Senate Standing Committee on Government Operations

Foreign.

Thank you for your patience.

We're convening the joint committees with the Committee on Energy Intergovernmental affairs and the Committee on Government Operations on this Tuesday, March 18th at 3 o' clock in room 016. This hearing is being streamed live on YouTube so if there's any type of technical difficulties we will post notice as to when we will reconvene this hearing.

For those who are testifying, we're going to limit your testimony I'm feeling generous today to two minutes. Not one minute usually, but two minutes for, for today. We have one item on this agenda that is House Bill 344 HD1 relating to electric vehicle charging infrastructure. On our testifiers list we have Mark Glick from State Energy Office.

Chris Junker on behalf of Mark Wick for the Hawaii State Energy Office Chairs, Vice Chairs, Members of the Committee, we stand on our written testimony in support and are available for questions.

Thank you, Chris. Keith Reagan from DAGS.

Chair, Vice Chairs, Regan Comptroller, State of Hawaii Department of County Internal Services send our written testimony in support of this measure. Happy to answer any questions you may have. Chair Great.

Thank you Keith Kirby Shaw from the Disabilities and Communication Access Board has. Thank you. Leah Laraby has submitted testimony in support. Ted Bolik has indicated he might be here but he's not and has submitted testimony in support and Timur Tal Fai okay from Hawaiian Electric.

And we have Tiffany Yajima from the Automobile Association that might be joining us via Zoom.

Not present on Zoom Chair that's all I have.

Well Members we have, I would guesstimate another 20 individuals all in support for this measure. Is there anyone else wishing to testify in person or on Zoom? If not Members, any questions? Okay and yeah, I just. Oh wait, we got one.

Keith Reagan so this requires a design of all new buildings to include electric vehicle charger ready parking stalls. Is this going to increase the cost of the of the new buildings and if so by how much?

It may increase the cost but I think it'll be nominal because if you design it properly from the get go you can accommodate, you know, the additional infrastructure that's necessary eventually place targeting stations. Okay.

But I can't tell you exactly how much it's going to because things are in so much flux right now as it relates to tariffs and everything else. So, I don't, I couldn't tell you exactly how much it's going to cost but a ballpark, you know, maybe 10 and 15,000 additional per stall maybe I don't.

Know something in that ballpark.

25 pretty nominal.

Big scheme of things.

As a general rule. How much do you allocate for parking for new building construction?

Well, that's all driven by county codes and you know the requirements there. So I mean it would just be dependent on the size of the overall facility. So.

So for instance, if you're going to rebuild that state capital, you know, in which should house about, I don't know, 150 or so, how many parking stalls are you required to build? And so because I want to know how much 25% is that I can't use.

Well, it's not that you can't use them, it's just that they would have to be ready to be, have those, that infrastructure installed. I'm sorry, the charging station installed at some point. Okay. Down the road. So they could potentially still be used for their.

Okay, but so how many. It's not like a one for one. For every, for every office there should be at least one parking space. It's based on square footage. Use of the building. So for a building this size.

Again, you know, when this building was constructed back in the 60s, the requirement was a lot different than what it is today. So I couldn't, I don't have the cities specifications in front of me right now.

Okay. It doesn't require you to actually build the charger, just make it ready for.

New, for new facilities. Correct.

Which means to have the wiring or.

Or at least the conduits to be able to run wiring through it. So again, the cost is pretty nominal. Right. And then also making sure that the electrical infrastructure can accommodate eventual expansion. You know, of those EV charging stations, that's been our biggest challenge. Right.

With existing facilities is that the actual infrastructure needs to catch up to the demand to be able to deploy more charging stations.

Okay. Okay. Any further questions? Okay. If not, the two chairs have conferred and would like to go ahead and make a few suggested amendments. We're going to take the amendments suggested by the Hawaii State Energy Office, which there are two of them.

First, the Bill right now contemplates us building parking structures and then outfitting them with 25% EV charging, but doesn't talk about any building that might have just, you know, a black asphalt lot.

So we like to expand the reach of this Bill so that if in case that were the case that there'd be a on grade parking lot, that that would be covered under this Bill as well.

