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HomeMy WebLinkAboutCOM 1012.001 2008-2010 Page 1 of 1 Murashige,Laura rQMM. iUI PI COUNaL From: Nami Ohtomo [nohtomo @htbyb.com] Sent: Tuesday, November 16, 2010 9:37 AM L J t { �j r "``` 1 To: counciltestimony @co.hawaii.hi.us Subject: Resolution 412 -10 Testimony from Young BrothersLtd, Attachments: YB Testimony Res 412 -10 Final with Attachments.pdf Aloha, Please find attached testimony by Young Brothers Ltd, submitted in support of Resolution 412 -10. Mahalo. Nami Ohtomo Young Brothers, Limited (808) 543 -9493 nohtomo @htbyb.com Comm. N. ! o 11. Ref. To: VALWZI Ref. Date NOV 17 Z(11% 11/16/2010 Pier 44 Pei 3206 01-32 yo G Ph: (030(1.5414111 Fax 0 30 4 5434458 ngbmthershawanm Your Neighbor Island Partner HAWAI'I COUNTY COUNCIL THE HONORABLE J YOSHIMOTO, CHAIR THE HONORABLE EMILY I. NAEOLE, VICE CHAIR Resolution 412 -10 Council Meeting on November 17, 2010 Testimony of Roy Catalani on behalf of Young Brothers, Limited WRITTEN TESTIMONY ONLY Chair Yoshimoto, Vice Chair Naeole, and Members of the Hawai'i County Council: Thank you for the opportunity to testify on Resolution 412 -10. Young Brothers supports this resolution. Resolution 412 -20 would "encourag[e] the Public Utilities Commission to initiate neighbor island public hearings regarding approval of Pasha Hawai'i Transport Lines as a Hawai'i water carrier." On September 20, 2010, the PUC issued an Interim Decision & Order allowing Pasha to begin services only to select and profitable neighbor island ports with service once every two weeks, using its vessel the Jean Anne, which Pasha describes as a "pure car truck roll -on roll -off vessel." In comparison, with its seven barges dedicated to regulated service and a $100 million investment in Hawaii operations over the last five years, Young Brothers provides 12 sailings per week to serve all islands at six neighbor island ports, both profitable and unprofitable, and transports freight of all kinds, both profitable and unprofitable. As a regulated water carrier governed by Hawaii Revised Statutes Chapter 271G, we are obligated to provide such universal, frequent, yet affordable service. However, the recent PUC decision provides a lesser set of rules and service expectations for Pasha under which it may deliver solely profitable cargo to profitable ports, while Young Brothers is required to deliver (and has invested to deliver) to a much higher standard of service and frequency. Most significantly, allowing Pasha to 'cherry - pick' profitable cargo on "profitable routes" will change the economics of Young Brothers' statewide service and threaten our ability to continue providing our current level of service to all islands. The PUC decision puts our company's customers, employees, and investors at risk. This risk, in particular, justifies a public hearing at which Big Island residents should be given an opportunity to be heard. youNG pier . Ply 5=3" Ho �cslulu, Hl95801 -: 2ga Ph: Olt 441 t Fax OM) 543 -94 itwupyurxgb r otf Hersh amoral I .ca rn Your Neighbor Island Partner Young Brothers supports this resolution, for reasons stated in writing by community members and legislators. Recent letters to the PUC and /or Consumer Advocate and newspaper editorials that may be of interest to the Council are attached to this testimony: • November 5, 2010, joint letter by Hawai'i County state legislators: Sen. Dwight Takamine, Sen. Russell Kokubun, Sen. Josh Green, Rep. Clifton Tsuji, Rep. Robert Herkes, Rep. Jerry Chang, Rep. Denny Coffman, Rep. Faye Hanohano, Rep. Mark Nakashima, Rep. Cindy Evans; • October 14, 2010, letter from Mae Nakahata, President of Hawaii Farm Bureau Federation; • October 14, 2010, email from Alan Gottlieb, President of Hawai'i Cattlemen's Council; • October 14, 2010, email from Richard Ha, President of Mauna Kea Banana Company (dba Hamakua Springs); • October 15, 2010, West Hawaii Today editorial by its editor Reed Flickinger, entitled "PUC should reopen for neighbor islands Pasha's application;" and • November 15, 2010, Honolulu Star - Advertiser guest commentary by Warren K. Watanabe, executive director of the Maui County Farm Bureau, who also oversees transportation issues for the Hawaii Farm Bureau Federation. Also attached are letters submitted to the PUC by legislators in 2009, prior to the PUC's decision. Please note that many other community letters are also on the public record, under PUC docket #2009 -0059. Thank you for this opportunity to testify. \ a .RY. PA ;•.au�� abuat`t'tate Iegt5tature STATE CAPITOL HONOLULU, HAWAII 96813 November 5, 2010 VIA ELECTRONIC AND REGULAR MAIL The Honorable Carlito Caliboso Mr. Dean Nishina Chairman Executive Director State Public Utilities Commission Division of Consumer Advocacy 465 South King Street, Room 103 Dept. of Commerce & Consumer Affairs Honolulu, Hawaii 96813 335 Merchant Street, Room 326 Honolulu, Hawaii 96813 • Re: Application by Pasha Hawaii Transport Lines LLC - Docket No. 2009 -0059 To the State Public Utilities Commission and the State Consumer Advocate: We have reviewed your Decision and Order, dated September 20, 2010, in the case mentioned above. Many members of the Legislature shared and voiced very serious concerns about this case, and continue to have serious questions about both its process and result. Many of us have already pointed out to the Commission that, as members of the State's policymaking body, legislators must necessarily focus on issues involving the health of the State's economy. Those of us representing the Neighbor Islands are especially aware that the water cargo transportation industry plays a major role in sustaining our islands. This industry is pivotal in directly and indirectly shaping how Neighbor Island residents and businesses live and thrive. More specifically, the economy of the Neighbor Islands depends heavily on universal, frequent and reliable barge service provided by Young Brothers. As such, we earlier respectfully requested that this Commission exercise extreme caution in reviewing any proposal that may change the economics of its existing comprehensive intra -state freight system upon which the Neighbor Islands so heavily rely. Legislators also emphasized it is essential that you, as persons living and working on O`ahu (and entrusted to carry forth legislative policy in a case which so directly affects Neighbor Island residents), take the necessary measures to completely and truly understand the importance of Young Brothers' intra -state freight system and the health of this system to those who live and work on the Neighbor Islands. In particular, legislators called for both public hearings and an evidentiary hearing because residents had and have too much at stake for any lesser process. November 5, 2010 Page 2of2 Open government is the policy of this State. As you know, public hearings are an essential part of open, effective and accountable government. A public forum ensures not only that the public has an avenue to voice concerns, but also that government agencies are well - informed and made aware of, among other things, community concerns regarding risks of harm. It is particularly important that those individuals and communities who have much at stake and will potentially be impacted by agency decision - making have this opportunity to be heard. In cases where issues of public importance are heavily contested, evidentiary hearings are equally important. These hearings foster the development of a proper and complete record as a basis for good decision - making by, among other things, providing a forum for the testing of positions by the parties as well as the Commission. We believe that the present case should have included, before any PUC decision, the safeguards of public and evidentiary hearings, as part of ensuring careful review and public confidence in the result. This critical case should not have been closed without the benefit of the best available process and this process should have included public participation so that concerns and impacts, widely stated by both legislators and their constituents, could have been discussed, argued and heard in the view and with the participation of the public. Again, we call upon the Commission to reconsider the action taken and to hold public hearings on all islands in reconsidering this matter. We also call upon the Commission to employ all other available processes to ensure a well - developed record that reflects rigorous participation by all parties and the Commission and that includes the opportunity to question and test adverse witnesses and the opposing positions presented in this matter. If you have any questions about this matter, please do not hesitate to contact us. Like our constituents, we also look forward to the opportunity to be publically heard. Sincerely, F3 0,14,e)A4 . 