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Hawaii governor to decide on gasoline price cap law Price controls passed in 2002 scheduled to take effect July 1 would be modified by legislation passed earlier this year, delayed to 2005 The Associated Press
With less than two weeks to go before gasoline price controls passed in 2002 take effect, Hawaii Gov. Linda Lingle is still deciding what she will do with a bill passed this year that would modify the controls and delay their start until September 2005, a member of her cabinet said.
“This is being fully and actively considered,” said Ted Liu, director of the Hawaii Department of Business, Economic Development and Tourism.
Price controls passed two years ago and scheduled to take effect July 1 allow the state of Hawaii to set a maximum price for regular unleaded gasoline sold at wholesale and retail levels. The price cap would be based on an average of prices in West Coast markets.
Lawmakers this year changed the formula, tying it instead to a national average of spot prices and applying it to all grades of gasoline, but only at the wholesale level. The proposal also delays the price controls 15 months. Governor has options Lingle, who doesn’t support the price cap, has three options.
She could veto the new bill and allow the 2002 law to take effect as scheduled. Opponents say that could lead to higher prices when the cost of gasoline in West Coast markets goes above Hawaii’s average, which has happened in the past.
But the 2002 law also contains a provision that the governor can suspend the price cap if it is determined to cause economic hardship.
Lingle also could sign the new bill and delay implementation of the price cap, although her signature could be viewed as supporting price controls.
Her third option is to let the new bill become law without her signature.
Because of various legislative deadlines, if Lingle decides to let the law pass unsigned it wouldn’t take effect until July 13, meaning the 2002 price cap would take effect, but only for 13 days.
Under that scenario, it’s unlikely price caps would be implemented or enforced because no money was provided by the Hawaii Legislature to the Public Utilities Commission and Liu’s department, which would oversee the law. An antibusiness issue Liu said price caps, even if only in place for two weeks, would add to the state’s reputation of being antibusiness.
“I think it would be a bad signal, even if it’s for a short period of time, it’s going to run that risk,” Liu said.
Magazines such as Forbes that rank the business climate of states “all talk about this price cap because that’s an example of overregulation of the business climate,” he said.
If price caps become a reality next month, but aren’t enforced, they are unlikely to have an impact, said Sen. Ron Menor, chairman of the Senate Consumer Protection Committee.
“As a practical matter, I don’t think it should be problem,” said Menor, D-Mililani, an architect of both price caps. “We’re just looking forward to the legislation we passed this last session to take effect because I think it will lead to good results for consumers.”
The average price for regular unleaded gasoline in Honolulu was $2.25 a gallon June 20, according to AAA. The average was $2.38 a gallon in Hilo on the Big Island and $2.65 a gallon in Wailuku on Maui.
The national average was $1.96 a gallon, AAA said.
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