Experiment’s end

Lingle hopes legislators will consider regulating gas companies

Gov. Linda Lingle signed a bill yesterday ending Hawaii's cap on wholesale gasoline prices, saying there is probably no way she would ever use the power the new law gives her to reimpose price controls.

But before signing the bill, the governor suggested that lawmakers should consider a system to limit oil company profits in the islands. She plans to submit a resolution to the Legislature next year seeking a study of possible state regulation of the industry.

"I can't see any condition that I would reinstate the gas cap," Lingle told reporters after speaking at a convention of the Hawaii Credit Union League in Waikiki. "It's a bad idea, and it's not going to keep prices down for Hawaii."

The new law passed by the Legislature on its last day, Thursday, gives Lingle, a longtime critic of the gas cap, the power to bring back the controls if she thinks fuel prices are too high.

The original law brought Hawaii's wholesale gasoline prices under state control when it went into effect Sept. 1. However, local retail fuel costs continued to rise, making it difficult to know what impact the law had for consumers.

"I am pleased that Hawaii consumers will no longer be subject to the failed experiment to artificially control gas prices," Lingle said in a statement following the signing.

The new law went into effect immediately with Lingle's signature. But Lingle said she could not predict how soon consumers would see any difference in their gas prices -- either up or down -- once fuel companies are again allowed to set their wholesale prices as high or low as they want.

"It's such an artificial mechanism that you really don't know what the true market is right now," she said.

Lawmakers' efforts in combating rising fuel prices are better spent on helping to develop other energy sources for Hawaii, such as the energy bills passed by legislators this session, Lingle said.

One measure increases the cap on the state income tax credit for installing solar panels on a single-family home to $5,000 from $1,750, and for businesses to $500,000 from $250,000. Another authorizes a pilot project to begin installing the energy-gathering panels on the roofs of the state's schools.

Lingle said Hawaii could also consider regulating gasoline companies similar to the state's electric companies and interisland barge services.

"If gasoline is such an important commodity and people feel it's important, just as we do with electricity, then we should look at considering having the Public Utilities Commission, in fact, regulate how much profit a gas company can make, an oil company can make here in the state," she said.

Lingle said she planned to at least submit a resolution for the 2007 legislative session to request a study of gasoline company regulation and whether it would be appropriate for Hawaii.

Few believe repeal will help prices

Most customers at Lex Brodie's on Queen Street in Kakaako were pessimistic yesterday about whether the repeal of the state's wholesale gas cap will lower prices.

"There shouldn't have been one in the first place," said Wanda Arvin, who was getting regular unleaded gas for her Oldsmobile Cutlass, which she said is "all I can afford, and that's a stretch."

She predicted prices are "probably going to stay the same."

The cap "raised the price of gas," Arvin said. "Their objective was to compare it to prices on the mainland. Hello, I don't think so."

Christina White, a passenger in a Chevy Tahoe, a large sport utility vehicle driven by her husband, said, "If it makes the gas go down lower, the prices lower, then it makes it good for everyone. With the gas cap, the prices weren't going down. Seemed it went 14 cents up, 11 cents up and down 5 cents."

Her husband put in $50 worth of regular unleaded, which at $3.22 a gallon did not fill his tank.

"If it helps us, it'll be great," said Carol Santucci, a passenger in Mitchell Valbuena's car. "According to what we've been hearing, it's pushed the gas prices up."

Valbuena added, "I think what the state ought to do is have an investigation on the gas companies and find out why the prices are so high. If it's legitimate that the gas is high, OK. But if they're making beyond their normal profit margins in the last five years, then I think we ought to sue them, but penalize them without having to go to court."

Chris Yamaguchi was resigned to higher prices.

"To me, it doesn't really matter," he said. "It's like any other thing -- prices are going to rise anyway. To me, you just got to expect it."

Donnie Esposito felt the gas cap was purposely designed to be confusing.

"To me, 'cap' means they're going to put a cap on it, but it seems like they're allowing the gas stations to charge whatever they want," she said. "The profits these big oil companies are making, it just doesn't seem fair."