PUC "Appointment" Subverts the Law

Several weeks ago, I began my post, "Searching for Prudence" with the following:

For those steeped in the regulatory realm, the Hawaii Public Utilities Commission (PUC) merger decision and order will be thoroughly dissected and scrutinized given its ramifications.  But, unfortunately, outside that realm, there is a woeful lack of understanding on the role and scope of the PUC's responsibility, the need for each commissioners' and the staffs' expertise and independence to actively participate and deliberate to arrive at best decision possible and the endurance of this institution to think and act beyond political cycles and to earn the respect of regulated entities under its charge, by establishing clear performance expectations, conduct fair proceedings and dispense well-reasoned decisions and to gain the public's confidence in its ability to fulfill and advance the public interest.

Before one gets caught up in the debate whether Tom Gorack, the Governor's choice to replace Commission Michael Champley, is "qualified" for the position or not, and if this appointment was to "influence" the outcome of the merger decision, the question that should be asked is whether the Governor had the authority to make this interim "appointment" when Commissioner Champley's term expires today, June 30, 2016.

First let me say that I am not an attorney but I can read.  The law (269-2(a)) and a related Attorney General Opinion (73-7) on this subject is pretty clear that Commissioner Champley "shall hold office until the member's [Champley] successor is appointed and qualified," thus he is legally entitled to remain as a PUC Commissioner in a hold-over capacity until the appointment process is completed.

The sequence of an appointment of a Commissioner to the Public Utilities Commission is as follows; (1) a candidate is nominated by the governor, (2) the candidate's nomination is sent to the relevant Senate committee for a public hearing to be vetted (3) when the candidate receives the committee's approval, the nomination is sent to the full Senate for a vote (4) earning the Senate's approval, the nomination is thereby given the Senate's advice and consent for the Governor to make the appointment of the candidate as a Public Utilities Commissioner.  In this sequence and only "by and with the advice and consent of the Senate" can the Governor make an appointment and thus the appointee is qualified.

I tried to compile what I have read in a question and answer format below to understand the constitution, the related laws and Attorney General Opinion that affects the appointment process:

What is the Governor’s authority to nominate candidates to boards and commissions?

Article V, Section 6, Executive and Administrative Offices and Departments, of the Hawaii constitution grants the Governor’s authority to nominate candidates to boards and commissions.  The most relevant part states:

The governor shall nominate and, by and with the advice and consent of the senate, appoint all officers for whose election or appointment provision is not otherwise provided for by this constitution or by law.  If the manner of removal of an officer is not prescribed in this constitution, removal shall be as provided by law.

Can the Governor fill a vacancy when the Senate is not in session?

Article V, Section 6 states:

When the senate is not in session and a vacancy occurs in any office, appointment to which requires the confirmation of the senate, the governor may fill the office by granting a commission which shall expire, unless such appointment is confirmed, at the end of the next session of the senate.  The person so appointed shall not be eligible for another interim appointment to such office if the appointment failed to be confirmed by the senate.

Does the constitution allow for the law to prescribe the nomination process and removal of an officer?

Article V, Section 6 states:

The governor shall nominate and, by and with the advice and consent of the senate, appoint all officers for whose election or appointment provision is not otherwise provided for by this constitution or by law.  If the manner of removal of an officer is not prescribed in this constitution, removal shall be as provided by law.

Are there laws that prescribe the selection and terms of members of boards and commissions other than the constitution?

Chapter 26-34 generally prescribes the selection and terms of members of boards and commissions.

Are there laws other than Chapter 26-34 that are specific to the selection and terms of commissioners of the Hawaii Public Utilities Commission?

Chapter 269-2 outlines the qualifications, selection process and terms of PUC commissioners.

Does the law address the status of a PUC commissioner whose term has expired when a successor has not been qualified?

Section 269-2(a) explicitly states “Each member shall hold office until the member’s successor is appointed and qualified.”

Can the Governor conclude that a vacancy exists because a PUC commissioner’s term has expired?

No, in the situation of a PUC commissioner there is consideration for a “holdover” situation.  Section 269-2(a) is unambiguous that if there is no qualified successor for the expired member’s term that the member shall hold office until the member’s successor is appointed and qualified.

Also, Attorney General Opinion 73-7 states:

Where a statute or a constitutional provision provides for a fixed term of office and until a successor is appointed and qualified, upon the expiration of the fixed term, the incumbent continues to hold the office de jure until his successor is appointed and qualified.  State v. Watson, 45 A.2d 716.

What is the status of Commissioner Champley?

After July 1, 2016, in accordance with the constitution and relevant statues and past Attorney General opinions, Commissioner Champley “shall hold office until” his “successor is appointed and qualified.”

Some have commented on the fact that Commissioner Champley himself was an interim appointment and so was current PUC Chair, Randy Iwase.  With regard to Commissioner Champley, in accordance with the constitution, Governor Abercrombie made the interim appointment because a vacancy existed to fill an uncompleted term.  The vacancy was due to the resignation and departure of Commissioner Carlito Caliboso.  Subsequently, in the next legislative session Commissioner Champley was nominated, and by the advice and consent of the Senate, was appointed.

In the case of Chair Iwase, I submitted a letter of my intent not to seek reappointment in December 2014 and left the date of my resignation open to allow for a smooth transition of the chairmanship when a candidate was selected.  The announcement of Randy Iwase was made on Friday, January 16 (the day before a long weekend and before I could start the process of my own termination) and he was placed in position just before the opening of 2015 Legislature on January 21 to be considered an interim appointment. In both cases vacancies were created through the resignations of a Commissioner who did not complete his term and a Chair who was in a hold-over position.

Here, Governor Ige is trying to force a vacancy pushing Commissioner Champley out prematurely and subverting the law and the right of the Senate to advice and consent in the process. Thereby, one can only surmise the timing of this announcement and the public comments of the Chair regarding the merger decision why these types of political antics are being played out now given the Governor's vocal opposition to the HECO-NextEra merger application from the onset and wanting to "align" Commissioners consistent with his views.  It's a very sad day in Hawaii when a decision as important as this application is tainted with political interference and cannot be decided on its merits or demerits alone by the regulator.

But more importantly, if one cannot interpret the plain reading of statutes that govern the selection and terms of the PUC commissioners and if one is not committed to protecting the integrity and independence of the PUC by speaking up and to advise the Governor that this travesty is not pono, then what is the value of a Chief Counsel in serving the PUC.  I spent most of my legislative career trying to reform, modernize and build the reputation of the PUC with my legislative colleagues, which, at the time, included the Governor, as a fair and capable regulatory agency by finding the resources to build its capacity.  My heart is heavy today watching yesterday's political farce destroy an important institution where I had grown to love and respect the staff I worked with.