Gas cap revisions gain traction

The House and Senate are split on whether to amend or kill the law

A House measure to repeal the gas cap and a Senate proposal to amend it are advancing in the Legislature -- an indication that the fate of the nation's only regulations on gasoline is likely to come down to the final days of the legislative session.

Meanwhile, price caps are going up for a second consecutive week. The ceilings for next week published yesterday by the state Public Utilities Commission are 7 cents higher than the current caps.

The House and Senate are split on whether to keep the cap.

The Senate Consumer Protection Committee approved amendments to the cap law yesterday aimed at bringing down the price ceilings.

Chairman Ron Menor (D, Mililani) said an analysis prepared with the help of an oil industry expert shows that his amendments could bring down the cost of gas by about 16 cents per gallon, which would amount to a total annual savings to consumers of $68 million.

"I'm hoping that the House members will reconsider their position because of the fact that the amendments that we are proposing will generate additional savings," Menor said.

He said he would "keep an open mind" to hearing the House's bill.

"But clearly I support the Senate position," Menor said. "I think the Senate position is one that is pro-consumer and one that is designed to improve and strengthen a law that generally is working.

"The House needs to keep an open mind, and I'm hoping that we'll be able to discuss this further in the future."

The House proposal to suspend and ultimately repeal the gas cap was approved unanimously by the chamber's Finance Committee. The full House already has approved the bill on a preliminary vote but must do so one more time before it goes to the Senate.

House leaders have said they plan to force the issue to further debate in conference committee.

Meanwhile, next week's increase in the price cap comes on top of a 4-cent rise in the caps for this week.

By Monday, if wholesalers charged up to the maximum allowed and dealers added a markup of 16 cents, retail prices are expected to range from $2.64 a gallon for regular on Oahu to $3 on Lanai.

Hawaii's price cap is tied to the average of wholesale prices in the Gulf Coast, New York and Los Angeles, where costs have followed a recent rise in crude oil prices.

A key change proposed by Menor would add Singapore to the three target markets and discard the highest of the four weekly averages in setting the price caps. The measure intends to stabilize Hawaii's prices by eliminating price spikes from one specific region.

Menor criticized the PUC this week for not using its authority to make the adjustments he is proposing. He noted that the consultant hired by the PUC to assist in implementing the law had made similar recommendations.

PUC Chairman Carlito Caliboso said the commission has implemented the law according to its written intent, which states in part that the law is not meant to guarantee lower prices, but to ensure competitive market conditions similar to the mainland.

Menor said he was "in total disbelief" that the commission did not interpret the law to mean that the Legislature intended to bring down prices.

Caliboso said the commission has refrained from making arbitrary changes based on weekly market conditions in order to maintain stability and prevent any of the dire consequences predicted by some analysts.