44-- 'I _t .9., I, /54,„ Sen. Russell Kokubun Sen. Dwight Takamine Se osh Green GOP t011itect 41/ . Rep. Clifton Tsu(4;;;Ikly...N:\\ . Robert Herkes Rep. J-rry Cha D A V - 0 ‘°4. Rep. Denny Coffman Rep. aye Hanohano Rep. Mark Nakashima Rep. • dy Evans Hawaii Farm Bureau P 1 U 1 1 A T 1 0 M 2343 Rose Street, Honolulu, HI 96819 Phone: (808) 848 -2074; Neighbor Islands: 1-800-482-1272 Fax: (808) 848 -1921; e-mail: info @hfbf.org October 14, 2010 State Public Utilities Commission Consumer Advocate 465 South King Street, Room 103 P.O. Box 541 Honolulu, Hawaii 96813 Honolulu, HI 96809 Re: Interim Decision and Order Granting Pasha Hawaii Transport Lines LLC a Certificate of Public Convenience and Necessity - Docket No. 2009 -0059 Chair Caliboso, Members of the Commission and Mr. Nishina: Hawaii Farm Bureau Federation on behalf of commercial agricultural operations throughout the State has serious concerns regarding the interim decision granting Pasha Hawaii the right to provide selected interisland transportation services. We believe the entry of Pasha will have a serious negative impact on the movement of agricultural goods between islands. HFBF submitted such comments on April 28, 2009 and we strongly oppose the recent interim decision. This is another case of State policy stating support of agriculture but in the final decisions, implementation actions continue to treat local agriculture as the "spare tire" only to be used in times of emergency. The PUC recognized the State's Constitutional provision stating the importance of local agriculture to Hawaii's self sufficiency and granted YB the ability to provide up to 35% discounts for transport of fresh local island agricultural products. This latest decision does not appear to be consistent with the PUC's prior decision. Pasha's statement to PUC states it has wide based support including two state legislators but fails to state that this support was subsequently withdrawn when these two legislators recognized that the proposed service was not going to be complete. The change of position was sent by Speaker Say and Chair Souki on November 27 and published in the Advertiser as well. This was well within the period of document 21! submittals yet Pasha neglected to correct their original statement, and the PUC decision does not recognize this letter. This is to emphasize concern is not just from us as Farm Bureau. Others have equally expressed concern. The policy within the Hawaii Water Carrier Act, governing these proceedings, clearly states that services must be provided without "unjust discrimination, undue preference or advantage or unfair or destructive competitive practices ". HFBF argues that this decision may be creating just such a situation. PASHA will not transport perishable commodities ...no refrigeration ...that means all fresh agricultural products will be left with YB. This will include refrigerated consumer goods so impact will be to the entire community. 1) Major agricultural production occurs on neighbor islands ...and even production on Oahu, the major population center, is shipped to the neighbor islands ...Interisland transportation is critical to Hawaii. Farm Bureau has worked with YB to implement an "island Product" discount that is up to 35% of shipping cost. We clearly understand that this discount is being subsidized by other lines but is important to local agriculture competing with mainland imports that at times pay no freight ...Why? Because the mainland imports piggyback on other heavier cargo, taking advantage of space and getting a "free ride ". YB has said this discount may go away if their revenue streams decline with Pasha's entry into the marketplace. 2) Frequency of Service is important to us. Our customers rely on Just in Time service. Since its implementation by the auto industry, businesses have recognized the value of not having large inventories. In the case of fresh agriculture products, the key is fresh ...they want it soon after it is harvested - not 1 week old ...so they want frequent deliveries. YB may be forced to modify the frequency of their service as shipping volume declines. This will mean less fresh product, leaving our farmers and ranchers to use air transport which tends to be significantly more expensive. YB's purchase of the larger barges has improved productivity and we have no doubt that it has contained costs. But Maui, as a tri- island County has been impacted. Cattlemen on Maui island who want to ship cows to Molokai to take advantage of the grazing lands there face higher costs. Maui cattle need to go through Oahu first before arriving in Molokai. impacts are already happening ...with 31 Pasha it will get worse if the frequency between the major islands is reduced. 3) YB has invested in infrastructure. They have improved their barges and there will be more improvements needed as new Food Safety regulations and efforts to reduce invasive species are ramped up. While all cargo carries invasive species, it is the agricultural products that has the highest risk - so all of this cargo, left with YB is of higher cost and require more investments. How can you take away business from an entity and then ask them to invest more money for the business they have left? Currently the cargo volume is down, so even a small loss of cargo can result in major impact. Shareholders of YB may not be willing to further invest in a business that they believe is of high risk. What to do? PUC recognized the selective services proposed by Pasha. Yet, in the D &O, states "Given the critical importance of the inter - island shipping industry in the movement of produce, livestock, and consumer goods within the State, the commission believes that the continued reliance on only one intrastate water carrier of property places the State in an untenable position." This does not make sense. Pasha is NOT going to carry produce, livestock and refrigerated consumer goods ...so what advantage will there be? If anything, we are putting the transport of these goods at risk. We urge PUC to reconsider the risks associated with this class of goods. PUC has reserved the right to revoke the interim authority if it sees significant adverse effect on YB. What is "adverse effect "? The authority was granted because PUC felt that the projections provided by YB were speculative at best. So, what is adverse effect? 1) There could be a "boiling frog" syndrome where the changes may not cross an "adverse condition" test in the short term but cumulatively prove to be detrimental. 