3 oil firms want
gas cap delayed

More data are sought on the law's
impact on the state economy

Three oil companies have asked that implementation of the state's unique gas price cap law be delayed so more work can be done to determine its effect on the economy and consumers.

Shell Oil Co., Tesoro Hawaii and Chevron USA filed papers Friday with the state Public Utilities Commission, saying they also need more time to determine how the law's stipulations will be affected by an April 2006 mandate for Hawaii's gas to be blended with ethanol.

The PUC will make a ruling on the law's implementation before it goes into effect Sept. 1.

"This delay would allow more time for the administration, Legislature and PUC to further analyze the potential impacts of the proposed price cap mechanism," wrote Chevron in an 87-page "position statement" to the commission, which also included stinging critiques of the law.

"We also recommend," Chevron continued, "that the state re-examine the current gasoline market in the context of an excessive regulatory environment and, rather than implement laws that interfere with the normal operation of the market, it develop policies that would help refiners and marketers reduce costs and further the competitive operation of the market."

Kris Nakagawa, chief legal counsel for the commission, said he was still sorting through the documents and could not comment on their contents. "They (commission members) will consider all of the positions presented by the parties and then make a decision," he said.

The law requires the commission to set a maximum pretax wholesale price at which gasoline can be sold in Hawaii based on the weekly average of spot prices in different parts of the nation.

In addition to asking for a delay, the gas companies called on politicians and the governor to repeal the law. Gov. Linda Lingle has been a staunch opponent of a price cap and has introduced proposals in the House and Senate to have the law repealed.

But Sen. Ron Menor, co-chairman of the Senate Consumer Protection Committee, has said he would deny a hearing for any such bill in the Senate.

State Division of Consumer Advocacy Executive Director John Cole said in documents filed Friday that the commission could consider implementing the gas cap law but not enforcing its consequences for non-adherence in the short term.

That would allow economists to determine the law's effect on the economy, Cole said, without penalizing oil companies that are not ready or able to comply.

The Hawaii Petroleum Marketers Association, which also filed documents with the commission, called for a similar setup "until a better understanding of the law is known," and also made recommendations on how the gas cap should be calculated.