House Standing Committee on Consumer Protection & Commerce

Good afternoon, everyone. We are competing the Joint Committee on Consumer Protection and Commerce and the Committee on Judiciary and Hawaiian Affairs. First item on the agenda is. Oh, I'm sorry, I need to read a thing. In order to allow as many people to testify as possible, there will be a two minute time limit for testifier.

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In that case, an appropriate notice will be posted. Please avoid using any trademarked or copyrighted images and please refrain from profanity or uncivil behavior. Such behavior may be grounds for removal from the hearing without the ability to rejoin. All right, first up on the agenda we have SB 148 SD2 HD1, relating to combat sports.

First up is Attorney General with comments.

Good afternoon, Chairs, Vice Chairs and Members of the Committees. Andrew Kim, Deputy Attorney General. We just provide written comments regarding having section two different from the rest of the bill. The effective date, provide a suggested edit on that. Thank you.

Thank you. Next up, DCCA with comments.

Good afternoon, Chair, Vice Chair. The Department stands on its written testimony.

All right, next up, we have Walter Carvalho, in support. Should be over Zoom. He's there. Walter, are you there?

And muted. I'm here. Hello. Honorable Chair and distinguished Committee, Walt Carvalho, Big Island of Hawaii. We support the bill with with amendments that I had added on to the testimony that we feel that it should be one commission and divisions for MMA and for boxing should be divided so that each sport can focus on their own thing.

Boxing knows nothing about MMA and vice versa. And we want to make sure that when we put this back together, because it's been stagnant for 14 years in MMA and 18 years in boxing. And I've been out here in Hawaii for 31 years working with all of these kids in all of these different programs.

And the only way to put this back together is the right way, and that is to develop this commission with the proper people in the proper places to avoid these kids from fighting in schools and shootings and different things. We have to get this thing going again like it was years ago before the DCCA got involved. I thank you very much for your time, and I'm open to all types of questions.

Thank you. Next up, we have Martin Day in support.

Not present. All right, late testimony from. No last name here, but John in support. John, are you online?

John Bernard. Hello. How's it going? Can you hear me?

Yep, go ahead.

Hi. Yeah, so I'm in support, kind of just to stand on my testimony and kind of echo what Walt Carvalho kind of stated. I was the one of the individuals or children that was involved in the combat scene. That kept me away from, you know, out of trouble and things of that nature.

Ever since the DCCA got involved, we've seen a dwindling of combat sports happening. You know, this incentivizing promoters and things of that nature. And it made it very difficult for U.S. athletes to stay involved and engaged in this combat sports.

You know, I noticed, I'm not sure if there's a correlation with the immense number of violence that have taken place in the west side. I'm born and raised on Waianae, and, you know, the island warrior spirit is within me, you know, and within a lot of locals in Hawaii.

And one thing that I noticed is it allowed us to check that, right? It allowed us to be warriors in a garden instead of gardeners in a warrior. And now this is just. The community is just in upwards.

It's a lot of nonsense and craziness going on, and I do feel like it's because of the lack of combat sports and the ability for us to channel the aggression that is, not aggression, but just that urge to be masculine and things of that nature in a controlled manner.

And ever since this engagement to try to keep it safe, you know, you guys have done that, but you folks have done it by removing combat sports from happening at all.

So if that was the intention of this whole initiative, I hope that this new bill will help to close that door and help us to get the combat scene back to where it used to be. But that's all I have. I stand on my testimony as well, my written testimony.

Okay, thank you. Anyone here to testify in this measure? Members, any questions from CPC? Member Ilagan.

Thanks, Chair. Could I have DCCA come up? Good afternoon. At the moment, how many events have you gone through regarding boxing this year?

I think, Executive Officer, probably better to answer that question.

I'm James Skizewski, executive officer for the boxing, the State Boxing Commission as well, the MMA program. So you're referring to boxing. So we delegate amateur boxing to USA Boxing, a national organization, who holds many amateur events across all the islands. I can get you.

Let's start with the Big island, just.

I'd have to reach out to them and see how many because.

So by chance, do you know the size of those events?

No. I mean, they're held in relatively small conditions. I mean, they're in gyms, they're not packing out any kind of.

So right now, if we were to take some amendments with DCCA and adding in an ambulatory or two physicians, is that what they're currently doing right now for boxing?

Yes, USA Boxing requires a doctor to be there.

One doctor or two?

I believe one doctor.

So now we're going to require two?

I believe that amendment is in regards to mixed martial arts combat contests.

Oh, only for MMA?

Yes.

So is it clear in the language with this bill that it only affects MMA or is it affecting both?

We believe with our amendments it would make it more clear, yes.

Okay.

So make it more clear for one, one for boxing and two for MMA or make it clear?

I don't think it's clear.

Well, our amendment is strictly related to combat sports. So this requirement was in relation to hold a combat sports contest, which is, you know, MMA as we now refer to it as.

And one of the requirements to hold a contest is, is that you have the sufficient medical staff and you have an ambulance in attendance, or at least that's what we would like.

Okay. I think the language right now, it's not clear what regulations is being imposed on which, boxing or MMA.

Yeah.

That's just a statement. So the other thing is right now for MMA currently happening throughout the state, is the current practice having an ambulance there and two physicians?

Yes.

Okay. If that's the current practice right now and those events are able to afford that safety, great. I'm in full support of that. My concern is that if we're going to impose this for boxing, I think I would like to know if, if that same protocol is also happening in boxing.

And from what you're telling me right now, boxing's only required one physician?

Yes, sir.

How about the ambulatory?

Not that I'm aware of. Not in the amateur scene.

So I would, I would want to make sure that we don't self impose the boxing community with these extra regulations. What they're currently practicing, I'm sure is a safe procedure and I don't want to hinder further contests throughout the state because we're adding new safety regulations. Thank you.

CPC Members, any other questions? Yep, Rep.

Yeah, I had a question for Mr. Carvalho. On Zoom.

Mr. Carvalho, are you still there?

So I just generally, you can probably hear me. So my question is generally one of.

Well, especially from the community members who are involved in coordinating some of these combat sports meetup, whatever events that this is, that some of these requirements will cause a greater expense and make them less, less accessible to the populations that you want to attract into this area.

Like will they have to pay bigger fees because now they have to hire all this extra medical attendance standing by. Like, does it increase costs that makes it less accessible?

So let me explain what they're not explaining to you, the DCCA. First of all, amateur boxing is regulated by USA Amateur Boxing. And I've been doing this longer than anybody in the State of Hawaii, including all of them. They're regulated by their own community. They pay for everything.

The DCCA is not involved hands on in amateur boxing in any way. The DCCA Boxing Commission that is in this bill is a professional boxing which hasn't done anything here in 18 years since Brian Viloria's last fight. There hasn't been a legitimate professional boxing event in the State of Hawaii for 18 years.

And over the last 14 years we went from 140 shows a year, amateur kickboxing and MMA shows and triple threat events, all the way down to zero last year because of the fees that they're charging. An ambulance is $2,800 in Hilo to stand by and just sit there.

And then the doctors that I have, they volunteer their time for the events I do for the kids here. Because I do kid events here. Right. We're trying to build combat sports back up. You can't build something up if all you're doing is taking and not giving.

Over the last 14 years, the DCCA has taken so many fees in licensing and event fees and 2% of the gate, 2% of this and 2% of that, that they've killed the combat sports community in Hawaii completely because of the cost. The cost is ridiculous to do these events.

I don't think they should even be regulating amateur kickboxing events, even if they're adults. We can never build this community back up to get 14 more kids into the UFC, which is what we've done way before they were involved.

We can do that again if we can get the smaller shows to run. The small events cannot afford to the ambulances and all these different things. And amateur fighters should not be, they don't have to be licensed anyway.

The only way the only reason why USA Amateur Boxing licenses the fighters is because they have a passbook that counts their wins and losses. It tracks the progress of the child from when he starts till he decides to turn pro. That's what the passbook is for, and that's what USA Boxing pays for. They pay the insurance.

They pay everything. DCCA doesn't pay anything. They just come and help hover over and pretend that they're part of amateur boxing, but they really aren't, and they don't have to be. What they need to be focusing on is pro boxing, which is failing. And if you read my testimony, that comes from my heart.

I've been here in Hawaii 31 years doing this for all the kids. And I'm not seeing the feedback that people helping me with the kids. Not money, money, money, money. We want to build this program back up.

We want to build this back so the kids will stop fighting in schools and they'll stop shooting each other at the boat harbors and all these different things. When the community was active in sports, there was no shootings and fightings. If they fought at Waianae High School, two kids, it was an up and up thing.

There wasn't five guys jumping on one guy. It was a much different world back then when there was an avenue for these kids to vent.

We definitely appreciate your passion on this. We do need to move on to other questions, though. Thank you.

That's fine.

Members, any other questions?

Judiciary Hawaiian Affairs Members Questions? No. Back to you.

