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It is a tragic irony that for decades the Public Utilities Commission, which is supposed to keep a careful eye on HECO, has seemed so, well, powerless.

For a generation, as the commission wrote blank check after blank check to the energy industry, it felt like they might never run out of ink.

The problem was that those checks were written from an account that is ultimately paid for by you and me.

But now, after all hope seemed long exhausted, the PUC has found its courage.

Tired of the same old HECO excuses for still-soaring electric rates and a reluctance to ween itself off of oil, the PUC blasted Hawaiian Electric Co. in a decision in May on a rate case concerning the utility’s Maui subsidiary. The commission laid into HECO for failing to pursue every avenue to bring down costs and it ordered the company to return $8 million to customers.

On the same day, commissioners said they would revisit a legislative decision that guarantees HECO a minimum level of profit at the same time the company works to decrease energy use. The PUC says the “decoupling” program isn’t working the way that it was intended to, and launched an investigation.

Collectively, those two actions suggest that the PUC is putting the “public” back into the Public Utilities Commission.

“We have a choice to preside over various regulated activities, or we can lead,” PUC Chair Mina Morita told Civil Beat. “This commission has chosen to lead.”

The commission seems to be remembering how powerful it can — and in some cases should — be in regulating the private company that provides power for 95 percent of Hawaii. Put another way, it is as though they are saying, on the blank check-writing front, that the ink stops here.

The current commission — comprised of Morita, Mike Champley and Lorraine Akiba — has been together a year now and has had a chance to gel into a cohesive force. The Maui rate case decision, which HECO is appealing, marked the first big one that the current commission team has seen all the way through.

Everyone from HECO executives to environmental nonprofit leaders are gauging the changing winds.

Some wonder if the decision on the Maui rate case is a one-shot deal.

Sally Kaye, a Lanai resident and member of a on how to integrate renewable power sources, said it’s too early to tell. The Maui case may simply have been an easy one for the commission to stand up on.

But in its 156-page decision, issued May 31, the commission promised that Maui Electric Co. will not be alone in facing much-deserved scrutiny. In several references, the commission put HECO companies on alert for their next round of proceedings that largely decide rates.

Pension costs are almost certain to get a closer look given that the commission slammed the utility for not even considering its soaring retirement costs as an area where reforms could bring down record-high electric bills.

The cost of employee pensions for the Maui company more than doubled in the three-year period up to 2012, when it reached almost $9 million, according to documents filed in the rate case.

Although it is common in the utility industry for the company to pay 100 percent of those costs, the commission said the company should consider changing its pension structure.

In its decision, the commission called it “presumptuous and unreasonable” for the HECO companies to assume they have a “blank check” on employee benefit expenses or that customers should pay for all of the cost increases.

The commissioners said they expect all HECO companies to aggressively pursue every effort to control and reduce employee benefit costs, not just to defer them.

Oh So Studious

The electric company’s financial accounting on its numerous long-term studies also came under the commission’s microscope.

The utility company comes across as very studious — perhaps too much so. The utility wants to do a total of 18 studies; five operational, four related to integration of renewable energy resources, and nine dealing with transmission and distribution. And MECO expected to extend them over a period of several years, even though they have uncertain schedules and budgets.

The Consumer Advocacy Division, a small state-funded agency headed by Jeff Ono that advocates in the public interest, characterized MECO’s planned future studies as “discreet and expensive.” That seems to mean that they spend a lot of money for studies that don’t have much or any visible impact.

Ono proposed cutting the company’s current annual budget expenses for these studies by 25 percent. The commission agreed with Ono, only more so. It hacked the budget for studies down to 50 percent, or to just under $2 million. The PUC justified the action partly by the fact that some past studies were never fully implemented.

The commission said it is concerned after it noticed a trend in which HECO companies increase the number of studies that they incorporate into rate-increase requests. “While technical studies may be necessary, perpetually studying the same or similar issues has no value for ratepayers and should not be an excuse for failure to act when it is in the customers’ interest to do so,” the commission concluded in its decision.

“It is reasonable to expect a disciplined, cost-controlled, well-managed company would be able to find off-setting cost reductions when there is a need to perform technical studies.”

Blowing It?

If the Maui decision is any indication, wind generation projects appear to be slated for closer scrutiny, too.

After all, MECO is simply wasting a substantial amount of wind energy every year. Why? It’s current generation system can’t integrate the outside energy efficiently. The commission says the utility should have prepared better to integrate new renewable energy producers all along.

The commission says that using the wind energy that is already available through existing systems could halve the electric rate, and spare the equivalent of nearly $7 million worth of imported oil.

By not using this energy generated by wind, the commission says, MECO is wasting more than 15,600 megawatt-hours of energy annually. That’s enough to power almost 1,800 homes, based on national consumption averages.

Given that the utility expects wind energy production to more than triple on Maui, that would suggest that more than 6,000 homes — almost 10 percent of Maui — could effectively be powered solely by wind each year. But that won’t happen anytime soon because the power company doesn’t have a system in place to distribute that energy.

That’s not all the utility’s fault though, HECO says.

The company’s vice president, Robbie Alm, lamented to Civil Beat that the commission operates at a snail’s pace, the bidding process for new projects is incredibly slow, and decisions on rate issues take years to resolve.

But the commission gave the Maui utility 90 days to respond with plans to address wind energy curtailment. And the agency intends to put more public pressure on the company to take action in the public interest.

By the end of June, MECO must begin to post crucial information on its website, including how much wind energy it accepts per month, how much it dumps per month, and the estimated cost to customers like you of not being able to utilize the wind power since January.

Over the past couple decades, Alm says, the Department of Business, Economic Development and Tourism has effectively acted as the state agency that sets Hawaii energy policy.

The utilities commission had been operating more as an appellate court, making decisions on a case-by-case basis as issues were brought before them. A renewable project here, another there.

The commissioners say they are now more focused on the big picture, how all the pieces work together to achieve long-term goals including sustainability, and reduced costs.

“You’re looking at a systemic change,” Morita said, noting the importance of driving a transformational process that brings broad benefits.

The Winds of Change

The goal isn’t for the PUC to essentially run a business, Alm suggested. The HECO vice president said that if regulators conclude that the company isn’t acting in the public interest, then they can intervene.

Akiba, who became the commission’s newest member last July, said the commission has evolved. “We’re not just presiding, we’re leading,” she said.

Henry Curtis, executive director of Life of the Land, a non-profit environmental and community action group, wonders whether the commission will be able to navigate through these complicated issues, or whether it might accidentally worsen the situation.

“Can the rates be kept as they are,” he asked, “or are they going to go through the roof?”

Morita acknowledged that the commission is working to restore public trust, and bolster transparency. She said that amid the many different opinions, the goal is to define “the public interest and what decisions are for the greater good.”

And ultimately, that means lowering your monthly bill.

Those on the emboldened commission seem to understand that great power can corrupt. Now they have to decide about the effect of over-priced power.