PUC Annual Report–Fiscal Year 2011-12 - Public Utilities Commission

Public Utilities Commission Annual Report 2011-12
State of Hawaii Page 8
the DCCA. Another important legislative action clearly defining the role of the PUC
occurred in 1977 with the passing of Act 102, which exempts producers of power from
non-fossil fuel sources from the definition of public utility while specifying that the PUC
has authority to assist in setting “just and reasonable rates” for the electricity generated
from these producers when supplied to a public utility. 8
In 1974, the regulation of private sewer companies was placed under the PUC
and also was the year the Commission established a legal basis for the regulation of
water carriers under the Commission. 7
In 1987, the Commission began developing the integrated resource planning
process for Hawaii utilities, resulting in the start of the first IRP process in 1990. 18 The
Commission recently revised the IRP framework in 2011. The first round of IRP lead to
the approval of demand-side management programs implemented by electric utilities in
1992, which then became the responsibility of a third party administrator under the
guidance of the PUC in 2009 after the fee was established by legislation in 2008. The
Legislature also placed renewable portfolio standards, net energy metering and the
One Call Center (for subsurface excavation) under the Commission in the early
twentieth century.
Landmark Developments of the Commission
In addition to organizational and regulatory changes, landmark developments
changed the way the PUC operated, shaping the Commission. In 1939 the Commission
hired an expert from the mainland to help to determine a rate base for HECO on its
investment in its property and to determine whether rates charged by HECO are
reasonable on the basis of the return which such rates yield. This was the first
investigation of a Return on Investment (“ROI”) of its kind of a Hawaii utility. 19 In 1965,
the Commission agreed upon its first “bill of rights” for electric, gas, and telephone utility
customers after months of meetings and studies. The rights included minimum
standards of services and formalized some services and billing. 20
In 2003 the Commission opened an investigation to evaluate competitive bidding
as a mechanism for acquiring or building new generating capacity in Hawaii. This
resulted in a competitive bidding framework in 2006 that is designed to ensure that each
competitive bidding process is fair in its design and implementation so that selection is
based on the merits.
As a result of rapid changes in the world of telecommunications, in 1992, the
Commission began an investigation into the sole telecommunication carrier,
GTE Hawaiian Tel, and opened a docket to develop a telecommunications infrastructure
for Hawaii in 1993. The aim of the proceedings was to develop an efficient,
18 State of Hawaii Public Utilities Commission. Annual Report Fiscal Year 1988.
19 “Dittmar Here for H. E. Study” Honolulu Star-Bulletin. May 4, 1939. P. 12.
1965. 1:1.
20 “Consumer ‘bill of rights’ ready” Honolulu Star-Bulletin. September 29,