Okay, so I have one question for you, Walter, and hopefully we'll try to keep this fairly brief. But my concern in this.

My concern in requiring fewer physicians or no ambulances at some of these events is that there might be harm to the participants in these events that could have been mitigated if a doctor or if an ambulance was standing by. Can you speak to that briefly?

In 31 years that I've been doing this out here in Hawaii, in the kickboxing community, there's only been one kid transported to the ambulance, to the hospital because his shoulder came out of the socket. MMA is a different story. MMA, because they go on the ground and they're really. And, you know, I.

I have an ambulance at my 18 and under junior division kickboxing show on standby. If I can afford it for the event, I have an ambulance. I buy medical insurance for every kid. I buy liability insurance for every kid and every fan in the building. I protect my interest and my company that I own and the youth program that I run here in Hilo to make sure that the kids safety is primary.

In your opinion, an ambulance and maybe one physician would be sufficient for a boxing event?

No, two physicians and one ambulance.

For or a boxing event?

Yes, for boxing and MMA. One ambulance and two physicians. I mean, I have that here. Not only do I have that, but I have two paramedics and one nurse that works.

I'm actually in agreement with you, so thank you. Appreciate it. Okay. Okay. All right, let's move on to SB 1117 SD2HD1 relating to transportation. First up, we have.in support. Please come to the microphone so everyone on zoom and everything can hear you.

Aloha. Thank you. Chairs, Vice Chairs, Members of the Committee, Tammy Lee, Deputy Director for the Hawaii Department of Transportation. We stand on our written testimony and support. I'm here for any questions.

Thank you. Next up, the initiative in support.

Afternoon Chairs, Vice Chairs, Members of the committees, Michael Munakatsi here on behalf of Uluponi Initiative. We'll stand on our testimony in strong support of this measure. Thank you very much. Chairs.

Thank you. Next up, we have Hawaii Bicycling League in support. Not present. All right, anyone else here to testify about this measure?

CBC Members, any questions?

Judiciary and Hawaiian affairs Members, Questions? Representative Shimizu, Please proceed.

Thank you. Chair, I have a question for Department of Transportation. My question is regarding the rebate program. How successful is that program? Is that an incentive for people to purchase these types of electric. Products?

What it does is it's an incentive to help with opportunities for different modes of transportation. This program became live in February of 2023, and since then, we've provided about 500 rebates at a cost of about 166,000.

So it is just, you know, for opportunities for those that do not own a vehicle to get around mobility using a different device than a car.

Follow up question, Chair. Yes, I guess when I look at this Bill, I am in agreement with everything except the rebate. I feel like people don't need that rebate to buy this product. They will afford it and make a decision to buy it. And I'm wondering if we somehow took out the rebate part of it.

Do you have any comment on how that would affect people using, purchasing and using electric transportation?

Thank you for the question. As I mentioned, it really is to provide an opportunity for those that do not own vehicles for whatever reason to have an opportunity to get to good services. Opportunities, you know, maybe. Well, I'm not. I just think it's just for another kind of vehicle to get around.

In the past the current rebate program was pretty narrow. It allowed for those that were over 18.

You had to self certify that you did not own a vehicle with four wheels and you had to belong, these are ORs, or you had to belong to a low income program like SNAP or you know, those other low income programs.

So the intent of this measure, it appears to widen to make, you know, electric bike purchases more available to a greater number of public. And that's why it increases the amount from 500 to 750. Or, or if you can qualify under a low income program, then you get this special assistance additional 750.

So just to clarify, you said 500 quantity approximately 166,000. That's total from the start of 2023, correct? February of 2023. Thank you. Thank you, Chair.

Thank you very much. Other questions, Members, JHA Members? Nope. Back to you.

Okay, let's move on to SB897 SD3HD1 relating to energy. First up, we have DCCA consumer advocacy with comments.

Afternoon chairs, Vice chairs, Members of the committees. My name is Michel Angelo, Executive Director, Division of Consumer Advocacy. Stand on our testimony providing comments available for questions. Thank you.

Thank you. Next up, Public Utilities Commission with comments.

Hi, good afternoon Chairs. Daniel Park, Vice Chairs and Members of the Committee's Daniel Park for the PUC. We'll stand on our written testimony providing comments. To summarize, we do, we are encouraged about the use of securitization for infrastructure investments because we do believe that that will reduce wildfire risk in this state.

We have offered several amendments that would sort of clarify the wildfire mitigation plan that would be tied to these infrastructure investments as well as a few other technical amendments for the Committee's consideration. I'm available for any questions. Thank you.

Thank you. Next up, Attorney General with comments.

Good afternoon. Deputy Attorney General Randall Nishiyama. We submitted our written comments and are available for questions if you have any. Thank you.

Thank you. Next up, we have Life of the Land in support. Not present. Next up, Clearway Energy group in support.

Aloha chairs, Vice chairs, Member of the Committee, Nicola Park on behalf of Clearway Energy, stand on our written testimony in support of the intent of the Bill available for any questions. Thank you.

Thank you. Next up, Ulupono Initiative in support.

Thank you. Chairs, vice chairs, Members of the committees. Ulupono stands in this testimony in support. Thank you.

Next up, we have Kawaii of KIUC in support.

Yes. Good afternoon. Chairs, vice chairs and Members of the Committee, Beth Amaro with KIUC. We've provided testimony in support of this measure and are suggesting one amendment that would expand the definition of a catastrophic wildfire so that it would be more applicable to utility the size of KIUC. And I'll be available for any questions you might have. Mahalo.

Next up, we have charter communications with comments. Okay. All right. Not present. Next up, IBEW Local 1260 in support.

Good afternoon. Chairs, vice chairs, Committee Members, Kiko Bukowski on behalf of IBEW 1260 standing in support of our testimony with amendments and available for any questions. Thank you.

Thank you. Next up, Hawaii Association for Justice in opposition.

Okay. Not present. Next up, Hawaiian Electric in support.

Aloha Chairs, Vice Chairs, Members of the Committee, Jason Ben Hawaiian Electric testifying in support of SB897, SD3HD1 with proposed amendments. The Bill is forward looking, remains in the public interest and protects customers from cost increases caused by the utilities exposure to unlimited liability for future fires.

It does not apply to past claims and I want to make clear our commitment to pay our $2 billion share of the global settlement with no contribution from customers. Briefly, utilities must serve despite risk factors not all within their control.

And across the United States, there's a growing recognition that unbounded wildfire liability risk leads to higher cost of capital, leads to higher cost to customers and must be addressed through policy. More than a dozen states have passed or are actively considering bills or regulatory policy changes to that end.

Prior to the 8th August, Hawaiian Electric's credit rating was as high as A-. Currently our credit rating is non investment grade speculative and the lowest in the US amongst regulated utilities. This Bill is critical to begin the process of returning to investment grade and reducing costs to customers.

Particularly now, as we need to make critical infrastructure improvements to address safety, reliability, resiliency and meet the energy policy objectives of the State of Hawaii. So we believe...

We continue to believe the existence of a Wildfire Recovery Fund, coupled with a limitation on liability provides significant benefits, represents the best balance of interest and therefore request the committees consider passing the current version of the Bill with our proposed amendments which include adding a provision requiring a study on how best to implement a Wildfire Recovery Fund in the future.

Ask you please pass 897, SD3HD1 with our proposed amendments and mahalo for allowing me to testify in support and I'm available for any questions you may have. Thank you.

Anyone else here to testify in this measure? Members, any questions? Representative Iwamoto?

Thank you. Oh, yes, sorry. Thank you. So I know this is forward looking, but using the Maui wildfires as an example, I'm specifically concerned with the limitation on aggregate liability.

When you look at the lesser of, it says 1 billion, but then number 2 it says the average assessed value of commercial structures times the number of commercial structures and then value of personal property. What would the that number have been for if you were to use this as a template on the current fire?

First of all, I don't have that number directly offhand.

Would it be, okay, could... Is it going to be less than 5 million? Less than a million?

Around. So your question is whether the cap would have come into play.

I mean again, assuming that that's behind us. And this is forward moving.

An event of that size, I think the cap, as it's written, applies specifically to individual utilities. So I think when you think about how that spread across all the parties involved, I mean, this event is involving many other parties. I don't know that it would have...

Do we know a direct answer to that question? Yeah, I think we can get back to you on that for sure.

I guess, because we're kind of adopting a cap on liability that is deemed as aggregate liability, which also includes bodily injury and death potentially. And what we're seeing now is the settlement's already paying out 1 point something million to families who've lost loved one. And this thing is lesser than. It shall not exceed the lesser of.

And it lists all of these three conditions. And then you take the lowest number, and that's the cap. So do you see how it might actually end up being less than what we're paying out to families who've lost lives?

Right. I mean, I respect that question. I think interpretation of the economic damage is, it's pretty broad. So. Yeah, I don't know that I can. Maybe I can phone a friend on that. Yeah. oh, thank you. Thank you for correcting me.