We're going to add language as suggested by the state Energy office to put in level one or level three charging when it's appropriate. And those are the two suggested amendments. Any discussion?

Yeah. So my question is so now the state is going to be required to come up with level one and level three charging instead just making it charger accessible.

Well that's what the state energy office wanted and it's not mandating it. It's just when appropriate.

And there's no and there's no cost associated with how much we're going to. Okay, well I'm, I, I have severe reservations for this. Any other discussion?

Yeah, I, I agree with getting ready but I am a little concerned about infrastructure and I think more talk story needs to be there so I'll be supporting but with reservations.

We got quorum. Sure.

Okay. For the Committee on Energy Intergovernmental Affairs I stated the two suggested amendments and would like to take a vote on it and I vote yes. Senator Richardson, please take their vote.

For the Committee on House Bill 344 House Draft 1 passing with amendments. Chair votes aye, Vice Chair is excused, Senator DeCoit, aye vote with reservation and Senator Favelo is excused. Chair, you have three in favor.

Thank you.

Thank you very much. Committee and government operations same recommendation. Senate draft 1 Vice Chair I vote yes.

Vice Chair also votes yes. Senator Morocki excused Senator Sanbuenaventura? Reservations. And Senator Fevella is excused. The measure passes.

Thank you for your patience.

Thank you for your patience, we are convening the Committee on Energy Intergovernmental Affairs, spot 302 in room 016, on this Tuesday March 18th. We have one item on this agenda that is House Bill 1001 HD1, SD1. And our testifier is list we have Will Kane or someone from the governor. Oh, Will's here.

He's everywhere.

Geting my exercise today. Aloha Chair, Vice Chair Will Kane, officer of the Governor. We stand in strong support of HB1100, and we hope that obviously the importance of this bill for the Maui Wildfire Settlement Trust Fund and so I'm here to answer the questions.

Thank you Will. Randall Nishiyama from the Attorney General's Office.

Good afternoon Chair, Deputy Attorney General Reese Nakamura for Randall Nishiyama, and on behalf of the Department of the Attorney General. Chair and committee members, good afternoon again. We submitted our written testimony with comments in support of this bill. This bill supports the Malu Artifacts Agreement and supports the portion of the state's contribution to the settlement. I won't be here for any question.

Thank you, Reese.

Alice Lee from the County of Maui has submitted testimony support. Evan Oue has submitted testimony in support, and we might have Tom Yama Chica on Zoom.

Good afternoon Chair, Vice Chair, members of the comittee. Tom Yamachika for Tax Foundation of Hawaii. We will stand our written testimony and be available for questions.

We got it. Thank you, Tom. Is there anyone else wishing to testify? Okay. Scott Sue, since you're there, can we ask you to come forward?

Chair Wakai, members of the committee. Just introducing myself, Scott Sue, President and CEO of HEI.

How come you didn't submit testimony?

We stand, I'm willing to support and testify in support of thisbBill.

I know, but you didn't submit any written testimony, and in the previous committee, there's no testimony support either. This is your number one priority bill, correct?

It is. It is a priority that the settlement be funded. Absolutely.

So why wouldn't you support your own bill?

Well, let me just to clarify, Senator, we feel that this settlement to be able to board is absolutely critical that all of the parties be able to contribute what we agree to. And at HEI Home Electric, we're, we're, we are there. So this particular bill is very important in order to keep the entire settlement going forward.

Yeah, I don't have any excuse for why we did not submit written testimony in support, but we do strongly support.

Okay. I am looking at your financials and I'm looking at your, your fourth quarter financial results, this, these slides. And I see that you've secured 479 million dollars you set aside for your first payment of your two billion dollar portion of the judgment, and then you are fully expecting about 523 million dollars more from the ATM program.

That's going to give you 250 million utility, accounts receivable credit facility, 239 million, and a credit facility capacity for 34 million. So it looks like you are in good shape to cover your first two payments. So about half of the two billion dollars. How are you going to pay the last billion dollars?

So we plan to use a combination of debt as well as issuing more equity in the coming years.