2) If the 35% discount is removed and the effect is not on YB, but our farmers and ranchers are hurt, will that be considered? Removal of the 35% discount will require PUC approval but will farmers and ranchers be forced to go through the hearing process - a time consuming process taking valuable time from farmers and ranchers who should be tending their crops and livestock before PUC decides that there will be an adverse effect? 41 We urge that "adverse effect" include impacts on agriculture as well as the consumer community and that they be clearly defined so corrections to the interim decision can be done before irreversible damage is done. These should include not just impacts due to costs to the user of the service but should also include such things as frequency of service that impacts the integrity of the agricultural products from the consumers' point of view. We urge your serious consideration about the issues expressed and grant Young Bros. request for reconsideration and denial of the application. As the decision was rendered, HFBF found it surprising that there were no public hearings conducted. Just as it is important to get information from Pasha and YB, isn't it critical to understand all of the potential impacts of this decision? HFBF believes much of the community does not realize what could happen. Everyone deserves a right to know and opportunity to voice their opinion. Remember, after the closure of Aloha Airlines, people wanted to know why they were not informed that this was coming. if, during the consideration process, you find not to deny the application, please reopen the public comment period through a public hearing process. We will be available to answer any questions. Please contact Warren Watanabe, HFBF Transportation chair at 2819718 or by email warrenmcfb @hotmail.com. Thank you. Respectfully submitted, Mae Nakahata President Hawaii Farm Bureau Federation cc: Mr. Robin Matsunaga, State Ombudsman Ms. Sharon Pang, Small Business Regulatory Board Speaker Calvin Say, House of Representatives Chair Clift Tsuji, House of Representatives Chair Clayton Hee, Senate Chair Joseph Souki, House of Representatives Chair Kalani English, Senate From: Alan Gottlieb f mailto:gottlieb©hawaii.rr.coml Sent: Thursday, October 14, 2010 4:17 PM To: ' consumeradvocate @dcca.hawaii.gov' Cc: 'Hawaii.PUC @hawaii.gov'; 'Hawaii Cattlemen's Council'; 'Tim Richards - Kahua Ranch' Subject: Pasha Docket # (2009 -0059) Dear Consumer Advocate Dean Nishina I called your office on Tuesday Oct 12, 2010 and left a message to have someone call me about the above referenced case, but so far no one has called me back. My name is Alan Gottlieb, and I am the President of the Hawaii Cattlemen's Council. The Hawaii Cattlemen's Council, Inc. (HCC) is the Statewide umbrella organization comprised of the five county level Cattlemen's Associations. Our 130+ member ranchers represent over 60,000 head of beef cows; more than 75% of all the beef cows in the State. Ranchers are the stewards of approximately 25% of the State's total land mass. We understand that the PUC recently sent an order directing the Consumer Advocate to respond to Young Brothers' motion for reconsideration within 10 days. As such, we would like to reiterate to you, the office who is supposed to represent and protect the interests of consumers in Hawaii, the severe harm that the PUC's decision in allowing Pasha to operate in Hawaii will have on the Hawaii Cattle Industry and to Hawaii farming in general. Of course, if the Hawaii agricultural industry suffers from this decision, every consumer in Hawaii will suffer when purchasing fresh local products. After all, doesn't the State have mandates for Food Security and Sustainability? We draw your attention to the attached affidavit the Hawaii Cattlemen's Council submitted. We cannot understand how the PUC can allow Pasha to cherry pick routes, schedules and cargo in Hawaii, when Young Brothers is required to service all ports and all types of cargo. For many years Young Brothers has supported the ranch and farming industries by offering us discounts for our Hawaii agricultural goods. If Young Brothers is put in a position where they lose their best business to a cherry picker, we doubt they will be able to continue to offer these types of discounts. If they cannot offer these discounts, then the price of Hawaii fresh foods will go up in supermarkets across the State, and the consumers will suffer. Furthermore, without these discounts, if Hawaii agricultural cannot compete with imported agricultural products, often dumped in Hawaii at cheap prices, our entire local agricultural business is at risk of disappearing. Isn't this the type of interests the Consumer Advocate should be looking out for? We sincerely hope you will let the PUC know that allowing Pasha to cherry pick is bad for Hawaii consumer. We hope you will urge the PUC to reconsider and either immediately deny the Pasha application as proposed, or at least reopen the case and hold public hearings (unlike last time). On the other hand, if Pasha is willing to support all the routes, schedules and types of Cargo as Young Brothers does, then we would whole heartedly welcome them into the marketplace. Sincerely, Alan Gottlieb, President Hawaii Cattlemen's Council, Inc. From: Richard Ha fmailto :richard@hamakuasprings.coml Sent: Thursday, October 14, 2010 1:01 PM To: ' consumeradvocate @dcca.hawaii.gov' Cc: '.' Subject: FW: Re: Application of Pasha Hawaii Transport Lines LLC Docket No. 2009 -0059 Consumer Advocate Attn: Dean Nishina Re: Application of Pasha Hawaii Transport Lines LLC Docket No. 2009 -0059 Authorizing Pasha to compete against Young Brothers unfairly in a world of rising oil prices and business contraction, will hurt Hawaii's ability to achieve food security. I am vehemently against doing this. I am the owner and President of Mauna Kea Banana Company, Inc., a Hawaii corporation, doing business as Hamakua Springs Country Farms (Hamakua Springs) at Pepeekeo on the Big Island. I have a degree in accounting from UH Manna and I am a member of the Hawaii Clean Energy Initiative - Steering Committee; Co chair of the Geothermal working group- authorized by Senate Concurrent Resolution 99; Member of the Hawaii Island Economic Development Board and a board member of the Kohala Center. Hamakua Springs is a family business that we started 30 years ago with 2 acres - -by trading chicken manure for banana keiki. We now have more than 60 employees and own 600 fee simple acres. Farming is a very tough business. The average age of a farmer in Hawaii is 60. We are survivors and the most important trait that helped us to survive all these years was the ability to foresee and adapt to change. We routinely plan for the reality that will exist —five, ten years in the future; then we force the change necessary to get us there. From our farm point of view, we will adapt to whatever decision is made. Our decision to expand and to supply produce statewide had lots to do with Young Brothers discounted agricultural rates that was instituted many years ago. If the discount rates go away, we will make the financial decisions necessary to adapt, very quickly. We are discussing that eventuality right now. We will not wait and let our cash position deteriorate to the point it jeopardizes our future. But, from a larger community point of view, I think that Pashas entry into the Hawaii market now, comes at an inopportune time. I attended the Peak Oil conference in Wash. DC. last week. The consensus among numerous credible sources from our own Dept of Defense, the German military, petroleum industry leaders, etc., is that world oil supply will start to decline steadily 2 to 5 years from now. Energy is what drives economies and when energy declines, economic activity declines. Introducing more capacity into our interisland trade at a time when economic activity is declining is foolish. Allowing