Energy (Utility Regulation)

This bill, known as the Hawaii Ratepayer Protection Act of 2026, directs the Public Utilities Commission to maintain the state's performance-based regulation model for electric utilities rather than reverting to a traditional cost-of-service system. The law reinforces the requirement that utility revenues must be tied to performance metrics such as reliability, renewable energy progress, and customer service, instead of being based on the utility's investment levels or projected costs. By codifying these rules, the legislation ensures that the state continues to prioritize customer savings and efficiency over rewarding utilities for increased capital expenditures. The measure directly affects Hawaii's electric utility companies and the ratepayers who pay their bills, aiming to prevent a return to a regulatory framework that could lead to higher costs for consumers.

This House Resolution requests the Hawaii Public Utilities Commission to impose specific conditions before approving any costs related to liquefied natural gas infrastructure, operations, or fuel. The bill directly affects utility regulators, energy providers, and ratepayers by mandating that LNG investments be fully amortized by 2045, prohibiting take-or-pay fuel contracts, and ensuring no increased costs for customers in Hawaii, Kauai, or Maui. Key provisions require utilities to share fuel price volatility risks with customers, deny LNG costs if cheaper renewable alternatives exist, and consider how LNG approvals might impact renewable energy development. The resolution also asks the commission to evaluate risks of stranded assets and reliance on single fuel suppliers when determining cost reasonableness.

Requires and appropriates moneys for the Public Utilities Commission to establish standards requiring each electric utility company to remove from the rate base a commensurate amount of costs related to fossil fuel resources when adding new or converted renewable electrical energy and renewable energy resources.

Allows the Public Utilities Commission to establish a lifeline baseline performance standard and medically essential needs energy program based on proposals from electric utilities. Effective 7/1/3000. (HD1)

Requires the Public Utilities Commission to establish residential electricity rate structures that prioritize affordability and equity. Requires the Public Utilities Commission to establish a lifeline baseline performance standard, a medical essential needs energy program, and a new tariff. Requires electric utilities to file revised tariffs no later than twelve months after the Public Utilities Commission has issued a final decision and order under this Act. Requires the Public Utilities Commission to convene a stakeholder process for developing and implementing this Act.

Requires the Public Utilities Commission to consider whether approving a proposed merger or acquisition would or would not further the State's renewable energy goals. Prohibits the acquiring entity of an electric utility company from terminating or attempting to renegotiate any existing and valid power purchase agreements and requires the acquiring entity to assume and be bound by existing collective bargaining agreements and retain all covered employees. Establishes a process to ensure that when an electric utility is subject to an application for a proposed acquisition, merger, or consolidation by a potential acquiring entity that is an investor-owned utility and seeks approval of the application from the Public Utilities Commission, the electric utility shall demonstrate that it solicited bids from potential acquiring entities that operate under a non-investor-owned utility ownership model. Requires the electric utility to submit acceptable bids from a potential acquiring entity operating under a non-investor-owned utility ownership model concurrently with an application by a potential acquiring entity that is an investor-owned utility and the Public Utilities Commission to review those applications concurrently. Effective 7/1/3000. (HD1)

Grants the Public Utilities Commission the ability to authorize preferential rates for the purchase of renewable energy from facilities that meet certain prevailing wage requirements. Requires public utilities to forward certain requests for preferential rates to the PUC for approval. Appropriates funds. Effective 07/01/3000. (HD1)

Specifies that adjustments required to compensate for certain unavoidable increases in financing costs, if proven by a producer of nonfossil fuel generated electricity by clear and convincing evidence, are mechanisms for reasonable and appropriate incremental adjustments that the Public Utilities Commission may include in the rate payable to the producer. Effective 7/1/3000. (HD1)

Requires gas utilities to file a proposed initial renewable gas tariff or tariffs with the Public Utilities Commission by August 31, 2025. Requires the Public Utilities Commission to approve or modify a renewable gas tariff within six months of receiving a proposed renewable gas tariff. Effective 7/1/3000. (HD1)

Clarifies that, for electric utilities, "performance-based incentives" include revenue adjustment mechanisms, cost control mechanisms, rewards for superior performance, and penalties for subpar performance. Authorizes the Public Utilities Commission to adopt alternative ratemaking procedures to establish electric utility rates and performance-based incentives. Requires the Commission to apply a presumption in favor of considering historical cost trends and external indices that reflect incentives to control costs if the Commission resets an electric utility's allowed revenues based on consideration of the utility's costs. Effective 7/1/3000. (HD1)