Gas regulation Legislative proposals to regulate Hawaii's high prices of gasoline are alive but in limbo following more than four hours of debate yesterday afternoon before joint hearings of state House committees.
clears committees
Lawmakers want to hear details
of the state's $20 million settlement
with major oil firmsBy Tim Ruel
truel@starbulletin.com
The measures deserve more discussion, primarily because the terms of the state's legal settlement with Hawaii's major oil companies have not yet been made public, state representatives said. The state sued the companies in October 1998, alleging that the firms had formed a conspiracy to artificially boost retail gas prices in Hawaii.
The state settled the suit in exchange for a payment of $20 million from the five companies, according to people familiar with the deal.
One of the more innovative legislative proposals, a plan to fix wholesale gas prices as a percentage of crude oil prices, was passed out of the committees yesterday, but as a defective bill.
The move keeps the measure alive for future debate, and allows it to serve as a vehicle for other proposals.
"We need to gather more information," said Rep. Kenneth Hiraki, who was part of a three-member bipartisan group of legislators that introduced the bill.
"To me, this is a last resort," said Rep. Ed Case.
The state Department of Business, Economic Development and Tourism spoke against the measure, noting that attempts to control gas prices in the 1970s caused major problems in the market.
Linda Rosehill, a lobbyist for a coalition of four of the oil companies, said the law would be anticompetitive, and that prices are better left up to the marketplace.
The problem is that the gas market in Hawaii isn't free, said Frank Young, who testified in support of the new law.
"It's evident that this oligopolistic market has big problems," he said, referring to the small amount of competitors that serve the state. The oil companies have long been making excessive profits in Hawaii from consumers, Young said. Even if it's legal, it's not right, Young said.
A separate bill that would put gas prices under the jurisdiction of the state Public Utilities Commission was deferred by the committees yesterday for a future vote, and barely survived being killed.
The commission testified against the bill, as did the state Division of Consumer Advocacy, a passive agency that represents utility customers. Gregg Kinkley, executive director of the division, said the PUC is meant to work with monopolies, and there is no monopoly when it comes to retail gasoline sales in Hawaii.
Other measures related to the gas market were deferred yesterday by the committees.
One bill that sparked debate was a proposal to strengthen a 1997 law that was meant to prevent the oil companies from putting dealers out of business.
"They don't want dealers," Young said, because dealers help to promote competition at the retail level. In the past six months, five local Shell dealers have gone out of business, Young noted.
When a dealer walks away from a station, the new law would limit the amount of time that the oil companies can run the station before having to find another dealer. Rosehill argued against the measure, saying that the proposed three-month time limit was too short.
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