Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Transportation Regulation topic
No spam. Unsubscribe anytime.
Young Brothers backs automatic inflation index; retailers and PUC urge safeguards before automatic annual adjustments
Summary
Legislators advanced SB 2694 SD2 HD1 to authorize a water‑carrier inflationary cost index (WICI) after testimony from Young Brothers that the mechanism would stabilize finances; the Division of Consumer Advocacy and retail groups urged caution, saying automatic adjustments could mask inefficiencies and urged PUC oversight and guardrails.
The House Committee on Consumer Protection & Commerce advanced SB 2694 SD2 HD1 on April 9 after an extended exchange between regulators, the carrier Young Brothers, and business groups over whether an automatic inflationary adjustment (WICI) should be imposed.
David Vellutini, associate general counsel at Young Brothers, urged adoption of WICI, arguing the current rate‑case process creates long lags between cost increases and rate adjustments and that an automatic index (capped annual adjustments with a triennial reset) would stabilize carrier finances and help maintain service. "The state's regulatory framework for water carriers is broken," Vellutini told the committee.
Consumer and retail representatives, including Lauren Zirbel of the Hawaii Food Industry Association, opposed an automatic adjustment without strong PUC oversight. Zirbel noted the PUC recently approved a 25.75% increase effective Jan. 1, 2026, and warned another automatic increase could be burdensome to businesses that already face high costs.
Representatives from the Public Utilities Commission said the PUC would need guardrails and that any WICI mechanism should include caps, regular rate reviews and special overseer involvement. Young Brothers’ finance director, Ashley Kishimoto, described the limits of baking multi‑year inflation into a single test year and said protracted rate cases make it difficult to capture real costs in a timely way.
The committee adopted HD2 language establishing an automatic adjustment mechanism with statutory guardrails; members asked for language ensuring the PUC’s role in oversight and preserving mandatory rate reviews. During decision making the committee passed SB 2694 with amendments; the record included no votes from Representatives Iwamoto, Kong and Pierick.
Why it matters: Interisland freight is essential for Hawaii’s supply chains. Proponents say automatic adjustments reduce disruptive, infrequent large increases; opponents say annual indexation could subsidize operational inefficiencies unless paired with oversight and conditional triggers.
What’s next: The committee adopted the proposed HD2 and passed the bill with amendments reflecting guardrails and PUC involvement.
