House seeks to halt local gas cap

Three committees approve a measure to suspend the state's wholesale regulation

A proposal to suspend the state's gasoline price caps for 18 months starting in July appears likely to pass out of the House this session, after it received the unanimous endorsement of three committees yesterday.

Whether it will be taken up by the Senate remains to be seen. The Senate's main backer of the price cap law said he was surprised by yesterday's House action.

"I'm quite surprised that House leadership is now reversing course and flip-flopping on this issue," said Senate Consumer Protection Chairman Ron Menor (D, Mililani).

The amended measure to suspend the gas cap and in its place put transparency measures to force more reporting, monitoring and analysis of the oil industry, passed out of the House committees on Judiciary, Consumer Protection and Energy & Environmental Protection without a single no vote.

The proposal also includes strict antitrust penalties for those who are found to be violating the law and creates a special fund to finance the oversight. If, after 18 months, the transparency is found to be working, the caps would be repealed permanently.

House Consumer Protection Chairman Bob Herkes said he has no doubt there is support for the bill among his colleagues.

"Oh, yes, no question about it," said Herkes (D, Volcano-Kainaliu).

Menor, however, said his previous discussions with House leadership led him to believe that the chamber supported the price cap law. He also noted that House leaders have previously expressed support for the law, noting that it has generated savings to consumers.

"The House needs to clarify its position," Menor said.

House Majority Leader Marcus Oshiro, in a written statement, said an informational briefing on the gas cap by the Public Utilities Commission last week led him and others to conclude that more needed to be done, even if it meant temporarily sacrificing the price caps.

"Without greater transparency, we are unable to determine whether the cap has allowed unreasonable profits," said Oshiro (D, Wahiawa-Poamoho). "Therefore, I support looking at a temporary suspension, but it's critical that the transparency measures be tied to it."

Yesterday's votes bring to 23 the number of House Democrats who support either a temporary or permanent repeal of the price caps. Along with the 10 Republicans in the chamber who also have introduced a repeal proposal, the 33 votes would be more than enough to support any such measure.

"I think there's a substantial group of members of our Democratic caucus who are troubled by the gas cap and question whether it is working," said Rep. Kirk Caldwell (D, Manoa), who voted in favor of the suspension and also was among 12 Democrats who endorsed a permanent repeal.

"Watching how it's been working so far ... while there's a lot of volatility it hasn't resulted in a reduction," he added. "I think they're troubled by that and they're wondering if there isn't a better way."

Caldwell said the suspension should be seen as part of an overall package of bills aimed at reducing Hawaii's dependence on fossil fuels and increasing the vigilance over the oil industry.

"I think the caucus sees the package as a better way to deal with this rather than by just manipulating price," he said.

Energy and Environmental Protection Chairwoman Hermina Morita has been a staunch supporter of the price cap law, but said the transparency measure should be given a chance to work.

"We all know that there's a role for transparency in monitoring the industry and protecting consumer interests," said Morita (D, Hanalei-Kapaa). "We will have a chance to see transparency, to see if that is working in keeping prices fair."