Senate Standing Committee on Commerce and Consumer Protection

Okay. Good morning and welcome. This is our Hawaii State Senate Committee on Commerce and consumer protection. Wednesday, February 4, 2026. 9:30am deferred agenda in Conference Room 2 to 9. We will be reconvening on two bills that were heard yesterday. SB2471 relating to the powers of artificial persons, and SB2829 also relating to the powers of artificial persons.

We had a robust conversation and a lot of testimony on these two measures which I think are very significant for our election system and our democracy.

Upon further discussion with the Attorney General's office after a robust Q and A period, the recommendation to the Committee is that we defer decision making on these two measures one more time with the intention of passing out an amended version of each bill, hopefully with the support of the Administration and their lawyers.

So we will defer decision making on these measures until Tuesday, February 10, 2026 in this room 229 at 9:30am Any comments or discussion? No. Okay, so we'll adjourn that agenda. And. Wait, await our friends from the EIG Committee. Kat, we can go in on the 9:35.

Okay. Reconvening on this Wednesday, February 420269:35am agenda in Conference Room 2 to 9 at the Hawaii State Capitol to reconsider SB 2180 relating to deposits of public funds. This measure was heard in this Committee yesterday in a joint hearing with the Housing Committee.

We had some late testimony that the Members were not able to receive prior to the hearing. So we deferred action on it so everybody could take a look and. There. Are no objections and prepare to make a recommendation which is to pass this measure out with a defective effective date of July 1, 2050. Members. Any discussion?

KC None. Vice Chair for the vote. Passing with amendments. Chair votes Aye.

Thank you. Vice Chair also votes Aye. [Roll Call] Measure is adopted.

Thank you very much. We're adjourned. Okay, Good morning and welcome to this Wednesday, February 4, 2026. 9:30am Joint Committee Agenda between the Hawaii State Senate Committees on Commerce and Consumer Protection and the Committee on Energy and Intergovernmental affairs to consider three bills. The first is SB 2033 relating to renewable energy.

This measure requires the Public Utilities Commission to establish a streamlined grid ready homes interconnection process. First up, we have the PUC with comments. Good morning.

Good morning. Chair Keohokalola, Chair Wakai, Vice Chair Senator Fukunaga, Senator Chang and Members of the Committee. My name is John Itumura, Chair of the PUC and with me today to assist with any questions is Andrew. Good morning. The Commission supports the intent of this measure to establish streamlined and transparent interconnection processes for residential customers.

While the Commission supports efforts to expedite the interconnection of distributed energy resources, the Commission does have concerns because establishing the prescribed process in this measure would require considerable time and resources among various parties and stakeholders to determine the cost of significant infrastructure upgrades necessary for such interconnections.

Currently, issues relating to residential interconnection timelines will be considered in a new docket. Also, this measure refers to grid ready homes. Therefore, clarification is necessary whether grid ready homes are subset of the residential stock or refers broadly to any home equipped with distributed energy resources or energy efficiency technology.

For example, Governor Green's recent Executive order number 2501 refers to zero energy ready homes, a term applying only to new single family projects. It's also unclear at present if this measure seeks to expedite current queues or establish new procedures for a subset of interconnection cases.

Furthermore, this measure contemplates the role of the Hawaii Electric Reliability Administration, or hira, to facilitate the implementation of this customer sited interconnection process. The Commission has procured a consultant to serve as the HERA and the HERO scope of work will focus on interconnection cues for utility scale projects versus residential interconnection cues. Thank you, Chair.

Next we have the Consumer Advocate with comments. Thank you. And thank you for standing on your testimony. Hawaiian Electric in opposition. Good morning.

Good morning, Chairs, Vice Chairs, Members of the committees. My name is Shannon Alibado. On behalf of Hawaiian Electric, we are supporting the intent of the bill. But as the PUC Chair has stated, we are opposed to the process proposed. Also the reference and use of HERA. Funding to expedite and implement this program. Thank you.

Thank you very much. The Hawaii Solar Energy association with comments.

Good morning, Chair, Chairs, Vice Chairs, Rocky Mould, Hawaii Solar Energy Association. I'm going to stand on my testimony in strong support of this measure. I'd just like to add a little additional context. This measure is about updating our interconnection process for new technologies that are coming online that are lower cost and more grid friendly.

It's also about meeting our significant renewable energy goals here in Hawaii. It's been over six months now since this Legislature passed SB589, which was signed into law as Act 266. It's been over a year now since Governor Greene's Executive Order 2501, both of those measures put in place a 50,000 rooftop solar target in five years.

That's 10,000 per year. The last number that I saw from HECO was we had a year of 6,500 installs this year. That's a great year, but that's only 65% of that 10,000 goal. So we really need to pick up the pace and create a more streamlined process to bring rooftop solar and energy storage online.

And remember, this new technology that's coming online is lower cost. This is going to lower costs for everyone, for customers and, and the overall grid. So thank you very much for the opportunity to testify. I'm here for any questions if you have them.

Thank you very much. KAUC with comments online.

Good morning, Vice Chairs and Members of the committees. My name is Scott Sato and I'm the Government Affairs and Energy Services Manager at Kauai Island Utility Cooperative. KUC stands on its written testimony providing comments and has noted some possible amendments for your consideration. And we thank you for the opportunity to provide feedback.

Thank you very much. That's all the registered testimony we have for individuals who indicated they would be present at the hearing. Is there anyone else online or in the room who would like to submit testimony in this measure? Okay. In total, there were 27 organizations or individuals who submitted testimony and support two in opposition and four with.

Well, actually the four with comments just spoke. Members questions? Senator Dacoite.

PUC, please. Thank you. You know what, what is, what is a grid ready home interconnection process? Like, like explain that to me.

I'm going to turn that over to Andrew for the specifics.

So I believe, you know, as interpreted or as implied in the bill, it would be a more streamlined process in which a homeowner or project owner could get their project online. It's not unlike, I would say, a process we currently use on fully regulated side with HECO and KAUC for that matter.

But you know, if we were to do it without input of, and maybe I'm straining too much here, if we were to do it without the input of all the stakeholders, there might be some issues with it, you know, that we have not, you know, need to be resolved. So.

And could you just state your full name?

