Lawmakers hear competing views on co-op access in electric utility acquisition bill

Members of the House Committee on Consumer Protection & Commerce heard two hours of testimony March 19 on Senate Bill 137, SD2, HD1, a bill that would add PUC oversight and new procedures when investor-owned utilities change ownership and to allow community cooperatives to bid on utility acquisitions.

Supporters including Michael Municata of the Ulupono Initiative urged the committee to give community entities a fair opportunity to participate in acquisition processes, calling for an "open and transparent process" that lets local groups explore cooperative ownership models. "We just gotta make sure that we allow for something to happen," Municata said in support of the bill's intent.

Opponents focused on a section of the bill that would permit co-ops to enter acquisition proceedings after material steps such as confidentiality agreements and execution of purchase agreements. Henry Curtis, executive director of Life of the Land, testified he had consulted legal and regulatory experts and concluded "there is no mechanism" for a co-op to meaningfully intervene once a buyer and seller have executed nondisclosure agreements or a purchase-and-sale agreement. Curtis said the bill as written would let a co-op assert a competing bid after those steps but that practical constraints—including nondisclosure agreements, merger timelines and federal securities rules—make that ineffective in real commercial transactions.

James Abraham of Hawaiian Electric submitted comments and a requested amendment, saying the bill's definition of "acquiring entity" could be overbroad and inadvertently reach routine intra-island transfers of equipment that already require PUC approval. He asked the committee to consider narrowing language so the measure would not sweep in local, purely transactional transfers that were not the bill's intent.

Committee members asked detailed questions about how a coop process would work in practice and whether putting the mechanism into statute would violate SEC rules or chill interest from potential purchasers. Bradley Uliano and other members pressed proponents to explain whether removing the merger-related language would be acceptable; Ulupono said it favored keeping a pathway but could consider clarifying amendments. The Division of Consumer Advocacy and the Public Utilities Commission stood on written comments and were available for questions.

The chair concluded that the committee would defer SB137 after hearing the concerns raised.

Ending: The committee deferred the measure for further work; members suggested clarifying amendments to narrow the bill—particularly the merger/intervention language—so it would not conflict with securities or PUC processes.