Bill > SB2694

This bill requires the Public Utilities Commission (PUC) to establish automatic adjustment mechanisms for water carriers, which are companies that transport goods or people by water, to address economic factors like inflation and regulatory lag, meaning the time it takes for regulations to catch up with changing conditions. Specifically, the PUC must create a water carrier inflationary cost index automatic adjustment mechanism, which will be tied to changes in wharfage rates (fees for loading and unloading cargo at a port) set by the Department of Transportation's harbors division, and will be capped at a 5% annual increase. From July 1, 2026, to June 30, 2029, the PUC must apply these mechanisms annually, with a requirement for water carriers to submit a rate application for the third year of this period. From July 1, 2029, to June 30, 2033, the PUC is authorized to apply these mechanisms annually, again with a requirement for a rate application in the third year. The bill also allows the PUC to waive or exempt any water carrier from certain requirements of the Hawaii Water Carrier Act if deemed unjust or unreasonable, and it defines "automatic adjustment mechanism" as any system allowing water carriers to change rates between formal rate cases. Importantly, customers eligible for preferential agricultural water rates will be exempt from these automatic adjustments. This entire framework will expire on July 1, 2033.