PUC swap pre-HECO ruling may see a fight

Hawaii Senate President Ron Kouchi (D, Kauai-Niihau) said Thursday he might challenge Gov. David Ige’s decision to appoint a new member to the Public Utilities Commission just days before the three-person panel was to decide whether to approve the sale of the state’s largest utility.

On Wednesday, Ige appointed Thomas Gorak, chief counsel for the PUC, to replace Michael Champley, whose term expired Thursday. Analysts said Gorak might be skeptical of NextEra Energy Inc.’s proposed $4.3 billion purchase of Hawaiian Electric Industries Inc.

The appointment requires the approval of the state Senate, but Ige said he has the authority to appoint Gorak on an interim basis. Ige said Gorak will take office today.

State commission or board members often continue to serve after their terms expire in a “holdover” position until a new appointee is approved by the Senate.

“We’re exploring what our options would be,” Kouchi said. “There has been concern expressed about the Senate’s authority on the advise and consent.”

Kouchi said the Senate is reviewing an attorney general’s opinion, which said that Ige’s actions were appropriate.

“That document has been conveyed to us, and we’re reviewing it to make a determination,” Kouchi said.

PUC Chairman Randy Iwase said Thursday he hopes Gorak will take over as commissioner today, but the talk about the interim appointment’s legality makes it unclear.

“We don’t know if anyone is going to file legal action or what,” Iwase said. “It is something we will move forward with when things clear up. I would hope that tomorrow would be the first day as (Gorak’s) interim term as the commissioner.”

Iwase said he did not speak with Champley on Thursday. “His door was closed when I left, and I left him a note,” Iwase said.

Champley could not be reached Thursday.

Ige has said he is opposed to NextEra’s takeover bid.

HEI’s stock price fell following Ige’s appointment of Gorak. Thursday’s price decline was the steepest in more than six years.

Gorak’s appointment to the panel could threaten the NextEra deal, stock market analysts said.

“Gorak will be more in line with Chairman Randy Iwase, who has indicated concerns with the deal,” Peter Cohn, an analyst with Height Securities LLC, wrote Thursday in a research note. Outgoing commissioner Champley is a former utility executive who was seen as “potentially sympathetic” toward the merger, according to Cohn.

HEI’s stock fell as much as 8.2 percent intraday to $31.64 before paring its loss to finish down 4.9 percent at $32.79, off $1.69. The last time HEI’s shares closed down that much in a day was on Jan. 27, 2010, when they fell 5.1 percent.

“The prospects for the merger to be denied could be perceived to be higher, given the fact that the governor, who has voiced strong opposition to the deal, has appointed a new commissioner shortly before a decision is expected,” said Paul Patterson, a New York-based analyst at Glenrock Associates LLC.

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Bloomberg News contributed to this report.