Gasoline price cap
survives at Capitol

Legislative wrangling over
the oil industry ensures wholesale
price limits on Sept. 1

A bill that would have required state monitoring of the petroleum industry appears dead at the Legislature, a victim of a dispute over whether the governor should decide when to implement the new gasoline price cap law.

This means that the gas cap will go into effect as scheduled on Sept. 1.

The Senate and House passed differing versions on the monitoring bill, and the differences were to be worked out in conference committee. The House named its conferees but the Senate did not.

"We anticipated that the House would look on the bill as a vehicle to effectively kill the gas cap," Sen. Ron Menor, the architect of the gas cap law, said yesterday.

"The Senate's position has consistently been in support of the gas cap, and I supported the Senate president's decision not to name conferees," said Menor (D, Mililani), chairman of the Senate Consumer Protection Committee. The Senate president usually names conferees on the recommendation of the committee chairmen.

But it is the House position that implementation of the gas cap should be left to the governor, said Rep. Ken Hiraki, chairman of the House Consumer Protection Committee.

Republican Gov. Linda Lingle unsuccessfully sought repeal of the gas cap law, which was first passed in 2002 before she took office. She has said, through a spokesman, that she would exercise the authority to delay implementation, if it were given.

The one-of-a-kind law allows the state Public Utilities Commission to set a maximum wholesale price at which gasoline can be sold in Hawaii. That price would be based on the weekly average of spot prices in Los Angeles, New York and the U.S. Gulf Coast. It would not put a cap on retail prices.

The Senate Ways and Means Committee, in approving the monitoring bill, urged that it be amended in conference committee to give the governor authority over the implementation of the gas cap.

The committee said in its report that it planned to amend the bill but did not do so because of the objections of Menor, who said the amendment would kill the gas cap because of Lingle's objections.

The Senate's failure to name conferees effectively kills the monitoring bill.

Hiraki (D, Kakaako-Downtown) raised the possibility of a floor amendment and said he is not willing to concede until final action comes next week. The Legislature is scheduled to adjourn next Thursday.

The monitoring proposal can be addressed in the budget or some other vehicle, Menor said.

But Rep. Hermina Morita (D, Hanalei-Kapaa), who introduced the measure, said she believes her bill is dead because there is no other vehicle.

"I wish they (the Senate) would see the importance of the benefits of transparency," she said.

"Hawaii is so vulnerable (to fluctuations affecting the oil industry)," she said. "We need an overall oil strategy, and the bill would help develop that."

Undeterred, Morita said she will submit the bill again next year -- for the third time.

The bill would have required the Department of Business, Economic Development and Tourism to develop and maintain a petroleum industry monitoring, analysis and reporting system, which would be funded by revenues from the environmental response revolving fund.

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