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Editorial | Our View

Slow to change

    Clean-energy advocates like Jeff Mikulina of Blue Planet say that HECO investing in large, high-priced power plants is an outdated strategy ill-suited to a rapidly evolving renewable-energy environment. Above, the exhaust stack at HECO’s biodiesel plant at Campbell Industrial Park is shown.

No one says the chronically understaffed, underfunded and overworked Hawaii Public Utilities Commission isn’t doing the best it can in a tough and thankless job.

Last year, the PUC’s area of oversight included 219 utility companies or entities — including four electric companies, one gas company, 176 telecommunications companies and 38 water and sewer companies — as well as four water carriers, 679 passenger carriers and 593 property carriers.

The commission opened 330 new dockets relating to regulated utility and transportation companies, completed and disposed of 448 dockets from its total caseload and issued 690 decisions and orders. And it did it all with three commissioners — who confer and then render judgments — and a 42-member staff including attorneys, researchers, engineers, auditors, investigators and enforcement officers.

But now, with the state committed to the Clean Energy Initiative — which calls for 70 percent clean energy by 2030, with 30 percent coming from efficiency measures and 40 percent from renewable local sources — some say the PUC may be out of its element and are proposing a new regulatory agency dedicated to energy issues.

Gov. Neil Abercrombie’s nomination of state Rep. Hermina Morita of Kauai to fill a vacated seat of the PUC and become its chairperson upon confirmation by the Senate could be the first step. Morita has built a record as a strong backer of renewable energy and was chairwoman of the House Committee on Energy and Environmental Protection.

"From a policy perspective she certainly understands the energy arena and has watched the PUC for a number of years as well," says state Sen. Rosalyn Baker of Maui, who has introduced legislation seeking to reorganize the PUC. Senate Bill 99 calls for the PUC to increase from three to five commissioners and to create a pair of two-member panels, with the chair acting as the tiebreaker for both.

Baker says the legislation seeks to advance Abercrombie’s campaign call for an independent energy authority and has received support from the governor.

"I think what we’ve tried to do, because of budget constraints and not wanting to disrupt many of the dockets that are ongoing, we decided … to create these two panels (within the PUC), so you’d have one that’s dedicated to energy and the other dedicated to telecommunications and water transportation, some of those other things," Baker says.

"And each panel would be able to make those decisions. They wouldn’t have to go back to the full five members. So you would be creating within the current regulatory framework two panels that would be more dedicated … they’d be able to develop some real expertise."

The Blue Planet Foundation, which champions clean energy, doesn’t think SB 99 goes far enough. Executive Director Jeff Mikulina says Hawaiian Electric Co. continues to control a one-sided and outdated conversation about energy, and that the state needs a dedicated agency with a legislative mandate that goes beyond tweaking the regulatory framework and into actual policymaking authority on energy issues.

"Right now, the PUC can’t do that," Mikulina says. "They need someone to come to them. For example, we were thinking of doing a different rate structure … you know, different rates for clean energy, different time-of-use rates. I mean, there’s plenty of electricity at night. Shouldn’t it be cheaper?

"But these ideas have to originate somewhere else (because) the PUC can’t organically do that. They’re a creature of what the Legislature gives them in terms of their policy guidelines, which is something Chair (Carlito) Caliboso says all the time in front of committees: ‘We are the creature of whatever you tell us, so you need to give us legislative intent.’ Otherwise, they’re really confined. They’re asked to consider A, B and C. They can’t consider Z unless they’re explicitly told."


Short of legislative action, Mikulina says, HECO will try to make its returns by clinging to its traditional business model of energy generation and distribution for as long as it can, even as technology steadily renders such practices obsolete.

Mikulina says the PUC had the right idea in approving both a feed-in tariff, in which owners of small- to medium-sized renewable energy projects are allowed to sell electricity to HECO, and decoupling, which guarantees HECO a rate of return in an effort to boost the utility’s willingness to support and invest in less-profitable renewable energy and energy efficiency measures.

But in both cases, Mikulina says, the terms ended up favoring HECO and discouraging true progress.

"Before, when it was a public utility, it was easy," Mikulina says. "But what does it look like now? Declining sales, and all of a sudden there’s wind and solar, some really small rooftop units and some really big ones, and who knows, a whole mix of things coming together.

"And here’s this utility that’s still trying to make a profit based on investing in power plants and investing in infrastructure. And it’s all so technical. So maybe the PUC needs to look at something entirely different. That’s what the governor was proposing with the Hawaii Energy Authority. … Just take all this technological regulation and turn it over to folks who can devote their attention to it. And if you have to, you can leave the economic regulation to the PUC, like what should the rate be. And that would be all they would do."

Caliboso admits the PUC is "a creature of statute." But he says he believes that’s the best way for the commission to operate.

"Different people might tell you different things — ‘You should be doing this or that, or more of this and less of that’ — and they might have good points. But I always fall back on: What is our mandate? Because I find comfort in the law.

"I think we’re capable (of handling energy issues) — maybe more capable than anyone else, because we’ve been working on this for several years now and because, at the same time, the traditional objectives (of the PUC as utility regulator) haven’t gone away," he says.

"To set up a separate agency, you’d have to fund them — and fund them properly. And you would have to give them a legislative mandate."

As for Baker’s reorganization plan, Caliboso says a five-member panel "may increase diversity, but I don’t think it’s going to necessarily increase effectiveness. I think it’s just camouflage."


"For Hawaiian Electric, as a publicly regulated utility, the structure for how government regulates is a policy call for government to make," HECO spokesman Peter Rosegg said in an e-mail to the Star-Advertiser. "From our point of view, the key is to have energy decision-making in one place."

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