Just. Well, my name is Andrew Okabe. I'm a utility analyst at the Public Utilities Commission. Thank you.

If I may supplement Mr. Okabe's testimony or response is that traditionally the commission has reviewed interconnection issues. I understand and recognize that the concern is that it often takes very long or is very difficult to complete the process or be approved for interconnection.

But that's one of the concerns that we brought up or the need for clarification is that we've been dealing with large scale utility or utility interconnection rather than residential.

So I guess trying to figure out how does it actually work. So again, house like interconnect. How you looking at streamline? We just like bypassing some stuff or like we're not doing the average. Like I'm gonna apply, I can put in my stuff. And what does that leave the majority of the people that want to do.

If I may, before I turn it over to Mr. Okabe, my understanding the intent of the Bill is to provide the process, to provide guidelines so that all parties are clear as to what the process is and the timelines that it will involve.

So part of, you know, what's involved may be grid upgrades before, even before someone would, you know, submit an application or want to install their system. So Hawaiian Electric and KOC would need to start upgrading some of their older circuits now. Especially some of the ends of the circuits are tapered, you know, tapered lines.

They would have to change those out.

Okay, so because the reason why I'm asking this is because Tic Molokai they normal grid space. So you're telling me the utility going to pay for that, they're going to pass that on to me to, to upgrade, to then do an interconnection to.

Allow this to occur?

To allow this to occur. So I'm going to pay more for do that when I really struggling to what most people struggling to get by on a day to day average.

That may be the case. Well, those are the issues that you.

Guys gonna look at. We will consider. Okay. Okay, thank you. Thank you, Chair.

Members, Senator McKelvey.

Okay, I just real quickly, this is what I love about this process and the public testifying is because sometimes they come in with incredible.

I don't know if you saw Ms. Freitas's testimony on concerns with the bill and suggested amendments, but looking at that, if this Committee were to move the bill forward with adopting or considering amendments like the one she has proposed, would that address the concerns that you see with this measure?

Oh, I'm not sure. They've been the, the testimony was made public this morning. Okay. So if you have it in front.

Of you, basically, consumer cost protections, equity and access standards, grid hosting capacity transparency, reliability and safety, expense exceptions, independent oversight of cost recovery, limits on delegated authority and consumer remedies and dispute resolution, or some of the things that were flagged as potential concerns with the bill moving forward, would you, would you agree that considering those.

Or that looking at that would create some guardrails and more certainty in the measure moving forward?

Those are all elements that are very obvious and would be considered.

Okay, but so you would support amendments like that in the bill to try to fine tune it.

Any amendments that provide further clarification is always helpful. Okay. All right, thank you, Chair. Appreciate you asking the question, Senator.

Yeah. So for you guys, I don't know the guy's name. Mr. Mold. Thank you.

Yeah.

And if you could just reintroduce yourself and your title. I'm Rocky Mould, Executive Director of the Hawaii Solar Energy Association. Associations.

Yeah. So so early, earlier you said that, you know, as we do this, in the long run, it's going to save money. My solar on my home is 30 years old already. We put it on there.

No matter what was the connection and what was the lines put in, upgrades or whatever put in, we really didn't see a cost savings even when we put in the PV. But you saying this, what decade where we start seeing this?

Because you're gonna have to change lines, upgrade things to retrofit what you're saying, that is gonna be a cost savings to the consumer. But in what year? When I'm 90 years old? Because right now none of the cost servings in my community with all that ugly solar that we see is giving anybody any breaks in my community.

And I got probably the most on my side of the island with solar farms from pro city, Waipa. I mean, excuse me, Upper Waipahu, Kunia, Kapolei, Ever beach. I think we get like two or three. Guess how much dollars I save. They said in 30, 40 years I'll be dead. 30, 40 years.

We should invest in something else. Because again, you keep, you guys keep seeing that. Not just you, you got asking the questions too. But in the long run, who is it gonna save for? We always talk about protecting the environment, which I'm great for that. But again, to what cost?

Because again, we can't even afford the electric right now. My electric bill has been going up since we put in. That never went down. Right. We never do anything different. Got rid of the AC, got rid of the big ice maker, everything. Our bill never really went down.

So it's about five to 600 a month every month. Right. So again, I like know what would be your cost? What is the immediate cost savings to the consumer by making or how retrofits align with Hawaiian electric or whoever you got to make the upgrades to. When is the cost savings going to come in?

When my grandkids are born, hopefully 40 years from now. But anyway, you see what I'm saying.

Well, I mean each project is different and 30 years ago was a long time ago in the solar industry. There's been a ton of innovation and cost savings that have come that have happened since then. I'm sorry that you didn't experience the savings that you expected in your project.

Again, have to look at the details to understand that. But over the last 10, 15 years, projects have come online and they've provided immediate bill savings for customers on their bills. When designed right and when done with, you know, designed right and sold right, it actually brings immediate savings to someone's bill.

Now it's an upfront investment and it's how you pay for that upfront investment and over what time frame that determines your payoff. And those range depending on what incentives are available, where interest rates are. But we do see payoff times less than 10 years now in most instances, if not all instances.

And with the right incentive packages, those can be five years to seven years. And so it all depends what we've seen with time. So the chief cost on our system right now is the reliance on fossil fuel to fuel our electricity system right now.

So the faster we can get away from fossil fuel and find lower cost alternatives, the sooner we're going to start bringing overall electricity costs down for everyone.

And so there have been studies that have shown that particularly the new technology that's coming online for solar energy storage and combined with different grid services programs, the right combination that actually brings savings to the overall grid for everyone because it's providing, it's opening up the grid for more cost effective energy to be able to come on online.

Studies have been done across. The US. That have shown that these new packages of rooftop solar energy storage are bringing costs down sooner rather than later for folks. And that's what this bill is about.

This Bill is about allowing for those new lower cost technologies to come online more quickly so that we can all feel the benefits sooner of that cost effective energy.

So you're telling me that who's going to do the upgrades for we can get this online quickly.

So in this Bill and in this Bill there's a recommended cost sharing mechanism. Now we're just saying that cost sharing mechanism is designed for customers to pay into almost like an insurance Fund. And that insurance Fund will share in the costs of those upgrades and help pay down the cost of those upgrades for customers.

