Report Title:

Utilities; Receivership

 

Description:

Guarantees the operation of water and sewer services to Hawaii residents by allowing the Public Utility Commission to take necessary action and appoint receivers whenever regulated public utilities fail to provide adequate and reasonable service.  (HB1061 HD1)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1061

TWENTY-FIFTH LEGISLATURE, 2009

H.D. 1

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO PUBLIC UTILITIES.

 

 

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

 


     SECTION 1.  The legislature finds that the health and welfare of the State's citizens depend in large part on their ability to access essential water and sewer services.  The state public utilities commission regulates water and sewer services provided by private companies, but not those same services as provided by the counties.  To better ensure that the commission has all the necessary authority to take proactive measures on behalf of customers when a regulated water or sewer utility either fails to provide adequate and reasonable service to its customers, or fails in such a way that there is serious and imminent threat to the health and welfare of its customers, the legislature believes that the commission should have the power to appoint a receiver to ensure that utility services are continued or brought back up to appropriate standards.

     The purpose of this Act is to provide the public utilities commission with authority to appoint a receiver to take such temporary action as is necessary to assure continued adequate water or sewer service.

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

     "§269-    Appointment of receiver for public utilities.  (a)  Whenever the commission finds that a regulated private water utility or regulated private sewer utility is failing, or that there is an imminent threat of the utility failing, to provide adequate and reasonable service to its customers, and that such failure is a serious and imminent threat to the health, safety, and welfare of those customers of the utility, the commission may appoint a receiver to take such temporary action as is necessary to assure continued service, or to bring the service up to appropriate regulatory standards.  The commission may also appoint a receiver to take such temporary action as is necessary to assure continued service if, after notice and hearing, the commission finds that any private water or any private sewer utility regulated under this chapter is consistently failing to provide adequate and reasonable service.  In carrying out its responsibilities, the receiver, and any additional outside legal counsel, consultants, or staff the commission or receiver may deem necessary under the circumstances, shall have the authority to gain access to all of the company utility assets and records, and to manage those assets in a manner that will restore or maintain an acceptable level of service to customers.  The receiver shall be authorized to expend existing company utility revenues for labor and materials and to commit additional expenditures as are essential to providing an acceptable level of service, such expenditures to be funded in accordance with generally accepted ratemaking practices.  Any costs incurred by the commission, its staff, or the appointed receiver under this section shall be the responsibility of the utility in receivership or its ratepayers.  Control of and responsibility for the utility shall remain in the receiver until the utility can, in the best interests of its customers, be returned to the original owners, transferred to new owners, or liquidated, whichever the commission may determine to be in the public interest.

     (b)  If the commission determines that the utility's action, or inaction, that caused it to be placed under the control and responsibility of a receiver under this section, was due to intentional misappropriation or wrongful diversion of the assets or income of such utility or to other wilful misconduct by any director, officer, or manager of the utility, it may require such director, officer, or manager to make restitution to the utility."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.