this to happen in the form of "cherry- picking" is even more inexplicable, particularly when it threatens (and the new market entrant does not offer) the things upon which famers rely such as Young Brothers' frequency of service, refrigerated service, service directly to Honolulu Harbor and the Oahu markets and island agricultural product discount. Lloyd's of London issued a white paper for its business clients, it warned them to be prepared for $200 per barrel oil by 2013. http: / /www.chathamhouse.org.uk /files /16720 0610 froggatt lahn.pdf. I asked Carl Bonham and Denise Konan of UHERO if they would do an analysis of $200 per barrel oil. They agreed but made clear that they are not in the business of predicting; but they could evaluate the effects should it happen. In the discussion, it was acknowledged that $200 per barrel oil would be devastating to our tourism industry. To reiterate, allowing Pasha into the interisland trade could force Young Brothers to repeal or change the very things upon which farmers rely to stay in business, including the frequency and nature of the services Young Brothers offers and its agricultural subsidies as described above. Food security has to do with farmers farming and if the farmers make money, the farmers will farm. Allowing Pasha to compete with Young Brothers unfairly and at a time of economic downturn will hurt Hawaii's effort to become food secure. You need to word your denial of Pasha's entry into the interisland cargo trade in a strong unequivocal way. The stakes are very high. Aloha Richard Ha President Mauna Kea Banana Company Dba Hamakua Springs Print Version - PUC should reopen for neighbor islands Pasha's application Page 1 of 2 West Hawaii TO Print Page PUC should reopen for neighbor islands Pasha's application by Reed Flickinger West Hawaii Today Friday, October 15, 2010 8:53 AM HST Usually, free market, competition and public benefit are concepts that dovetail neatly in our economy. Traditional business models dictate that competitive pricing, quality and service will result in delivery of a better product to consumers. Rarely is that model upset. But there are exceptions. And the allowance of Pasha's entry by the Public Utilities Commission into the interisland freight business appears to be that rare exception. A disclosure: I am a Young Brothers customer and have used that freight carrier over the past three decades. Another disclosure: Chances are 99 percent or greater that you, too, are a Young Brothers customer, directly or indirectly. Young Brothers earlier this month asked the PUC to reopen the Pasha application and has presented some compelling arguments to do so. And given comments made this week by Young Brothers President Glenn Hong, for the PUC to do so would greatly be in the interest of neighbor island businesses and residents. Most freight in Hawaii is inbound and most intraisland freight is outbound from Honolulu. After those loads have been emptied, whether by Young Brothers (intrastate) or Pasha (interstate), vessels return to their port of origin largely empty, what truckers call deadheading. Young Brothers, as a means to generate return load cargo, has for some shippers offered reduced rates, as much as 35 percent, for their return loads to Honolulu. Ask Richard Ha, the Hamakua farmer who has a burgeoning business supplying Big Island -grown tomatoes and bananas to a statewide market. Pasha, in seeking to offset the empty vessel with some revenue, wants to move cars and roll -on, roll -off freight to Maui and the Big Island. These types of freight, says Hong, are the most profitable to carriers and represent a significant portion of Young Brothers' profitability (15 to 25 percent in a nonrecession market). Pasha cannot offer refrigerated containers and if you want to ship from the neighbor islands to Oahu, your cargo will take a two -week trip to San Diego first, he said. It's competition, you might say, so buck up and compete. Yet it's not quite so simple. As Hong outlines it, the competition is unfair because the rules set forth by the PUC are unfair. Two companies cannot play the same game fairly under greatly different rules. Young Brothers, he said, is required by the PUC to maintain service levels and frequency. This includes services to Molokai and Lanai, which are by no means profitable, he added. Pasha is being allowed to provide minimal service and only to limited destinations, with the most profitable cargo -- "cherry picking," he called it. And he noted that rates provided to the PUC by Pasha were not lower, but in some cases greater than Young Brothers' tariffs, so there would be no cost savings to consumers. Hong was resolute: If the Pasha license is allowed, it will force significant changes to Young Brothers' service: rates will go up, services or frequency decreased and some markets might not be serviced. That might include some serious repercussions for Lanai and Molokai, though he was reticent to put names on the areas jeopardized. The PUC process is supposed to weigh the impact on consumers of licenses granted to serve in regulated industries, including interisland freight. Any change in services or rates in that industry will have little or no effect upon Oahu; it is a neighbor island issue. Yet none of the hearings on this application was heard on the neighbor islands. And none of the commissioners on the PUC is a neighbor island resident. A very important public issue was heard and decided far from those whom it will impact the most. The PUC is also supposed to grant licenses based upon a demonstration of need by the applicant. Hong claims Pasha never demonstrated that need. He is also keen to point out that the state consumer advocate, the governmental entity supposedly representing the interests of consumers in matters before the PUC, ultimately told those commissioners, "given the potential negative consequences of the applicant's (Pasha's) entry in the Hawaii market, the consumer advocate believes that Pasha Hawaii has failed to provide sufficient information to meet the burden of proof that its proposed service is in the public interest ..." These are some compelling arguments. Not necessarily is it that Pasha's application should die a swift death, rather that the public process be reopened and made truly public. Those affected should not be neglected. And those who are competing in a regulated industry should be compelled to compete under the same rules. http: / /www.westhawaiitoday.com /articles/ 2010 /10/15 /opinion /columns /columnOl .prt 11/12/2010 Print Version - PUC should reopen for neighbor islands Pasha's application Page 2 of 2 It would behoove all parties, from the competing carriers to the governmental entities involved and all neighbor island residents and businesses to reopen this case, to hear and weigh it thoroughly in the light of neighbor island review. We have no interstate highways and depend upon waterborne freight carriers to supply our needs. We must know that these needs are being met in the most efficient, affordable and competitive means. If the PUC hasn't the wisdom to do so, we urge our legislators to step in and our courts to be consulted to protect the interests of all parties. rflickingerna westhawaiitoday. com Copyright © 2010 West Hawaii Today http: / /www.westhawaiitoday.com /articles/ 2010 /10/15 /opinion /columns /columnOl .prt 11/12/2010 Format Dynamics :: CleanPrint :: http: / /www.staradvertiser.com/ editorials /guesteditorials /20101115_P... Page 1 of 2 ,tar ' 2duertiser Some have stated that the fee schedule proposed by Pashas entry into Pasha is more than that offered by Young Brothers so customers may not go with Pasha. But if there wasn't a interisland S h p p i n g likelihood that it would get business, would