RELATING TO WATER.

SB3174

THE SENATE

S.B. NO.

3174

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to water
.

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

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SECTION
1
.
�
Section 269-1, Hawaii Revised Statutes, is
amended by amending the definition of "public utility" to read as follows:

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"
"Public
utility":

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(1)
�
Includes every person who may own,
control, operate, or manage as owner, lessee, trustee, receiver, or otherwise,
whether under a franchise, charter, license, articles of association, or
otherwise, any plant or equipment, or any part thereof, directly or indirectly
for public use for the transportation of passengers or freight; for the
conveyance or transmission of telecommunications messages; for the furnishing
of facilities for the transmission of intelligence by electricity within the
State or between points within the State by land, water, or air; for the
production, conveyance, transmission, delivery, or furnishing of light, power,
heat, cold, water,
including water furnished by plants or facilities
developed pursuant to chapter 167 for conveying, distributing, and transmitting
water for irrigation and other purposes for public use,
gas, or oil; for
the storage or warehousing of goods; or for the disposal of sewage; provided
that the term shall include:

���������
(A)
�
An owner or operator of a private sewer
company or sewer facility; and

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(B)
�
A telecommunications carrier or
telecommunications common carrier; and

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(2)
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Shall not include:

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(A)
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An owner or operator of an aerial
transportation enterprise;

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(B)
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An owner or operator of a taxicab as
defined in this section;

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(C)
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Common carriers that transport only
freight on the public highways, unless operating within localities, along
routes, or between points that the public utilities commission finds to be
inadequately serviced without regulation under this chapter;

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(D)
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Persons engaged in the business of
warehousing or storage unless the commission finds that regulation is necessary
in the public interest;

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(E)
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A carrier by water to the extent that
the carrier enters into private contracts for towage, salvage, hauling, or
carriage between points within the State; provided that the towing, salvage,
hauling, or carriage is not pursuant to either an established schedule or an
undertaking to perform carriage services on behalf of the public generally;

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(F)
�
A carrier by water, substantially
engaged in interstate or foreign commerce, that transports passengers on luxury
cruises between points within the State or on luxury round-trip cruises
returning to the point of departure;

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(G)
�
Any user, owner, or operator of the
Hawaii electric system as defined under section 269-141;

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(H)
�
A telecommunications provider only to
the extent determined by the public utilities commission pursuant to section
269-16.9;

��������
[
(I)
�
Any person who controls, operates,
or manages plants or facilities developed pursuant to chapter 167 for
conveying, distributing, and transmitting water for irrigation and other
purposes for public use and purpose;

��������
(J)
]
�
(I)
�
Any person who owns, controls,
operates, or manages plants or facilities for the reclamation of wastewater;
provided that:

��������������
(i)
�
The services of the facility are
provided pursuant to a service contract between the person and a state or
county agency and at least ten per cent of the wastewater processed is used
directly by the state or county agency that entered into the service contract;

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(ii)
�
The primary function of the facility is
the processing of secondary treated wastewater that has been produced by a
municipal wastewater treatment facility owned by a state or county agency;

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(iii)
�
The facility does not make sales of
water to residential customers;

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(iv)
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The facility may distribute and sell
recycled or reclaimed water to entities not covered by a state or county
service contract; provided that, in the absence of regulatory oversight and
direct competition, the distribution and sale of recycled or reclaimed water
shall be voluntary and its pricing fair and reasonable.
�
For purposes of this subparagraph,
"recycled water" and "reclaimed water" means treated
wastewater that by design is intended or used for a beneficial purpose; and

��������������
(v)
�
The facility is not engaged, either
directly or indirectly, in the processing of food wastes;

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[
(K)
]
�
(J)
�
Any person who owns, controls,
operates, or manages any seawater air conditioning district cooling project;
provided that at least fifty per cent of the energy required for the seawater
air conditioning district cooling system is provided by a renewable energy
resource, such as cold, deep seawater;

�������
[
(L)
]
�
(K)
�
Any person who owns, controls,
operates, or manages plants or facilities primarily used to charge or discharge
a vehicle battery that provides power for vehicle propulsion;

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[
(M)
]
�
(L)
�
Any person who:

��������������
(i)
�
Owns, controls, operates, or manages a
renewable energy system that is located on a customer's property; and

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(ii)
�
Provides, sells, or transmits the power
generated from that renewable energy system to an electric utility or to the
customer on whose property the renewable energy system is located; provided
that, for purposes of this subparagraph, a customer's property shall include
all contiguous property owned or leased by the customer without regard to
interruptions in contiguity caused by easements, public thoroughfares,
transportation rights-of-way, and utility rights-of-way; and

�������
[
(N)
]
�
(M)
�
Any person who owns, controls,
operates, or manages a renewable energy system that is located on the person's
property and provides, sells, or transmits the power generated from that
renewable energy system to an electric utility or to lessees or tenants on the
person's property where the renewable energy system is located; provided that:

��������������
(i)
�
An interconnection, as defined in
section 269-141, is maintained with an electric public utility to preserve the
lessees' or tenants' ability to be served by an electric utility;

�������������
(ii)
�
The person does not use an electric
public utility's transmission or distribution lines to provide, sell, or
transmit electricity to lessees or tenants;

������������
(iii)
�
At the time that the lease agreement is
signed, the rate charged to the lessee or tenant for the power generated by the
renewable energy system shall be no greater than the effective rate charged per
kilowatt hour from the applicable electric utility schedule filed with the
public utilities commission;

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(iv)
�
The rate schedule or formula shall be
established for the duration of the lease, and the lease agreement entered into
by the lessee or tenant shall reflect the rate schedule or formula;

��������������
(v)
�
The lease agreement shall not abrogate
any terms or conditions of applicable tariffs for termination of services for
nonpayment of electric utility services or rules regarding health, safety, and
welfare; and

�������������
(vi)
�
The lease agreement shall
disclose:
�
(1) the rate schedule or
formula for the duration of the lease agreement; (2) that, at the time that the
lease agreement is signed, the rate charged to the lessee or tenant for the
power generated by the renewable energy system shall be no greater than the
effective rate charged per kilowatt hour from the applicable electric utility
schedule filed with the public utilities commission; (3) that the lease
agreement shall not abrogate any terms or conditions of applicable tariffs for
termination of services for nonpayment of electric utility services or rules
regarding health, safety, and welfare; and (4) whether the lease is contingent
upon the purchase of electricity from the renewable energy system; provided
further that any disputes concerning the requirements of this provision shall
be resolved pursuant to the provisions of the lease agreement or chapter 521,
if applicable.

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If
the application of this chapter is ordered by the commission in any case
provided in paragraph (2)(C), (D), [
(H), and (I),
]
and (H),
the
business of any public utility that presents evidence of bona fide operation on
the date of the commencement of the proceedings resulting in the order shall be
presumed to be necessary to the public convenience and necessity, but any
certificate issued under this proviso shall nevertheless be subject to terms
and conditions as the public utilities commission may prescribe, as provided in
sections 269‑16.9 and 269-20."

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SECTION 2.
�

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

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SECTION 3.
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This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

PUC;
Water; Public Use; Regulation

Description:

Subjects
a person who controls, operates, or manages plants or facilities for conveying,
distributing, and transmitting water for irrigation and other purposes for
public use to regulation by the Public Utilities Commission.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.