The customers interconnecting ultimately are going to be the ones on the hook for those interconnection costs. Right. And so we're not saying to pass those costs onto the whole grid, we're saying we're actually creating a mechanism to help pay that down, the cost of that for customers. So that's the design of that cost sharing mechanism.

So what is the percent of a household of three that if they want to buy into this, what do you think the estimated cost would be them on their household living expenses?

So they'd have to find upfront costs, they'd have to find money upfront to be able to pay for the system. And we're going through a pretty rapid disruption right now given federal tax credits and what's happened to the residential tax credit. So we're going to start seeing, probably going to see more systems that are leased.

And those systems that are leased can bring immediate savings to customers who do that. Now ultimately buying a system outright, getting a loan and buying a system outright might provide more long term savings in the end for a customer. But with leased products, you get immediate savings, almost immediate savings.

The reason why I bring this up, I don't know if where you're at, but we're in Hawaii 2025, nobody can even squeeze on turn up for any more juice.

So you're going to ask them to upfront household costs that they can barely even pay the water and the electric to stay on now to benefit them within seven years or possible seven years.

Yeah. So the GEMS program, the Hawaii Green Infrastructure Authority Program, it's a program designed for low to moderate income residents to be able to afford solar. I would recommend taking a close look at that because the requirements of that program are to provide at least 20% savings on electricity bills for folks like immediately.

So those types of programs are bringing immediate savings. Of course, those programs, there's some public support of those programs to be able to bring that to low and moderate income folks. But solar, it really does, it's the most cost effective tool for bringing bills down, electricity bills down for people in Hawaii.

So the more we can get that out there, the more we can get consumers over that upfront hurdle of investment, the more they're going to benefit from those savings.

So that's what our public policy advocacy is about, is about finding ways to get people over that hurdle, over that hump, so that they can feel that savings in 5710 years as opposed to 20 years. And by the way, costs are continuing to come down.

So it's with These new technologies that this bill is trying to promote, trying to bring in those are allowing us to do more, to get more savings with less investment. That's why we want to.

One of the chief benefits of this bill is we're going to bring in new technologies that are, do, do more for lower cost to lower bills for people.

So you talk about these programs, but again how these low and moderate income families would navigate through that because they're too busy working two jobs. The reason why I say this is my community is not for it.

They're not for this bill and I got a lot of calls in opposition to that because they don't understand the complexity of what you're trying to say. Yeah, savings costs and everything. But some of them get 34 families in a house that they share. They're right up transportation, public transportation because they cannot afford car and insurance.

So now again, these guys will probably never be able to navigate what you're talking about because they're not going to have the time to do that to get the cost savings. And then we're going to buy into a plan that my community probably cannot afford.

So again, it's going to exclude certain communities, certain rural area communities when it comes to these savings. Then again, it's only going to be for the rich. They're going to be able to afford this product and continue to them to save.

And the poor is not going to be able to do this because they cannot make a loan because they have bad credit. So then how are we going to have cost savings on to them?

If you tell me that, hey, 100% everything is going to be to the people putting it in and not the consumer, then maybe it's a little different. But again, you selling a product to improve on it, on the cost of the consumer, that's the issue right there. If I want to improve a car, right.

I'm a manufacturer, approve a car. Okay, right. We will pass the cost on to the consumer of the improvements, reverse camera, everything like that. Well, again we're talking about utilities. Again we're going to be passing over.

So again, in my lifetime, in my lifetime, I don't think my community would ever see that big savings of all of the solar farms around there because they're not. Now some of them is older than others, some of them is new. But my community is not seeing it.

Senator, right next to me, can I ask to ask a question? That's the question. How are you going to have them navigate?

So I think we haven't communicated the benefits of These programs well enough to our communities. These systems are bringing savings to people. We need to get them to more people to bring more savings to people. And it is incumbent upon the solar industry and policymakers to communicate how this is happening.

And I'm sorry that you've come out with that impression that it isn't benefiting your community.

It's not my impression, it's my community.

So there are some consumer protection bills for solar that are going around. Yesterday we heard SB 2032. That bill is designed to be more transparent about the offering that solar companies are coming to people with. And so part of this is we need to communicate this.

But I absolutely agree that we need to get the word out and educate folks on how this is benefiting them a lot better.

Thank you. Chair, Members, other questions. Okay, can you, so there are multiple testifiers who commented that there may be some confusion with the term grid ready home as to whether we're talking about a packaged home or a new home that is that has sufficient infrastructure to receive PV built in versus a retrofitted home.

Can you comment on those concerns?

I understand that and when I looked, I saw those comments. When I looked at it, I would offer an amendment to clear that up. It's a pretty simple amendment, adding the word with and two commas into the definition of grid ready home.

The design, the intent of this is to create a process to upgrade homes to be grid ready, but also streamline for already existing grid ready homes. So it's upgrading and retrofitting to achieve grid readiness for homes and serving grid ready homes. That's, that's the intent.

So it's a universal standard? Yes, it's a universal. Yeah. Okay. Okay. Thank you very much, Senator DeCoite. So.

I, you know, I don't usually agree with the guy all at the other end of this table, but I have to say upgrading and retrofitting cost money. Yeah.

Yeah.

So basically yesterday's bill that passed past you telling me based on what you just said wasn't transparent or was it more transparent than this bill?

It's about creating a better process.

So let's put it this way. So say if there's a hundred homes that is a grid ready home that they upgraded and say one of those homes is 50 years old, whatever new technology is there. Right. The homeowner would have to pay. Who knows what that cost would be.

But of those hundred homes, how much would, if your company or any company was to then secure doing the retrofitting and upgrading, how much would that company make?

Yeah, that's, that's proprietary information. I represent the industry. That's what I figured. That's okay, enough said.

That's all. That's okay, enough said. Thank you, Chair. Thank you.

Can you, can you speak to what type of work it would take to upgrade a 50 year old Hicks home on Oahu, say in Kaneohe so that it can receive a PV system? Well, so that it can meet this grid ready standard and get I guess accelerated approval and installation of the solar. Right. That's the point.

So it would be the normal process that you would look at for looking at a home. One you would want to check to see whether the roof, whether the roof was stable. Right. And when that roof was retrofitted or.

Okay, the roof, if you could just.

