Senate Standing Committee on Ways and Means

Hey.

Calling the Committee on Ways and Means to order. This meeting, including the audio and video of remote participants, is being streamed live on YouTube. You will find links to viewing options for all Senate meetings on the live and on demand video page of the Legislature's website.

In the unlikely event we have to abruptly end this hearing due to major technical difficulties, the Committee will reconvene to discuss any outstanding business. Monday, February 23rd, 10am in this room. This is for decision making only. No oral testimony will be taken for these measures. If you're interested in reviewing the written testimony, please go to our website.

You'll find a link on the status page of each measure. Okay. First item. SB99 recommendation is to pass unamended. Any discussions? If not, Chair vote.

Chair votes Aye on SB99. Vice Chair votes Aye. [Roll Call] Your recommendation adopted, Chair.

Okay, thank you. Next item. SB585 recommendation is to pass the amendments just effecting the date to 2015. Any discussion? If not Chair votes Ayes.

On SB585 pass with amendments. All Members present. Anyone voting no with reservation. Recommendation adopted.

Thank you. Next item. SB 2060 recommendation is to pass with amendments. We're going to require that HHFDC create a project list for funds that will be transferred between sub accounts and require that the list be made available to the public on their website upon the approval by the corporation.

To require that the Director of Finance must receive approval from the Legislature by Concurrent Resolution prior to transferring the funds between sub accounts and and remove appropriations in sections 5 and 6 and insert a new section to add language from SB2062, proposed SD1, to allow HHFTC to use funds that have been awarded but not unencumbered toward a different project, provided that the corporation must receive approval from Legislature.

From the Legislature by Concurrent Resolution. Any discussion? Not sure. What's that?

SB 2060, all Members present. Anyone voting no with reservation. Recommendation adopted.

Thank you. Next item. SB 2069 recommendation is to pass with amendments.

Working with subject matter Chair, we're going to be removing the repeal of the pilot program and extending the sunset from 2028 to 2030 on page eight and adding a new subsection on page three to require that the units are in a transit Oriented Development zone as defined by 206E 243. Any discussion? If not Chair votes Aye.

I think. SB 2069, all Members present Anyone voting no with reservation. Recommendation adopted.

Thank you. Next item is SB 2110. Recommendation is to pass, unamended. Any discussion? If not Chair votes Aye.

SB 2110 to pass, unamended. All Members present. Anyone voting no with regulation reservation for Senator Fevella. Anyone else? Okay. Recommendation adopted.

Thank you. Next item, SB 2115. Recommendation is to pass, unamended. Any discussion? Chair votes Aye.

Everyone present? Anyone voting no with reservation. Recommendation adopted. Pass, unamended.

Next item, SB2152. Recommendation is to pass with amendments requesting the date to 2050. Any discussion? Not sure. Both sides.

Okay. SB 2152, passed with amendments. All Members present. Anyone voting no with reservation. Recommendation adopted.

Oh, how many times? This measure has gone through.

Quite a bit, though. Next item, SB 2211. If we can have DHS come up.

So how is the Department paying for this now?

So what we did was we tapped into our 5% restricted funds and then 5% restricted funds altogether 10% restricted funds. We also then. Sorry.

Joseph Campos, Deputy Director, Department of Human Services we also then transferred fourth quarter funding from Med Quest in the amount of 17 million over to the third quarter so that we could also pay for this.

Okay, so the seven. Really all you need is the 17 million then to pay back MedQuest?

We actually need the 14 million because out of the 30. Was it 38 million, Scott? Yeah, out of the 38 million, TANF reimbursed us for those that qualified for TANF. So then we were requesting 14 million in this. Okay. So that was the amount that was expended minus the TANF.

So the 14 million can be eaten in the.

Basically the reserves. Correct, the restrictions.

Yeah. But you know, there is. We also have to tap into money from fourth quarter. Yeah.

So how much. How much is that?

So we need the 14 million that we requested so that the 14 million pays back the Med Quest. The restrictions. Med Quest and vesting.

No. So I'm trying to just separate. I think you should eat the restriction because you have that current money. You're just taking it out of your current budget. Okay. Budget and finance might think differently on that, but so if you're. I mean, that's. You're taking it from your budgeted allocation.

