Bill > HB2386

This bill allows the Public Utilities Commission (PUC), which regulates utilities in Hawaii, to create "automatic adjustment mechanisms" for water carriers, meaning they can adjust their rates between formal rate reviews to account for things like inflation and delays in regulatory processes. These mechanisms must be established through specific rules that include strict financial and operational checks for water carriers, limits on annual rate increases, and requirements for how long these mechanisms can be used before a full rate case is needed. The rules also mandate transparent accounting, assessment of the carrier's commitment to Hawaii (including workforce stability and local investment), a ban on dividend payments or executive bonuses during periods of automatic rate increases, a two-year waiting period after a general rate case before using the mechanism, specific performance metrics for service reliability, mandatory community outreach, strict biosecurity compliance, and annual reporting. Importantly, the Governor has veto authority over these rules, with a 21-day review period, and customers eligible for agricultural rates are exempt from these automatic adjustments. The bill also clarifies that any request for an automatic adjustment mechanism must be filed as a tariff transmittal or part of a general rate case application, and the PUC can waive or exempt water carriers from certain requirements if deemed unjust or not in the public interest. This legislation is set to take effect on July 1, 2026, and will be repealed on July 1, 2032, with a provision to revert the tariff rules back to their previous state.