Summarize, then you look at the Bill and find out how large they're, how much electricity they're using and then you size the system based on that and you look at their, you know, the time of day that they're using that energy and you make calculations and then you go install that.

Well, but that's okay. So those are the, that's the installation process. I'm talking about what you need to take that 50 year old home from where, whatever standard it's at now to grid ready. So, okay, we got to make sure the roof can handle the system because that's weight you're adding onto it.

What else would they need to consider?

Update the main panel to make sure that that main panel is up to new standards. And that's very much addressed in this bill. It's about allowing for a more efficient.

Electrical can receive the PV on the roof. Okay, what else?

And really it's the components of a rooftop solar energy storage system along with that main panel upgrade. And here's what we've been talking about. The key is there might need to be some, you know, grid side improvements that are done to allow. That's outside the fence. That's outside the fence.

So that doesn't, that's not contemplated in the definition of a grid ready home.

Right. It's just whether, basically what we're talking about is whether the electrical in the house has been upgraded to be able to receive PV and then distribute it out. Right. And then whether the roof can handle.

No.

Right. And then electric vehicle charging is another.

And then whether you have like the 220 in the garage so that they.

Can charge the car. Yeah. So be upgrading the electrical system to be able to accept, you know, these new technologies. And actually the new technology it's basically.

Electrical and then structural. Yes. Okay. Thank you. If there are no other questions, we'll move on. Okay, thank you very much. Next next measure is SB2487 relating to the Public Utilities Commission.

This measure clarifies that for electric utilities performance based incentives include revenue adjustment mechanisms, cost control mechanisms, rewards for superior performance and penalties for subpar performance and confirms that the PUC may adopt alternative rate making procedures to establish electric utility rates and performance based incentives. PUC with comments.

Hello again Chair, Vice Chair and Committee Members. We the PUC stands on its written testimony in support of this measure, but just like to comment on a couple couple areas.

It's very clear that there's a lot of concern with what appears to be a return to a traditional cost service review for the going forward and for purposes of setting rates into the next period, the multi year period. But what is important to point out is the timing.

So to my understanding, because I wasn't at the PC during this interim is that the last rate case happened right before Covid and therefore when the order came out, which was in the summer of 2020 and shutdown had already happened. There are certain assumptions being made.

And in response to that, that's one of the driving reasons to go through what would be more traditional review so that the rates are properly set. And this doesn't mean that it provides the utility with that opportunity to this is the wrong term but to, you know, start padding its expenses and cost.

It's the opportunity to go back and look at carefully what we couldn't look at because of the circumstances at the time. And then also the other concern of the forward test year. Yes, that we're subject to that for our regulations. Any statute to change that of course will have an impact on our regulations.

But in review of all rate cases there is always a very good look at historical in fact often that drives the initial review for all the rate case proceedings is looking back. Thank you very much.

Next we have the Consumer Advocate with comments.

Chairs, Vice Chairs, Members, Mickey Knox for the Consumer Advocate. Director Michelangelo really wanted to be here, but he had to cover an important wildfire safety meeting. I just wanted to quickly summarize two points from our testimony.

We have a concern that the proposed amendments to 26916.1amight unintentionally take away some very important scrutiny and due process and public transparency provisions in 26916 and parts of HAR16601. And the second point is the proposed new 26916.1 B&C.

We have a concern that that would lock in the PUC when it is evaluating a lot of parts of PBR that weren't in the original act, five weren't in 26916.1 but were created through regulatory processes which even my office was a part of.

But we need to see how they're working and the PUC needs the ability to see what is working, what should be changed. Available for questions.

Thank you very much. Ulupono Initiative and Support.

Chairs, Vice Chairs, Michael Colon, Energy Director Ulupono Initiative and standing in my testimony and strong support. Wanted to just add a little bit on that. You know, we, the Legislature in their guidance wanted to do something different in directing the Public Utilities Commission to do PBR in the first place.

We see that there's a tension between the existing framework that the regulators have mentioned and the guidance that was directed through the PBR mandate. We are seeing a little bit of backsliding. I think it's mainly just change management. You know, it's new stuff. And we're being asked to do something differently and this would reaffirm and reassert that.

This is what we want to see as outcomes, you know, doing this differently, tying performance for the utility to their revenue, their achievement of revenue so that we can more closely monitor. And then it, it should have some built in cost control.

The historic test year, along with the concerns about due process that are raised by the regulators are valid. There's questions about it, but that's what can be established through the design process that we've been engaged in for several years.

So I would just urge the Committee to pass this bill knowing that, you know, this process needs to be fulfilled.

Thank you very much. Coin Electric with comments. Thank you for standing on your testimony. Earth Justice and support.

Good morning. Chairs, Vice Chairs, Members of the Committee, Isaac Moriwake, Earth Justice, standing in strong support of this measure which would clarify and reaffirm the Ratepayer Protection act of 2018 with a follow up Ratepayer Protection act of 2026. Performance based regulation worked as the Legislature intended. Why do we know this?

Because before PBR, the electric utility HECO was proposing a total of $100 million per year rate increase every year, $100 million extra. The PC held the line and imposed that cost control discipline of performance based regulation. And so that's at least how much money we saved going into pbr.

Now, this bill would reaffirm that framework and the legislature's mandate under the Rate Peer Protection Act. And really it's necessary guidance given what we saw in that informational briefing that this Committee held last year in June. Really no one could have sat through that and watched that. And chairs, you were there.

Senator Wakai, Senator Fukunaga, Senator Richards, you were there. Senator McKelvey, Senator Richards, you said we're adrift here. No one could have seen that and not realize that. Yes, we need this guidance and help and that's what this bill does. Even in the testimony today, there's mixed messages and there's dissonance, right? zero, we don't need it.

And yet we have this potential traditional rate case and a historic rate hike hanging over our heads. Contrary to what the consumer advocate said, this does not take away the PC's flexibility. In fact, it does the exact opposite. It gives them the discretion to do the right thing and uphold the original purposes of the Ratepayer Protection Act.

I can go point by point in rebutting some of these testimonies, but I'm available for questions as necessary. Thank you. Thank you very much.

We also have the Hawaii Clean Power alliance submitting written testimony and support. Is there anyone else who would like to testify? Please. Good morning.

