PUC majority on HECO-NextEra reached last month, but infighting stalled its release

Always Investigating

An internal Public Utilities Commission document obtained by Always Investigating indicates a majority opinion had been reached in the HECO-NextEra merger case last month, but infighting delayed its issuance.

A couple days later, that majority was thrown into limbo when Gov. David Ige replaced one of the commissioners.

A complaint given to Always Investigating alleges the PUC chairman and his then-staff counsel teamed up to marginalize the other two commissioners, but our further digging reveals discord at the commission that has the biggest business deal in Hawaii history in its hands.

The complaint takes issue with Tom Goraks’ conduct as staff attorney, and Randy Iwase’s as chair. It alleges they’ve been working together to override the other commissioners even though the chair “does not have a super vote.”

Here’s where it gets interesting. We’ve verified a majority opinion was reached in the HECO-NextEra merger case as recently as June 27, but internal squabbling over the language and access to staff attorney resources appears to have been a factor in delaying its release just long enough.

The complaint reads:

“On June 27, 2016, commissioner Champley is completely denied any legal staff support to assist him in drafting the majority opinion. He is informed that staff attorney is no longer able to assist him…This is done at the direction of chair and TG (Tom Gorak) as chief counsel and adversely impacts and impedes the commissioner’s ability to carry out his decisionmaking duties.”

We asked the PUC why the order wasn’t issued back in June, when the majority was reached. Because it’s an ongoing docket, they can’t reveal specifics on this case other than to point to standard PUC procedure, which is that once a majority is reached, orders are essentially good to go unless one of the majority voices stalls it.

It’s largely irrelevant now, because two days later, on June 29, the governor announced commissioner Michael Champley was being replaced by Gorak, a move critics and leading senators are questioning the legality of. They say a change requires Senate approval.

Besides the HECO drama, the complaint details a level of disagreement that is leading to dysfunction between the commissioners.

While the complaint blames the chairman for this, saying he’s blocking everything from resources to leadership meetings, the chair himself explained his docket deliberation process another way to Always Investigating last month:

“Everything will be in private,” Iwase explained. “What I’ve instituted here is what I call the ‘American flag process.’ That, is you get a draft, you tell the staff whether you want amendments or you want deletions.

“It’s hard to buy into a new process,” he added. “I instituted it. We’ve got to shake out the bugs, but I think this is the best way for the staff and all the commissioners to know where each commissioner is and it does require a commissioner to think.”

The complaint alleges the new process had a different effect and “enabled the chair to de facto disenfranchise these commissioners… through limitations and constraints on access to legal resources.” For example, when the draft order on HECO started circulating in May, Gorak switched roles to “adjudicator” to which the two commissioners called foul as a conflict of interest and asked for — and were denied — an independent attorney to help prepare the final order instead.

The complaint says Gorak’s “actions expose the commission to potential liability for conflict of interest and due process challenges by parties regarding the independence and integrity of the commission’s decisionmaking.”

It says there are more affected cases too — including the Green Energy Market Securitization Program (GEMS), Young Brothers, Hawaii Gas, and the Public Benefits Fee Administrator. It also alludes to human resources issues and allegations.

“We have no comment on what appears to be a smear campaign that has come to us on an unsigned document,” the PUC told KHON2 on behalf of the commission and the chair.

The complaint adds that Gorak has worked only for Iwase since Iwase came on as chair and alleges that is “contrary to the established conduct and role of the chief counsel.”

PUC-related statute 269-3(a) does state: “The chairperson of the Public Utilities Commission may appoint and employ clerks, stenographers, agents, engineers, accountants, and other assistants for the Public Utilities Commission as the chairperson finds necessary for the performance of the commission’s functions and define their powers and duties.”

So were dockets being hampered, or was Iwase’s new process moving things along? Even the governor hinted at internal discord when he told us why he didn’t want Champley to just keep serving until the Senate could convene and confirm a replacement.

“I do know and am aware that Mr. Champley had disagreed with the previous chair in the commission and on many instances had prevented the previous chair of the commission from moving forward,” Ige said on June 29, upon appointing Gorak. “There definitely is some anecdotal information, not specifics, but disagreements and I was in the Senate and I passed the measure to restructure the commission because of the challenges the commission was having.”

Gorak himself explained on the day of his appointment why he feels he has the background to do the job of commissioner, saying at his appointment press conference: “I’ve been intimately involved from the beginning. I was involved in the hearings. I have been to all the public listening sessions, and there is a draft circulating that we will review and any decision that is made will be based on the record evidence and the law.”

Champley told KHON2 on Friday, “”I have no comment other than to say the document did not come from me, was not prepared by me, nor was it submitted.”

Commissioner Lorraine Akiba did not respond to a request for comment.

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