Dems say gas-cap
report ‘fixed’The consultant's study
says that gas price caps will
hurt, not help, isle consumers
House Consumer Protection Chairman Ken Hiraki accused the Lingle administration yesterday of directing changes so a hired consultant's report would recommend that Hawaii's gasoline price cap law be repealed.
"The administration wrote the study. The administration paid for this report, and basically, they got what they paid for," Hiraki (D, Kakaako-Downtown) told a news conference in Senate President Robert Bunda's office. "We'll argue that it was fixed from the beginning."
Pressed by reporters on his accusation, Hiraki acknowledged he had no direct evidence Lingle administrators ordered changes in the report.
An administration official called Hiraki's statements "patently false and completely without merit."
"We did in no way interfere, meddle or try to influence the findings and conclusions of the consultant," said Theodore Liu, director of the Department of Business, Economic Development & Tourism, which oversaw the $250,000 contract. "Their findings were based on their own data and the information on how price caps would work in a market like Hawaii."
Liu said his department served as a facilitator of the report that the Legislature mandated as part of the gas-cap law passed in 2002, noting the contract was awarded during the administration of Democratic former Gov. Ben Cayetano.
Bunda (D, Kaena-Wahiawa-Pupukea) and House Speaker Calvin Say (D, St. Louis Heights-Wilhelmina Rise) called the news conference so Hiraki and Senate Consumer Protection Chairman Ron Menor could respond to the consultant's report released Monday.
The report by Stillwater Associates LLC, an Irvine, Calif.-based firm, said the gas price caps tied to average West Coast gas prices and scheduled to take effect July 1 would not benefit consumers and would hurt the state's gasoline market. That conclusion coincides with Republican Gov. Linda Lingle's position, which was a major element in her gubernatorial campaign last year.
When asked about Hiraki's allegations, Stillwater President David Hackett, who gave a public presentation of the report Monday at the Capitol auditorium, said, "Wow!"
Hackett said he would be meeting with Hiraki today.
"I didn't have a sense there was any political influence to push it one way or the other," Hackett said. "There was a push for us to do a good report."
Hiraki noted that the Legislature directed that the report be given to it before the 2003 session, but the consultant -- awarded the contract in November -- could not meet that deadline and said it would be available in March or April.
"What happened was, once the report was submitted to the administration in March, the administration decided to hold the report because they didn't like the results," Hiraki said. "So they delayed the release of this report until yesterday."
Asked what makes him think the administration did not like the initial report, Hiraki replied, "Because they asked that it be amended, and they wouldn't release it to the Legislature."
He added: "That's why we want to invite the administration to release to us all copies of any communication between the executive branch and Stillwater Associates to let us know why was there this delay, on what points, what information had to be changed. We want to know that."
An oil industry spokeswoman supported the report's findings, saying the price caps would "create shortages, and it will increase price volatility."
"I don't think it is clear that the state is going ahead with the price cap," said Melissa Pavlicek, an attorney representing the Western States Petroleum Association. "I think the Legislature was counting on this report to tell them whether the cap would work, and in light of the findings that the cap won't work, they will have to seriously consider repealing it."
House and Senate Republicans called a news conference of their own yesterday to support the report's findings and vowing to introduce legislation next year to repeal the gas cap.