Pasha have submitted the application? The interim decision was to determine the impact on Young Brothers. If our could harm small fears are realized, how much loss will Young Brothers be required to incur before the decision is withdrawn? neighbor island Or worse, what will be the extent of loss to agriculture and other small businesses? For some, such those shipping to and from Molokai and Lanai, options are farmers limited. Has the Chamber of Commerce or small businesses dependent on refrigerated and just -in -time services evaluated potential impacts of this decision? Farmers and ranchers currently benefit from Young By Warren K. Watanabe Brothers' discounted rates of up to 35 percent for local POSTED 01 30 a.m. HST, Nov 15, 2010 agricultural products. They need these discounts because their profit margins are already thin. Said Big Hawaii residents -- especially on the neighbor islands Island farmer Richard Ha: "Farmers know that food -- will soon be impacted by a development that has security involves farmers farming. If farmers can make been largely under the radar: an impending drastic money, farmers will farm. Young Brothers helps change in the rules governing interisland cargo. farmers to make money." Why are we worried? Interisland barge service will get Another disturbing observation is the lack of reaction much more expensive, service frequency will probably by those currently using Young Brothers's refrigerated be reduced to all neighbor islands, and some and LCL services. Agriculture has reacted but we have unprofitable routes -- think Molokai and Lanai -- not seen other small businesses that depend on might even lose service altogether. This will raise the Young Brothers voice their concern. This is not just an cost of living and, worse, hurt neighbor island agriculture issue. I believe that this happened since farmers, businesses, workers and consumers -- in the PUC voted without holding hearings on a single other words, everybody. neighbor island. Most of our neighbor island cargo depends on Young The consumer advocate's recommendation states that Brothers. During the LCL (less than container load) h it feels that the PUC did not have enough information earings a few years ago relating to Kahului Harbor, to make a decision. I read the decision. Much of it the range of businesses dependent upon Young speaks to Pasha and Young Brothers. What is missing Brothers was apparent. Young Brothers is regulated by the Public Utilities Commission. The PUC authoriizes ADVERTISEMENT schedules and rates. -. -. GROUPON # r ' In early 2009, Pasha Hawaii Transport Lines applied to s ' ,., f the PUC for permission to provide interisland cargo � .�, - � I transportation. I contacted Pasha's general manager, Reggie Maldonado, who confirmed that services offered will be limited, probably not involve -( W�i#jr ";(i _ Honolulu d for a agricultural goods and definitely will not handle refrigerated cargo. 1 One -Year° Subscription to 1 Recently, the PUC announced an interim decision and f "HONOLULU Magazine" ($20 I order allowing Pasha to operate as an intrastate water 1 Value) ) carrier through 2013. I was shocked. If Young ] I3 z ®; Brothers loses its more profitable lines of services, GET DEAL AT: I what will happen to us who use the higher risk, more • expensive services? Will we one day find ourselves 1 www.PrintGroupon.com /2971 b 4 1 reliving the closure of Aloha Airlines? 0 ' +, , L ®,� Time Sensitive Offer Print Powered By al i F t I ■ Dynamics http://www.staradvertiser.com/templates/fdcp?1289862462995 11/15/2010 Format Dynamics :: CleanPrint :: http: / /www.staradvertiser.com/ editorials /guesteditorials /20101115_P... Page 2 of 2 v � s tar s 2 du ertiu er is defining the impact to us as customers of Young Brothers and the consumers of Hawaii. Young Brothers will be forced into the business model that the PUC has approved for Pasha, one in which Young Brothers will service the types of customers and routes at frequencies based on profit and at prices that an open market will bear. Young Brothers has appealed to the PUC to reconsider its decision. For the sake of our neighbor island farmers, and all residents, we certainly hope the PUC will reconsider and prevent the damage that will otherwise follow. PUC should follow the public hearing process so it could better understand the full potential impacts of this action. However, we agree with the conclusion of a West Hawaii Today editorial: "If the PUC hasn't the wisdom to (reconsider), we urge our legislators to step in and our courts to be consulted to protect the interests of all parties." Maui resident Warren K. Watanabe is the executive director of the Maui County Farm Bureau and oversees transportation issues for the Hawaii Farm Bureau Federation. ADVERTISEMENT F-RE1 Home Security System! PROTECT :'YOUR HOME �! ib `�.ith P*ftIC ' $854 Value! litMoNl lilt -877- 246 -7519 4 Mn +n 7∎c- , ii . ;0) bix4:l:rm - aµ41 kst Print Powered By I til 1F n n , ,'- Dyn arnics http://www.staradvertiser.com/templates/fdcp?1289862462995 11/15/2010 .(� 111 • i q7.0 HOUSE OF REPRESENTATIVES STATE OF HAWAII STATE CAPITOL HONOLULU, HAWAII 96813 April 23, 2009 Honorable Car lito P. Caliboso Chairman State Public Utilities Commission 465 South King Street, Room 103 Honolulu, Hawaii 96813 Re: Application by Pasha Hawaii Transport Lines LLC — Docket No. 2009 -0059 Dear Chair Caliboso and Members of the State Public Utilities Commission: I am writing in connection with the recent application filed by Pasha Hawaii Transport Lines LLC (Pasha) with the State Public Utilities Commission (Commission). I understand that Pasha, an inter -state shipping company, has filed an application asking the Commission to grant Pasha the authority to provide inter- island/intra -state service between and (only) among the ports of Honolulu, Kahului and Hilo every two weeks and the Port of Nawiliwili on inducement. Kahului is the only commercial port on my home island of Maui. As you know, Hawai'i, as an island state, relies heavily upon inter - island/intra -state shipping. Given the importance of inter- island/intra -state cargo transportation to this State's residents and our economy, I urge you to review this application with close scrutiny on the impact of Pasha's proposal upon the basic economics of inter - island/intra -state shipping and its impact upon essential cargo services between Honolulu and all of the neighbor islands. In that regard, I strongly endorse a full and fair hearing on the Pasha matter that includes (a) public hearings, which are necessary for a true opportunity for public review of the issue and public comment and (b) given the vital importance of inter - island/intra -state cargo transportation to this State's residents and our economy, inclusion of Young Brothers (the State's primary inter - island/intra- state cargo shipper) as a party to the Pasha proceeding. The Commission's preliminary decisions on these matters of procedure are critical to a good and well - informed decision on the merits. I believe that public hearings are essential to a full and fair review of these issues and that, given that Pasha's proposal may change the economics of shipping for all islands (not just the ones Pasha proposes to serve), that these hearings should be held on the islands of Lanai and Molokai as well as on the island of Maui and other islands that Pasha proposes to serve. The inclusion of Young Brothers as a party to the PUC proceeding is essential, given Young Brothers' history, stake and expertise in inter- island/intra -state shipping to all islands, and to ensure fairness in the process and developing a full record on the important issues presented by the Pasha matter. Thank you for this opportunity to present my views on