Thursday, August 20, 2015

Who's In Control Here?

I can't stand Donald Trump.  Pundits say his appeal is his authenticity.  Yeah,  I think he's an authentic boorish a--.  But I have to admit, I do agree with him on one point - when politicians call, big corporations and/or individual big donors are expected to give.  I shudder to think that Trump may be able to win a presidential election because not going after big donors and having his own money is what differentiates him from the rest of the field. God forbid, but if he does, it may be primarily on that one truth that I, like many other people across political ideologies, am disgusted over the political influence and messaging/marketing big money donors can buy.

Politicians in big money races will sit with a contacts list making personal calls until he or she reaches their daily quota for fundraising.  That's straight from national campaign playbooks and what is expected of a politician to be a viable candidate.  Big donors make that task easier and faster. It's the big ask (surely there are different expectations when asking for couple of hundred versus thousands of dollars) that begins the vicious cycle of big donor political giving and resulting influence.  Surely, Hawaii's last gubernatorial race was a repudiation of that vicious donor/influence cycle.

So I think we need to put into perspective NextEra's "political" influence in the State of Hawaii.  That is, we are responsible for our political climate and it is our kuleana to properly support the regulatory environment NextEra must function in to align its business with the public interest.  

Back in February, during a legislative briefing on the merger, a Representative lamented about how NextEra was going to use their political clout to change Hawaii's existing energy laws.  As a former politician I found, and I think even current Legislators would find, that comment extremely offensive. Sure, NextEra can try to repeal laws or make new laws but will the Legislature allow them to do so if its a bad policy?  Those are decisions we have total control over through our elected officials and we shouldn't be blaming anyone else if we cede control over our energy transformation.

On the regulatory side, there were some information requests and comments in the merger docket regarding the Public Utilities Commission (PUC) capacity to regulate such a large corporation.  Again, this is something the State of Hawaii has total control over.  If we fail to provide the PUC and Division of Consumer Advocacy with adequate resources it will not be due to the inadequacy of the Public Service Company Tax (PSCT).  The PSCT that is assessed all public utilities is more than enough to support both agencies, however, all unspent money automatically gets dumped into the State's general fund from the PUC's special fund at the end of the fiscal year except for a $1 million carryover.

It is very laudable that the Legislature has given more autonomy to the PUC with the transfer of the PUC from the Department of Budget & Finance to the Department of Commerce & Consumer Affairs and the PUC's reorganization and modernization plans are finally moving forward.  However, it is the administrative and legislative budget approval processes that determines (or limits) the resources required to build and sustain the capacity of the PUC and Division of Consumer Advocacy to be effective regulators and advocates for consumers.

Like Hawaii's statutory energy policies, I would think it would take a huge, and not unnoticeable effort on NextEra's part, to unwind and challenge the PUC's past decisions and inclinations.  Again, these are actions and decisions that are totally under the PUC's control.

Obviously, the merger application as submitted has many shortcomings as pointed out by the Consumer Advocate as well the many intervenors' witness testimonies.  NextEra and the Hawaiian Electric Companies will be filing their response shortly to answer the concerns in those testimonies. However, speculative fear around political clout and lack of regulatory capacity should not be used as justification to turn down the application because it's us that is suppose to be in control and responsible for those realms.  We cede power and authority over a regulatory entity only if we give it up - so who's in control here?

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