So as we wrote it and as we interpret it now, it does not apply to wrongful death and personal injury.

So arising out of property damage.

Okay.

When you actually look online for aggregate liability, it does include bodily injury.

I think the qualifying language that follows representatives is arising from property as written. And I know in the original language that we proposed, it expressly excluded wrongful death and personal injury. If that helps you. Okay.

Yes, it does. Thank you.

Right, right. Thank you.

Good afternoon. My name is Henry Weissman, and I'm an attorney representing Hawaiian Electric that's been working with the company on this. To answer your question, the defined term, the aggregate damage cap, applies only to qualifying damages. That's the defined term. Qualifying damages is defined as property damage.

So personal injury and wrongful death would not be subject to the aggregate limitation on liability.

Okay, thank you very much.

And if it would be helpful to you, I'm happy to follow up with you to give you an accurate answer on how that calculation of the average assessed value would apply to an event such as the Maui fires.

Great. Thank you so much.

Any other questions? Members? Lowen.

Sorry, Just following up on that. Sorry. I guess I could look this up and maybe you can refresh my memory. Did The House Bill 982 have a more clear definition of economic damages that we could adopt? I think it might have.

In Hawaiian Electric's proposed amendments, we had a more, I'll say, specific definition of qualifying damages as excluding physical injury. And then we went on to have a more specific definition of physical injury to leave no ambiguity that claims that arise from physical injury or wrongful death are not subject to the aggregate cap.

So happy to share with the Committee that language. But yes, that was our intent.

Okay. I think we had that in the House Bill that crossed over. Maybe. But we have to maybe adopt that to clarify that question, which is a good question, because I think the intention is not for that cap to apply to loss of life or personal injury.

Yes.

Can I ask another question? For Hawaiian Electric? If we pass a Bill in this form or something similar that authorizes securitization for financing, you know, directly for implementing the Wildfire Mitigation Plan and infrastructure improvements, will Hawaiian Electric submit an application and seek a financing order?

Yeah, we're going to do, we affirm that we will be seeking relief for our Wildfire Safety Strategy. That's work in progress.

So we filed the strategy and the to follow is applications to execute the projects in the strategy.

Okay.

And you don't envision that you would try to seek financing outside of, at least for that up to that capped amount?

We would seek the least cost financing for customers. And if this was available, we would pursue it.

Okay. All right. I have another question. I don't want to. Okay, just to clarify. Okay, that sounds good. And for the settlement to clarify, can you just update us all on where Hawaiian Electric stands raising the money for the settlement?

So we have raised the first 550 million in equity and set that aside for the first payment. We're allowed to pay it over four years. We've also sold 90% of American savings bank and divested controlling interests of that. We're using that to refinance debt to be in a position to raise additional payments.

And then recently divested Hamakua Energy Partners from our portfolio. So we're doing what we can to be in the best financial position to raise the additional payments, and we're confident we can do that. We don't have a laid out specific plan for you today, but we're positioning ourselves to do that. So that's where we're at.

So the 500 million was from issuing stock?

Yes, dilution of the stock.

What was the, for ASB and HEP, like, what additional amount, dollar amount is attached to that?

Yeah. So I work for the utility, not the holding company. But I know that we might know the amounts, it's publicly known. I can check it for you. Representative. I can follow up. But here. Yeah. Okay. Okay.

Thank you for the question. Henry Weissman. So, from memory, I believe that the ASB sale was approximately 450 million as total value. And I believe the Hamakua sale price is not, is not public information.

Okay. All right. And what's the remaining balance of the settlement right now?

So the total amount that is obligated is four payments of 478 million each. So the first 478 has been set aside and is restricted. So the balance, call it round numbers, approximately 1.5 billion.

Okay. All right, thanks. Go ahead.

Members, any other questions? Okay, let's start with the AG's office. So your testimony suggested that maybe we should put a standard of negligence, gross negligence, some kind of standard on the limitation of liability cap. I'm wondering how much, if we put this standard on there, I assume that it will be litigated, if the cap were to be reached, how much do you think this would delay money getting to the victims of a future wildfire? And how much more cost might it take for discovery or whatnot to show or not show that there was gross negligence or whatever standard we picked?

Yes, it would cause a delay in paying out monies to the survivors or to the claimants.

You know, how much? Can you give us an idea of it? Would it be a pretty significant delay, you think?

It would depend up to the courts how quickly the courts can act.

Not putting money on that one. Okay, thank you, Consumer advocate. So in your testimony, I was a little bit confused, and we had talked earlier. I just want to give you a chance to explain your logic here. But you're arguing for a lower limitation, a lower cap on limitation of liability.

Currently it's set at, I believe a billion was what Lowen sets it at. Set it at. What would you. What are. What cap level would you recommend?

Speaking from the ratepayers perspective, only a lower cap decreases the chances that, say, Hawaiian Electric or another utility will seek private insurance to come in, which is very costly, and try to insure up to that cap. So the lower the cap amount, it presumably better for ratepayers. It's also better for Hawaiian Electric because it lessens their liability.

But that doesn't address the issues that are being raised with respect to property damages going forward.

Okay. Hawaiian Electric, would you mind commenting on whether you would be seeking insurance to cover up to that cap, up to whatever liability cap we set?

Sure. I think we certainly would evaluate trying to get as much insurance as we reasonably could at a reasonable price. What we've sought so far hasn't been reasonable, which is why we came to you folks with a fun concept. But yeah, we'd have to evaluate what it would cost us to ensure the gap.

Okay. So it is possible that you have to. If we set it, if we kept it at a billion, you would need to ensure or you would seek to insure up to that $1.0 billion loss and pass that on to ratepayers.

We would seek to insure as much as reasonable and file with the Commission relief for that. But the prices we're seeing are not reasonable.

Even if you partially insured though, whatever insurance you buy would be passed on to ratepayers, is that correct?

As we've testified to previously, insurance liability insurance specifically is part of the cost of services normally in rates. It's just been unachievable, which is why we were pursuing the Fund, which was a cheaper way to do it.

Okay, and maybe a couple more questions for you. So what other states have implemented limitation of liability for electric companies? Because we've only found, I think Wyoming.

Utah and Wyoming specifically have an about roughly 8 or 9 from memory are looking at it right now actively in session. So for certain, the Governor signed it into law in Wyoming and in Utah after the Ledge passed it. Specifically Montana, Idaho, Arizona, North Dakota, Kansas, New Mexico and Texas at the moment.

Or considering it all.

Considering actively in session.

Okay. PUC.

Good afternoon.

Good afternoon. So your testimony suggests limiting securitization amounts to just wildfire mitigation improvements. Do you mean to take out the more expansive language requiring or allowing them to use securitization for. I think it was a climate mitigation and things like that too. Your suggestion was to just have it narrowly for wildfire mitigation?

Not necessarily. It was more to largely in line to sort of provide additional clarity about what wildfire mitigation plan might need.

Because the current definitions that are in this measure, they only sort of talk about or hint at what a wildfire mitigation plan is and don't really provide details about what may or may not be included in that wildfire mitigation plan.

So I would suppose that to the extent that the items within a wildfire mitigation plan do also touch on other things like climate resiliency or whatever like that, that would be sort of included in what we might consider for securitization here.

Okay, HECO, your plan, your wildfire mitigation plan, does it touch on climate change mitigation and things like that too.

So our. Yes, I mean, generally speaking, yes, our wildfire mitigation plan is a function of our overall resiliency plan. In fact, when we applied to the Federal Government and received 95 million, we pivoted that to wildfire areas. Hardening poles and infrastructure is resilient against more than one hazard.

So I understand your plan is a three year plan. Do you know the total cost of that plan right now?

Roughly speaking, it's $130 million a year. We spent 130 million without raising rates in the last 18 months at 130 million plus to Harden the grid against wildfires. The current plan projects out 130 over the next three years to bring the risk down further. And we've reduced it by an estimated 60% already.

So we're going to keep pursuing it.

Okay, so to Clarify, you spent 130 million, but there's another 390?

That's correct.

Okay.

Over the next three years. Yes. Sure.

Okay. So I mean, do you need the 500 million for the securitization Bill or would you rather have... I know there might be ongoing expenditures, things like that, and I know that the definition that Chair Lowen put into the Bill is a little more expensive than wildfire mitigation necessarily.

But do you think that you folks would need more than 390 million going forward?

I think for. Specifically for the wildfire work, which is the subject here, I think 400 is an adequate amount to securitize. Our credit rating will improve over time as well. So I think just 400 is probably sufficient.

I think there is a desire for you folks to use securitization maximally to avoid any kind of impact on ratepayers or capex benefit to HECO. So if we did give you the $500 million amount, could it be used by HECO on other projects? I mean, you get to the 390, 400ish.

I mean, not going to hold you to that. Exactly. For your wildfire mitigation plan, you have another 100 million left over over for securitization. Under the current definition of what you can use it for, would HECO be able to use it to further harden or maintain?