this issue of extreme importance to the residents and economy of this State. Very truly yours, per Gilbert S. C. Keith- Agaran State Representative Ninth District 43:GKA/at y ' HOUSE OF REPRESENTATIVES STATE OF HAWAII STATE CAPITOL HONOLULU, HAWAII 96813 April 24, 2009 Via U.S. Mail and E -Mail (E -Mail: Hawaii.PUC( hawaii.00v) Honorable Carlito P. Caliboso, Chairman State Public Utilities Commission 465 South King Street, Room 103 Honolulu, Hawaii 96813 Re: Application by Pasha Hawaii Transport Lines LLC — Docket No, 2009 -0059 Dear Chair Caliboso and Members of the State Public Utilities Commission: We understand that Pasha Hawaii Transport Lines LLC (Pasha) has filed to obtain PUC authority to provide intra -state service between the ports of Honolulu, Kahului, Hilo and Nawiliwili. We recognize the importance of the PUC's close review of this matter. In this regard, We endorse a full and fair hearing on the Pasha matter that includes (a) public hearings and a true opportunity for public review of the issues and public comment by all island communities that have vital interests at stake, and (b) given the need for fairness and a full record on these vital issues and interests, inclusion of Young Brothers (the State's primary inter - island /intra -state cargo shipper) as a party to the Pasha proceeding. We recognize the decision is within the PUC's authority. We are confident that the PUC will make the decision which is in the best public interest. Thank you for your consideration of this request. Sincerely, Or v U 4 4/ Noi 4 toseph M. Souki, Calvin K.Y. Say Chair, Committee on Transportation Speaker c: Merle Kelai, Pasha Hawaii Transport Lines LLC . • q - \ t ;g ,-) r -o �G co r 1 Ti enztte -._ - D t� 't.it< of i-1ntu. iii - co April 27, 2009 Chair Carlito Caliboso Commissioners John Cole and Leslie Kondo Public Utilities Commission 465 South King Street, #103 Honolulu, HI 96813 Re: Application by PASHA Hawaii Transport Lines LLC- Docket No. 2009 -0059 Dear Chair Caliboso and Commissioners Cole and Kondo: Members of the Legislature have been made aware of the above referenced Application by PASHA Hawaii Transport Lines LLC (Docket No. 2009 -0059) to provide inter- island/intra- state service between Honolulu, Kahalui and Hilo (every two weeks) and Kauai (on inducement). Certain of our colleagues have in fact endorsed the Application which is filed and pending before you. On its face, any increase in inter- island/intra -state service appears to be in the best interest of the residents of this State. However, we have concerns about the type of service to be provided and whether there will be unintended consequences of an approval of the Application. For example, with the recent decision by the Hawai ` i Supreme Court relating to the large capacity ferry vessel, the Hawaii Superferry has now terminated its service between Honolulu and Kahalui Harbor. This has caused many of our business persons who availed themselves of the Superferry to transport their goods and services to either cease interisland operations and/or to seek alternative modes of transportation. One such provider of transportation is Young Brothers who is the State's primary inter- island/intra -state cargo shipper. In that we have no idea what the impact of the granting of this Application can have upon Young Brothers' provision of services to the neighbor islands, we find it necessary to request that you have a full contested case hearing on this matter. As you know, we believe services to Molokai and Lanai may be affected by the PUC's decision as well. it • Chair Carlito Caliboso Commissioners John Cole and Leslie Kondo April 27, 2009 Page 2 It can be assumed that if this Application is for limited services, then it must be lucrative for the applicant to provide only those services proposed in the application. How this affects other service routes and rates may be a question for the Commission to explore. A full contested case hearing, which we would assume intervenors with full party status participating, would be in the best interest of this State. It is for the reasons stated above, that we ask you consider the consequences, intended and unintended of this Application. If you have any questions, please do not hesitate to contact us. Sincerely, Senator Col - en Hanabusa President of e Senate 1 • P t it'l Senator J. Kalani English Senatorial District 6 Hana, East and Upcountry Maui, Moloka'i, Lana'i, and Kaho'olawe 4 Senator Dwight Takamine Senatorial District 1 Hilo, Honoka'a, Laupahoehoe, Hamakua, Waiakea Uka, Keaukaha, and Waimea • • HOUSE OF REPRESENTATIVES STATE OF HAWAII STATE CAPITOL HONOLULU. HAWAII 96813 April 27, 2009 c g "Ti -j -o 3 F .r Via U.S. Mail and E-Mail o r (E - Mail: I (u��aii.Pl It' a hakvaii.goN) 0 a- Honorable Carlito P. Caliboso Chairman State Public Utilities Commission 465 South King Street, Room 103 Ilonolulu, Hawaii 96813 Re: Application by Pasha Hawaii Transport Lines LLC — Docket No. 2009 -0059 Dear Chair Caliboso and Members of the State Public Utilities Commission: 1 am the State Representative for the 29th Representative District (Kalihi, Sand Island) and the Chair of the Tourism, Culture, & International Affairs Committee. I submit this letter in connection with an application filed with State of Hawaii Public Utilities Commission by Pasha Hawaii Transport Lines for "issuance of a certificate of public convenience and necessity to provide water carrier services between and among the islands of Oahu, Maui, I lawaii and Kauai." As the Representative for the 29 District, which is home to the State's major cargo carriers (and a major employment center) and the Chair of the committee referenced above, I have concerns for the health of the maritime industry and the role of this industry in supporting tourism on all islands (as the service providers for the delivery of all goods and materials needed to support our neighbor islands, including the tourism industry). Like residents and businesses of all of our neighbor islands, the tourism industry needs a sustainably and financially healthy cargo delivery system to itself remain viable. Representative Joey Manahan District 29: Sand Island, .tlnkuuea, h'alihi tai, liapalama State Capitol, Room 421 -- Honolulu, Hawaii 96813 Phone: 586 -6010 Fax: 586 -6011 reomanahan a capitol.hawaii.gi,c ! . • l ionorable Carlito P. C'aliboso April 27, 2009 Page 2 I ask that you review the Pasha application and analyze with the care the effect that Pasha's proposal (for intra -state cargo services) would have upon our cargo delivery system for all our islands. As part of this careful review, I also ask that you include two things in your procedure for the Pasha application. First, I believe it is essential for our businesses and residents to have a full airing of the issues through public hearings on every island in this State as each island may be impacted by changes to the economics of the current cargo delivery system. Second, given that our neighbor island residents and businesses depend on the frequency of Young Brothers' service as well as its service to all islands, 1 believe it is also critical that Young Brothers be included as a party to make sure we understand fully the impact of the Pasha proposal on the economic viability and sustainability of the Young Brothers' system. Thank you for this opportunity to present my views on this very important issue. Sincerely, Joey MI . an Representative Joey Manahan Uiarici 29: Sand Island, •%Aokauea, Kalihi Kai, Kapalama State Capitol, Room 421 - Honolulu, Hawaii 96813 Phone: 586 -6010 - Fax: 586-6011 E -Mail: r4pmanahaii capitol.hauaii.guv • SE OF NI 4�l;. pes t Senator Michelle Kidani A.. n it ,, Vice -Chair Education and Housing . 