So I'm not sure why we would give you an appropriate. You're going to have that money, plus you're going to be able to. We're going to give you extra money. Yeah. So the. I can understand the paying back of the MedQuest, but eating out of your own budget.

Right, but. So we totally diminished all of our restrictions. So there is nothing left for us should we come to the fourth quarter and need funding that we would normally tap into the restrictions.

So this is just a way to make sure that the Department is whole, you know, as we go forward into fourth quarter every year prior. So how much. How much did you lapse last year? How much did we lapse last year? Yeah. Okay, we can get you that figure.

But in addition, there is the amendment from the governor's testimony that we also support, which is the 16.5 million for the ACA enhanced tax credit subsidies that disappeared or expired December 31st and those

You can't take out of your current budget.

No, that is definitely something we would need the monies put forward.

Okay, so the original request, if you guys can get back to us on what you lapsed.

Yes, we'll do.

Okay, thank you. Any questions? Okay, if not, Chair's going to recommend to pass with the amendments. We're going to blank the appropriation.

Hopefully we can get information from the Department and will adopt DHS amendment to insert a new section with a blank appropriation to assist residents in continuing to afford coverage provided by the Affordable Care act and effective date by 2050. Any discussion? Not sure.

SB2211 passed with amendments. All Members present. Anyone voting with reservation? No. Chair, your recommendations adopted.

Thank you. Next item. SB2259. Recommendation is to pass, unamended. Any discussion? If not Chair votes Aye.

SB 2259 to pass, unamended. All Members present. Anyone voting no reservation. Recommendation adopted.

Thank you. Next item, SB 2315. Recommendation is to pass with amendments defecting the date to 2050. Any discussion? If not Chair votes Aye.

SB 2315, all Members present. Anyone voting no with reservation. Recommendation is amended, is recommended, is adopted. Sorry.

Thank you. Next item, SB 2342. Recommendation is to pass with amendments. Bless you. Having received prior concurrence from the previous Committee on page 7, from lines line 5 to 10, amendments will require that the projects are in TOD zones as defined in HRS 206e 243. Any discussion? If not Chair votes Aye.

All Members present. SB2342 passed with amendments. All Members present. Anyone voting no with reservation. Recommendation adopted.

Thank you. Next item, SB2382. Recommendation is to pass, unamended. Any discussion? If not Chair votes Aye.

2382 to pass, unamended. All Members present. Anyone voting no with reservation. Recommendation adopted.

Thank you. Next item, SB2442. Recommendation is to pass, unamended. Any discussion? If not Cahir votes Aye.

SB2442 to pass. Unamended. All Members present. Anyone voting no with reservation. Recommendation adopted.

Thank you. Next item. SB2446. Recommendation is to pass with amendments effecting the date to 2050. Any discussion? If not Chair votes Aye.

SB 2446 to pass with amendments. All Members present. Anyone voting no reservation. Thank you. Adopted.

Thank you. Next item. SB2485. Recommendation is to pass unamended. Any discussion? If not Chair votes Aye.

SB2485, all Members present. Anyone voting no, with reservation?Recommendation adopted.

Thank you. Next item. SB2544. Recommendation is to pass with amendments removing the appropriation section in Section 4 and instead inserting a new section that provides a blank cap on how much can be appropriate out of DIR. Any discussion? If not Chair votes Aye.

SB2544 to pass with amendments. All Members present. Anyone voting no, the reservation recommendation.

Thank you. Next item. SB2577. Recommendation is to pass with amendments. We're just going to change the appropriation section to fund the study through HTA's current budget. Any discussion? If not Chair votes Aye.

SB2577 to pass with amendments. All Members present. Anyone voting no with reservation. Recommendation adopted.

Thank you. Next item. SB2580. Recommendation is to pass with amendments by making changes on page four, line 14 to blank the total amount of tax credits allowed per year. Any discussion? If not Chair votes Aye.

SB2580 pass with amendments. All Members present. Anyone voting no? With reservation? Recommendation adopted.

