A balancing act

Every decision the state’s lone consumer advocate Jeffrey Ono makes is a balancing act between ensuring consumers have a voice and public utilities have the wherewithal to provide safe, reliable and adequate service in the long term.

That may not always mean backing the lowest rate, which may benefit consumers greatly but at the cost of a healthy utility, said Ono, who heads the Division of Consumer Advocacy. Though he is concerned with the seemingly ever-increasing electricity rates in Hawaii, Ono said he must be mindful that utilities need a reasonable profit margin to operate successful in the long term.

“I advocate on behalf of the consumer to keep the rates as low as possible, but the goal is not to advocate for the lowest rate with no consideration to the utility (because) we have to make sure it has a sufficient rate of return so it will continue to be a viable, ongoing utility,” he said. “We hear the consumers and we’re mindful of what electric bills are doing to businesses and residents.”

One thing Ono said he does to help reduce rates in the long term is to always question whether a project will help wean the state off its dependence on foreign fuels for electricity.

“The No. 1 reason that our electric bills are so high is we are so dependent upon imported oil as a means of generating electricity,” he said. “The goal now is to get more renewable energy so on any application I look at if it will help get us away from using fossil fuels or imported petroleum.”

As advocate, Ono is tasked with protecting and representing consumer interests before the state Public Utilities Commission, Federal Communications Commission and other local and federal agencies. State law requires Ono be the consumer advocate for all hearings before the PUC, which regulates utilities statewide, but remain independent of the commission.

From water and motor carriers to telephone and electric and gas utilities, Ono provides a recommendation that he said must be fair to both consumer and supplier. Though his recommendations affect nearly every PUC decision, he has no real legal sway, Ono and his Division of Consumer Advocacy Executive Director Dean Nishina said.

“I’m not the decision maker,” said Ono. “The PUC is the ultimate decision maker, but they always look to the consumer advocate for guidance for the proper and appropriate analysis of whatever docket is before them.”

Beside special interest groups, such as the Sierra Club, there is no other consumer advocacy group or advocate in the state, Ono said. Ono is a member of the National Association of Consumer Advocates, or NACA, a nonprofit organization with more than 1,500 attorneys and consumer advocates committed to representing customers’ interests.

Because he is a party to nearly every docket that comes before the commission, Ono did note he can appeal a PUC decision, if deemed necessary. He can also request the PUC investigate a utility.

Investigations and appeals do not happen too frequently, Ono said. On average, the office receives one complaint annually that it brings to the PUC. Appeals are also rare because an appeal can only be sought in certain instances such as an abuse of discretion or misapplying the law, he said.

“It is very limited,” he said. “The only time we’ll take an appeal is under extraordinary circumstances.”

Ono is a lawyer by trade, licensed in Hawaii, with approximately 30 years of experience. His background includes insurance defense litigation and personal injury litigation including product, pharmaceutical and premises liability, as well as work in asbestos, toxic tort and accident cases.

He also represented in the late 1990s the state in its four-year antitrust battle that alleged oil companies fixed gasoline prices in Hawaii. The litigation ended in a 2002 settlement for $35 million.

With that wealth of knowledge and experience, Ono said he is well-suited to provide the PUC with a thorough analysis that takes all aspects of the decision — from residents to businesses — into account.

“It gives me the ability to critically analyze different situations,” he said.

Ono’s salaried position falls under the auspices of the state Department of Commerce and Consumer Affairs. Like the PUC, though completely independent of the regulatory agency, the Division of the Consumer Advocacy is funded via the PUC Special Fund, which derives its income from various fees, charges and interest assessed on utilities by the PUC.

The division, which staffs 13, received $2.1 million in fiscal 2011, according to the fund’s annual report. That covers all the division’s operations, including attending all public hearings statewide and includes one visit annually to Hawaii Island, Ono and Nishina said. Ono’s office is in Honolulu.

However, getting to the outer islands to gather input beyond the mandatory public hearings, which are set by the PUC and must be announced in accordance with state law, has become increasingly difficult because of travel budget cuts, Ono said.

“I attend all public hearings — whether in Honolulu, Maui, Hilo or Kona,” he said. “And, prior to the budget (issues) we made more field visits (to the neighbor islands) to talk with the utilities and customers, but since then, those types of visits have been reduced.”

Ono said, considering the economic and budgetary constraints, the division is doing a good job representing fairly the interests of both sides to a docket.

In a perfect world, where money doesn’t limit scope, Ono said he’d like to see not only the public hearings, but also subsequent evidentiary hearings held in the area that will ultimately be affected by a PUC decision, such as a rate increase.

“The public hearing is the vehicle by which consumers on the various neighbor islands can voice their concerns and opinions about what is being requested,” Ono said. “But sometimes, the word doesn’t get out or people can’t make it, and that’s where some things get missed.”

Until then, the division is considering other ways to obtain public input without too much travel, he said. Among the ideas is creating software and surveys to collect input.

Currently, residents can visit the division’s website, hawaii.gov/dcca/dca, to keep up to date on public utilities happenings and decisions. Residents can also email Ono with input that doesn’t necessarily have to be related to any current case.