7r-- s r1je &enate o F STATE CAPITOL ry �'Ti HONOLULU, HAWAII 96813 5 > 0 April 28, 2009 1' t„,,, v Honorable Carlito P. Caliboso Chair State Public Utilities Commission 465 South King Street, Room 103 Honolulu, Hawaii 96813 Re: Application by Pasha Hawaii Transport Lines LLC- Docket No. 2009 -0059 Dear Chair Caliboso and Members, I would like to express my concern with regard to the application by Pasha for authority to provide inter - island/ intra -state service between the ports of Honolulu, Kahului and Hilo every two weeks and the Port of Nawiliwili on inducement. As an island state, Hawaii relies very heavily upon inter- island/intra -state shipping. I believe that full public hearings on each island is essential for a fair determination of how Pasha's proposal will impact essential basic services to all of our islands, as well as the economic impacts to users of current inter- island/intra -state services provided by Young Brothers. Further, Young Brothers should be allowed to intervene as a party to the PUC proceeding given their history and expertise in inter- island/intra -state shipping to all islands, and to ensure fairness in the process and developing a full record on the important issues presented by the Pasha matter. Thank you for allowing me to share my concerns over this extremely important issue which will have great impact on the residents, businesses and economy of this State. Sincerely, Senator Michelle Kidani Senate District 17 - Mililani— Mililanl Mauka — Walpro — Walpro Gentry 415 Beretania Street, Room 203, Honolulu, Hawaii 98813 Phone: (808)588 -7100 Fax: (808)588.7109 E -mail: senkidani©capitol.hawali.gov HOUSE OF REPRESENTATIVES FILED STATE OF HAWAII u STATE CAPITOL 10x9 NAY 21 1 i P 12: 21 HONOLULU, HAWAII 96813 PUBLIC UTILITIES May 14, 2009 COMMISSION Mr. Carlito Caliboso Chair, Public Utilities Commission 465 South King St. Honolulu, HI 96813 Dear Mr. Caliboso: 1 have had inquiries regarding an application by Pasha Hawaii Transport Lines LLC for a license to provide inter - island cargo service. 1 would like to ask that this application be appropriately vetted, and if there has not yet been a public hearing on this platter scheduled. 1 would like to request a public hearing for this Docket, it 2009 -0059. Thank you very much for your time and attention to this matter. Should you have any further questions or concerns, please feel free to contact me any time. Sincerely, CHRIS LEE State Representative .4 Cc: E. Troxwell Representative Chris Lee 51st House District Hawaii State Capitol, Room 313 / Honolulu, Hawaii 96813 Phone: (8081 586 -9450 / Fax: (808) 586 -9456 / E -mail: repel a apitol.hawaii.gov 4` Or N 4 I I T , ., : • T)e crenate STATE CAPITOL HONOLULU, HAWAII 96813 November 12, 2009 VIA ELECTRONIC MAIL Honorable Carlito Caliboso Catherine Awakuni, Esq. Chairman Executive Director State Public Utilities Commission Division of Consumer Advocacy 465 South King Street, Room 103 Dept. of Commerce & Consumer Affairs Honolulu, Hawaii 96813 335 Merchant Street, Room 326 Honolulu, Hawaii 96813 Re: Application by Pasha Hawaii Transport Lines LLC — Docket No. 2009 -0059 To the State Public Utilities Commission and the State Consumer Advocate: We share serious concerns regarding the Pasha Hawaii Transport Lines' application for issuance of a certificate of public convenience and necessity to provide water carrier services from Honolulu to Kahului and Hilo every two weeks and to Nawiliwili on inducement. As legislators, we are especially interested in issues involving the health of the cargo transportation industry and the role of this industry in sustaining our islands and creating and maintaining our large local work force with good jobs. The economy of the Neighbor Islands depends heavily on regular and reliable barge service. As such, we welcome proposals to improve our transportation systems. However, we would respectfully suggest exercising extreme caution in reviewing any proposal that may change the economics of the intra -state barge service upon which the Neighbor Islands so heavily rely. We ask that you closely review all of the evidence from all available sources, including those who depend on the present Young Brothers system and our State's experts on the relevant issues. We also ask that you recognize the significance of this issue to the Neighbor Islands. It is essential that you, as persons living and working on Oahu, take the necessary measures to completely and truly understand the importance of Young Brothers' inter - island barge system and the health of this system to those who live and work on the Neighbor Islands. In doing so, and in protecting the well- being of Neighbor Island businesses and residents, we ask that you specifically review and articulate your analysis on these issues: November 12, 2009 Page 2of2 1. Public Convenience and Necessity. Given the approximately 350 persons employed by Young Brothers, the new barges and other equipment and facilities in which Young Brothers has invested and the system it has developed to transport freight of all kinds to each Neighbor Island, what segment of the population, if any, is left unserved by Young Brothers' operations? What studies or expert testimony, if any, demonstrate that we now, or will in the future, lack adequate facilities to serve the public and that what Pasha is proposing will fill that need? If there is no such unmet need and Pasha service is not required by any such necessity, then the law is clear. The Pasha application should be denied. 2. Economic Health of the Existing Water Carrier. What do experts say about the impact of a second carrier (i.e., the impact of what Pasha is proposing) on the health of Young Brothers and how such a second carrier may change the economics upon which its essential intra -state barge service is based? If the Pasha proposal presents a risk to the existing essential system upon which the Neighbor Islands rely, then, again, it should be denied. 3. Impact on Neighbor Islands. Directly related to the health of Young Brothers, if there is any potential for negative impact upon the sustainability, affordability and frequency of Young Brothers' intra - island barge service connecting all of our islands, what will be the impact of the Pasha proposal on residents and businesses of Neighbor Island communities? What efforts have been made to notify, inform and /or seek review and comments by those who live and work in the Neighbor Island communities? 4. Fair Competition. Is what Pasha is proposing truly fair competition or is it merely "cherry - picking" the best, i.e., the most profitable, routes and lines of service? In a regulated environment, as structured by the Legislature, how is it consistent with legislative intent to both require the existing carrier to continue to provide universal service and, at the same time, allow a new service provider to pick and choose routes and lines of service with the aim of meeting the new provider's profit or return on investment standards? Again, if the Pasha proposal is not consistent with both the express language and intent of Chapter 271G of the Hawaii Revised Statutes, then it should be denied. Thank you for this opportunity to present our views on these very important issues. Please respond at the appropriate time. Sincerely, C1 4 1 16414444 . Senator Coll:en Hanabusa Senator Russell Kokubun 46, 9( Senator Dwight Takamine E O A k1 y F Ft:a•P i HAWAII STATE LEGISLATURE STATE CAPITOL HONOLULU, HAWAII 96813 November 23, 2009 • Carlito P. Caliboso, Esq., Chair and Members of the Public Utilities Commission 465 South King Street #103 Honolulu, Hawaii 96813 Re: Application of Pasha Hawaii Transport Lines, LLC filed on March 13, 2009 (Docket No. 2009 - 0059). Dear Chair Caliboso and Members of the Public Utilities