Thank you. Next item. SB2861. Recommendation is to pass with amendments. We're going to adopt language from DHS to clarify the eligibility for TANF and adopt the Office of Wellness and Resilience's amendment to provide a one year planning period. Any discussion? If not Chair votes Aye.

SB2861 to pass with amendments. Anyone voting no reservation. Recommendation adopted.

Recess.

Okay, calling the meeting. Back to order. Next item. SB 2919. Recommendation is to pass with amendments blanking the appropriation defect from the date to 2050. Any discussion? If not Chair votes Aye.

SB2919 pass with amendments. All Members present. Anyone? No, with reservation. Recommendation adopted.

Okay. Next item. SB 3326. Recommendation is to pass. Unamended. Any discussion?

Yes.

Senator Inouye.

Yes. Thank you, Mr. Chair. I'll be voting no on this measure simply because there has been a study previously 2019 by DBEDT and this affects the Big Island tremendously. Rate increases will happen. We already have ruling blackouts. On top of that, separating a company without an idea of what's going to happen.

I think we really need to understand what's going to happen to businesses that already have so many thousands of people.

On top of that our geographic in the state the lands where an island state each island is separated and has its own process of the utility that needs to be provided for that particular islands and it's very concerning. I see no way out of something like this that we're mandating it's going to go in statute that we're.

That this companies must be must act on the statute and I can't see anything out of getting out of this so I will keep my vote with a no thank you Chair.

Okay well there is a defective date to 2050 so that hopefully there's time to

Recess.

I want talk to you.

Recess. Recess. Recess. Back to order.

Senator Wakai now the.

The. The problems that we face today are because for 135 years HECO really hasn't changed. This bill makes them change. All it simply does is separates out power generation from transmission and distribution. The study cited by Senator Inouye was in 2019 was about. It was their better business model for them.

It wasn't about separation of power from T and D. That study in 2019 found that it was a pun that was more looking at should be a co op should it be fully privatized or should it continue to be an investor owned utility. And it concluded nothing.

So that's why we have the status quo that we have today. You look at HECO today it has most of its diesel generation 50 years old. Some of their diesel generators are 76 years old. We are seeing more and more unplanned outages across our islands. We know that they caused the Maui wildfires.

They have a $2 billion judgment against them. They've covered the first billion dollars. They have absolutely no idea how they're going to cover the second billion dollars. They're in no position to make any investments improving the grid on the power side or the transmission side no one wants. They're. They're continuing to be in junk bond status status.

Wall street isn't going to loan them a dime to do anything to improve the grid. Their fallback plan right now is to beg the U S Department of Energy to give them a loan.

If they don't get the loan then things are that 76 year old generator is going to be 778 there we at a certain point the legislative body has to come in and help HICO fix problems that they are financially unable to Fix on their own.

All of us were here last year when they begged us for limited liability and securitization. We gave it to them. They, they.

I just want to correct you. We did not give it to them.

We gave them the potential to.

So they had. There's a process that they can actually go through to see if the PUC thinks that they, they're warranted. But the Legislature did not give them any of that.

Okay. If they were financially strong, they wouldn't have asked for any of that. But they're not. They're financially weak. This bill does protect union jobs. There's language in there specifically to say that mainly IBEW is not going to go away if we separate out these two entities.

And all we're doing is saying for the generation side we're going to allow for free competition. We already have, as many of us know, independent power producers that are doing 30% of the renewable power in this state. So there's already successes with HECO having private companies provide us power. This Bill simply says all of the power.

Those 70 year old diesel generators. Someone else might have a better plan as to how to retire those and, and get us as a community the power that we need. Because Hiko at this point is just floundering. They cannot.

Yeah, but I think the Seno's point is that there are differences between HELO situation and hico. There's Oahu versus Big Island.

Big island has more and more rolling blackouts. And you look at Maui, Maui in 2028, if nothing is done, it's going to go dark. Has no replacement parts for their Mitsubishi generators. Sorry. Kahului has an EPA exemption that allows them to continue. That's going to go away in 2028. Maui is in the worst situation.

Big Island is worse than Oahu. But Maui is like it's, it's, it's pretty.

So why don't you think we're holding Office of Energy accountable? Because that whole office is supposed to be trying to figure out strategies so that we can generate more energy.

