Lingle urges legislators
to put brakes on gas cap

With less than a month to go before Hawaii's gasoline price cap takes effect, Gov. Linda Lingle is again calling on the Legislature to reconsider the program because she says it will hurt consumers.

The state Public Utilities Commission, charged with overseeing the price cap, published this week its rules and the formula for calculating the maximum pretax price at which gasoline can be sold at wholesale levels beginning Sept. 1.

It remains unclear how prices at the pump will be affected, because there are no limits placed on retail prices. Supporters say the cap will bring down costs for suppliers, who could pass the savings along to motorists.

In a meeting with reporters yesterday, Lingle recalled failed attempts by the federal government to regulate gasoline prices in the 1970s as an example of what is likely to happen when Hawaii's law begins.

"I think it will lead to shortages of gas, it will lead to higher prices, it will lead to a negative business reputation for our state," Lingle said. "I've been as clear as I could be with the Legislature.

"If they wanted to go into a special session now to delay the gas cap, I could give them my word that I would sign a bill to delay it, but they would have to take that step first."

A special session would require two-thirds approval of members in both the House and the Senate. Democrats, who control both houses, have repeatedly said the issue of whether a price cap is justified has been thoroughly examined since the proposal was first introduced and passed in 2002. The legislation has been revised twice since then.

Sen. Ron Menor, one of the authors of the gas cap law, said the commission's rules validate the Legislature's intentions.

"The law that the Legislature passed gave the PUC the authority to review the gas price cap formula adapted by the Legislature and make any necessary revisions to the law," said Menor (D, Mililani). "After receiving information and documents from various parties, the commission concluded in its order that it is appropriate to implement the gas price cap law."

Lisa Kikuta, a PUC researcher, said all outstanding issues, including those raised by oil companies, have been addressed, and the rules are set to begin as scheduled next month.