Under the current definition? Yes, we could use up to the max for that purpose. We'd have to apply for our financing order to do it, some of that, So yes.

That's something HECO is interested in pursuing though.

I mean, we're interested in making the right investments for the community and leveraging the securitization that the Committee gives us to the extent that they give it to us for that purpose. But I think it's a complex issue that would, that I can touch on briefly.

There's a maximum threshold by which, or capacity, by which we could reasonably securitize. We can't securitize O and M and other functions and we'd have to cast out what we would use it for at a point in time when we do the financing order.

And there is a point where it's credit negative to us to continue to securitize the costs because it erodes our credit profile. It erodes our cost of capital.

Okay.

Yeah.

That is how lawyers say maybe. By the way, thank you for that. Let's see. Oh, for when you're securitizing. I'm sorry, this is just for me maybe not understanding securitization. Are you. Are you looking at it for 20 years or 30 years?

All securitization? Yeah, we would, we would finance it over 30 years at the best possible credit range.

I do understand that other securitization from other states that they've been using more of a 20 year timeline. Why did you pick 30?

30 years is typically the plant the depreciation property schedule for utility assets and stretches that impact to a smaller amount over a greater period of time. But it's the useful life of utility assets. Poles, substations are generally depreciated over 30 years. So we want to mirror that.

Okay. And I have one question that came up more recently. Securitization at the level that we're going to. At 500 million, your estimate was about $2 per ratepayer Bill, roughly.

Interest rate dependent. Yeah.

Yeah. So I mean we're just rough numbers here. Two bucks a Bill, that's on an average homeowner residential though. For commercial or for government buildings like this one, we might be looking at a much higher rate is what I'm hearing. In the tens of millions of dollars.

Yeah.

Can you give us some kind of idea of what it might cost the government or commercial businesses for securitization?

It, we've run those numbers across different rate schedules and I've read we ran it against the 1 billion for the Fund chair. So quickly cutting them in half here. Small commercial would be about $3 a month compared to $2 for resi. Medium commercial, $83.50. Medium commercial meaning restaurants, mid sized groceries, retails mid sized condo.

$83 a month.

Yes sir, $83 approximately. And then large commercial using all the same assumptions. These are hotels, military high rise warehouses, about 1600 a month additional.

Okay, so a building like the capital would be roughly 1600, maybe

Monthly

Or more per month that we'd be paying for electricity.

If it felt the schedule P and DS. So.

Okay, yeah, sorry, follow up. Yes, but just to also clarify, the financing that you can get with, you know, backed by securitization is at a much lower rate than the financing you can get with your current credit rating.

It is.

And that cost of financing is borne by ratepayers, no matter what it is. Okay, so we hear the cost increasing. Just so everyone understands.

It is the cheapest form of financing

that is regardless. Yeah. It's not like by not passing this Bill we save anyone from those increases on their bills.

But it's important to understand what the increases are. Can I ask

You have a question

That was kind of a question.

Okay, go ahead. If you have.

Can I actually have a follow up on the insurance question? Because this is another thing, I mean, we've grappled with because it's a tough thing to talk about, but this is... We're talking about insurance in the event of a catastrophic wildfire.

If there's a wildfire that falls below this catastrophic threshold, then people are covered by their individual homeowner's insurance. Is that. I mean, that's a question. Sorry.

Yes, they are.

And how much coverage they have depends on their personal policy.

That's right.

And so we actually have this kind of scenario where in the event of a catastrophic wildfire, if we hold the utility to full liability for everything up to, you know, a cap that exceeds the, you know, the, if the value of the damages was the lesser number, you know, if it was, you know, basically the full value of all the damages as was lined out, outlined in the Bill.

For those like two formulas that might be used to calculate it outside of the dollar, the 1 billion cap, that would be more than people would typically be able to recover under their person; their private insurance policies.

Yes.

I mean, because they will get coverage for whatever falls outside of their personal policy.

People would make claims and the claims would be for their uninsured portion. But insurers could also make subrogated claims to us. So the cap would apply to the subrogation and the insurers and also the uninsured property claims. Yeah.

Okay I think that's just part of the calculation that gets forgotten when we're having these conversations too.

Yes. I'm sorry, one more question that kind of came up that I was thinking about. So you're not, you're not able. If you use the securitized Fund it's going to be bond funding. So you won't be able to get any capex return on it.

That's correct.

So basically HECO is not getting any money back in profit from not being expenditure for this. Will this affect your ability to re, to fund the Maui Wildfire settlement? Because I am worried about the money HECO being able to get enough money to fully pay for the settlement amount for the Maui Wildfire victims.

I think to the extent that it's specific to Wildfire work and limited, it will not. I think if it was expansive in its use it would be earnings negative to the point. But I think as it's defined, I think it works and it wouldn't affect our ability to raise it.

Okay, so just to clarify the way it's structured right now, it will not affect negatively affect your ability to pay the Wildfire?

It will not.

Okay, thank you.

I'm curious as a follow up. Sorry. This is real time thinking. Like if you had to just like ballpark a cap that that where you would put your foot down.

Like if we were to put language in there that would basically say the first x dollar amount of expenditures you have to securitize them or you cannot get return on equity if you do private funding, like what would be your breaking point? Like where you're...

I mean it seems like you'll be happy to have access to this capital to do needed work. The needed work will reduce your risk, that will improve the credit rating and you know, presumably improve reliability, et cetera.

So I mean to be responsive to this question? We've already asked investors to consume $2 billion of costs with no return on it. This Bill would likely induce another 500 million that has no return.

We're not going to look like a very good investment and that ultimately is bad for customers because it raises our cost of capital. It's credit negative and it's earnings negative. But we understand the urgency to get the Wildfire work done. We understand and acutely aware of the impact to customers. We want to get it done.

We've been doing it on largely without raising rates to this point. And we need to get that wildfire work done as soon as possible. I think this is the upper bound of what investors and credit rating agencies would seem as acceptable given we're already putting out 2 billion on the books that don't earn any money.

Can I ask the same question of the Commission. Sorry. I want to hear if you have something to add. I'm happy to hear what you had to say. Yes, please.

Thank you. Investors are certainly concerned about the earnings profile of the company. So one possibility that might be considered is to. So normally, normally capital investments are financed partly with debt, partly with equity. So certainly securitization would be a lower cost of debt relative to the utilities cost of borrowing.

So one possible structure could be to allow securitization for the debt portion of the investments without impairing the ability of the company to finance the equity portion, which would support the company's earning profile and in turn support its ability both to raise the money for the settlement and go forward to improve the financial strength of the company for the benefit.

I mean, if it's capped at a certain amount, and presumably there's a lot of infrastructure work to be done beyond that amount. I mean, this is not just, not just implementing the Wildfire mitigation plan. It's also other infrastructure improvements that...

I mean, outside of securitization, there are many infrastructure improvements and improvements to Hawaiian Electric's generating facilities, et cetera, that are needed, and there will be plenty of opportunities for capital expenditures outside of securitization.

I appreciate the point, and it's true. I'm just reflecting perspective from the investment community, which is actions that reduce the earnings potential of the company have.

I guess my question is, what is the breaking point where that actually impacts ratepayers? What's the balance point there?

I'm not sure that we can definitively answer that question because it's a question that we won't know until the investment community actually reacts to what happens. So the best we can do is give you some, I'll say, qualitative guidance, which is the more that that is restricted, the more challenged the company's financial position is.

All right, thanks. I'm sure, PUC, if you had a perspective.

Yeah, sure. So to sort of answer that specific question, I'd have to sort of, you know, give a similar answer to the previous test buyer in that without knowing the actual sort of response from the credit rating agencies themselves, you know, it's hard to gauge, you know, at what point does, you know, is there some breaking point or whatever for ratepayers.

I will say, though, that what, you know, so long as the actions that are taken by the Legislature here are viewed as being credit positive, so credit supportive, whether it is, you know, to support the company's earnings or to perhaps, you know, limit liability or whatever that, you know, I can't say that that will definitely result in some sort of credit rating improvement, whatever.

But if it's credit positive, then we can hope that that's going to be the case. And we can hope that that means lower cost of capital for the companies and then, you know, for rate payers as well.

Thank you. Sorry. Go ahead.

I think that's it from us, Judiciary Hawaiian affairs Members. Questions? Yeah, right. They did. Anything else for any Members? Nope. Okay. Because we got 15 more on this side, so no. All right. That's it for the bills. Let's take a brief recess. Recess.

Reminds me of school. Sorry. Reconvening the Committee. All right, a couple items on the agenda. Let's go for the first one, which is SB148SD2HD1 relating to combat sports. Chair's recommendation is to change the effective date to the Bill to defect it to 7-1-3000, except for Section 14, which will take effect on July 12025.

I want to note in the Committee report that the defective date should be changed to July 12026 if amended back to give DCCA one year to stand up the Commission.

I want to adopt the first, second and fourth proposed amendments from DCCA's testimony relating to safety for the participants and adequate medical coverage for their change the Commission name to Boxing and Combat Sports Commission for clarity.

