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House committee advances bill to let water carriers use inflation index; PUC and Young Brothers debate which index to use
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Summary
Lawmakers advanced HB 914 (HD1) to authorize an inflation-linked adjustment for water carrier rates but asked stakeholders to deliver proposals on alternative indexes; Young Brothers and the Public Utilities Commission discussed the GDPPI recommendation from a 2021 working group and Jones Act cost pressures.
The House Committee on Consumer Protection & Commerce moved House Bill 914 (HD1) forward on Feb. 11 after testimony from water carriers, regulators and industry groups about whether an automatic, inflation-linked rate adjustment should be pegged to the GDP price index (GDPPI).
Young Brothers, the inter-island carrier, and other industry witnesses urged the committee to adopt a standardized inflation index so carriers can recover inflationary costs more predictably. An industry representative said the index was recommended by a 2021 working group that included counties, the Public Utilities Commission (PUC), and other stakeholders. “The consensus on the recommendations…came up with the GDPPI as the index,” the Young Brothers representative said.
Regulatory and policy questions: The committee asked whether the GDPPI is the best choice and asked stakeholders to submit alternative proposals. Commission staff told members they use different indices for decoupling and said they could use BEA (Bureau of Economic Analysis) measures if directed. Members noted the PUC is already considering some approaches and that the bill might not be necessary if the commission adopts a mechanism on its own.
Other testimony: Young Brothers explained Jones Act compliance increases capital and replacement costs for vessels, affecting rates. The carrier said its regulated operations have been losing money for “at least 3 to 5 years” and that automatic mechanisms could phase rate increases to avoid infrequent, large-rate cases.
Committee action: The chair recommended striking the specific index from the statutory text and including committee-report language asking the next committee to consider alternative indexes; the committee adopted that change and passed HB 914 with amendments.
