WHEREAS, the Executive branch and Legislature have established the goals, policies, and directives for energy initiatives in the State, to be followed and implemented by the Public Utilities Commission (Commission); and

WHEREAS, the Commission is burdened with implementing our State's energy policies in a manner that meets our State's energy needs, pursuant to section 269-6, Hawaii Revised Statutes, to perform the duties and exercise the powers imposed or conferred upon it for the general supervision over all public utilities; and

WHEREAS the Commission is currently going through a significant transition with new leadership, expansion of employees, and meeting numerous Legislative directives; and

WHEREAS, the Commission ordered Hawaiian Electric Companies (HECO), which serve ninety-five per cent of the energy needs of Hawaii citizens, to take immediate steps to implement new technologies and lower costs; and

WHEREAS, HECO is required to meet standards in the public's best interest for all ratepayers, including issuing satisfactory action plans, integrating and upgrading infrastructure, and implementing new technology; and

WHEREAS, HECO announcements restrict renewable energy exploration and integration into the market is against the public interest; and

WHEREAS, the planned merger of HECO with NextEra Energy creates unknown implications for compliance with the State's goals and directives for energy initiatives with growing concern for ratepayers; and

WHEREAS, HECO, without explanation, surpassed deadlines by nearly a year and a-half to announce an award for a request for proposal; and

WHEREAS, Commission dockets have remained open for nearly a decade, which have resulted in lack of public faith in the Commission's proper and prudent oversight of the electric utilities serving the State; and

WHEREAS, lower rates and more renewable energy operations are vital to the public interests of financial accountability and protection and preservation of the environment; and

WHEREAS, to serve the public interests of accountability and transparency to Hawaii taxpayers, closer scrutiny is needed of the Commission and the public utilities it oversees, as well as clearer guidance for standard evaluations of the Commission; and

WHEREAS, section 269-5, Hawaii Revised Statutes, requires the Commission to prepare and present an annual report and register of orders to the Governor, for executive reporting to the Legislature; and

WHEREAS, section 23-4, Hawaii Revised Statutes, requires the Auditor to conduct a financial audit of all departments, offices, and agencies of the State and its political subdivisions at least once every two years; and

WHEREAS, neither report currently mandated includes metrics for assessing the managerial and operational effectiveness of the Commission; and

WHEREAS, a management audit systematically examines the decisions and actions of the management to assess the methods and policies thereof in the use of resources, tactical and strategic planning, and employee and organizational improvement; and

WHEREAS, the objectives of a management audit are to establish the current level of effectiveness, suggest improvements, and establish standards for future performance; and

WHEREAS, the Commission has historically gone through a full audit approximately every twelve years, and is in a current transition phase to implement improvements, without an independently evaluated framework to facilitate internal efficiency and effectiveness audits; and

WHEREAS, section 23G-3, Hawaii Revised Statutes, states the purpose of the Legislative Reference Bureau includes conducting impartial research, and serving in an advisory capacity to the legislature; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-eighth Legislature of the State of Hawaii, Regular Session of 2015, that the Public Utilities Commission is requested to include, beginning January 1, 2017, a managerial audit as a part of the Commission's annual report; and

BE IT FURTHER RESOLVED that the Legislative Reference Bureau is requested to research the results of the Commission's previous managerial audit and recommend an effective and economical ongoing assessment framework for an annual managerial audit of the Commission and its utility companies, to be utilized for future analysis and reports to the Legislature, which may include tools to assess situations such as:

(1) Residential permit delays, apparently caused by lack of staffing;

(2) The length of time dockets remain open without further

action before becoming stale with reason to close; and

(3) Employee stabilization and transition policies; and

BE IT FURTHER RESOLVED that the Legislative Reference Bureau is requested to submit its findings and recommendations, including proposed legislation if any, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2016; and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Chairperson of the Public Utilities Commission and the Director of the Legislative Reference Bureau.

	OFFERED BY:	_____________________________

Report Title:

LRB study for PUC managerial audit; PUC annual managerial audits

HOUSE OF REPRESENTATIVES	H.R. NO.	153
TWENTY-EIGHTH LEGISLATURE, 2015
STATE OF HAWAII