And I want to delete the references to small combat sports contests to bring all of these contests under the same requirements, including for safety for medical professionals. Members, any comments? Vice Chair for the vote.

Members voting on Senate Bill 148, Senate Draft 2, House Draft 1. Chair's recommendation is to pass with amendments. Chair and Vice Chair vote aye. Representative Iligan, reservations Representative Ichiyama, Representative Iwamoto, reservations. [Roll Call]

Thank you. May I take the vote for JJ? Thank you. So on SB148SD2HD one recommendation is to pass with amendments. As chair of CPC has described questions or concerns Members Jha, if not Vice.

Chair for the vote, please voting on SB148SD2HD1 with amendments. Chair and Vice Chair vote aye. Representative Bellotti, Representative Cochran has excused Representative Hashem, Representative Kahaloa, Representative Puruso, Representative Takayama, Representative Todd, Representative Garcia, Representative Shimizu with reservations for Shimizu. Recommendation is adopted.

Thank you.

Moving on to SD 1117 SD2HD1 relating to transportation. I've been asked to keep this Bill moving, so Chair's recommendation is to pass this as is. Members, any comments? Vice Chair for the vote.

Right. Members voting On Senate Bill 1117, SD 2 HD1 chair's recommendation is to pass unamended, letting the excused absences of Representatives TAM and P. Are there any Members wish to vote with reservations? Any noes? Seeing none. Chair, your recommendation is adopted. Thank you.

Members on JHA for Senate Bill 1117, Senate Draft 2, House Draft 1, pass as is questions or concerns. Members, if not Vice Chair for the.

Vote, please voting on SB 1117 SD2HD1 as is. Representative Cochran is excused. Are there any no's or reservations. A no vote for Representative Garcia recommendation is adopted.

Thank you. All right, last Bill on the agenda. What everyone's here for. SB897SD3HD1 relating to energy Chair's recommendation is to insert language making sure the $500 million securitization amount applies to HEI and not $500 million each to each of its subsidiaries, which would put us way over what we were anticipating.

We're going to insert language clarifying that the damage cap does not apply to personal injury claims. Require HECO in good faith to seek the maximum federal funding to offset the cost of infrastructure.

Per PUC's testimony, we are going to exempt securitization from HRS to 26917 and also apply this measure to only electric utilities instead of to public utilities. Add a section allowing the HYMA Director to determine if the to make the determination that a wildfire or is a catastrophic wildfire qualifies as a catastrophic wildfire.

Add back in section 269J on several liability. Adopting proposed amendment by Spectrum on the section and also adapting the section to fit the current form of the Bill since we don't have a wildfire recovery Fund anymore. Also adding a study for potential wildfire recovery for a potential filed wildfire recovery Fund and a working group Members. Any comments?

Vice Chair for the vote Members voting.

On Senate Bill897SD3HD1 recommendation is to pass with amendments noting the excused absences of Representatives TAM and pic. Are there any Members who wish to vote with reservations? Any nos seeing None Chair, your recommendation is adopted. Thank you.

Members for JHA Committee on Senate Bill 897 Senate Draft 3 House Draft 1 Recommendation is to pass with amendments as described by the Consumer Protection and Commerce Chair. Questions or concerns Members if not Vice Chair for the vote, please.

Voting on SB897SD3HD1 with amendments. Representative Cochran is excused. Are there any no's or reservations? A no vote for Representative Garcia. Reservations for Representative Shimizu Hearing no others. Recommendation adopted.

Thank you. Thank you. We are adjourned.

Good afternoon again, everyone. We are convening the Committee on Consumer Protection and Commerce. It is Tuesday, March 18, 2025 for the 205 Agenda, but it is right around 3:11 in Conference Room 329. First up on the agenda. zero, I'll have to read this thing again. Sorry, we just came from another hearing.

I'll read it one more time for this one. In order to allow as many people to testify as possible, there will be a two minute time limit per testifier. For those on Zoom, please keep yourself muted and your video off while waiting to testify.

And after your testimony is complete, the Zoom chat function will allow you to chat with the technical staff only. Please use the chat only for technical issues. If you are disconnected unexpectedly, you may attempt to rejoin the meeting. If disconnected while presenting testimony, you may not be allowed to continue. If time permits.

Please note the House is not responsible for any bad Internet connections on the testifiers end. In the event of a network failure, it may be necessary to reschedule the hearing or schedule a meeting for decision making. In that case, an appropriate notice will be posted. Please avoid using any trademarked or copyrighted images.

Please refrain from profanity or uncivil behavior. Such behavior may be grounds for removal from the hearing without the ability to rejoin. All right, first up on the agenda, we've got SB 822 SD2 relating to the landlord tenant code. First up, we have the Judiciary. Good support.

Good afternoon, chair, vice chair, Jessica Orr from the Judiciary. We stand on our written testimony and if you have any questions, I'm available.

Okay, thank you. Next up, Hawaii Realtors in support.

Aloha, chair, vice chair, members, my name is Lindsay Garcia of the Hawaii Realtors. We're in strong support of this bill. We see a lot of bills over the years on landlord tenant issues, and we think that setting up a working group to take a comprehensive look at the landlord tenant code is a good idea.

Bring all the stakeholders together to kind of look through the entire code and see if there's any updating that needs to be done, since it was written a long time ago and we've been kind of adding and subtracting to it kind of piecemeal.

So it kind of makes sense for everybody to kind of look at it as a whole and see if there are things that we can come together with and work out as a group. So thank you.

Okay, anyone else here to testify in this measure? Members, any questions?

Thank you for the Realtor Association. So you mentioned stakeholders coming together. So would you support amending this bill to ensure that there are equal numbers of tenant advocate groups and representatives on this.

I leave that to the legislature to decide what they think is a good amount. But we do know that there are a lot of people who are interested in the issue and so we're be happy to have the conversation with anyone as you all deem fit. Thank you.

I have a question, but I'm not sure who to ask. Judiciary maybe. Maybe we'll just ask Judiciary first. So I believe your testimony or someone else's testimony here, I think it was your testimony that suggested taking out the appropriate or appropriation language for reimbursement. Do you think that the.

My only concern with that, and I understand your concern, my concern with that would be that river island members might have a harder time joining. Although maybe in the advent of Zoom, where you are literally on Zoom right now, that is not as much of a problem. But do you have any thoughts on that?

No, it's completely up to you. I think we were just feeling that we didn't want to put that as necessary, but if you feel that the legislature feels that that would be helpful, then that that would be completely fine with us.

Okay. Okay. Thank you.

Thank you.

All right, let's move on. SB 1035 SC2 relating to consumer protection. First up we have DCCA Office of Consumer Protection with comments.

Good afternoon, Chair, Vice Chair and Members of the Committee. My name is Mana Moriarty. I'm the Executive Director of the Office of Consumer Protection. We submitted comments. We also submitted a proposed House draft one for the Committee's consideration.

The proposed House draft one, really the thrust of it is to ensure that this bill mirrors as closely as possible the rule passed by the Federal Trade Commission. There are a number of respects in which this bill before you does not identically follow the provisions of the rule. We think there's a chance for mischief there.

I'll give you one example. One of the ways in which this bill differs is it has no definition of ancillary goods or services.

And the Federal Trade Commission specifically found that mandatory ancillary goods or services include, for example, resort fees charged by a hotel after the consumer has already paid and has arrived at the hotel for check in. We believe that's an important example completely relevant to Hawaii and that the definition therefore should be reinserted into this bill.

I have one more example if you'd like, and let me just refer that example is with respect to final amount of payment versus total price, this bill does not provide direction to businesses for a situation in which the total Price and the final amount are both displayed. Let me explain what that means because they sound very similar.

The total price could mean the price exclusive of all, including all discounts. Excuse me, but exclusive of government charges and shipping, the final price means everything altogether, what's ultimately charged to the consumer.

So if we pass this bill as written, we could have a situation where business advertises both the total price and the total price might be really, really big.

Or if it's a radio ad, the total price might be advertised by the radio announcer up front with that really fast language at the end of the radio announcement that says, but the final price is this.

Right.

So that's another example of the way in which this bill, we think, does not track the rule, and it should be amended to track the rule. So we've provided our HD1 to address that. There is another example. I'll save that if you have questions for me. Thank you.

Thank you. Next up, Kula Software Systems.

Aloha. Mahalo for this opportunity to testify. Chair, Vice Chair, Members of the Committee. Antoinette Davis, President, founder of Ponhrez Reservation System. And I've read through the DCCA's changes, and I totally agree with him and. I support this bill. Thank you so much.

Thank you. That's all the testifiers we have today for this measure. Anyone else here to testify in this measure? All right, Members, any questions? All right, let's move on. Next up, we have SB 1048 SD2 relating to solicitation of funds from the public. First up, AG's office with comments.

Good afternoon. Chair Matayoshi and Members of the Committee. Christy Chang, Deputy Attorney General. We've submitted comments providing some suggested revisions to the Bill and are available for questions. Thank you.

