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The Honolulu Advertiser
Posted on: Wednesday, March 8, 2006

Gas cap author says he's open to change

By Derrick DePledge and Treena Shapiro
Advertiser Government Writers

State Sen. Ron Menor, the main author of the state's cap on wholesale gasoline prices, said yesterday he would hear a House bill to repeal the cap and force greater transparency on oil company pricing.

Menor, D-17th (Mililani, Waipi'o), had previously said he would not hear the repeal bill but now has promised other Senate Democrats to at least listen to it and other potential changes to the controversial law. One of those changes would allow the state's Public Utilities Commission to suspend the law until January while the commission studies whether it is working.

"I will keep an open mind," Menor told his colleagues yesterday.

His comments came as lawmakers prepared for first crossover, the Thursday deadline for bills to move between the Senate and the House and a significant indicator of what legislation will go forward this session and what will die.

Menor, the chairman of the Senate Consumer Protection and Housing Committee, believes the Senate will not support a repeal but said the gas cap law will likely be amended. The law, which took effect last September, connects the state's wholesale gas prices to markets on the Mainland but has led to debate about whether it has helped or hurt consumers. Retail gas prices remain high, as do oil company profits, but Menor argues that prices would be even higher without the cap.

The Senate voted to move a bill favored by Menor that would add Singapore to the Los Angeles, New York and Gulf Coast markets now used to set the cap and make other revisions that Menor estimates would lower prices by as much as 16 cents.


Some Senate Democrats are asking Menor to hear an amendment that would require oil companies to provide more cost and pricing information, give the governor the ability to suspend the law if there is a negative impact — rather than a major adverse impact — to the economy, and allow the PUC to suspend the law until January for further study. The Senate and House would have to agree to lift the suspension after reviewing the PUC's findings.

The House, meanwhile, voted yesterday to suspend the cap in July and eventually repeal it by the end of 2007. Oil companies would also have to disclose marketing, production and distribution expenses.

All but one House member —Rep. Bev Harbin, D-28th, (Iwilei, Chinatown, Kaka'ako) — voted for the repeal, although some Republicans raised concerns about the additional reporting requirements on the petroleum industry.

"We're asking them for information we don't ask any other industry for. We're singling them out. I question whether that is constitutional," said Rep. Colleen Meyer, R-47th (Ha'iku, Kahalu'u, La'ie). But she added she was "grateful that this bill does call for a repeal."

House Democrats have said the gas cap's problems are due in part to what they call poor implementation by the PUC, but believe suspending and then repealing the law is better than trying to fix it this session. "At this time ... there is no political will to make it work," said Rep. Hermina Morita, D-14th (Kapa'a, Hanalei).


Gov. Linda Lingle has called for a repeal and House Democrats are now uncomfortably in agreement with the Republican governor on what could be a political issue in elections this year. Senate Republicans also asked Menor to hear the repeal.

"The market speaks for itself," said Sen. Bob Hogue, R-24th (Kailua, Kane'ohe). "The market has spoken very loudly that this doesn't work."

Both chambers held lengthy floor sessions yesterday ahead of first crossover, a key initial deadline for legislation. Several bills dealing with the top issues identified by lawmakers and the governor for the session — public school repairs, affordable housing, alternative energy —made it through the cutoff.

Lawmakers also moved other bills that have received attention this session, such as a remedy for the stalled Hokuli'a luxury home project on the Big Island, a three-strikes bill for violent offenders, and health insurance for uninsured children.

The Hokuli'a bill, which passed in the House, would allow the Kona project to move forward and would also protect other housing already built on agricultural land. The project was halted by Circuit Judge Ronald Ibarra in 2003 as an illegal use of agricultural land. But the developers and the activists who sued to stop the project are headed for a settlement.

Rep. Ezra Kanoho, D-15th, (Lihu'e, Koloa), said the bill is necessary "to provide the incentive for the parties to continue toward a settlement."

Sen. Colleen Hanabusa, D-21st (Nanakuli, Makaha), said the potential settlement would allow lawmakers to focus on the larger land-use issues raised by the project.

"Now people will be able to look at the issue without being clouded by Hokuli'a," she said.

The three-strikes penalty, which passed the Senate, would require criminals to serve a mandatory 30 years of their life sentences after being convicted of their third violent felony.


The health insurance bill for children, approved by the House, is targeted at kids who are not covered by Quest, the state's insurance program for the poor, or private insurance.

"This is probably a seminal moment in the history of our Legislature because we'll be the first state that actually provides healthcare for all of its children," said Rep. Dennis Arakaki, D-30th (Moanalua, Kalihi Valley).

Other notable bills that are moving include:

  • A constitutional amendment that would enable voters to elect the state's attorney general.

  • A ban on political donations by lobbyists to lawmakers during session.

  • A revision to the state's abortion law to allow abortions at clinics and doctors' offices, rather than just at hospitals, and remove an unconstitutional residency requirement.

  • An exemption for the elderly, the disabled and families with children from fast-track evictions from public housing.

  • An increase in the penalties for drivers who violate a law protecting pedestrians in crosswalks.

    Majority Democrats usually decide in closed caucuses which bills will advance, so there are rarely surprises on the floor. But the Senate voted to defeat two bills that would have permitted the testing of genetically modified taro and coffee under safeguards to protect existing crops.

    Reach Derrick DePledge at ddepledge@honoluluadvertiser.com and Treena Shapiro at tshapiro@honoluluadvertiser.com.