Public Utilities Commission not Oahu-centric, the state’s lone regulators say

By CHELSEA JENSEN

Stephens Media

Can three people effectively ensure Hawaii’s regulated utilities’ performance is aligned with the public’s interest across six islands and four counties?

The Honolulu-based Public Utilities Commission, the state’s sole regulator of hundreds of public utilities doing business in the islands, says it can and does — despite the seeming appearance of the commission being “Oahu-centric.”

“It is our duty to align the performance of utilities with the public interest,” said Mina Morita, the commission’s chairwoman. “We do that. But, it’s not so much about the actual (three) commissioners, but the functioning of the agency as a whole.”

She said while the PUC spends most of its time on Oahu — unless mandated to hold public hearings on a neighbor island — that does not affect the commission’s final decision or its ability to balance fairly consumers’ and utilities’ interests.

She also noted each of the three commissioners has neighbor island ties. That, she said, gives commissioners broader insight.

“We are not an urban utilities commission,” Morita said. “I was born and raised on Lanai, so I have a pretty good idea and feeling for what it’s like living on the neighbor islands and what the lifestyle, challenges and issues facing small rural communities in Hawaii.”

Morita, John Cole, who grew up on the Big Island, and Michael Champley, who hails from Maui, are the state’s three commissioners.

However, that does not mean those ties can skew a commissioner, she said.

“The decisions the commission makes have statewide implications,” Morita said. “Commissioners are not solely advocating for a particular island or place, they have the ability to look broadly, as well as narrowly, to understand the issue before them.”

While there are six islands to represent, each with its own unique issues and challenges, Morita said three commissioners are enough to make fair decisions.

She said most mainland commissions only have three members. A check of various commissions around the U.S., including those in Texas, Washington, Utah, Michigan and Connecticut, confirms her comment.

And, to ensure the public’s interests are represented and protected, the PUC also independently funds a state consumer advocate. Jeffrey Ono, who heads the Division of Consumer Advocacy, is party to every case and public meeting. He provides a recommendation to commissioners that he said is based upon ensuring consumers have a voice and public utilities have the wherewithal to provide safe, reliable and adequate service in the long term.

But beyond the recommendation, Ono has little sway, he said.

“I’m not the decisionmaker,” said Ono. “The PUC is the ultimate decisionmaker, but they always look to the consumer advocate for guidance for the proper and appropriate analysis of whatever docket is before them.”

The Public Utilities Commission alone regulates registered public utilities in Hawaii and is tasked with prescribing rates, tariffs, charges and fees; determining and establishing allowable rates; and deciding requests for acquisition, sale or other exchange of utilities.

Established in 1913, the commission has regulatory control over public utility companies that provide electricity, gas, telecommunications, private water and sewage, and motor and water carriers in Hawaii, according to its 2011 annual report to the state Legislature.

Today, the commission regulates nearly 1,500 utilities and carriers, as of its 2011 report. On average, the full-time commissioners, along with about 40 staff, handle nearly 400 dockets, or applications, annually, Brooke Kane, PUC administrative director, said. It operated, including travel and meeting costs, in 2011 on $9.2 million, derived from a special fund consisting of various fees, penalties and interest assessed on utilities.

For the fiscal year, according to the commission’s annual report, about $3.9 million of the commission’s budget went toward personnel services and $5.5 million toward other expenses, including $2.1 million to fund the Division of the Consumer Advocate.

Those 400 dockets come from all over the state and, in some cases, force the commission to hold a public hearing outside its Honolulu base. The commission does not hold regular monthly meetings, but rather convenes only when a docket is before it, Morita said.

The commission is mandated when a utility submits an application for a rate, fare, charge, classification, schedule, rule or practice change to hold formal public hearings in the area where consumers will be directly impacted, according to Hawaii Revised Statutes.

The PUC’s last meeting on the Big Island was triggered by a 2011 request by Aina Koa Pono to spread the cost of a proposed Ka’u biofuel refinery to electricity customers on Oahu and the Big Island.

Outside of the mandated triggers for hearings, the commission has discretion as to where it holds its meeting for such issues as investigations, policy and energy discussions, and accidents at utilities, said Catherine Awakuni, lead counsel for the PUC.

“The commission has full discretion to determine where it will hold regular meetings,” she said. “There are certain instances by statute when a public hearing is required, but the commission can also choose to hold a public hearing where it needs input of the community that is not required by statute.”

Awakuni said the commission has not recently held a meeting on Hawaii Island outside of the mandated hearings, which are always held in Hilo and Kona, because of a limited travel budget. She did note, however, commissioners often travel on their own time to the neighbor islands and meet with people and utilities.

“(Commissioners) are very connected to the outer islands,” she said. “But, with the budget and expense of traveling (for the commission and staff) we always take written and email comments.”

But, is only meeting when required enough for people to feel involved and equally represented? It depends, said Kona attorney Frank Jung.

People most often testify on a matter before the commission when it will directly affect them, he said. Those types of matters trigger public hearings that give the public a chance to provide input face-to-face, which is important.

However, beyond the required meetings, there is little room for direct public input unless a person doles out hundreds of dollars to travel to Oahu, he said. Though a person can submit written testimony, Jung said it does not have the same impact on a decisionmaker as seeing a person speak.

Is it unfair?

“It may be intrinsically unfair because it’s easier for people on Oahu to attend the meetings than for people on the outer islands,” he said. “But, we are the only archipelago state and it’s a special situation.”

One relatively cheap solution that could provide pseudo face-to-face time is using video teleconferencing for hearings, he said. Some state departments, including the Judiciary, currently use the technology.

“The physical and visual presence of a person makes a difference,” Jung explained about why someone would want to testify before the PUC.

After the public hearings wind down and the PUC spends months considering a docket, a final decision is rendered, Awakuni said. Appealing the decision to the courts is limited to parties directly involved in the docket.

The Division of Consumer Advocacy can also appeal to the courts.

Email Chelsea Jensen at cjensen@westhawaiitoday.com.