By: OHA Trustee Rowena Akana
Source: Ka Wai Ola o OHA, October 2009
On July 9, 2009, the Honolulu Advertiser reported that Oahu electric bills would rise at least 4.7 percent so that the Hawaiian Electric Co. (HECO) can pay for more than $200 million in new “capital investment projects.”
I found HECO’s justification for their Public Utilities Commission (PUC) approved rate hike disingenuous because nowhere did it mention that HECO has accumulated $1.4 billion worth of debt. In fact, the Advertiser later reported on July 21 that Moody’s Investors Service has lowered its rating outlook for Hawaiian Electric Industries Inc.’s debt from stable to negative.
The public should not have to suffer because of HECO’s failed investments. How can Oahu residents be sure that the rate hike will be used for new capital investment projects and not to help pay down HECO’s debt? In the meantime, all of us will have to take on this added burden at a time we can least afford it. The PUC has really let us down.
Most people have no idea what the PUC is or who is in charge of the organization. I believe that anonymity allows them to make these kinds of detrimental decisions. Therefore, in an effort to bring transparency to the PUC, here is a brief summary of the agency:
THE PUC COMMISSION
According to the PUC’s Annual Report, Fiscal Year 2006-07, the PUC is responsible for regulating 221 utility companies or entities (four electric, one gas, 179 telecommunications, and 37 water and sewer companies), four water carriers, 590 passenger carriers and 521 property carriers in the State.
The PUC was established in 1913 as a part-time, three-member body with broad regulatory oversight and investigative authority over all public utility companies in the Territory of Hawaii.
Today, the PUC is comprised of three full-time Commissioners appointed by the Governor with the consent of the State Senate. They each serve six-year terms on a staggered basis.
Carlito P. Caliboso, Chairman – Appointed and named Chairman by Gov. Linda Lingle on April 30, 2003. He earned a B.A. in business administration and a law degree from the University of Hawaii. In 2004, he was reappointed to the Commission for a term to expire on June 30, 2010.
John E. Cole, Commissioner – Appointed by Governor Lingle on April 24, 2006, for a term to expire on June 30, 2012. Prior to his appointment, Commissioner Cole served as Executive Director of the Division of Consumer Advocacy of the State Department of Commerce and Consumer Affairs. He has a B.A. in biology from UH and a law degree from Washington University.
Leslie H. Kondo, Commissioner – Appointed by Governor Lingle on July 3, 2007, to replace Commissioner Wayne Kimura for the remainder of the six-year term that expired on June 30, 2008. He was later reappointed for a term to expire June 30, 2014. Mr. Kondo was the past director of the Office of Information Practices and is an attorney with an educational background in industrial engineering.
As of June 30, 2007, the PUC had a staff of 35 employees, including an administrative director, attorneys, engineers, auditors, researchers, investigators, neighbor island representatives, documentation staff and clerical staff. The PUC has four offices located throughout the State:
* OAHU: Public Utilities Commission, Kekuanaoa Building, 465 South King St., #103, Honolulu, HI 96813, Phone: (808) 586-2020, Fax: (808) 586-2066.
* MAUI: PUC Maui District Office, State Office Building #1, 54 S. High St., #218, Wailuku, HI 96793, Phone: (808) 984-8182, Fax: (808) 984-8183.
* KAUAI: PUC Kauai District Office, 3060 Eiwa St., #302-C, Lihue, HI 96766, Phone: (808) 274-3232, Fax: (808) 274-3233.
* HAWAII: PUC Hawaii District Office, 688 Kinoole St., #106-A, Hilo, HI 96720, Phone: (808) 974-4533, Fax: (808) 974-4534.
* PUC e-mail: Hawaii.PUC@hawaii.gov
* PUC web site: hawaii.gov/budget/puc
The PUC regulates all four electric companies in the State: (1) HECO on Oahu; (2) MECO on Maui, Lanai and Molokai; (3) HELCO on the island of Hawaii; and (4) Kauai Island Utility Cooperative (“KIUC”) on Kauai. MECO and HELCO are subsidiaries of HECO, which is in turn a subsidiary of Hawaiian Electric Industries Inc.
The PUC’s main job is to make sure that the companies they regulate provide their customers with “adequate” and “reliable” services at reasonable rates in a way that is efficient and safe. They also have to allow them a “fair opportunity to earn a reasonable rate of return.” Question: What is the “reasonable” rate of return?
I am encouraged that the PUC has stated that their short-term goal is to “increase the transparency of the regulatory process and public access to the Commission to ensure that the Commission efficiently, independently, fairly, and impartially regulates public utilities.”
Certainly a step in the right direction. The Question is though, when does this goal become a reality? Let’s work together to make sure the PUC keeps its word.
ON ANOTHER NOTE:
On Sept. 10, 2009, the County of Maui adopted a kuleana land tax-exemption ordinance. After five years of hard work by OHA trustees and staff, kuleana lands are now protected from the threat of rising property taxes in all four counties!
Until the next time. Aloha pumehana.