Aloha Chairs, Vice Chairs and Committee Members. Henry Curtis, life of the land. The PBR was supposed to have a formalistic way for gradually increasing rates over time. The past five year period did not anticipate in the runaway inflation, the tariffs, the supply chain interruptions and everything else.

So HECO has not pulled in enough money to cover some of their costs. We anticipated an inflation rate. The inflation rate was much higher, so rates are going to be adjusted. Now. All parties in the proceeding believe that HECO is going to have to increase the rates.

The issue is whether we just look at the things that HECO wants us to look at or whether we take a more comprehensive look and see if things are being padded in other areas.

So Earth Justice, Ulupono Initiative and Blue Planet, HECO would like to just look at the things that HECO is concerned with and increase them by a certain amount. Consumer Advocate and Life of Land would like to look at things more comprehensively to make sure things are not being padded. Now, if you call that a rate case.

Okay, okay. But it's not anything but looking at things more comprehensively so we don't increase rates quite as much. Thank you.

Thank you very much. Is there anyone else who would like to testify?

Sure. Is he supporting or he, again, opposing? Comments? Comments?

Thank you. Thank you for clarifying. Is there anyone else? Okay. Members question. Okay. I have a question for the consumer advocate.

Yeah.

Okay. Good morning, Mickey. I'm trying to understand what the. How you would characterize the concerns you cited. I mean, can you point to the provision of the bill that triggers a due process risk? Sure.

It's the proposed amendments. I think it's. Section three of the bill is where the amendments are. Okay, let me just pull that up.

I'm just trying to confirm that your concern is that we strike a reference to Section 269 to 16 and instead replace it with a reference to this chapter, Chapter 269.

Well, it's the specificity of 26916 versus the whole chapter. The way we.

How does that trigger a due process risk?

We wrote, we tried to be very careful in the way that we phrased our testimony. We wrote, we said that creates unhelpful uncertainty about the due process that is in 16.

I guess I'm having some trouble understanding how citing to Chapter 269 instead of citing to Chapter 26916 triggers a due process risk.

Chair, isn't 269.

16 in Chapter 269?

Yes.

Okay. So how could a consumer read this bill in a way that triggers a concern that their due process rights are not accounted for?

Chair, we did not say that. We thought that. It definitely did. We very carefully phrased that it creates uncertainty, which we are worried about.

Can you help me understand what the uncertainty is?

The uncertainty is if the scrutiny and public transparency that is in 26916, if that would still apply or not specifically. And a lot of the processes in HR 16601, which is tied to 16 and applications under 16. So you're.

Well, but you're. So you're talking about the administrative rules.

Both the statute and the administrative rules. There is specifically in the statute itself in 16 that cross references the public hearings in 26912. Okay, but 26912 is also in Chapter 269. Yes. Chair, I am not disagreeing with you that there's all in Chapter 269. Okay.

That's why we very carefully just said it's a matter of specificity and concerning uncertainty.

But you're saying there's uncertainty but not explaining what the uncertainty is. That creates uncertainty.

You pointed to a toe as part of the human body, but why is pointing to the toe as part of the human body going to impact you? In other words, why to his point.

It would be like if you said what do you walk on the human body? We'd prefer to say it's the foot.

How does that trigger a due process risk?

It is a two step process. So let me go away from the word due process. More on scrutiny and investigation and public transparency. There are parts specifically in 26916 and cross referenced 12 but only through 16 and parts of HAR16601 only if an application is coming in under 16. Okay. Okay.

I just think, you know, saying due process risk triggers a constitutional concern and if there isn't one, if it's a process concern, then the PUC has the discretion to change their rules. It's the, it's their rule. They have delegated authority to change the rules.

As the PUC in its testimony point out there are constitutional concerns. But that's that's he goes argument.

Okay, but you've made your points and not not theirs. Okay. And then the second part is you you cited the chain the sections B and C proposed to Chapter 26916.1 as creating an. Where'S my note here? You made a comment about those to provisions. But they're discretionary provisions. They're mais, not shalls and then presumptions, not requirements.

So I guess we're giving the PUC.

The bill proposes to give the PUC the discretion to decide but establishes guardrails so that the public has assurance that we're not just solely looking at the test year, that they're also looking at what happened during the last five years because that's what the public is looking at when they think about how much their rates are about to be increased by but there's no requirement that they have to ignore the test year.

I guess I'm just a little bit confused about what we're doing. What the, what the concern is there.

If the Legislature reads this as maintaining Commission discretion. And that's a good thing. Then why not leave the additional discretion, the greater discretion that's already there. Sorry, that's a rhetorical question. All right. Okay.

Thank you, Senator McKelvey.

Whose due process rights.

What you're talking about due process rights of customers who we represent. We are statutorily representing all of the customers of any public utility.

Well, it seems by your testimony both on this and the previous bill, you're asserting the concerns of utilities. And so that's why I asked that. Question very much not. Well, go back and look at your testimony in the last bill. You said the utility was the main concern and the effect on the utility.

Then you talk about the ratepayer.

We see the effects coming through the utility. So if cost shifts happen at the utility, then other customers have to take up those costs and we represent those.

Customers if the regulatory environment allows it. I guess what I'm saying is the consumer doesn't seem to be the front and center focus. It seems to be the effect on other entities, both regulatory and otherwise.

I'm just hoping to hear about how not only affects the consumer, but what we can do to empower legislation like this to protect and advance consumers. That's the part I'm missing from all the testing.

Thank you. I appreciate that intent.

Appreciate you.

Members. Other questions.

Oh, one question. Chair.

Senator Decoite.

PUC, please. I'm just trying to figure out how. How has performance based incentives benefited our rate pairs.

That is, again, I have to apologize that I wasn't part of the initial process and I'm being brought up to speed. But that process, it involves providing incentives to the performance metrics of the utility that will bring costs down.

What needs to be done going forward is more of an emphasis on penalty mechanisms that will also send a strong message to the utilities on efficiency, which also will have an impact on costs being brought down for the consumers.

Thank you. Thank you, Chair. Can I, can I follow up?

I mean, in the briefing over the summer, we spent an extended amount of time and there was general agreement in the room that, you know, in addition to penalties, there needs to be a recalibration of the incentives, that perhaps there were a lot of them and perhaps they were not necessarily calibrated in a way that gets us the result that we want.