Thank you. Next up, GoFundMe in support.

Good afternoon. I am Amanda Brown-Lierman, Vice President for Policy Engagement and Impact at GoFundMe. Thank you for opportunity to testify. We believe Act 205 as enacted, would slow down donations, impose unnecessary burdens on charities and platforms, and reduce support for Hawaii residents, especially in times of crisis.

So we are supportive of efforts to amend the Bill to mitigate harmful consequences on charitable fundraising efforts in Hawaii. And we have been in regular communication with the Attorney General's Office today to explore areas of alignment.

And we're really grateful for their partnership in pursuit of our shared goals of protecting the philanthropic space from misuse while reducing unnecessary burdens. Attached to our written testimony is a draft Bill that we believe represents a compromise between GoFundMe and the Attorney General, based on the meetings that we have had.

It combines elements of SB 1048 with key provisions of HB 992, which was introduced by the Attorney General.

This attached language represents the agreement in principle between our two organizations addressing the key areas of concern which had been raised in previous testimony by offering common sense fixes around eliminating the 10 day waiting period requirements, eliminating the bonding requirements, allowing donor email and IP address in place of mailing address for online transactions, streamlining reporting requirements, eliminating the vicarious liability provision and shifting the bill's effective date.

We believe this bill provides the necessary fixes to preserve trust in online fundraising while ensuring that all the residents continue to receive vital charitable support. And thank you for the opportunity to provide this testimony.

Thank you. Anyone else here to testify in this measure? Members, any questions? Yeah, I have one for AG. So I noticed in the end, by the way, I really appreciate you guys meeting before to compromise and try to figure out a compromise bill that's always very much appreciated.

In the compromise bill though, you both eliminated vicarious liability, which I had thought was a pretty big hook to motivate online platforms to comply, to play nice, to not allow fraud, fraudsters on there. So can you kind of explain your thinking on eliminating that?

Well, I think both Amanda and I can comment on that. I think our concern really in looking at this sector and what has happened in trying to prevent fraud, it really is happening with people that don't actually register on these platforms. Right.

So I think by having the regulations that are in place and having them register with our office, it allows us to at least know up front early what's going on in the activity and sort of work with these platforms to make sure that they are in compliance.

GoFundMe can comment on what sort of the protections that they have in place. I mean, we've been in contact with other in the sector as well. I think trying to most of them have internal controls about making sure that whoever goes onto their platform to do fundraising, they're vetted. So we do think that there's protection in there.

And I mean really this is a new space for us as well. And it may be something that's going to have to evolve as the industry evolves and we sort of see what kind of comes into the office.

So if we do have a bad actor, and I'm not saying it's GoFundMe, but there are a lot of platforms out there, what is the recourse under this Bill for a fake Maui Lahaina Wildfire page?

Well, so in those situations, right. We do have an investigative division. That's a criminal area. If those reports do come in. And so many of them are not necessarily on GoFundMe or these other platforms they're raising on Facebook Marketplace.

So, like I said, going back to why Act 205 was implemented is to kind of give us these tools because previously we didn't have the tools necessary in order to sort of regulate. Because part of it is, do we have jurisdiction over people that are on the mainland that are raising here in Hawaii?

So having this law come into effect allows us to sort of extend that reach as far as enforcement.

What's the consequence against the platform if the platform is not complying or not taking down or whatnot?

Yeah. So we would then refer it to our criminal area to make sure that that gets taken care of. And, you know, that's a different area. And we can get back to you on what process that they would follow.

Is there a monetary fine or anything like that associated with it, or is it just...

It would be just sort of to shut them down. And then, because I don't think the bill right now, the Act 205 provides for a monetary fine, just more allowing us to have enforcement powers to pursue other avenues for them.

That was kind of my concern about vicarious liability. It sounds like that was the more civil-ish remedy for it. But it was taken out. So that. Anyway, if you think that your enforcement powers are enough without it, then that's kind of the answer I was looking for.

Okay. Yes.

Yes. Thank you. Thanks. Okay, Any other questions? All right, let's move on to SB21 SD2 HD1 relating to water carriers. First up, we've got DCCA consumer advocacy with comments.

Good afternoon, Chair, Vice Chair, Members of the Committee. My name is Michel Angelo. I'm the Executive Director of the Division of Consumer Advocacy. We stand on our testimony providing comments available for questions. Thank you.

Thank you. HDOA with comments not present. PUC in support.

ALA. Good afternoon, Chair Marioshi, Vice Chair Chun and Members of the House Committee on Consumer Protection and Commerce. My name is Andrew Okabe. I'm the utility analyst of the Public Utilities Commission. I'm here on behalf of the Commission.

I am standing on the Commission's written testimony in support of SB21 SD2 HD1 with our amendment available for any questions the Committee may have. Thank you.

Thank you. Next up, Department of Transportation in support.

Aloha, Chair, Deputy Director of Transportation for Harbors, standing on our testimony and strong support. Thank you.

Thank you. Next up, we have young brothers in support.

Good afternoon, Chair, Vice Chair, and Members of the Committee. Chris Nakagawa, on behalf of Young Brothers, we also stand on in a strong support and honor testimony. Thanks. Available for any questions.

Thank you. Anyone else here to testify in this measure? Members, any questions? Yep. Rep Iwamoto.

For Angelo. So you mentioned, I think part of your testimony included concern for consumers facing the increased cost.

So normally when the PUC is going to look at, if you look at this is going to allow multi year rate increases, but if they were to do it year by year, increase by increase, it would allow the consumer to come and explain and be heard about how it's going to negatively impact them. An increase in rates.

Is that part of your concern? Is that.

The concern for us, the concern is that the rates would be automatically adjusted without the ability to have oversight on an interim basis.

So like they get an adjustment for certain types of costs and those would typically be reviewed within a rate case and it's to the benefit of the ratepayer because the utility has to act prudently and efficiently with their costs in between the time that they come in for another rate case.

Okay, got it. Okay. Okay. Thank you.

Thank you. Okay. Sorry. PUC. So I appreciated your amendments. I do like them. Part of your testimony, you said that with regular rate adjustments there could be potential compounding of fees. But I was a little confused about that.

Why can't you, I mean you guys know everything in front of you and you know, if we implemented this regular rate adjustment, you could, you would know that too. It'd be a pretty constant schedule. Why, why couldn't you just take that into account when you're doing your rates get rate cases.

Yeah, we. Thanks Chair. We would take that in account and we're just pointing out, you know, a lot of people are confused, could be confused by all these different percentages put out there. So we just wanted to highlight that as a impact on rate pairs that, you know, year one you have a 2.7%.

Year two you would have a 5%. Year three you had a 1.2%. That that would all compound.

Okay. It'd be a public perception of compounding rather than an actual you not realizing and it compounding that way.

Yeah. Okay, we try and address that. Yes.

Checks. I had another question for you. Now I forgot it. Well, young brothers first then. Sorry, I might call you back. Can you. There's a lot of testimony being not so kind to this bill and to you folks for constant rate adjustments. Can you kind of expound on that a little bit?

I mean, why have there been so many rate increases in the past five to seven years.

I would correct the record for that. I mean, I think that's not really true. I mean, it's. And the Commission is aware of this. Our last rate increase was in 2020. So it's been five years since our last rate increase. We do have a pending application right now before us that we're asking for 27%.

So that's the intent of this Bill is, is to break this cycle so that we can actually have a mechanism placed to. Your question is so that we can spread out the rate increases so we don't have to come back and then actually ask for large increases every three.

You know, so there's a point where there's control costs that are not controllable, such as inflation, can be actually be predictable not only just to us as the utility, but also to the customers.

So we have, I think in testimony a lot of some customers saying that they like this because actually they know ahead of time that there is an index that we follow, the GDPI or whatever it is, and it actually will occur like once a year, let's say July 1st of every year until we come in for the next rate increase.

And so therefore it spreads out the rate increase over time. And that's the way for us. It's to keep us stable and sustainable. And that's what we're here for. I think we're aligned with the PC on this. I mean, this is something that's important for us.

In order for us to survive, we need to have this mechanism in place. Otherwise, like you said, we're going to be coming in all the time for rate increases because there's nothing.

It costs so much money and it's burdensome to actually prepare a rate case and to come in every year to actually ask for the PUC to recover our costs and also our capital investments.

Understandable. But the accusation made was that they had afforded you a certain mechanism to increase rates and that, I mean, the implication of the testimony at least, was that it had been abused and they had taken it away afterwards because it didn't. The reason I'm asking you this is to give you a chance to respond to it.

Yeah, and I can't really speak to that because probably predates my time when I was with young brothers. But I don't know what happened between 1020 years ago in terms of any mechanism.

Fairly recent was the testimony, I think.

The mechanism they're referring to, though, what happened before 2020, I think it was in the middle. Is it. Do you know what, Afra? Yeah, it's like a 2013 period. So that's before even my time. I mean, I don't know if that's. They're going back into history in terms of these mechanisms in place.