So just to reiterate some of the points that you just made, Senator, so in September of last year at HEI, we did go to the markets and we basically sold HEI stock, and that allowed us to raise the amounts to cover the first installment, the first settlement here.

So we set that aside, and we'll be ready to make that payment once the court gives final approval for the settlement, which we expect by the end of this year. We sold ASB at the end of the year.

So that has allowed us to pay down our existing debt, which now positions us to be able to raise through debt the second installment payment, which would be due a year later.

And then the third and the fourth installment payments, we would be again using a combination of taking on more debt and then also selling more AGI stock to raise those, those last two.

Yeah, but you know, when you, when you talk about you're going to take on more debt, and then considering where you are now, which is junk bond status, I mean, that debt is going to be very expensive debt for you to put on the books, correct?

It will be more expensive because you're correct. We are not investment grade anymore. We are required though, right. When I mentioned the sale of ASB, we're required by our existing debt agreements that we have to use those proceeds from the sale of the bank to first pay down that debt.

If we had the choice, we wouldn't do it that way. We would just maintain the existing debt. But that's, that's the requirement in the future, when we get to the third and fourth installment payments, our desire is that we will have continued to make progress in terms of shoring up the financial strength of the company.

Perhaps we'll see some improvement in terms of the credit ratings three years from now or what have you. And so we would hope that we would be able to take on that debt at, you know, hopefully not as bad pricing.

Right now, this bill contemplates the state putting in north of 800 million, 800 million dollars. And we're going to put it in two tranches. And from your payment plan, it sounds like it's going to be put up in four pieces. Could we do the same with our 800 million?

So, as you put in your first 500 million or, or so we'll put up our first 200 million. You put in your next 500 million, we'll put in at that time, 400 million. And then we kind of parcel this out to meet your, your payments.

So my understanding is that all of the contributors towards the settlement do have that option to pay off in four installing payments. Let me just glance at my shoulder this. Yeah, okay. Yeah, but that is my understanding. But I would have to go probably go back and clarify what other dependents are allowed to do.

But I know for sure we have that, that.

Okay, so you don't mind us if we put that language in here that from the state standpoint, as all of you defendants put in your contributions will match up as you in your money.

The only caveat on that one, Senator, is I would want to make sure that whatever is part of the official settlement agreement, it's consistent with that. Right, so again, if the settlement agreement allows for that four installment payments for all defendants, then absolutely, that, that would be.

You don't, you don't want to go counter to whatever is now ready for.

Right. Well, the problem is that none of us have seen the settlement agreement. So I'm not too sure like what the understanding is between all of the, the parties, but okay. Members, any further questions for Mr. Seu? Nope.

Thank you.

I think we're good, thank you.

Thank you.

Thank you.

Mr. Reese.

Good afternoon. You've seen the settlement agreement, correct?

Good afternoon.

No, actually, your honor, Senator, I have not seen the settlement agreement itself. I have, like I said, I'm just standing in for Randall Nishiyama, but I can take questions back to him if you would like.

Okay. Well, do you think it's reasonable as I was mentioning to Mr. Sue about as each of the defendants puts in their portion state will match, match whatever the defendants put in, rather than, just in this bill, it says we're going to drop 400 million and we're going to drop 400 million.

Sorry Senator, I to the mechanics of the settlement agreement in this particular nor have I been involved in settlement negotiation. I'm not sure of the dynamics. I have gone on board of the parties to identify going on but I can raise that question with those who have my office if you like.

You know we talked much about HECO and their contributions, but I'm not sure where KS stands, Spectrum, I think the Hawaiian Telecom, Kamehameha Schools, where they are in their allotments. And it seems like all that's guaranteed in this bill is the state's coming in with its 100% of the proceeds.

Would it be okay if we put in language here that each of the defendants in this settlement has to provide to you, the AG's office, what their plan is for payment to fulfill their obligations under the settlement agreement.

It's really not for me to say, but I can take back that suggestion. I can you know, that is what this committee would like to do. Well, consult with the those who have been involved with the negotiations.

