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The Honolulu Advertiser
Posted on: Wednesday, February 3, 2010

State needs to finance energy revolution

The Public Utilities Commission gets no respect, judging by the paltry funding support it gets from the state.

Is this any way to treat an agency that plays a pivotal role in helping Hawai'i prepare for greater energy independence?

Definitely not. The commission deserves a dedicated source of funds that is not tapped for other purposes. This is especially important over the coming years when competing needs for lagging tax revenue are likely to siphon away some of its resources in the midst of essential regulatory work.

That critical job: helping the state meet its ambitious goals to rely far less on fossil fuels for energy, goals enacted through the Hawai'i Clean Energy Initiative. That initiative has set an ambitious deadline of 2030 for shifting Hawai'i onto renewable sources for 70 percent of its energy needs.

Among its many duties, the commission must review and sign off on proposals aimed at improving the electrical grid so that the system can draw on more renewable energy sources. These projects need professional study and analysis to make sure they're done efficiently, to minimize unnecessary costs and, ultimately, protect ratepayers from excess fees.

The commission gets money through the general fund as well as from a special fund from fees charged to public utilities. But in recent years more than half of those special-fund revenues have been diverted to the state's general fund.

And, like every other state department, the agency took a hit in the recessionary budget crisis, sacrificing part of its allotment.

Bills that attempt to address this problem deserve attention. The provisions of one, House Bill 2642, to be heard at 2 p.m. today in room 325 by the House Consumer Protection Committee, would boost funding levels to restore some positions lost in last year's budget cuts.

This bill and its twin (SB 2807), point to a 2007 reorganization of the commission that included increased staffing levels to do the necessary research and provide advice to the three commissioners who make final decisions.

But a better approach that would give the PUC greater security is dedicated funding. One idea that merits consideration: a boost in the barrel tax paid on imported petroleum. The environmental group Life of the Land favors a modest tax on oil and other fossil fuels, such as the coal that fires a 180-megawatt generator at Barbers Point. Extending the fee to that plant would make sense.

Blue Planet Foundation, another advocate, said the tax would help by making renewable energy more price-competitive and deter use of fossil fuels.

They're right, but this route must be followed cautiously. Such a broad-based tax should start at a low level, just enough to finance the commission, at least while the economy is weak and people are just scraping by.

A tax increase is a hard sell in this economy. But a strong, effective PUC one with the tools to make well-informed decisions is a wise investment in Hawai'i's future.