And I can't, sorry, I can't really speak to those mechanisms, but I'm just looking at, forward looking as to how to keep this utility survivable and as sustainable. And so. And as we mentioned previously, this is not like something that we came up out of the blue, right?

We had a working group, SM125 that came up in 2021 and there was a lot of stakeholders and this is the solution to the problem was to make it ratable rate increases to provide the ability for the Commission to have these mechanisms in place to actually set something that, so that we can actually start to recover our costs immediately.

Such costs that are much less controllable to us, such as inflation.

Could you speak to your survival survivability without the spill, potentially? I mean, yeah, it's before, but I. Want everyone to hear it in terms of.

For us to be, I mean the key for this is for us to basically break the cycle. One is to be able for us to recover our costs.

If you don't get this Bill, I mean, what's your chance of surviving the next 510 years?

It's limited. I don't want to come before you again next year to actually ask for this again because I think this is not the silver bullet. I mean, let's make it clear, right?

It's a mechanism that helps mitigate the rate increases, but we also need a rate increase just overall, just to help us with recovering other costs, such as, for example, capital investments that we made over time. So this is solely just to recover for.

I think I'm not getting through here. Sorry. Has Young Brothers been profitable the last couple of years.

For the past five years, except for one year? No, we haven't been. And it's over the period of time, let's say, you know, I think it's in the record. It's like over the past 20 years, you know, our rate of return overall average has been like less than 2% where we normally should be earning close to 10%.

That's usually what's authorized by the PUC. It ranges between 9 and 10%. So that kind of gives you the ability that we haven't been making a great rate of return. And so that's why our financial challenges we're facing right now is very difficult at this point in Time.

Okay, thank you. PUC. We talked for long enough for me to remember my question. Yes, sir. So you asked for flexibility on what index to use. Do you really need that flexibility though, or can you guys figure out what index to use now? We could just put it in. It just feels weird.

If we pass this Bill and we give you the flexibility to select the index by changing the index, you could actually change the amount too. And that might add some unpredictability to not only young brothers, but to the people testifying and their customers relying on predictability in the future.

That's correct. But we would rely predominantly on the filing by the applicant. So in this case, the applicant did request GDPPI without food or fuel or energy. Sorry from bea. We.

Again, like I've said, we've said in testimony and like I said in the last hearing we had here, we don't have a preference as to which of the indices we use.

We want to keep our mind open and maybe if the parties to the docket decide we're going to settle on another metric that isn't may not have as much volatility or has more applicability to the actual costs we are trying to mitigate for, maybe that would be good for the parties to decide.

Hey, we don't want to use this particular ppi.

So it's the applicant that proposes it.

Then the applicant would propose it. But as with anything before the Commission, the parties, if they settle, they could select something else. And that would be permissible under. Under this measure, should it pass with Commission's amendments more giving them the flexibility.

To justify the number before you that they're proposing to you.

Yes. And allow. And allow us to accept it. If we were. If the measure did only say be a gdpi, non. Non food, non energy, we would. That would be the only metric we could utilize.

And thank you.

Thank you.

Okay, let's move on. SP177 ST1, HD1 relating to aquaculture. Well, Department of Agriculture in support. I'm assuming there's not here still. Okay. Agribusiness Development Corporation, ADC in support. Is ADC here online? No. Okay. To be fair, the other hearing went a little long. Anyone else here to testify on this measure for aquaculture Members? Sorry, let's move on.

SD 1100, SD2 HD1 relating to biosecurity. First up, we have Department of Agriculture in support. Not here. Next up, Pest Control Board with comments.

Chair Maruyoshi, Vice Chair Chun. Members of the Committee, my name is Candace Ito. I'm here for Executive Officer Green, the Pest Control Board stands on its written testimony with comments and I'm here to answer any questions.

Thank you. Next up, DCCA with comments.

Good afternoon. Chair, Vice Chair, Members of the Committee. The Department stands on its testimony, submitting comments.

Thank you. Next up, DLNR with comments.

Good afternoon. Chair, Vice Chair, Committee Members, Rob Hauff, Director, Chang, DLNR. The Department stands on its testimony with written comments and is available for questions. Thank you.

Thank you. John, what you're here for or who are you? What, what organization are you here for? Okay. We already called you. You want to come up in? Yeah.

Chair, Vice Chair, Rep. Iwamoto, Jonathan Ho on behalf of the Department of Agriculture, we stand on our written testimony in. Support, and I'm here for questions. Thank you.

Thank you. Next up, Hawaii Invasive Species Council with comments.

Aloha, Chair, Vice Chair, Members of the Committee, Chelsea Arnon, on behalf of the Hawaiian Basis Species Council. We submitted testimony with comments on this measure in the last hearing that they made amendments to remove language to move the Hawaiian Basis Species Council over to Department of Agriculture. We're just flagging that.

There was one section that would the language is the Deputy Chairperson of Biosecurity, oversees initiatives, enlists a number of chapters. One of them is 194, which is the Hawaiian Invasive Species Council statute. So we just recommend removing that language from the measure. Mahalo.

Thank you.

Next up, we've got Sierra Club of Hawaii with comments. Not present, not present. Next up, Hawaii Farm Bureau in support. Not present. Next up, Coordinating Group on Alien Pest Species with comments.

Aloha, Chair, Vice Chair, Members of the Committee, My name is Stephanie Easley with the Coordinating Group on Alien Pest Species, or CGAPS. Our organization attempts to see gaps in Hawaii's biosecurity security and bring together partners to try to fill those gaps.

You have our written testimony, which I think highlights a number of gaps that we identified potentially in this Bill. Our testimony was very long, so I'm going to quickly run through the highlights. As his testimony just mentioned, the use of the word state on the last line of page 22.

It places all of the state's biosecurity programs under the oversight of a deputy of the Department of Agriculture and biosecurity. So DLNR's access deer program, anything that Department of Health is doing with the vectors would all be overseen by a deputy of another Department.

We urge you to please change that word state to Department, and please remove the reference to Chapter 194, which is the HIC statute. So you would have a Deputy overseeing her chair and the chair of DLNR carrying out the HIC statute, which I don't think was the intention.

Just quickly Chapter 27 or Section 27 on page 59 takes away the authority for the Chapter 72 administrative rule amendments. It is removed. So those amendments do not have an authority in chapter 150A anymore. So that I don't know how they'll handle that. Administrative.

Those administrative rules now replaces it with these requirements that actually favor out of state imports over in state produced agricultural products. Not sure what the intention was there, but we really hope that you will put back in the text of 150A8 so that the Chapter 72amendments can be carried out. Just quickly.

Sorry, I don't want to cut you too short, but we're probably going to be putting in the House version into this Bill. So do your comments and complaints relate to the House version as well or is it just for the Senate version?

You're going to put 427 into this Bill?

Yeah, 427.

Sorry. Okay.

Yeah, I know I'm spitting you here, but I just didn't want you to waste your time testifying on something that's not going to.

And all of your time has been a very long afternoon for you and I'm sorry to take up all this time.

I would say that the Department on the bottom of having that Deputy Director only oversee the Department of Agriculture and Biosecurity's biosecurity initiatives, she is a deputy within that Department is more appropriate and not overseeing the HISC. So that comment is still correct.

And for the House version, there used to be a quarantine authority in the original version as introduced, which would allow hdoa, like if they found red imported by ant in one of your districts to say we're quarantining this area. You can't move any of the green waste out, please, until we can get this under control.

It was removed because HDOA requested it to be removed, saying it was duplicative of the Chapter 72amendments. It is not. Chapter 72 only applies for things for sale to the public. So those would be my amendments. Thank you very much. I'm here if you have any questions. I'm sorry, this has gotten very confusing.

Thank you. Okay. Comments.

Yes. Sorry, I lost you guys for a second. Michelle Montgomery, manager of Hawaii Ant Lab. We stand on our written testimony and are available for comments or questions.

Okay. Oahu Invasive Species Committee. Nate, you around?

Aloha chair, Vice Chair, Members of the Committee. We submitted written testimony on behalf of the Oahu Invasive Species Committee, we'll stand on that testimony. I do apologize for it being a little late. So I did want to highlight one particular portion Starting on line 16 of page 71, it starts to discuss the Invasive Species Dashboard.

And we would just request a lot more clarity regarding that. There are some specifications regarding how funding would be provided and who would be allowed to receive funding and expend funding, depending on what kind of data they are able to provide to that dashboard.

There is a UH governance data governance policy that I believe kind of indicates some of the. The data that we use that we house and that we publicize is protected. So there would need to be some. Some clarifications regarding that and probably some type of agreement between the University.

I don't want to speak for them, but some sort of agreement between the University and other parties to allow the more protected classes of data to be shared between agencies and departments. Otherwise echoing a lot of what the CGAPS testimony has specified, as well as the Hawai' I Invasive Species Council and here for questions. Thanks.