I'm just not sure what the dynamics are, and what those positions are, you know a total guess as to whether or not, can't really say what the position of the department is. But if you'd like me to take back a question to someone who may have been involved in the negotiation, or even assuming. I can.

Okay. Also, one final question for you though, is that just want to make sure every, the payments are great and going to be put in in a timely fashion.

I'm trying to think like maybe we should have an escrow account for all of the defendants in this because the state's going to be good for its share of the funds, and then we put, we have the defendants put in 30 days prior to the first, whatever the increment is.

If, if it's once a year for four years, that 30 days prior to payment that these defendants all have to put the money into an escrow that you will receive. Is that plausible?

I can take that, that scenario back to my department to see if that would be something that would be workable with that. I can't say right now whether that will be possible or not, because as I said earlier, haven't been involved in the dynamics of the negotiations. But I can't ask.

I mean, I hear your suggestions attempting to make something work right now. I just can't say yes or no to that.

Okay, well, we're going to make some amendments to this bill, and you can weigh in at the next committee whether it's allowable or reasonable or whatever your, your thoughts might be.

Thank you, members.

Sorry. Would you like to submit any question that they should take back or you.

Oh, no, we're going to make amendments, and then you guys can decipher whether you support or not support those amendments. Members, any further questions? Yeah.

So are there any, are there any lawsuits that this settlement will not cover?

I'm not aware of that, Senator DeCoite. I could find out if you, if you want.

Yeah. And then, can you also find out, are there any other costs that the state may have to bear for wildfire, ongoing wildfire-related litigation, as well?

Any other costs associated.

With wildfire-related litigation. Thank you. Thank you, Chair.

Just follow up on that. Yeah, thank you. It's my understanding this is supposed to be the global power, right? So, okay, yeah, if we could follow up with that, I'd appreciate that follow up.

Okay.

Itching for questions? Nope. Thank you. Members, any further questions of those who are here? Okay, if not, I'm going to jump straight into decision making on House Bill 1001 HD1, SD1. There's no question that the community needs this global settlement. And Hawaiian Electric certainly needs, and HEI needs this, so think we need to move this forward.

I do think, though, that it's not clear as to how not just Hawaii Electric Industries, but all of the defendants, I mean, do they have the money to pony up to pay their fair share? So I'd like to find out if in fact how reasonable it is for us to see this global settlement fully realized.

So I'm going to amend the bill by just asking that all the defendant parties in the settlement submit a plan and evidence of their ability to pay their share of the settlement as the payments become due. Under the agreement and give that to the attorney general's office for review.

Second amendment I'm going to make is that all the defendant parties, other defendant parties, this not the state, but the others actually fund their share of the settlement 30 days prior to the payments becoming due under the settlement agreement.

And they put that money into an escrow that's going to be overseen by the attorney general, and that all other defendants' shares of the settlement will be paid before, before the state agrees to release its share of the settlement.

So we're going to be the last to pay in because right now, as the bills outlined, we're the first to pay into this settlement. So we're going to be the last to pay it to make sure that everybody else pays their fair share. And then we're going to do our obligation as outlined in the bill.

So, members, any discussion? If not, Senator Chang, I vote yes.

Senator Richards?

Aye.

So Chair's recommendation for HB1001 is to pass with amendments. Chair votes aye. Vice Chair votes aye. Senator DeCoite?

Senator Fevella is excused, the recommendation is backed.

Aye.

Okay, thank you, members. We are adjourned.

We are convening our Committee on Energy and Governmental affairs. We have a 302 agenda. This is just for decision making. On three measures that were heard last week with a Joint Committee with our friends from the Transportation Committee. On House Bill 229 HD1 relating to transportation, TCA had made a number of recommended amendments. Seven actually.

First is to amend to restrict the vehicle of 10,000 pounds from left lane on roads with three or more lanes going in the same direction. Number two, also restrict vehicles actively towing another vehicle, a trailer.

Three penalties shall be a blank amount for the first offense, blank amount for the second offense and a blank amount for traffic safety or traffic safety course for both.

