PUC Annual Report–Fiscal Year 2011-12 - Public Utilities Commission

Public Utilities Commission Annual Report 2011-12
State of Hawaii Page 6
Regulatory Agencies (“DRA”) and the director gained the power to employ, appoint,
promote, transfer, and describe Commission staff, renaming the staff the Public Utilities
Division (“PUD”). The change in the director’s power over staff was done to promote
efficiency in the department and to allow the director to distribute the workload;
however, in effect, it divided the Commissioners and staff leading to General Order
No. 1 in 1966, which prohibited any ex parte communication. The Commission gained
power to hire their own attorney again in 1972 as it proved a conflict of interest for the
Attorney General to represent both the Commission and the PUD given that the PUD
now assisted the director of the DRA rather than the Commission. This power was
gained as a result of a Supreme Court case decided in 1970 where the Commission did
not side with the director of the DRA, who was using the PUD staff to present his
position before the Commission and to appeal the Commission’s decision to the
Supreme Court. The court case, which was about telephone rates, presented a
problem when both the Commission and the PUD were to be represented by the
Attorney General’s office. Meanwhile in 1969, the Office of Consumer Protection was
created which had concurrent jurisdiction with the Department of Regulatory Agencies
in matters before the Commission, creating confusion over roles and responsibilities at
the Commission. 7
In 1976, after years of debate on the effectiveness of a commission with
five part-time commissioners, three of which were commuting from neighbor islands, the
Commission structure changed from five part-time commissioners to three full-time
commissioners, removing the neighbor island commissioner representation
requirement, while establishing PUC assistant positions in the neighboring counties.
Part of the reason for this change was that the neighbor islands had a majority in the
Commission and the regulation of passenger carriers was a county-specific concern.
The PUC was moved from the DRA (later known as the Department of Commerce and
Consumer Affairs) to the Department of Budget & Finance. The director of the DRA
became the consumer advocate and the PUD became the Division of Consumer
Advocacy (“DCA”). 8
Regulatory Power of the Commission
As stated earlier, the Commission began by regulating businesses involved in the
transportation of passengers, transportation of freight, telephone, telegraph, wireless
telegraphy, light, power, heat, cold, water, gas, oil, storage and warehouse business.
As technology progressed and the Commission reorganized, the regulatory authority of
the Commission also evolved. Figure 2 describes some of the regulatory changes that
have occurred in the history of the Commission.
In the 1930s, the regulatory oversight of the Commission began to change. The
state legislature tasked the Commission with regulatory power over radio interference
7 State of Hawaii Legislative Auditor. 1975. Management Audit of the Public
Utilities Commission of the State of Hawaii, Volume I. Report No. 75-3.
8 State of Hawaii Legislative Auditor. 1989. Management Audit of the Public
Utilities Commission of the State of Hawaii. Report No. 89-17.