Because I seem to recall sort of everyone in the room acknowledging, including the utility who met many of the performance metrics, but maybe not all of them. And so I do hope as we continue this conversation going forward, that that's taken into consideration because I think that's what you guys are working on right now, right? Correct. Yeah.

Okay. Any other Senator Wakai, you know, I.

Think the PBR had good intentions and it's been in effect for some six or so years. And to Chair Keokaloli's question, I think the public still, the jury's still out as to the effectiveness of PBR, so maybe if you could give us some highlights and low lights.

I mean, it was supposed to provide sticks and carrots, and I'm not really sure as to how did the sticks work, what penalties, what did HECO not meet, and what were the penalties for that behavior?

And on the flip side, if they reached whatever the goals were, what kind of incentives did we give to HECO that ultimately benefited the ratepayer?

Okay, before I turn it over to Daniel Park, who's our analyst responsible for PVR, my understanding is that the sticks were not put in place, and that's really important to complete the PBR picture in addition to what Chair was talking about with all calibrations, even on the performance, I mean, on the incentive side as well.

So, Daniel Park, I'm an economist at the PEC. So as Chair Itamoro's saying that the only sort of sticks that are in place at the moment in terms of an actual, like, hard penalty on the companies, to my understanding, are the reliability, the existing reliability pins.

So if the Hawaiian Electric companies fail to, if their safety metrics sort of deviate from the historical performance that we expect from them, that they do get penalized for that, and they have. I don't recall which specific years, but over the, over the MRPs, each of the companies has, to some degree they've incurred those penalties.

Looking at the data, it's a bit difficult to sort of fully capture sort of like whether or the company's performance outside of, say, because what happens, they'll Lahaina Wildfires, because that significantly did affect their reliability metrics, including a lot of the PSPS stuff that they've implemented.

Post Lahaina Wildfire, we've had to sort of adjust the pins on the fly to account for that and give the company space so that they could find the sort of programs or procedures that would work on their end in order to maintain safety on the grid. So it's. It's complicated. But at the moment, that's.

That is the sort of the one area where sticks have been applied because these PIMs do exist and the companies have been penalized in the past for failing to meet these reliability standards for.

The general public PIMs are the performance incentive mechanisms.

So for the carrots that are out there, seems like there's more carrots than sticks. What exactly did the HECO achieve and then what were the rewards for that achievement?

Well, I think one of the most successful PIMs that we had during the first MRP was related to the interconnection process. So not for individual residents, you know, like for example, what was being discussed earlier this morning, but rather at the utilities or at a more grid scale level.

And the companies were able to bring that interconnection time down significantly to the point where the commission, after we reviewed the data and the improvements that the companies had made there, we decided the PIM wasn't necessary anymore because the companies had basically done what they did, which is reduced that interconnection time and, and they were rewarded for that financially and we didn't need to keep rewarding them anymore.

So that PIM was unsettled.

What was the amount of that reward?

I don't have that specific number off the top of my head, but I can get that to you.

Okay, so the commission will commit to providing a summary of both the penalties and the incentives that were provided to the MRP1, thank you.

Any other questions? Okay, thank you very much. We'll move on to the last measure on this agenda, SP2497 relating to electric energy. This measure requires all electric utilities to provide transparent customer bill impact analyses that are accessible to the public in a format reasonably usable by ratepayers. First up, the PUC with comments.

The PC stands on its written testimony and is available for questions.

Thank you very much. The Consumer Advocate comments.

Sir, just one note about our comments. We stand on our written comments. But to Senator McKelvey's earlier point, I want to point out where we talk about how we'd like to better understand the electric utilities basis redeeming certain aspects of the bill. Impact calculations confidential. That's the type of thing where it's several steps removed.

So for instance, if keeping certain information confidential from the public, this on this bill here. Yes, it is. If that keeps the RFP processes intact so that HECO can get better bids, lower bids for lower bills for all customers that may look like we are concerned with something that the utility is concerned about.

But as complicated as is, that's about customers.

That needs to be your total point in all arguments is about the consumer.

It is top of mind for everything we do.

I'm going to hold you to that.

Thank you.

Thank you, Jeff. Point Electricity, others.

We appreciate the intent of the measure, but we express our concerns.

Thank you. We have KIUC in opposition online. Good morning.

Good morning. KIUC stands on its written testimony in respectful opposition to this proposal and thank. You again for the opportunity to provide testimony.

Thank you very much. Cares in support online not present on Zoom Chair. Thank you. We also have written testimony and support from the Hawaii Clean Power alliance and the Office of Information Practices offered comments. Is there anyone else who would like to testify? Okay, Members questions.

Senator Puchh this Bill was offered because there's a black box when it comes to cost to consumers.

And this Bill just simply tries to provide some level of visibility on the Bill impact analysis that the PUC does and tries to kind of just get to the heart of the assumptions and methodology that the PUC takes as well as HECO takes that ultimately lines up on our bills.

I mean, over the past five years, each individual homeowner has an average increase in their utility Bill of about $60 a month.

And I'm trying to wrap my head around how that's possible when you know, solar and batteries are coming in cheaper and cheaper, wind and other renewables are coming in way cheaper than oil and our bills are going in the opposite direction. So I'm trying to for years try to understand like how is this even possible?

Any other business runs where the supply goes down or the costs go down, then the consumer sees a benefit of that. But in this case, the costs are going down for HECO and all of us are paying more.

So going into some of the testimony you pointed out as to why you're hesitant about supporting this measure, you talk about competitive harm that might be gotten because of this bill, but this bill doesn't ask for any bitter specific information. Correct.

That may be a subject of interpretation that we may need to go back and clarify.

Well, it doesn't. It just tries to give the public and the a look into what is going on in the math behind the curtain. So there is no competitive disadvantage as five or so bidders bid into whatever their costs are for X amount of megawatts. We're not asking for what does AES do it, what is Clearway doing?

We're not asking for any of that information. We just want to understand how it is that whatever pricing decisions are made, how that all comes about.

The thought behind that response is that when the intent of the measure appears to want to look into the analysis that's done within the commission, you know, the knee jerk reaction is we look at everything and within that voluminous amount of Data is going to be considerations about comparative issues between vendors, maybe even vendors who are not part of the project.