A third offense within three years and the seventh and last amendment are exceptions still apply, excluding vehicles overtaking, turning from the left and for public transit, school buses and emergency vehicles as defined in Section 291C-26. Those were the amendments agreed to by the Committees on Transportation as well as this Committee on Energy. Any discussion?

Sure. Yes. Clarification. So it's just for populations 500,000 and more, right?

Oh, yeah, yeah, yeah, yeah. That's outlined in the Bill. Thank you. Just all you want to.

No, no, no. This is the population.

No. So it's less than, not more.

Yes. So it is the Big island and not a Ohahu. Is that what I'm reading?

Yeah. This was asking if the amendment was for populations of more than. Because. Exactly what I'm thinking.

In a County popullation 500,000 or more. Also we establishing statewide speed restrictions and what outlines authorization.

So that's what the amendment does. I don't have the.

Oh yes. Authorized a contemplation of less than 500,000 to adopt an online speed restriction for more actors. Oh yeah, there's two parts. Yeah, there's two parts. I cannot tell which part.

Yeah because what Senator DeCoit's talking about is.

The cattle trucks.

We are till Thursday. You want me just defer this one and do vote on Thursday.

Just clarify that. Just to be safe.

So the vast public that's watching us at the moment, we're going to defer action on this Measure till Thursday, March 20th at 302. Okay. And then I'll be able to answer questions at that time. We're going to move on to House Bill 860 HD1 relating to liability.

Again, the recommendations from the Transportation Committee were to amend Section 2 to remove immunity from liability from the Bill.

Establish that for roads whose jurisdiction is in dispute between the state and the county, state or county may undertake limited resurfacing of the existing road surface which shall not extend to any span of bridge or section or street that crosses a culvert without conferring ownership.

Third amendment is any additional liability for that road as a result of limited resurfacing pursuant to this act shall be limited to resurfacing and not underlying non conforming issues. Fourth Amendment.

In the event of an incident, liability shall be split proportionally to the share of the contributing cause for the incident between the party who resurfaced the road and the party who's responsible for the underlying road. Depending upon which is at fault and for how much. This Bill will sunset in five years and will maintain its defective date.

Those are the six suggested amendments. Any discussion?

Yeah, Chair, I'll weigh on this. I'm very familiar with this. As most of it happens in this is has to do with the roads in limbo, which a great number of them are in my Hamakua District. And this is carryover from plantation days where they just built built a road and black topped it.

So this is a way forward to help our community fix some of the roads. And so I am definitely going to support this. It's a little, I don't want to say quirky, but I think it's a way for it because we have so many of these roads in limbo in our districts, especially in Kamakua.

So at least we're going to be able to get some maintenance done because the state doesn't want them and neither does the county. And the private people don't want them either. So nobody wants them, but they want to use them. So we have to do something. So for that reason I'm going to support it.

I think, I'm curious about how they're trying to assign the liability, but I think this is the first, this is the best crack at trying to address this. So I'm going to support it.

Any other discussion? 19 Senator Richard said enough. Thank you, Chair okay, well, we don't.

Want to leave this issue in limbo, so we're going to vote on it. Chair's recommendations to pass the measure with the stated amendments.

Chair votes aye for HB860. Chair's recommendations to pass amendments Chair votes aye. Noting excusable of Senator Favela. In the Members present any other than objections or reservations. Hearing none the recommendation is done.

Members on the last Bill on this deferred agenda is House Bill 1161 HD2 relating to transportation. Transportation chair has made three amendments. We're going to adopt DOT's recommendations to remove hybrid formula inclusion since report back on and then report back on how to calculate formula to prevent double taxation due at the end of the year.

Number two, we're going to add language to insert into SB 1480 expanding use of the State Highway Fund and Highway Funds for broader multimodal purposes and then three adopt Alliance for Automobile Innovations recommendations which were to prohibit counties from assessing additional fees for EVs zero emission vehicles beyond the average paid by gas vehicles.

Those are the three suggested amendments. Any discussion?

If not Senator Chang I vote yes.

For HB 1161 the chair's recommendation is to pass with amendments of the Members present are there any objections and reservations. Seeing none of the recommendation is adopted.

Thank you Members. We are adjurned, thank you.