Thank you. Next up, an individual, John Gordines. Not present. In support. Joseph Watt. In opposition. Not present. Not present. Anyone else here to testify in this measure? Members, any questions? Yep, Rep Iwamoto.

Thank you for OISC, the Oahu Invasive Species Committee. While you're coming up, I just want to congratulate you guys on the work you did with the little fire ants in the Kailua side.

Oh, thank you. Yes, that was a joint effort. A lot of agencies provided. It was led by OISC Howe. But you know, folks from CGAPs, his HDOA did help on the ground, so we appreciate all the assistance. Thank you.

So I think I heard Chair mention, including language from the House Bill. Is that House?

What I mean, the intention right now is to put in the House position. Position.

So I just wanted to get their feedback. Would. Would you be addressing some of their concerns from their testimony when you do that, or will it just totally.

A little bit.

Okay. Okay.

Well, always available for questions too, so just let me know.

I don't know how to. I mean, I guess. I guess for me, I obviously respect them a lot. I want to know, like, what their input is on whatever amendments you make, but it's fine. Okay.

I mean, I did state my intention, so if you want to respond to that or the House Bill, you're welcome to.

Yeah, I think we have provided testimony on the House version of the Bill at several stages, so I would stand on that testimony when there is another opportunity to testify. Should language and amendments be made to this version, this measure will definitely provide some testimony. Our main goal or our not goal?

Our main concern was the movement of the Hawaii Invasive Species Council from being administered under the Department of Land and Natural Resources to being administered under the proposed Department of Agriculture and Biosecurity.

So if that is going to not be moved, as was not indicated in the earlier versions of House Bill 427, then we would continue to agree with that. Otherwise, we would we would post some testimony noting our concerns.

Any other questions, Members?

Thank you.

Okay, thank you. Take a brief recess. Recess.

Okay, reconvening. All right, let's start with SB 822, SD 2, relating to the landlord tenant code. Chair's recommendation is to adopt the Hawaii Association of Realtors amendments, but delete the provision on reimbursement for expenses and add a defective date of July 1st, 3000. I'd also like to add language requiring a final report due on July 1st, 2028. Members, any comments?

Yes, Chair. Would you be open to including language that specifies that there should be equal numbers of landlord affiliated individuals and then equal representation of tenant advocate affiliated representative to this task force? Because I'm concerned that if it's too heavily industry, landlord looking, then it might... You know, I just want to make sure that whatever comes out is, has the credibility of being well balanced among tenant advocates.

I mean, the version of the bill that we intend to pass does ensure that there are going to be tenant advocates at the table.

Only two of them.

Two of them. But I mean, it depends if you're considering the Attorney General to be a landlord advocate or a Senate designee to be a landlord advocate. I'm not sure that I would consider that as such. There are also, there's also a provision to add other members, other Members of the Committee deemed necessary. So there is an opportunity for that. But that being said, this isn't meant to, this is meant to be a working group. It's not meant to be like a...

It's not us, you know. I think that this, you need the voice. You need everyone's voice at the table. But I don't think this is a situation where you necessarily need to ensure... A lot of these people on the committee are neither landlord nor tenant advocates.

They're just meant to have provide information and perspectives from the government or Attorney Generals or legal. So trying to balance a group like this is, it seems a little odd to do that when there are neutral parties and parties that don't fit into either cap as well.

Yes, and I'm open to that. You know, I'm open there for there to be three categories of people. It's just, you know, because there could be ultimately, at the end of the day, the task force will vote on, is this the report? Yes. And we're all going to vote on approving that this is the report. It's not like those two members can, their votes if there's only two of them won't count at the end of the day, and the report will have their name on it.

There's three groups. I mean, honestly, the neutral parties outweigh them anyway. So trying to stuff it with more tenant advocates I don't think is a great idea. I mean, they're one party to this, and I think that they need to be seen as one party to this. Including the Attorney General is one party to it.

The Legislature is basically one party to it. Although House and Senate would probably disagree, say they're two parties. But that's... They're one aspect to this of many aspects, not just two or three. There's probably like seven in here. So to try to make one party equal to all the rest combined, or even to, that's not how this working group is meant to function. And I think it would probably lead to dysfunction in the working group if we were to try to balance it because it's...

You're ejecting a lot of subjectivity into it of who is, who counts as a, in what party. I'm not willing to parse people out like that. I want this group to be a cohesive group that works together to try to find a common end. That's all. Okay. Okay. That's all the amendments. Vice Chair for the vote.

Okay, Members. Voting on Senate Bill 822, SD 2. Chair's recommendation is to pass with amendments. Chair and Vice Chair will vote aye. [Roll Call] Chair, your recommendation is adopted.

Thank you, Members. Next up, we have SB 1035, SD 2, relating to consumer protection. Chair's recommendation is to adopt the amendments provided or proposed by the Office of Consumer Protection, but with the defective date of July 1st, 3000. Members, any comments? Vice Chair for the vote.

Members, voting on Senate Bill 1035, SD 2. Chair's recommendation is to pass with amendments. Noting the excused absences of Representatives Tam and Pierick. Are there any Members wish to vote with reservations? Any noes? Seeing none. Chair, your recommendation is adopted.

Thank you. Next up, we have SB 1048, SD 2, relating to solicitation of funds from the public. Chair's recommendation is to adopt the AG's proposed amendments. Also to change those amendments so that Section 10 of the AG's proposed amendments has an effective date of July 1, 2025. Members, any questions or comments? Vice Chair for the vote.

Members, voting on Senate Bill 1048, Senate Draft 2. Recommendation is to pass with amendments. Noting the excuse absences of Representatives Tam and Pierick. Are there any Members who wish to vote with reservations? Any noes? Seeing none. Chair, your Recommendation is adopted.

Thank you, Members. Next up, we have SB 21, SD 2, HD 1, relating to water carriers. Chair's recommendation is to adopt PUC's proposed amendments. But for the first proposed amendment, make it so that they need to do this by a date no later than July 1, 2026. Members, any comments? Vice Chair for the vote.

Members, voting on Senate Bill 21, Senate Draft 2, House Draft 1. Chair's recommendation is to pass with amendments. Noting the excused absences of Representatives Tam and Pierick. Are there any Members wish to vote with reservations? Reservations for Rep. Iwamoto. Any noes? Seeing none. Chair, your recommendation is adopted.

Thank you. Next up, SB 11... Sorry. 177, SD 1, HD 1, relating to aquaculture. Chair's recommendation is to pass this measure as is. Members, any comments? Vice Chair for the vote.

Members, voting on Senate Bill 177, Senate Draft 1, House Draft 1. Recommendation is to pass unamended. Noting the excused absences of Representatives Tam and Pierick. Are there any Members who wish to vote with reservations? Any noes? Seeing none. Chair, your recommendation is adopted.

Thank you, Members. Next up is SB 1100, SD 2, HD 1, relating to biosecurity. I think we need a little more time to work on this. The intention of this Committee is to pass it out, but I'd like to defer decision making on this measure to tomorrow's agenda at 2pm. Or onto tomorrow's 2pm agenda, I should say.

Last up, we've got DM on SB 146, SD 1, relating to condominiums. Chair's recommendation is to delete early neutral evaluation and non-binding arbitration from this measure. Make evaluative mediation mandatory. Revise evaluative mediation to have mediation to have those mediators give an oral and or written evaluation to the parties after the mediation if the parties have failed to settle during the mediation itself.

Add an experience requirement for the evaluative mediator of three years of mediation experience. Deleting subsections B and C of section 514B-A and inserting a new subsection B. Sorry. Inserting a new subsection B to read all costs and expenses, including reasonable attorney's fees, incurred by or on behalf of an association in connection with collecting delinquent assessments, foreclosing any lien on any owner's unit, or the interpretation or enforcement of the declaration bylaws, house rules.

This chapter or the rules of the commission shall be promptly paid on demand to the association by the owner or tenant assessed for such costs and expenses, provided that such amounts may be disputed in accordance with section 514B-146 if those amounts have not been awarded pursuant to the judgment of a court or the award of an arbitrator.

I want to insert an amount of $3,500 on page eight, line five. Where that blank, where it's blank currently. There's another blank on page nine, line 14. We're going to be inserting an amount of $6,000 there. Page 36, line four, I want to add that the requested mediation must be made prior to the initiation of an action concerning the assessment and within the same 30 day window there. Members, any comments?

I'm just... Chair, I'm going to vote with reservations, only because it's a really long bill and all of the amendments you made. I can't, I couldn't follow along. So reservations. Thanks.

That's fair. Okay, Vice Chair for the vote.

Members, voting on Senate Bill 146, Senate Draft 1. Recommendation is to pass with amendments. Noting the excused absences of Representatives Tam and Pierick and the reservations from Representative Iwamoto. Are there any other Members who wish to vote with reservations? Any noes? Seeing none. Chair, your recommendation is adopted.

Thank you, Members. We are adjourned.