Ultimately it's the PUC's decision. They can, all of us can recommend. Well, Energy Office can recommend all they want. It's really up to the Puc.

So why even have an Office of Energy then if we're not going to get anything out of it?

They help monitor our methodical plans towards 100% renewable. But we didn't empower them to make decisions on how the utility is set up. That's the PUC's responsibility.

But they can make recommendations for us to invest in certain types of energy options. And they have they haven't. Like which one? Like what?

Like the fact that we have solar and batteries that are a bulk of the 35% of renewable energy you and I are working on geothermal.

Yeah, but that, that's not because that's their recommendation. Senator Noy, Yes.

Just to add to the discussions, Scottsu made an appointment, arranged an appointment to brief us in his trip just before the holidays.

And the briefing was very important just to tell me what the plans to make the improvements of our two projects right now existing on the improvements to create and get rid of the diesel operating on in Puna and in Hilo. And that's the question I raised as well. When is it going to happen?

But there, there are plans already with Heco and Coin Electric in coming up with the plans for the changes to those two plants. So it's not like they're not doing anything, but there are already plans working on it as well.

Yeah, but you look at the Hiko's history in on the Big Island, I mean, they had Pacific Courage that bought Hamakua, that Hamakua plant. They ran that thing into the ground. You guys were without power. I can't remember two years ago because your baseload generation at Hamakua went kaputs.

Then Kailoa Partners, I can't remember the Parry Company, they bought it. So HECO has a history of not properly operating the grid on the Big Island.

The issue here is we're doing something that they're kind of like getting involved with a private entity, a business. There is no plan in this measure that says, okay, maybe the company from Florida will come back and take over.

But having to do with a Bill to have an agency, a utility company, without giving us what's going to happen to the company, we're actually dismantling a business that's already been with us from generations and more generations to come. So there's no plans. We're doing this.

How can the Legislature in government do something to a business already operating and you're dismantling their whole operations not knowing what's going to happen? And that's the another issue. Sorry.

Mr. Well, if you're happy with the status quo, then yes, vote no. But I think a lot of us see that there are some really concerning issues currently as well as on the horizon. And this Bill is kind of like last year's securitization and limited liability issue. We're not saying this is going to have a breakup.

We're putting the onus on the PUC to come up and look across the country. What are the best practices for partial deregulation of their utilities. So this Bill is not in itself breaking them up.

And yeah, it doesn't have all the answers because the PUC will help us get to all of the answers just like they are doing with our issue of securitization and with limited liability we passed last year.

Maybe we should do a study then have POC do their work.

Chair. I have a comment. I think it might be a good idea, but what we don't have is there are the options to reduce the rates to get them to be more to upgrade their facilities or their equipment. So I think it's premature.

So there should be something here that allows for an assessment and not just right now. It just says PUC just execute. And I think I have problems with that.

So. Okay, recess. Okay.

Reconvening back to SB3326. So based on the discussion, Chair's recommendation is going to be to pass with amendments. We're going to require the PUC actually initiate a study and do a study we want to report before next session and the final report the following session.

So at least they're probably not going to get the monies to do it till July. So they won't probably have enough time to do the full study by next session.

So if they can at least give us an interim report and then a full report the following session prior to the following session and then we'll give them enabling legislation so that depending on what comes from the study that they may initiate into these types of proceedings.

Chair Mr. Recap. So we're going to do one study.

The PUC will do the study.

Yeah, the PUC will do the study. But PUC also said that rates too might be fluctuations so that in the PUC's exploring they could talk about rates.

Yeah, yeah. So we will they can talk about rates, other options. We'll try to make it as robust as possible so that we can get as much information as possible because every as Senator Noy pointed out, every county may have different economies of scale, things like that.

So they can when based on the study and if they decide that each county might be treated differently, we'll just give them enabling legislation so that if they determine it's in the best interest of the ratepayer to separate, that's up to them and then they can initiate proceedings.

Thank you. Thank you.

Any other discussion? Okay. If not, Chair votes Aye.

SP3326 to pass with amendments. All Members, President, anyone voting no. Anyone with reservations. Adopted.

Thank you.

No further business adjournment.