• Allow a price cap law passed in 2002 to take effect July 1, but suspend it by exercising emergency powers — a decision some may view as anti-consumer. That would require written warning of a veto before June 29 to a recently passed bill that delays price caps.

• Sign the bill to delay price caps, which could be viewed as support for gasoline price controls.

• Allow the price-cap delay bill to automatically become a law without her signature.

If allowed to become law without her signature, that bill, which is designed to fix flaws in the current price-cap law, wouldn't take effect until July 13. That means that two years after being passed by lawmakers, the original law setting ceilings on retail gasoline prices would take effect July 1 and last until July 13.

However, under such a scenario, it's unlikely price caps would be implemented or enforced because no money was provided by the Legislature. Additionally, the Public Utilities Commission and the Department of Business, Economic Development and Tourism, which would implement the law, have said that deadline cannot be met.

Still, becoming the first state to enact gasoline price caps would be a dubious honor for Hawai'i, which is saddled with a reputation of being unfriendly to business.

"I think it would be a bad signal, even if it's for a short period of time, it's going to run that risk," said DBEDT Director Ted Liu. Magazines such as Forbes that rank the business climate of states "all talk about this price cap because that's an example of overregulation of the business climate."

Just what Lingle will do has yet to be decided, Liu said.

"This is being fully and actively considered," he said. "It's an important issue."

If price caps become a reality next month, but aren't enforced, they are unlikely to have an impact, said Sen. Ron Menor, chairman of the Senate Consumer Protection Committee.

"As a practical matter, I don't think it should be problem," said Menor, an architect of both price- cap policies. "We're just looking forward to the legislation we passed this last session to take effect because I think it will lead to good results for consumers."

Act 77, the price-cap law scheduled to take effect July 1, ties Hawai'i prices to those on the West Coast. It was passed after the state settled a price- fixing lawsuit with refiners for $22 million and is intended to artificially impose Mainland-type prices in the Islands.

Under that formula Honolulu's retail prices for regular next week would be capped at $2.19 a gallon, though at various times this year the ceiling would have been greater than $2.30 a gallon. That compares with an O'ahu average of $2.25 a gallon yesterday, according to the AAA travel club. While that may seem attractive, a state-financed study conducted last year said the current price-cap law would lead to higher prices and potential shortages.

Under the bill amending Act 77, the price-cap formula would be based on spot prices in several markets across the nation. It also would expand the caps to cover all gasoline grades except diesel.

In addition to the delay, the second bill would tighten a provision in the law that gives the governor discretion over whether to implement price caps. The bill sets a higher threshold for the governor to suspend price caps. If Lingle were to suspend Act 77, price caps would not be implemented until after the next regular or special session.

Act 77's proponents acknowledge its flaws, but maintain that the law could reduce prices over time.

"It has flaws in it, but it could have worked," said Frank Young, president of the Hawaii Automotive Repair and Gasoline Dealers Association and an advocate for gasoline price controls. "Prices would be higher at times, but this summer it would have been lower.

"It's going to be tough for (Lingle) to rationalize a veto because she's going to have to veto the thing that will make things better (in Act 77). She's got a tough job," Young said.

Hawai'i's high gas prices are the result of a number of other factors including the state's low-tech, small-volume refineries that process expensive forms of crude oil. Local refiners also charge higher prices for gasoline to compensate for lower-margin products such as jet fuel and fuel oil used to generate electricity. Shipping crude oil to the middle of the Pacific also increases prices.

Oil companies operating in the state also maintain that gasoline prices are high because of the cost of doing business in Hawai'i and the state's high taxes. Melissa Pavlicek, a lobbyist for the Western States Petroleum Association, which represents Chevron, Shell and other oil companies that operate in the state, said the group is opposed to both versions of the price caps and instead favored an outright repeal.

"It doesn't address the real reasons prices in Hawai'i are higher," she said.

"It's simply delaying the gas cap and won't address the fundamental flaws. Repeal of the flawed legislation is the only way to solve some of the problems that would be created by a gas cap."