Commission: We represent the communities of Kahului, Wailuku, Puunene, Spreckelsville and Lower Pa'ia. Our legislative districts — Senate District 4 and House District 9 -- include Kahului Harbor and many of the businesses that rely upon Young Brothers' service to and from Kahului Harbor. We believe in competition and appreciate the appeal of introducing competition even in inter- island cargo transportation. However, in a regulated market, competition should not be a goal in and of itself. In fact, in such a market, regulation is the means by which the Legislature (as expressed in Chapter 271 G of the Hawaii Revised Statutes) seeks to achieve the actual and ultimate goals of promoting "safe, adequate, economical, and efficient service" and the "establishment and maintenance of reasonable rates" for our residents. Introducing competition in a regulated utility environment would defeat these goals if such introduction destabilizes the existing utility that provides the service and, as a result, destabilizes the businesses that depend on reliable service. As Neighbor Island residents, we have a well- developed sense of the importance of the inter- island transportation system to the health and well -being of the State and our individual communities. Maui, as we understand is the case with other Neighbor Islands, heavily depends on frequent, timely, efficient and cost - effective shipping service which Young Brothers has historically provided. Even so, occasional events demonstrate just how important this regulated . utility is to us. For example, two weeks ago, rough seas prevented Young Brothers' Thursday barge (as well as a Matson vessel) from entering Kahului Harbor and delayed deliveries: of products to several local area businesses. Young Brothers' barge eventually berthed on the following morning (after a night at sea outside the harbor) and was only one of three regular Young Brothers barge calls upon Kahului that week. Having just this one barge arrive late reminded our residents, including our own families, in a very real and immediate way, the importance of frequent, timely, efficient and cost - effective shipping for Maui and the potential impact if, for example, our community had one less barge per week instead of just this one late barge. Under Chapter 271G, the Legislature provides that the State must regulate a water carrier such that the carrier provides the necessary service and has the corresponding opportunity to operate in a efficient and financially feasible manner. The regulated entity, of course, must deliver on this obligation of service by providing adequate facilities, among other things. Chapter 271G does not proscribe new or multiple water carriers; however, a new entrant must prove that its proposed service is "required" by the "public convenience and necessity "; that is, by proving, for example, that there is "either a lack of adequate existing facilities to presently serve the public, or insufficient facilities to meet anticipated future demands for service." In re Charley's Tour & Transp., 55 Haw. 463, 469 (1974). Our concerns with maintaining the present level and quality of service appear to be supported by submissions made by Hawaii economists Sumner La Croix and Paul Brewbaker on this matter. Without doubt, a "reduction in the frequency of service to Hawaii's ports," "higher rates on routes and product lines," "reduction or elimination of existing discounts," "damaging the • financial health of the only [universal] water carrier," "serious repercussions for customers," "uncertainty among public utilities," potentially "reduc[ing] investment" in any regulated public utility and "induc[ing] the kind of disruption to the economy that regulation is intended to minimize" are precisely the types of results that the Legislature, through Chapter 271G, sought and seeks to prevent. The perspective of neighbor island residents and businesses differs from those on the island of Oahu with respect to the flow of goods into our communities. As a result, the economic impacts of another water carrier, as pointed out by Professor La Croix and Dr. Brewbaker, are not taken lightly by our constituents, to whom frequent, timely, efficient and cost - effective shipping is vital. Thank you for this opportunity to present our views. Yours Truly, • (.1""°•0%.•4.41/4-. t?' ‘r - ‘ 1r1-- SHAN S. TSUTSUI GILBERT S.C. KEITH -AGARA State Senator - State Representative District 4 District 9 c: Division of Consumer Advocacy . , 1 a , T =.1 .i- a HOUSE OF REPRESENTATIVES STATE OF HAWAII STATE CAPITOL HONOLULU, HAWAII 96813 The Honorable Carlito Caliboso, Chair Hawaii State Public Utilities Commission 465 South King Street, Room 103 Honolulu, Hawaii 96813 Re: Application by Pasha Hawaii Transport Lines LLC, Docket No. 2009 -0059 Dear Chair Caliboso and Members of the Commission: We are in receipt of a copy of a November 12, 2009 letter submitted to the Public Utilities Commission (PUC) from Hawaii State Senators Colleen Hanabusa, Dwight Takamine and Russell Kokubun. We too share similar concerns regarding the impacts of the economics and service of an additional, on inducement, intra -state barge service upon the Neighbor Islands. Further, in reviewing the Consumer Advocate's Statement of Position, we have concluded that as the "party of interest" that "shall represent, protect, and advance the interests of all consumers, including small businesses. of utility services ", the Office of the Consumer Advocate, does not answer the critical question of whether Pasha's proposed service is required by the present or future "public convenience of necessity" to place the burden on the applicant to show that the proposed operation not only will be of beneficial value to the community, but also is a necessity. We find it disturbing that there has been no requirement for Pasha to demonstrate that there is either a lack of adequate existing facilities to presently serve the public, or insufficient facilities to meet anticipated future demands for service which is a critical analytical component to answer all the major concerns raised in the Senators' November 12, 2009 letter. It is obvious that the public cannot be served and protected without actual and complete analysis of this record by the State agency that is charged with protecting consumers. We understand that the Office of the Consumer Advocate has been challenged by budget cuts and the furlough situation which may have impeded their ability to undertake such an analysis. However, such a failure of the system should not be at the cost of the public's interest. Further, the abbreviated procedure and procedural schedule that was dictated by the PUC may have exacerbated the lack of analysis on this application. The usual procedure of a contested case may have prevented inadequate research and a poorly drafted Statement of Position from 1 Application by Pasha Hawaii Transport Lines LLC, Docket No. 2009 -0059 advancing to this critical juncture as that procedure would allow for all the parties to challenge each other's positions, demonstrate the flaws of analysis or reasoning and allow stronger positions to become evident. It is unfortunate, and for these reasons, the adverse impact of the submitted Statement of Position by the Office of the Consumer Advocate has been magnified in this application and must be corrected to protect and advance the interests of all consumers. Thank you for the opportunity to present our views on this very important issue. We look forward to your response. Sincerely yours, • Offt4t144") C)otoibl linil Re. Hermina M. Morita, District 14 p. an}Os K. okioka, District 15 Rep. Roland D m 111, District 16 4 l / Cato- a ts1 -- Application by Pasha Hawaii Transport Lines LLC, Docket No. 2009 -0059