And therefore there's going to be concerns with confidentiality with. I can't even begin to note. We provide a lot of information already and so it, and I know it would be difficult even for this body to go through and try to highlight what's missing. You don't know what you don't know.

But on the flip side, for us to say we just can't open the books to everything, but this is what we look at, that's a process that we may need to work through in terms of how this bill is or the impact of this measure.

Part of your testimony talks about closing part of the book by only sharing information on approved projects. I think there's great value in us understanding projects that were disapproved as well. I mean over the past eight years, 50% of the projects have just kind of disappeared.

And the public is wondering like, was it because of financing on their part? Was it because HECO is doing things that irritate and push away the developers? We don't know. I think we should also know why projects were disapproved as well.

I mean that's like going through all of these bills and telling the public only about the bills that got approved and never letting them know why bills died here. So I don't think there should be any kind of restriction that you're only going to be looking at approved projects.

We should look at the disapproved ones too and why they kind of just evaporated.

I completely agree with you, Senator. I think the intent of that response was probably narrow sighted to those that are have not been approved yet and not so much the ones that have been disapproved.

Thank you. Thank you, Chair. Any other questions, Senator Favela?

No. So I'm not, I, I'm not really understanding if you understand what Senator is saying. Transparency is big. We asking these guys to pay and then we select. Well, you guys select on what they can and cannot see. So certain things we are privy to because we're elected officials.

Because even like in the community where I'm a Pikunilla project was coming on board. You guys gave you guys Puc, gave you guys input. Hawaiian Electric gave a kilowatt or whatever per whatever kilowatt. Then later on negotiations went bad. Nobody know where they went, came to the neighborhood board.

Nobody knew what happened to the project, why the project didn't come through because they had not only talked about service Packages and taking care of the community like nonprofits and you know, having on great things for help all the community. And then the project went away.

Same thing with Senator Glenn Macai is saying we didn't, we don't know. So we tell the community, hey, Rah, Rah, Rah, Rah. And in transparency, they're gone. And then who holds the bag? Us. Elected officials. Yes. So you know what happened to the project?

We would probably support the project and then we didn't see the transparency of what happened. So I think this is a good Bill to get more transparency and clarity as we move forward.

So that's something that you should consider because again, we deal with a lot of projects that we don't see to proficient and we don't know about it, especially when it comes to clean energy.

Subject to the concerns of any potential confidentiality. Data and information. As I mentioned to Senator Wakai, I agree with you and disapprove projects to the extent that we can disclose. We will.

We don't like details. We just like, no, you know, if it was because of the negotiation, we don't even have to know the company's name, it's the project, you know, that kind of stuff. Why did it fail? You know, was it because the negotiation cost too much? Was it affordable for them?

That's the kind of simple thing you'd be like, no. Yes. If it was, it was granted, then we need to know why it was granted. The deal was good, right? You know, Kilowatts or whatever, you know, location, all of those things.

Yes. And I do appreciate and understand, especially when there's an issue of community benefits that, you know, has been promoted and marketed and then it just goes away. That's a very high concern.

Thank you. Thank you, Chair.

Any other questions? Okay, I have a question for Hiko. Thank you. Good morning.

Morning. James Abraham, on behalf of Flying Electric.

Thank you. I'd like you to comment on this whole line of questioning. My. I, because I, I think I have a similar question which I think is probably, I think is the same question as the consumer advocate. I mean, what are we hiding and why are we hiding it?

The point of this is to provide information that's reasonably useful for the consumer. So I have a hard time believing you're going to disclose proprietary information if you're putting it in a summary that normal ratepayers are going to try and decipher.

Well, so this bill is looking for much more than a high level summary. We already do provide a lot of aggregated pricing information. But this bill would have, you know, much more detailed information on pricing and our assumptions and methodology. That wouldn't be something that a typical residential customer would be helpful or useful to them.

This type of information is sensitive because it's information that more sophisticated project developers could use to potentially manipulate their bids that they're providing into our renewal, our renewal requests for proposals. So, you know, that's our concern is that it could be. The result would be higher bids.

And, you know, so I can appreciate the concern that you don't want to be leveraged by disclosing, you know, negotiating positions that, you know, could be taken advantage of by multiple potential bidders. I'm trying to understand what are the things that this would require you to disclose that doesn't come out through the docket process anyway?

Well, again, so in the dockets, we do provide on a confidential basis a lot of the information that this Bill is trying to get disclosed publicly.

So we do provide this information confidentially for the PUC and the consumer advocate to review, as well as interested parties in the docket, and they can review that as the PUC is determining making their determinations on the project itself.

The difference is that this Bill would open it up and make that information and data available publicly, which is where we have the concern that it could be leveraged by, you know, future bidders. They could see, you know, what price do I need to have my future project come in on for it to get selected?

So instead of bidding their, you know, best price that, you know, they wanted to have their lowest price so that they have the highest chance of their project getting selected instead, they could, you know, raise that price based on these assumptions. And.

Yeah, we're going round. I understand the concern. I think it's that potentially more Members than I and Senator Favela, because I tend to agree with a lot of what he's saying.

I mean, there's got to be some sort of space in between the two where you guys are not getting leveraged against the consumer interest when providing a summary that regular people are going to be able to decipher. I mean, I think the point, you. Know.

The way I read this, you know, I mean, if this is information that's going to be disclosed through a confidential PUC vetting process anyway, then we should be able to figure out a way to make this publicly available since it's being reviewed by the PUC. And if you guys lie to the consumer, then they'll know it.

So, I mean, there's a way. Okay, that's Not a question. Thank you. If there are no other questions. No. Senator Wakai.

Just a quick question. I'm trying to understand the harm that's going to be done by this. In your view, by this bill. Because you talk about how others might be able to eyes on the numbers and have a competitive advantage. But doesn't HECO also bid into projects?

Yes, we do. We have a, under the PUC's RFP process, we have a separate self build team that is screened from our RFP team that's evaluating the bids. So the self build team that is submitting the bids, they don't have any of the information about our assumptions and the pricing that we would be evaluating.

So you're going to convey to the public that you have some kind of a China wall between HECO project bidding and then HECO itself and that somehow I don't believe in that. China walls are bulletproof. So I, from an outside perspective see that HECO is bidding on its own projects.

