Gov. Ige Signs Ratepayer Protection Act

Governor David Ige. Photo courtesy of the Office of Governor David Ige.

On Tuesday, April 24, 2018, Hawai‘i Gov. David Ige signed SB 2939 SD2 (Act 005), which requires the Hawai‘i Public Utilities Commission to create the framework that will tie electric utility revenues to performance metrics.

The bill, also known as the Hawai‘i Ratepayer Protection Act, establishes performance metrics that the PUC will consider while establishing performance incentives and penalty mechanisms. They include: affordability of electric rates and customer electric bills; service reliability; customer engagement and satisfaction, including customer options for managing electricity costs; access to utility system information; rapid integration of renewable energy sources; timely execution of competitive procurement.

“The bottom line is that SB 2939 is a victory for Hawai‘i’s energy consumers who will see more value for their hard-earned dollars,” said Gov. Ige. “Through its expertise and oversight, the PUC will ensure that we move aggressively toward our renewable energy and consumer protection goals while maintaining a safe, reliable and resilient electric grid operated by a financially stable utility.”

“By aligning the utility’s incentives with the consumer’s incentives, everyone wins,” said Sen. Stanley Chang, who introduced the bill. “Electricity bills will be based on performance: bringing renewable power sources online, upgrading the electric grid, ensuring reliability of the power supply, and even customer satisfaction. That’s good for consumers, good for businesses, good for the environment, good for the state, and good for the utilities.”

“This bill aligns the interests of utilities and our communities they serve,” said Rep. Chris Lee, chair of the Committee on Energy and Environmental Protection. “It is a big win for local consumers who will get improved electric services with more options for innovative renewables and batteries, and it is a responsible step forward helping our utilities transition to a sustainable business model that can survive disruption in the energy market.”

“The Legislature has worked hard to establish regulatory policy that will better align electric utility incentives with customer needs and the State’s energy policy,” said Rep. Della Belatti. “The Legislature is confident that the Public Utilities Commission, as already demonstrated through the release of its April 18, 2018 docket related to performance-based regulation, will appropriately incorporate stakeholder input in identifying incentives that make sense and implementing these incentives that will minimize unproductive disruption and not result in unintended consequences.  Through this collaborative, deliberative, and balanced process, the state will achieve the necessary update to our regulatory framework that ensures a safe, reliable, and resilient electric grid for all of our residents from our rural, agricultural communities to our most densely, populated urban areas.”

Act 005 takes effect on July 1, 2018. The PUC is required to create the framework by Jan. 1, 2020.