009-2010, the division has not had sufficient staff or resources to participate in any applications related to certification of new telecommunications services providers, and it has had to request more deadline extensions in matters of public utility regulation than in the past.

     Currently, there are fifty-one funded permanent positions in the public utilities commission.  Thirty-seven of these positions are filled, and fourteen positions are unfilled.  Of these unfilled positions, eleven are new positions created by the reorganization approved by Act 177, Session Laws of Hawaii 2007.  The commission is actively trying to obtain necessary approvals and find qualified applicants for the unfilled positions.

     Currently, there are fifteen funded positions in the division of consumer advocacy.  Eleven of these positions are filled and four positions are unfilled.  The division is actively trying to obtain the necessary approvals and find qualified applicants for the remaining vacancies.

     The legislature continues to believe that the reorganizations of the public utilities commission and the division of consumer advocacy provided by Act 177 and Act 183, Session Laws of Hawaii 2007, are essential for providing sufficient regulation of Hawaii's public utilities; controlling utility costs for Hawaii's people, businesses, and governmental agencies; and successfully implementing meaningful energy policy reform in Hawaii.  It is especially important for these agencies to have sufficient resources to effectively and efficiently oversee Hawaii's transition from its over-reliance on the use of imported fossil fuels to increased use of renewable energy and energy efficiency.  The public utilities commission and the division of consumer advocacy will be responsible to oversee the investment of several billion dollars in public utility-related capital investments as part of this transition in the next several years.

     The legislature acknowledges the budgetary difficulties faced by the State and its agencies, but it finds that the failure to adequately fund the staffing and reorganization of the public utilities commission and the division of consumer advocacy will have consequences that will extend much further than the current economic recession.  Indeed, it is recognized that a vital and effective public utility regulatory program is essential to Hawaii's economic recovery.  The public utilities commission and the division of consumer advocacy regulate between three to four billion dollars of electric and telecommunications bills annually that are paid by Hawaii's people, businesses, and government agencies.  Analyses performed by the Hawaii Energy Policy Forum indicate that the increased effectiveness of the public utilities commission and the division of consumer advocacy which would result from the reorganizations approved in Act 177 and Act 183, Session Laws of Hawaii 2007, would, in several years, reduce the annual utility expenses in the State's budget by several times as much as the annual cost of fully funding the reorganization of these agencies.  The savings that would result from effective regulation and efficient allocation of public utility investments over the next several years would save Hawaii's economy over one hundred million dollars annually.

     The legislature finds that the public utilities commission special fund contains sufficient moneys to adequately fund the public utilities commission and the division of consumer advocacy including all provisions of the reorganization approved in Act 177 and Act 183, Session Laws of Hawaii 2007.

     The purpose of this Act is to authorize sufficient funding for the operation and staffing of the public utilities commission and the division of consumer advocacy in order to accomplish the objectives of those agencies and fulfill the intent of their reorganization that was begun by Act 177 and Act 183, Session Laws of Hawaii 2007.

     SECTION 2.  There is appropriated out of the public utilities commission special fund the sum of           or so much thereof as may be necessary for fiscal year 2010-2011 for the operations of the public utilities commission, including funding all positions included in the reorganization approved by Act 177, Session Laws of Hawaii 2007, including the reinstating and funding of the nine positions removed by  Act 162, Session Laws of Hawaii 2009, and funding all expenses related to the relocation of the commission's offices as approved in Act 177, Session Laws of Hawaii 2007.

     The sum appropriated shall be expended by the public utilities commission for the purposes of this Act.

SECTION 3.  (a)  Upon request, other state and county agencies shall assist the public utilities commission in carrying out the provisions of this Act.

     (b)  The department of human resources development shall work cooperatively with the public utilities commission in establishing and re-describing job descriptions in a timely manner as is deemed necessary by the public utilities commission.

     SECTION 4.  There is appropriated out of the public utilities commission special fund the sum of $            or so much thereof as may be necessary for fiscal year 2010-2011 for the operations of the division of consumer advocacy, including the funding of all positions included in the reorganization approved by  Act 183, Session Laws of Hawaii 2007, including the reinstatement and funding of the positions removed in fiscal year 2009-2010 and the necessary  training for new and existing division personnel.

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

     SECTION 5.  This Act shall take effect on July 1, 2010.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Appropriations; Public Utilities Commission; Division of Consumer Advocacy

 

Description:

Appropriates moneys for the reorganization of the PUC and the division of consumer advocacy.

 

 

 

 

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