And so when you're talking about a competitive advantage for somebody else that might look at all the numbers, you have the front row seat into looking at all of the competition and then making a decision on how you're going to price things. Correct.

Well, again that's why this as you call the China walls set up. And again the PUC is overseeing all of our self build bids that are selected. Again they go through a review process for the PUC.

So there is a separation between the teams that are working on submitting bids for projects into the RFPs and the teams that are reviewing all of the bids, both self build and outside parties and evaluating them against one another.

Just seems like there's an inherent conflict just with that setup as well. Thank you Chair.

Chair.

Senator Fevella.

Okay, so, so let me, let me get this clear confidentiality on the bidding and possible they going to be able to adjust their bid the next time there's a project. Try to explain that to me because as projects go along, prices do change on construction and cost of materials and certain things. So I'll give you an example.

Right. University of Hawaii stadium, they use two different funding. We know the exact cost. Same like with the stadium, Right. We know what it's going to cost at the end of the day, probably 7,000 billion because it's not being done. But what I'm saying is we already kind of know, right? We already kind of have a diagram.

So the next time we have a big project they will still put them in the parameters. Are you saying that it's not going to be fair bidding. I, I don't think so.

I, I don't think that would be a concern for the consumer and for you guys in Puc because again, you can roll ball, you go do the way what you're going to do, it's not going to be that much of a cost difference. If I kind of get a little bit of a gist.

If you in the industry long enough, you kind of know what you can and what you cannot bid on. But again, by saying that that's the reason why is the competitiveness of somebody else might know and they're going to do this and they're going to do that. That's all assumptions, not facts.

Just like how Senator Glenn just said we don't know if Gepuka is in a China war. Right. We don't know if there's a holes in them or there's a telescope on the top that you can look down. We don't know. But again, we're going to trust the fact of PUC and you guys the same way.

So again, open it up, letting people know so we can know what, what is going on and what is going to cost it to the consumer.

Yeah, I mean, I hear what you're saying that you know, project developers probably do have a gist right. Of a range that will be acceptable.

The difference is if they, if we open up this black box, as it's being called and let them look at our assumptions and our pricing and our methodology that's typically held, you know, confidential, you know, they'll go from having a gist to knowing right where they need to bid.

So the, the difference is the savings to customers that, you know, customers won't be able to realize that savings if the developers are able to kind of manipulate, manipulate and you know, kind of frustrate the competitive bidding process.

So okay, so I understand that 100%, but let's just say I bid on one job, right? I'm the lowest bidder. Come in. We're supposed to save the consumer money. But after the project is done and change order, I am the highest bidder than the highest bidder that went bid. You see what I'm saying?

There's still yet again transparency. If the community know that I came in at $1,000, that the thing will cost $20,000, right. Then there's a problem, there's a problem on transparency. Right, but we don't know those things. Right.

Too later on we find out the project is done and they would pay $6 million over budget of what the cost of the place was going to be. That's the reason why I had to build on the procurement to change the procurement.

If you change the thing, ordered the original bid by so much percent, put it back out to bid because the person that is paid for it is the taxpayers, the consumer. At the end of the day, we paid for that stadium over budget over there at the University of Hawaii. So that's what I'm saying.

So if you get one legis, at the end of the day, it's do it questionable about we're saving money. We keep saying that we're gonna save money with the consumer. But even though you guys do a million dollar job, right, you get the job and then the thing will cost 5 million.

Did it really save the consumer money? Unless you stay within the costs, which we never do.

Yeah. Thank you, Chair. Thank you. So I think the, the public procurement process is a little different than our, you know, utility RFPs. You know, when we select the lowest bids or, you know, the best projects, then we go, it gets, it goes before the PUC for an approval process.

So if there are changes like we did see, you know, some of the projects that fell out of the stage 2 RFP because of inflation and you know, supply chain issues in prior years, you know, we would have to, if there's a change in the price that the developer can make the project, we would have to go in for an amendment before the PC.

So that price, you know, would be again before the PC and they would deliberate on the new project with the higher price.

Okay, thank you for that answer. Recess it.

Reconvening on this Wednesday, February 420269:30am Joint Committee Agenda between the CPN and EIG committees. We will be making recommendations on these measures. The first bill, SB 2033, relating to renewable energy. There are a number of issues on this bill that we would like to work out and see if we can keep this measure moving.

Okay.

So we will defer decision making on this measure until for the CPN Committee. We will make recommendations on, on Tuesday, February 10, 2026 at 9:30am in this room, two to nine for EIG, we're.

Going to be doing the same, except we will be contemplating the revisions on Tuesday, September, excuse me, not September, February 10th, at three o' clock in the afternoon that day.

Okay, thank you. The next measure, SB2487, relating to the PUC. The recommendation is to pass this measurement with a effective, effective date of July 1, 2050 and to also make Some technical, non substantive changes. Members, comments? Questions? Okay. If not, Vice Chair for the vote. Passing with amendments. Chair votes Aye.

Thank you. [Roll Call]. Your measure is adopted.

Thank you for EIG. Same recommendation. Any discussion? If not Senator Chang? I vote yes.

Chair's recommendation for Senate Bill 2487 is to pass with amendments. [Roll Call]. Recommendation is adopted.

And the final measure on this agenda, SB2497, relating to electric energy. The recommendation is to keep this measure moving. We will. The recommendation is to pass with amendments, adopting the recommended amendments from the Office of Information Practices and to defect the effective date of this measure to July 1, 2050. Any discussion? Sure. Senator Richards? Yeah.

Quick comment. Just listening very carefully to the conversation. I don't disagree and I think with moving this forward. I do listen very carefully to what people are saying. So I'm going to be voting with reservations because I agree moving it forward, but I understand the concern.

Thank you. Any other discussion?

Chair same. You know, a lot of discussion. Again, like to have more discussion on it. I can be voting with reservations as well.

So noted. Okay. There's no other discussion. Vice Chair passing with amendments. Chair votes Aye.

Thank you. Of the CPN Members present, are there any voting with reservations or objections? Hearing none. Recommendation is adopted.

Thank you for EIG. Same recommendation. Any discussion? If not Senator Chang? I vote yes.

Chair's recommendation to Senate Bill 2497 is to pass with amendments. [Roll Call] Recommendation is adopted.

Thank you. We're adjourned.