Bill delays gasoline price caps until September '05
By Sean Hao
Advertiser Staff Writer
State lawmakers last night agreed on a bill that would delay the start of the nation's only gasoline price cap law for 14 months, until September 2005.
Passed in 2002, Hawai'i's price cap law was scheduled to take effect on July 1. However, 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.
Under the bill, which is expected to come up for a final vote next week, the price-cap formula will be based on spot prices in several markets across the nation. It also would expand the caps to cover all gasoline grades except diesel. Gov. Linda Lingle opposes price caps.
In addition to the delay, the bill also would tighten up 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.
The bill also authorizes the attorney general to investigate any gasoline shortages resulting from the caps.
The PUC, which will get $500,000 to implement the program, also will have the power to adjust the price caps as needed.
"We expect the attorney general to investigate oil companies if shortages result," said Sen. Ron Menor, D-17th (Mililani, Waipi'o).
The current price cap 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; the law is intended to impose Mainland-type competition in the Islands.
However, a state-financed study conducted last year stated the current price-cap law is flawed because it caps only regular gasoline prices and bases Hawai'i prices on the volatile West Coast gasoline market.
Oil companies operating in the state maintain gasoline prices remain high because of the cost of doing business in Hawai'i and the state's high taxes.
"It's our high taxes that's the biggest problem and our high cost," said Bill Green, owner of Kahala Shell across from Kahala Mall. "I'm not in love with the oil companies. They haven't done me any favors. But that doesn't mean they're doing anything evil or illegal."
Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.
