RELATING TO WATER CARRIERS.

SB21

THE SENATE

S.B. NO.

21

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to water carriers
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION 1.
�
Chapter 271G,
Hawaii Revised Statutes, is amended by adding a new section to be appropriately
designated and to read as follows:

����
"
�271G-
�
Water
carrier inflationary cost index mechanism.
�
(a)
�
On or before January 1, 2026, for each water
carrier subject to this chapter, the commission shall establish automatic
adjustment mechanisms to address, among other things, inflation and regulatory
lag and, at a minimum, a water carrier inflationary cost index automatic
adjustment mechanism.
�
The water carrier
inflationary cost index automatic adjustment mechanism shall create an automatic
rate adjustment that is tied to the annual per cent change in the Gross
Domestic Product Price Index as reported by the Bureau of Economic Analysis of
the United States Department of Commerce.

����
(b)
�
The water carrier inflationary cost index
automatic adjustment mechanism shall:

����
(1)
�
Be
applied on an annual basis, regardless of whether the factor is a positive or
negative per cent change; and

����
(2)
�
Be
capped at plus or minus five per cent per year.
"

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SECTION 2.
�

Section 271G-5, Hawaii Revised Statutes, is amended by adding a new
definition to be appropriately inserted and to read as follows:

����
"
"
A
utomatic adjustment mechanism" means any rate
adjustment mechanism that allows a water carrier to change rates between rate
cases.
"

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SECTION
3
.
�
Section 271G-17, Hawaii Revised Statutes, is
amended to read as follows:

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"�2
71G-17
�
Tariffs of water
carriers.
�
(a)
�
Every water carrier shall file with the
public utilities commission, and print, and keep open to public inspection,
tariffs showing all the rates, fares, and charges for transportation, and all
services in connection therewith, of passengers or property.
�
The rates, fares, and charges shall be stated
in terms of lawful money of the United States.
�

The tariffs required by this section shall be published, filed, and
posted in [
such
]
that
form and manner, and shall contain [
such
]
information as the commission by regulations shall prescribe; and the
commission may reject any tariff filed with it which is not in consonance with
this section and with the regulations.
�

Any tariff so rejected by the commission shall be void and its use shall
be unlawful.

����
(b)
�

No change shall be made in any rate, fare, charge, or classification, or
any rule, regulation, or practice affecting the rate, fare, charge, or
classification, or the value of the service thereunder, specified in any
effective tariff of a water carrier, except after forty-five days' notice of
the proposed change filed and posted in accordance with subsection (a);
provided that changes to [
a fuel
]
an automatic adjustment mechanism

surcharge approved by the commission may be made after thirty days' notice of
the proposed change filed and posted in accordance with subsection (a).
�
The notice shall plainly state the change
proposed to be made and the time when it will take effect.
�
The commission may in its discretion and for
good cause shown allow the change upon notice less than that herein specified
or modify the requirements of this section with respect to posting and filing
of tariffs either in particular instances or by general order applicable to
special or peculiar circumstances or conditions.

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(c)
�

No water carrier shall engage in the transportation of passengers or
property unless the rates, fares, and charges upon which the same are
transported by the carrier have been filed and published in accordance with
this chapter.

����
(d)
�

Whenever there is filed with the commission any schedule stating a new
rate, fare, or charge, for the transportation of passengers or property by a
water carrier or any rule, regulation, or practice affecting [
such
]
the

rate, fare, or charge, or the value of the service thereunder, the carrier may
on its own initiative, or shall by order of the commission served prior to the
effective date of the schedule, concurrently file a pro forma statement of
account which shall be prepared under the same form and in the same manner as
prescribed by the commission's uniform system of accounts.

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The commission may upon complaint of any
interested person or upon its own initiative at once and, if it so orders,
without answer or other formal pleading by the interested carrier or carriers,
but upon reasonable notice, enter upon a hearing concerning the lawfulness of
the rate, fare, or charge, or the rule, regulation, or practice, and pending
the hearing and the decision thereon the commission, by delivering to the
carrier or carriers affected thereby a statement in writing of its reasons
therefor, may suspend the operation of the schedule and defer the use of the
rate, fare, or charge, or the rule, regulation, or practice.
�
From the date of ordering a hearing to
investigate the lawfulness of the rate, fare, or charge, the commission shall
have up to six months to complete its investigation.
�
If the commission fails to issue a final
order within the six-month period then the changes proposed by the carrier
shall go into effect.
�
At any hearing
involving a change in a rate, fare, charge, or classification, or in a rule,
regulation, or practice, the burden of proof shall be upon the carrier to show
that the proposed changed rate, fare, charge, classification, rule, regulation,
or practice, is just and reasonable.

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(e)
�

When a rate increase application is filed, the commission may in its
discretion and after public notice, and upon showing by a water carrier of
probable entitlement and financial need, authorize temporary increases in
rates, fares, and charges; provided that the commission shall by order require
the carrier to keep accurate account in detail of all amounts received by
reason of [
such
]
the
increase, specifying by whom and in whose
behalf [
such
]
the
amounts are paid, and upon completion of the
hearing and decision by further order require the interested carrier to refund,
with interest, to the persons in whose behalf [
such
]
the
amounts
were paid, [
such
]
the
portion of [
such
]
the

increased rates or charges by its decision shall be found not justified.
�
The interest to be paid shall be the rate of
return authorized in the last general rate case proceedings.

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(f)
�

Notwithstanding the preceding provisions of this section, any request to
establish an automatic adjustment mechanism made by a water carrier shall be
submitted as a forty‑five-day tariff transmittal filing, and the filing
shall not constitute a rate increase application or request for a general rate
increase.
�
The commission shall have
broad discretion in its application of any aspect of this section or its
applicable rules as it may relate to any request to establish or modify any
automatic adjustment mechanism made by a water carrier.

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(g)
�

Notwithstanding any provision of this chapter or any law, decision,
order, or rule to the contrary, the commission, sua sponte or upon the
application of a water carrier, may waive or exempt a water carrier from any or
all requirements of this chapter or any applicable decision, order, rule, or
other law upon a determination or demonstration that any requirement or
requirements should not be applied to water carriers or are otherwise unjust,
unreasonable, or not in the public interest.
"

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SECTION 4.
�

Statutory material to be repealed is bracketed and stricken.
�
New statutory material is underscored.

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SECTION 5.
�

This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

PUC;
Water Carriers; Tariffs; Water Carrier Inflationary Cost Index Mechanism; Rate
Adjustments

Description:

Establishes
a Water Carrier Inflationary Cost Index Mechanism.
�
Authorizes the Public Utilities Commission to
grant exemptions to any water carrier from any requirement under the Hawaii
Water Carrier Act.
�
Defines "automatic
adjustment mechanism".
�

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