Hawaii News Commission faces growing pressures By Kathryn Mykleseth Nov. 2, 2014 Mahalo for supporting Honolulu Star-Advertiser. Enjoy this free story! Read more Mahalo for reading the Honolulu Star-Advertiser! You're reading a premium story. Read the full story with our Print & Digital Subscription. Subscribe Now Read this story for free: Watch an ad or complete a survey Log In Already a subscriber? Log in now to continue reading this story. Activate Digital Account Print subscriber but without online access? Activate your Digital Account now. The state Public Utilities Commission is making far-reaching decisions that will shape Hawaii’s energy future with a workforce that is nearly 40 percent understaffed. Hawaii’s nation-leading position in renewables has put pressure on the PUC to create policies that will work best in the future, said Hermina Morita, chairwoman of the PUC. But the mounting workload, staff shortages and intricate work of forging policy in an energy landscape moving away from fossil fuels is slowing the process. In addition, the commission is in the midst of a reorganization as it transfers oversight of the agency to the state Department of Commerce and Consumer Affairs from the Department of Budget and Finance. The move is intended to help the PUC become more independent. The commission is handling these challenges with only 40 people on staff even though it is authorized to have 65 staff positions, including three commissioners. "We will have to fill the positions (by) making sure we offer fair compensation (and by making sure) we’re competitive with the private sector," said Morita. In April, the PUC made an unprecedented decision to reject Hawaiian Electric Co.’s action plans for the state’s transition to more renewable energy sources. The PUC’s rejection of the utility’s original proposals, or its Integrated Resource Planning Reports, was very rare, said Henry Curtis, executive director and vice president of Life of the Land, an energy environmental and action group. "It was the first time the PUC specifically rejected an IRP filing," Curtis said. Hawaii’s utilities commission is "ahead of the pack" in the steps it is taking to incorporate more renewable energy sources, said Ron Binz, the former chairman of the Colorado Public Utilities Commission. The abundance of clean energy resources and the ethic to develop those "is pretty much at an advanced stage in Hawaii where other states are just talking about a possibility," Binz said. "There is a lot of support to go green; Hawaii wants to go there." HECO submitted its 2,731-page action plans to the PUC in late August. The proposal was submitted after the PUC issued four separate rulings in April ordering the Hawaiian Electric Cos., which provides service to Oahu, Maui and Hawaii island, to reduce electricity costs and accommodate greater amounts of renewable energy generated by electric customers. HECO and its customers are still waiting for the PUC’s response to the amended action plans. "The PUC issued a pretty big order during an energy transition," said Shalanda Baker, associate professor at University of Hawaii at Manoa. "We have a very specific portfolio we have to meet by 2030. The policy piece has really been missing until now. The PUC is an innovator and it is leading the country in how it is trying to regulate the utility here." The state adopted the Hawaii Clean Energy Initiative in 2008 with a goal of getting 40 percent of its energy from renewable sources by 2030. "The high cost of energy has had a lot of impact on our economy," said Morita. "The first thing that we know for sure is that with renewable prices dropping, it is more cost effective than fossil fuels. It is not a stretch for us to be using these kinds of renewable resources because it is a cheaper option than fossil fuels." The PUCrejected the utility’s original Integrated Resource Planning Reports filed in 2013 calling the plans "fundamentally flawed"and "inadequate." "The IRP Action Plan appeared to be, in part, a series of unrelated capital projects without strategic focus on the clear issues facing the utility," said Deborah Kwan, spokeswoman for the PUC. The rulings required the utility to file a series of "action plans" with the PUC outlining its progress toward meeting various benchmarks. As energy customers wait for the PUC to respond to HECO’s action plans for the state’s transition to more renewable energy sources, the commission’s staff size and funding have proven to be a challenge. The state Legislature approved a $16 million budget for fiscal year 2015. That includes $3.9 million for the Division of Consumer Advocacy, which acts as the consumer watchdog over Hawaii’s regulated public utilities and transportation services. Additionally, almost $4 million of the budget will be used to help the commission expand its space and fill its total number of authorized staff positions. Even with the additional $3.9 million approved to help the PUC’s office expansion and increase the staff size to 65 positions, the staff is a fraction of the size of other utility commissions in states of comparable solar capacity per person. Hawaii ranks ninth in the U.S. for staff size despite having the second highest solar capacity. There is increasing frustration with the time it takes for the staff to respond to cases as the date for the end of a federal tax credit for renewable energy sources nears. The PUC currently has 72 open electricity dockets, including HECO’s action plans. A 30 percent federal tax credit available for installed solar systems ends Dec. 31, 2016. There is also a state tax credit for photovoltaic system installations of 35 percent up to $5,000 per system, which doesn’t have an expiration date. "I think everyone in the room shares the challenges and frustration of the PUC. The dockets have not been acted on in a timely manner," said David Ige, the Democratic candidate for governor, when he spoke earlier this month at the Gubernatorial Forum on Clean Energy for Hawaii’s Future. The PUC is falling behind in its workload with the number of policy decisions for utility related plans. The commission began the fiscal year that ended June 30 with 183 pending dockets, issued 804 decisions and orders, and closed the fiscal year with 186 open dockets. By comparison, Nevada, which ranks third for solar capacity per person and has more than double the staff size of Hawaii, issued 603 orders in fiscal 2014. That’s roughly 200 fewer orders — a lighter workload — than incurred by its Hawaii counterpart. "If you look at the 10 smallest PUCs in the U.S., (the Hawaii PUC) has the largest mandate and the smallest staff," Curtis said. The Hawaii PUC regulates 1,625 utility and transportation companies. Nevada’s utilities commissionregulates only 400 with 96 full-time staff members. "The PUC does the best job they can but they are underfunded and they are understaffed," said Chris Lee (D, Kailua-Lanikai-Waimanalo). "In other states, the PUCs there have far more resources and deal with less problems than we are dealing with (at HECO)." SOAKING IN THE SUN States with the highest levels of photovoltaic per capita and the staff size of their public utilities commissions in 2013. Hawaii is ranked ninth for staff size despite having the second highest solar capacity: Solar capacity in watts per person Arizona 275 Hawaii 243 Nevada 161 California 148 New Jersey 136 New Mexico 113 Delaware 82 Massachusetts 66 Colorado 63 North Carolina 57 Staff size California 940 Arizona 251 New Jersey 246 New Mexico 154 Massachusetts 140 Nevada 96 Colorado 91 North Carolina 52 Hawaii 40 Delaware 26 Previous Story Lava stalls 480 feet from Pahoa Village Road Next Story Civil Defense: Lava flow front 'relatively cold'